Sample Business Contracts

Employment Agreement - Critical Path Inc. and Pierre Van Beneden

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                              EMPLOYMENT AGREEMENT

               This Employment Agreement (the "Agreement") is entered into
effective as of October 8, 2001 between Critical Path ("Critical Path" or the
"Company") Pierre Van Beneden ("Van Beneden") (or collectively referred to as
the "Parties"). The Company desires to employ Van Beneden to have the benefits
of his expertise and knowledge. Van Beneden, in turn, desires employment with
the Company. The Parties, therefore, enter into this Agreement to establish the
terms and conditions of Van Beneden's employment with the Company.

               In consideration of the mutual covenants and representations
contained in this Agreement, the Company and Van Beneden agree as follows:

        1.     EMPLOYMENT OF VAN BENEDEN; DUTIES. The Company agrees to employ
Van Beneden, and Van Beneden agrees to be employed by the Company, as the
President of the Company, reporting to the Chief Executive Officer. Van Beneden
will commence his employment prior to November 1, 2001. Van Beneden's key duties
will include oversight and responsibility for all areas of the company's
business directly or indirectly involved in revenue production including,
without limitation, sales, marketing, customer service, professional services
and such other duties as the Company shall determine from time to time. Van
Beneden will be required to use his specialized expertise, independent judgment
and discretion in executing his job duties. Van Beneden shall devote any and all
time, interest and efforts reasonably necessary to the fulfillment of his duties
and responsibilities under this Agreement. The Company understands that Van
Beneden will reside and work out of Paris, France, although Van Beneden will
travel to the United States to the extent necessary to carry out his duties
(which is presently anticipated to be one week per month).

               Van Beneden is required to follow office policies and procedures
adopted from time to time by the Company and to take such general direction
consistent with his position within the Company as he may be given from time to
time from the Chief Executive Officer. The Company reserves the right to change
these policies and procedures at any time upon reasonable notice. The Company
also reserves the right to change Van Beneden's job duties, responsibilities and
reporting relationships with the reasonable consent of Van Beneden at any time
upon reasonable notice, based on the needs of the Company and Van Beneden's
expertise and skills.

Van Beneden represents to the Company that he has no other outstanding
commitments inconsistent with any of the terms of this Agreement or the services
to be provided in accordance with this Agreement. In addition, while employed
with the Company, Van Beneden shall not, whether for compensation or otherwise,
directly or indirectly perform any services or acts for any person or entity who
is in competition with any business, services or products being offered for sale
or produced by the Company. While employed by the Company, Van Beneden shall not
own an interest in, participate in or be connected as an officer, employee,
agent, independent contractor, partner, shareholder or principal, of any
corporation, partnership, proprietorship, firm, association, person, or other
entity that directly or indirectly compete with the services and


business of Company, provided, however, that Van Beneden may hold shares of
stock in a publicly traded company (or options to purchase such shares, provided
such options were issued prior to the date of this Agreement) so long as such
shares held by (including shares issuable to Van Beneden upon the exercise of
such options) do not exceed 1% of the outstanding shares of such company. The
Company understands that Van Beneden intends, on his own time, to translate a
book he has written in French into English, and that Van Beneden will receive
revenues therefrom.

               2.     COMPENSATION

               (a)    BASE SALARY. The Company shall pay Van Beneden at the
initial rate of Four Hundred Fifty Thousand Dollars ($450,000.00) per year, to
be paid twice per month. The Company shall have the right, to the fullest extent
permitted by law, to withhold from any payment of any kind due to Van Beneden
under this Agreement to satisfy the tax withholding obligations of the Company
under applicable law.

               (b)    BONUS COMPENSATION. Van Beneden will be eligible for bonus
compensation for his first year of employment in the amount of One Hundred Fifty
Thousand Dollars ($150,000.00) per quarter if the Company attains an EBITDA
target for each such quarter, to be set by the Company within 30 days of the
commencement of Van Beneden's employment. The EBITDA target shall be established
by the Chief Executive Officer and shall be mutually acceptable to Van Beneden.
Such bonus will be paid out as soon as practicable following the filing of the
10-K or 10-Q which indicates such EBITDA goal has been attained. In the event of
a change in control of the Company prior to termination of the period fixed to
measure EBITDA for purposes of calculating Van Beneden's bonus, Van Beneden will
be paid the full bonus amount. In the event that Van Beneden is terminated
without cause prior to termination of the period fixed to measure EBITDA for
purposes of calculating Van Beneden's bonus, Van Beneden will be paid a pro-rata
share of the bonus to which Van Beneden would have been entitled had he been
employed for all of such period.

