Employment Agreement - Critical Path Inc. and Tracy Currie
[CRITICAPATH LOGO]
November 4, 2002
Tracy Currie
c/o Critical Path
350 The Embarcadero
San Francisco, CA 94105
Dear Tracy,
On behalf of Critical Path, Inc. (the "Company"), I am pleased to offer you the
position of Executive Vice President, Operations & General Manager, Hosted
Organization. Speaking for myself, as well as other members of the Company's
management team, we are all very impressed with your credentials and we look
forward to your future success in this position.
The terms of your employment with the Company are set forth below:
POSITION You will be Executive Vice President, Operations and General
Manager, Hosted Services for the Company, working out of the
Company's offices in Denver and reporting to the Chief
Executive Office and Chairman of the Board of Directors. You
will also serve as a member of the Executive Committee. This
is a regular, full-time, exempt position.
You agree to the best of your ability and experience that you
will at all times loyally and conscientiously perform all of
the duties and obligations required of and from you pursuant
to the express and implicit terms hereof, and to the
reasonable satisfaction of the Company. During the term of
your employment, you further agree that you will devote
substantially all of your business time and attention to the
business of the Company (not including your work as an outside
director of FNStar, Inc., and for non-profits and similar
civic activities). You may also hold other outside
directorships, provided that they are disclosed and consent is
first obtained from Critical Path, not to be unreasonably
withheld. You will be based in the Denver, Colorado
Metropolitan area in offices to be obtained as soon as
practicable, and your business travel (including your travel
to the Company's offices in San Francisco) will be reimbursed
by the Company. It is expected that your travel time will not
exceed 50% of your ordinary working time.
START DATE Subject to fulfillment of any conditions imposed by this
letter agreement, you will commence this new position with the
Company on Monday, October 21, 2002. Your new hire orientation
will take place at a future date and time.
COMPENSATION Your base salary will be $250,000 on an annualized basis. Your
salary will be payable in two equal payments per month
pursuant to the Company's regular payroll practices.
BONUS You will be eligible to participate in a Critical Path
Incentive Bonus Plan. Your on-target bonus earnings at 100%
attainment is $250,000 annually, and your on-target bonus
earnings at 200% attainment is $500,000. The specifics of your
Plan are outlined in Exhibit B.
SEVERANCE Following six (6) months of continuous service to the Company
(including time spent as a consultant prior to the acceptance
of this offer) and upon your involuntary termination
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or resignation for Good Reason, you will receive, in exchange
for a full and complete release of, and covenant not to sue
with respect to, any claims or causes of action you may have
against the Company, its officers, directors, employees,
agents or affiliates, in the form prepared by counsel to the
Company and reasonably acceptable to you and your counsel, six
(6) months of then-current base salary. All as such terms are
defined in Appendix A.
REVIEW Your base salary will be reviewed annually as part of the
Company's salary review process. However, nothing in this
provision changes the at-will nature of the employment
relationship.
BENEFITS The Company will provide you and your eligible dependents with
generous Medical, Dental, and Vision benefits. You will also
receive Short-term Disability, Long-term Disability, and Life
Insurance. In addition, the Company offers employees the
opportunity to participate in its Flexible Spending Account,
Employee Assistance Program, 401(k) Plan, and Employee Stock
Purchase Plan. A complete overview of benefits will be
presented to you at a future date.
PAID TIME OFF You will receive 18 paid days off per year for the first four
complete years of service, which will be available from the
first day of your employment. Additional Paid Time Off will
accrue at the rate of 6 hours per pay period, or 12 hours per
month. You will also be entitled to standard Company holidays.
STOCK OPTIONS In connection with the commencement of your employment, the
Company will recommend that the Employee Stock Compensation
Committee and/or Board Compensation Committee grant you an
option to purchase 700,000 shares of the Company's Common
Stock ("Shares") with an exercise price equal to the closing
price of Critical Path's stock on the last trading day prior
to the date of Grant. These Shares will vest over four years
with 1/48th of the original grant vesting monthly Vesting
will, of course, depend on your continued employment with the
Company. These Shares will be subject to the terms of the
applicable Company Stock Option Plan and the Stock Option
Agreement between you and the Company. You shall be entitled
to a one year exercise period should your employment terminate
by reason of your death or disability, or involuntarily
without Cause or for Good Reason. Otherwise the exercise
period shall be ninety (90) days.
In the event of a Change of Control of the Company, any
unvested Shares originally granted will vest immediately
should your employment be terminated without Cause or if you
terminate your employment for Good Reason, each such event
occurring within twelve (12) months of such Change of Control,
all as such terms are defined in Appendix A.
PROOF OF RIGHT TO WORK
For purposes of federal immigration law, you will be required
to provide to the Company documentary evidence of your
identity and eligibility for employment in the United States.
A list of acceptable documents is available for your
reference. Please have your identity and employment
eligibility document(s) with you for your new hire
orientation.
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
Your acceptance of this offer and commencement of employment
with the Company is contingent upon the execution and
submission of the Company's Proprietary Information and
Inventions Agreement ("Proprietary Agreement"), a copy of
which has been provided to you with this offer letter.