               (c)    EQUITY COMPENSATION. Van Beneden will be granted an option
to purchase 2,000,000 shares of the Company's Common Stock on the date his
employment commences in accordance with the terms of the form of Stock Option
Agreement attached hereto (except as modified by this Agreement). Except as
provided below and in Section 5, the shares will have an exercise price equal to
the closing price of the Company's Common Stock on the date of option grant (or,
if such date is not a trading day, as of the most recently ended trading day)
and will vest in equal monthly installments over the three years following the
execution of this Agreement. In the event Van Beneden is terminated without
cause at any time, or if Van Beneden has not been offered the position of CEO,
at the time of his one-year anniversary, an additional 333,333 (equal to six
months vesting) shall immediately become vested and exercisable.

               (d)    EMPLOYEE BENEFITS.

                      (i)    Van Beneden will be entitled to participate in the
same employee benefits plans generally available to the Company's other
executive and managerial employees,


subject to the terms of the applicable plans, including: (a) all health
insurance benefits provided to Van Beneden and all other benefits applicable to
the Company's exempt employees; (b) paid vacation in accordance with the
Company's policies and procedures in effect with respect to the Company's other
senior officers (for which the days selected for Van Beneden's vacation shall be
scheduled at a mutually agreeable time for the Company and Van Beneden); and (c)
eligibility to participate in any profit sharing or other retirement plan
maintained by the Company for its executive employees. These benefits may change
from time to time. Van Beneden will be covered by workers' compensation
insurance and State Disability Insurance, as required by California state law.

                      (i)    The Company shall maintain its present director and
officer insurance policy during the term of Van Beneden's employment, which
shall cover Van Beneden to the same extent as the Company's other executive

               (b)    LOAN.

               The Company will provide Van Beneden with a signing bonus of
$350,000 in the form of a loan which shall be interest-free for a period of one
year, or until Van Beneden leaves the Company voluntarily or is terminated for
cause, whichever occurs first. The loan will be forgiven in the amount of
$29,166.67 per month during the first year of Van Beneden's employment, subject
to the following: (1) If Van Beneden has been terminated for cause during the
first year of his employment, the entire principal balance plus interest at the
prime rate calculated from the date of the loan shall be due and payable in full
upon Van Beneden's termination; (2) If Van Beneden has resigned during the first
six (6) months of his employment, the entire principal balance plus interest at
the prime rate calculated from the date of the loan shall be due and payable in
full within ninety (90) days of Van Beneden's last day of employment; and (3) If
Van Beneden has resigned after the first six (6) months of his employment, the
remaining, not yet forgiven principal balance of the loan shall be repayable in
full within ninety (90) days of Van Beneden's last day of employment. In the
event of a Change in Control (as defined herein), the loan will be completely
forgiven. Van Beneden agrees to execute a promissory note reflecting these terms
in the form of Exhibit A.

               (c)    INDEMNIFICATION BY THE COMPANY. The Company and Van
Beneden will execute the indemnification agreement in the form of Exhibit B.

               (d)    CHANGES IN COMPENSATION. The Company expects to consider
Van Beneden for the position of Chief Executive Officer within the twelve months
following execution of this Agreement. In the event that he is offered the
position of Chief Executive Officer, his future compensation will be determined
by subsequent agreement of the parties. If he remains in his current position,
his base salary may be changed from time to time on reasonable notice provided,
that the base salary may not be reduced below the amount set forth on Section
2(a) unless it is proportionately reduced pursuant to a reduction made
applicable to all of the Company's executive officers.


               (e)    APARTMENT; AUTOMOBILE. The Company will, at its expense,
rent an apartment for Van Beneden in San Francisco, and will rent an automobile
for Van Beneden in Paris, France.

INFORMATION. Van Beneden will be required to execute the Company's Standard
Confidentiality Agreement ("the Confidentiality Agreement") in the form of
Exhibit C. Van Beneden represents and warrants to the Company that the
performance of his duties will not violate any agreements with or trade secrets
of any other person or entity.

        3.     IMMIGRATION DOCUMENTATION. Van Beneden's employment is contingent
on his ability to prove identity and authorization to work in the U.S. for the
Company. Van Beneden must comply with the Immigration and Naturalization
Service's employment verification requirements requested by the Company.

        4.     TERMINATION.

               (a)    AT-WILL EMPLOYMENT. Van Beneden's employment pursuant to
this Agreement is "at-will." As such, either the Company or Van Beneden shall
have right to terminate Van Beneden's employment under this Agreement at any
time, for any reason, with or without notice.

               (b)    SEVERANCE. Upon termination without Cause or if Van
Beneden elects to resign after a Change of Control, Van Beneden will be offered,
in exchange for executing a release in the form of Exhibit D (the "RELEASE"),
and does not withdraw or rescind such Release during any period that he is
permitted to do so by law, severance as follows:

                      (i)    Upon termination without Cause or if Van Beneden
elects to resign after a Change in Control, Van Beneden will be offered nine (9)
months of then-current base salary plus nine (9) months' continuation of
then-current benefits from the Company.

                      (ii)   Upon a Change in Control, the vesting of the stock
options provided for in paragraph 2(c) shall be fully accelerated.

                      (iii)  "Change of Control" shall mean the consummation of
one of the following:

               The acquisition by a person of beneficial ownership (within the
meaning of Rule13d-3 of the Securities Exchange Act of 1934, as amended to
date); of 50% or more of the outstanding stock of the Company;

               A merger, reverse 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, reverse 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 or resulting
entity after such merger, consolidation or other reorganization;

               The sale of all or substantially all of the assets of the Company
to a third party who immediately prior to such sale did not have at least 50% of
its voting securities directly or indirectly owned by the Company; or

               The dissolution of the Company pursuant to action validly taken
by the stockholders of the Company in accordance with applicable state law.

                      (iv)   "Cause" shall mean (a) fraud, (b) conviction of a
felony; (c) an act by Van Beneden which constitutes gross misconduct; (d)
material breach by Van Beneden of his obligations under Section 3 of this
Agreement; or (e) Van Beneden's material breach of the Company's Confidentiality
Agreement, including without limitation, Van Beneden's theft or other
misappropriation of the Company's proprietary information.

Upon termination of this Agreement by either party, Van Beneden shall cooperate
fully with Company in providing an orderly transition of all Van Beneden's
pending work. Upon the mutual agreement of the Parties, Van Beneden also may
provide such full-time or part-time services as Company may reasonably require
during all or any part of the period following any notice of termination given
by either party.


               (a)    NONSOLICITATION OF CLIENTS. Van Beneden agrees all
customers or clients of the Company for which Van Beneden provides services
during Van Beneden's employment are solely the clients of the Company and not of
Van Beneden. Van Beneden agrees that both while employed and for a period of one
(1) year after the termination of this Agreement for any reason, Van Beneden
shall not, on behalf of a direct competitor in the messaging market either
directly or indirectly, solicit business, as to products or services competitive
with those of the Company, from any of the Company's clients or prospective

               (b)    NONSOLICITATION OF EMPLOYEES. Van Beneden agrees the
Company has invested substantial time and effort and resources in assembling,
training and managing its present staff of personnel, which constitutes a
significant asset of the Company. Accordingly, Van Beneden agrees that both
while employed and for a period of one (1) year after the termination of this
Agreement for any reason, Van Beneden will not directly or indirectly induce or
solicit or encourage any of the Company's employees to leave their employment
with the Company, provided that such restrictions shall not apply to newspaper
or similar advertisements.

               (c)    CONFIDENTIALITY. Van Beneden understands and agrees that
because of his position with the Company, comments by him concerning the
Company, its plans, its prospects, its personnel or any other aspect of the
Company's past or future performance could be understood as being based on
substantial information not available to the public. Accordingly, Van Beneden
agrees not to comment on such aspects of the Company after leaving the Company


except that he may describe his accomplishments at the Company to prospective
employers for the purpose of establishing his credentials.