AT-WILL EMPLOYMENT
Notwithstanding the Company's obligation described herein,
your employment with the Company will be on an "at-will"
basis, meaning that either you or the Company may
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terminate your employment at any time for any reason or no
reason, without further obligation or liability other than as
specifically set forth herein.
DISPUTE RESOLUTION PROCEDURE
You and the Company ("the parties") agree that any dispute
arising out of or related to the employment relationship
between them, including the termination of that relationship
and any allegations of unfair or discriminatory treatment
arising under state or federal law or otherwise, that cannot
be resolved through the Company's informal grievance
procedure, shall be resolved by final and binding arbitration
in San Francisco, California, except where the law
specifically forbids the use of arbitration as a final and
binding remedy. The following dispute resolution shall apply:
(a) The complainant shall provide the other party with a
written statement of the claim identifying any
supporting witnesses or documents and the requested
relief.
(b) The respondent shall furnish a statement of the relief,
if any, that it is willing to provide, and identify
supporting witnesses or documents. If the matter is not
resolved, the parties shall submit the dispute to
nonbinding mediation, paid for by the Company, before a
mediator to be selected by the parties.
(c) If the matter is not resolved through mediation, the
parties agree that the dispute shall be resolved by
binding arbitration. If the parties are unable to
jointly select an arbitrator, they will obtain a list of
arbitrators in San Francisco County, California, from
the Federal Mediation and Conciliation Service and
select an arbitrator by striking names from that list.
(d) The arbitrator shall have the authority to determine
whether the conduct complained of in section (a) of this
section violates the complainant's rights and, if so, to
grant any relief authorized by law; subject to the
exclusions of section (g) below. The arbitrator shall
not have the authority to modify, change, or refuse to
enforce the terms of any employment agreement between
the parties, or change any lawful policy or benefit
plan.
(e) The Company shall bear the costs of the arbitration if
you prevail. If the Company prevails, you will pay half
the cost of the arbitration or $500, whichever is less.
Each party shall pay its own attorney's fees, unless the
arbitrator orders otherwise pursuant to applicable law.
(f) ARBITRATION SHALL BE THE EXCLUSIVE FINAL REMEDY FOR ANY
DISPUTE BETWEEN THE PARTIES, SUCH AS DISPUTES INVOLVING
CLAIMS FOR DISCRIMINATION OR HARASSMENT (SUCH AS CLAIMS
UNDER THE FAIR EMPLOYMENT AND HOUSING ACT, TITLE VII OF
THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH
DISABILITIES ACT, OR THE AGE DISCRIMINATION IN
EMPLOYMENT ACT), WRONGFUL TERMINATION, BREACH OF
CONTRACT, BREACH OF PUBLIC POLICY, PHYSICAL OR MENTAL
HARM OR DISTRESS, OR ANY OTHER DISPUTES, AND THE PARTIES
AGREE THAT NO DISPUTE SHALL BE SUBMITTED TO ARBITRATION
WHERE THE COMPLAINANT HAS NOT COMPLIED WITH THE
PRELIMINARY STEPS PROVIDED FOR IN SECTIONS (a) AND (b)
ABOVE.
(g) The parties agree that the arbitration award shall be
enforceable in any court having jurisdiction to enforce
this agreement, so long as the arbitrator's findings of
fact are supported by substantial evidence on the whole
and the arbitrator has not made errors of law; however,
either party may bring an action in a court of competent
jurisdiction regarding or related to inventions that you
may claim to have developed prior to joining the
Company, pursuant to California Labor Code Section 2870
("Disputes Related to Inventions"). The parties further
agree that for Disputes Related to Inventions which the
parties have elected to submit to arbitration, each
party retains the right to seek preliminary injunctive
relief in court in order to preserve the status quo or
prevent irreparable injury before the matter can be
heard in arbitration.
Critical Path, Inc.
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OFFER CONDITIONS
This offer is null and void if not accepted or declined by
close of business on or before November 8, 2002. This offer is
also contingent upon receiving your completed employment
application and the successful results of our independent
verification of your application. We are delighted to be able
to extend you this offer and look forward to working with you.
To indicate your acceptance of the Company's offer, please
sign and date this letter in the space provided below and
return it to the Human Resources department (if by fax, then
to 415.541.2301), along with a signed and dated copy of the
Proprietary Agreement. This letter, together with the
Proprietary Agreement, constitute the full, complete, and
exclusive agreement between you and the Company regarding the
matters herein and supersedes any prior representations or
agreements, whether written or oral. This letter may not be
modified or amended except by a written agreement, signed by
the Company and by you.
ACCEPTED AND AGREED: CRITICAL PATH, INC.
Name: Patrick Tracy Currie By: /s/William E. McGalshan
-------------------------------
William E. McGlashan, Jr.