        6.     NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to Van Beneden at the last address he has filed in
writing with the Company or, in the case of the Company, to the General Counsel
at the Company's principal executive offices.

        7.     BINDING AGREEMENT. This Agreement shall be binding upon Van
Beneden and the Company on and after the date of this Agreement. The rights and
obligations of the Company under this Agreement shall inure to the benefit of
the Company and any successor of the Company. The Company may assign this
Agreement to any subsidiary, parent or affiliate, without the consent of Van
Beneden (provided that such entity is at least as credit-worthy as the Company,
or the Company guarantees the full performance of this Agreement), and such
assignment shall not, in and of itself, constitute a termination of employment
under this Agreement.

        8.     INTEGRATION. This Agreement constitutes the entire understanding
of Van Beneden and the Company with respect to the subject matter herein and
supersedes and voids any and all prior agreements, understandings, promises or
representations, written or oral, regarding the subject matter hereof. This
Agreement may not be changed, modified, or discharged orally, but only by an
instrument in writing signed by the Parties.

        9.     CONSTRUCTION. Each party has reviewed this Agreement. Therefore
the normal rule of construction that any ambiguity or uncertainty in any writing
shall be interpreted against the party drafting the writing shall not apply to
any action on this Agreement.

        10.    GOVERNING LAW. This Agreement shall be governed by the laws of
the State of California, and the invalidity or unenforceability of any
provisions hereof shall in no way affect the validity or enforceability of any
other provision.

        11.    SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable by any court of competent jurisdiction will immediately become
null and void, leaving the remainder of this Agreement in full force and effect.
Any such prohibition or unenforceability in any court of competent jurisdiction
shall not invalidate or render unenforceable such provision in any other

        12.    DISPUTE RESOLUTION. The Parties agree that any future
controversy, claim or dispute arising out of or related to Van Beneden's
employment or the termination of his employment shall be resolved as follows,
except where the law specifically forbids the use of arbitration as a final and
binding remedy, or where Section 13(g) below specifically allows a different

               (a)    The claiming party shall furnish to the other written
statement of the actions complained of, and shall identify witnesses and
documents that support the claim and the relief requested.


               (b)    The responding party shall specify the relief, if any,
that it is willing to provide and shall identify the witnesses and documents
that support its position.

               (c)    If the Parties are unable to jointly select an arbitrator,
they will obtain a list 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 paragraph (a) violates the complainant's
rights and, if so, to grant any relief authorized by law; subject to the
exclusions of Section 13(g) below. The arbitrator shall not have the authority
to modify, change, or refuse to enforce the lawful terms of this Employment

               (e)    The Company shall bear the costs of the arbitration,
except that Van Beneden may be required to pay costs to the same extent as in a
civil action filed in the court of general jurisdiction in the State of
California. Each party shall pay its own attorneys' fees, unless the arbitrator
orders otherwise, pursuant to applicable law.

               (f)    Arbitration shall be the exclusive final remedy for any
dispute between the Parties including but not limited to any disputes or 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.

               (g)    Notwithstanding the arbitration provisions set forth
herein, the Parties reserve their right to seek an injunction or other equitable
relief from a court with applicable authority in order to prevent irreparable
injury or to preserve the status quo.

               (h)    The arbitrator shall issue a written arbitration decision
stating the arbitrator's essential findings and conclusions upon which any award
is based. A party's right to review of the decision is limited to the grounds
provided under applicable law. The Parties agree that the arbitration award
shall be enforceable in any court having jurisdiction to enforce this Agreement.

        13.    COUNSEL FEES. The Company shall pay for Van Beneden's legal and
immigration fees in connection with entering into this Agreement and becoming an
employee of the Company.

               IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement as of the date first above written.

                                        CRITICAL PATH

Dated:                                  By:       /s/William McGlahsan
       ------------------------             ----------------------------------


                                                     WILLIAM McGLASHAN

                                                     PIERRE Van Beneden

Dated:                                  By:      /s/ Pierre Van Beneden
       ------------------------             ----------------------------------
                                                     Pierre Van Beneden