Chief Executive Officer and
Signed: /s/ Patrick Tracy Currie Chairman of the Board of
----------------------------- Directors
Date:________________________________
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Appendix A
APPENDIX A
"Change of Control" shall mean the consummation of one of the following: (i) the
acquisition of 50% or more of the outstanding stock of the Company pursuant to a
tender or exchange offer validly made under any federal or state law (other than
a tender offer by the Company) or other share acquisition transaction; (ii) a
merger, consolidation or other reorganization of the Company (other than a
reincorporation of the Company), if after giving effect to such merger,
consolidation or other reorganization of the Company, the shareholders of the
Company immediately prior to such merger, consolidation or other reorganization
do not represent a majority in interest of the holders of voting securities (on
a fully diluted basis) with the ordinary voting power to elect directors of the
surviving entity after such merger, consolidation or other reorganization; (iii)
the sale of all or substantially all of the assets of the Company to a third
party who is not an affiliate of the Company.
"Cause" shall mean (i) failure or refusal to perform a lawful directive of the
Board of Directors of the Company that is consistent with your duties and
responsibilities as set forth in paragraph 1 hereof (provided, that the Company
provides to you written notice specifying the nature of such failure or refusal
and the actions needed to be taken by you to cure the same and such failure or
refusal is not cured by you within thirty (30) days of receipt of such notice),
(ii) you shall have been determined by a majority vote of the entire Board of
Directors to be guilty of willful misconduct or be in material violation of your
fiduciary obligations to the Company (provided, that the Company provides to you
written notice specifying the nature of such breach and actions needed to be
taken by you to cure same and such breach is not cured by you within ten (10)
days of receipt of such notice), (iii) you perform your duties in a grossly
negligent manner, or (iv) are convicted of any crime that has a material adverse
impact on (A) your ability to perform your duties hereunder, (B) the Company or
(C) the Company's business.
"Good Reason" shall be deemed to occur if there is (a)(1) a material adverse
change in employee's position causing such position to be of significantly less
stature or of significantly less responsibility, (2) a material adverse change
in title, (3) employee no longer reports to the Chief Executive Officer, (4) a
material material reduction of employee's base salary (5) a material change in
your bonus structure or bonus targets such that your total potential
compensation will necessarily be materially reduced, (6) employee receives a
written request of the Board of Directors to relocate from the Denver
Metropolitan area, and employee's refusal to relocate; and (b) within the sixty
(60) day period immediately following any of the foregoing events employee
elects to terminate his employment voluntarily.
Critical Path, Inc.
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Exhibit B
2003 BONUS PLAN
This Plan Covers Calendar 2003 only. Any bonus payable for revenue generated in
2004 shall be subject to a new plan to be negotiated.
Definitions:
- Hosted Services: Business units that include world wide hosted
messaging, Supernews and worldwide product service and support of
hosted messaging.
- Baseline Revenue: Monthly recognized revenue in Hosted Services for
October 2002. Baseline Revenue will be adjusted pro-rata in event of a
sale or discontinuation of a portion of Hosted Services (e.g. Supernews
or CPP).
- Exit Run Rate Revenue: Hosted Services revenue recognized in the last
month of a quarterly reporting period (March, June, September and
December) in Hosted Services, as reported by CP Finance.
- Salary: Base salary as described above, subject to review in December
of each year.
- Recurring Revenue Target: = $625,000.
- Incremental Revenue: Exit Run Rate Revenue less Baseline Revenue
Tier One Bonus
- Quarterly Calculation: Tier One Bonus = [Salary * (Incremental Revenue
/Recurring Revenue Target)] less all previous quarters Tier One Bonus
payment amounts.
- Timing and Payments: Critical Path will calculate the Tier One Bonus at
the end of each calendar quarter. Critical Path will pay you the
Quarterly Calculation as your quarterly Tier One Bonus payment, payable
in the month directly following such calendar quarter; provided that
for Q1 2003, Critical Path will pay you the greater of: 1) the
Quarterly Calculation or 2) 20% of your annual Salary. The Tier One
Bonus will not exceed 100% of Salary. All Tier One Bonus payments
(including the 20% minimum) will be adjusted for year end actual
results against Target with the January 2004 payment.
- In the event you are terminated other than for Cause at any time or you
resign for Good Reason, then you shall be paid for the period you were
employed but not yet bonus compensated by applying the Quarterly
Calculation using the Exit Run Rate Revenue for the last full month of
employment. The resulting Tier One Bonus amount shall be prorated to
the number of business days actually employed during the related
period.
Tier Two Bonus
- Quarterly Calculation: Tier Two Bonus = [(Exit Run Rate Revenue for
current quarter less Baseline Revenue less Recurring Revenue Target) *
0.067 * 12)] less all previous quarters Tier Two Bonus payment amounts.
- Timing and Payment: Critical Path will calculate the Tier Two Bonus at
the end of each calendar quarter. Critical Path will pay all amounts
due to you from the Tier Two Bonus in the month directly following such
calendar quarter.
- In the event you are terminated other than for Cause or you resign for
Good Reason, then you shall be paid for the period you were employed
but not yet bonus compensated by applying the Quarterly Calculation
using the Exit Run Rate Revenue for the last full month of employment.
The resulting Tier Two Bonus amount shall be prorated to the number of
business days actually employed during the related period.
Critical Path, Inc.
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