Nonstatutory Stock Option Agreement - Critical Path Inc. and Pierre Van Beneden
CRITICAL PATH, INC.
1999 NONSTATUTORY STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Critical Path, Inc., a California corporation (the "Company"), granted an Option
on October 8, 2001 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant, as amended
and restated, are set forth in this cover sheet, the attachment, the Company's
1999 Nonstatutory Stock Option Plan (the "Plan") and in the Optionee's
employment agreement with the Company dated October 8, 2001.
Date of Option Grant: October 8, 2001
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Name of Optionee: Pierre Van Beneden
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Optionee's Social Security Number or Taxpayer ID Number:
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Number of Shares Covered by Option: 2,000,000
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Exercise Price per Share: $1.13
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Vesting Start Date: October 8, 2001
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BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY OF WHICH
IS ALSO ENCLOSED.
Optionee: /s/ Pierre Van Beneden
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(Signature)
Company: /s/ William McGlashan
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(Signature)
Title: Interim Chief Executive Officer
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Attachment
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CRITICAL PATH, INC.
1999 NONSTATUTORY STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY STOCK OPTION This option is not intended to be an incentive
stock option under section 422 of the Internal
Revenue Code and will be interpreted
accordingly.
VESTING COMMENCEMENT DATE The Vesting Commencement Date on this option
shall be October 9, 2001. Shares under this
option will vest in accordance with the vesting
schedule indicated below:
NUMBER OF OPTIONS VESTING EVENT
2,000,000 Monthly vesting beginning on the Vesting
Commencement Date indicated above and continue
all shares subject to this option shall be
vested over the three (3) years following the
issuance of this option.
In the event your employment is terminated
without cause by the Company prior to the one
year anniversary of employment, or in the event
you have not been offered the position of Chief
Executive Officer.
<PAGE>
Your option vesting will cease in the event
that your employment and service as a Company
director both terminate for any reason. Your
option vesting will also cease upon your
voluntary resignation of employment upon a
termination for Cause (as such terms are
defined in your employment agreement with the
Company). A leave of absence, regardless of the
reason, shall be deemed to constitute the
cessation of your employment unless such leave
is authorized by the Company, and you return
within the time specified in such
authorization.
The Compensation Committee of the Board of
Directors must certify in writing that the
performance goals have been satisfied before
any Option vesting will be accelerated pursuant
to attainment of performance goals.
In the event of a Change in Control of the
Company, 50% of your then-unvested Options
(meaning 50% of your unvested Options that are
otherwise scheduled to vest under (ii), (iii)
and (iv) above on each vesting date had a
Change in Control not occurred) shall become
vested provided that you are employed by the
Company on the date the negotiations or
communications began (as determined by the
Board in good faith) which lead to the Change
in Control provided, however, that all of your
then-unvested Options shall become vested if
the Change in Control consideration received by
Company shareholders is at least $10.00 per
share (with such share price adjusted for any
future stock splits, stock dividends,
recapitalization, or similar events).
TERM Your option will expire in any event at the
close of business at Company headquarters on
the day before the 10th anniversary of the Date
of Grant, as shown on the cover sheet. It will
expire earlier if your employment and your
service as a Company director terminate, as
described below.
REGULAR TERMINATION If your employment and your service as a
Company director terminate for any reason
except Cause, death or Disability, then your
option will expire at the close of business at
Company headquarters on the 90th day after your
termination date.
CAUSE If your employment or service as a Company
director terminates on account of Cause, then
your option will expire immediately.
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DEATH In the event of your death during the period of
your employment or service as a Company
director, your option will expire at the close
of business at Company headquarters on the date
six months after the date of death. During that
six-month period, your estate or heirs may
exercise your option.
DISABILITY If your employment and service as a Company
director terminate because of your Disability,
then your option will expire at the close of
business at Company headquarters on the date
six months after your termination date.
"Disability" means that you are unable to
engage in any substantial gainful activity by
reason of any medically determinable physical
or mental impairment.
LEAVES OF ABSENCE For purposes of this option, your employment
does not terminate when you go on a bona fide
leave of absence, that was approved by the
Company in writing, if the terms of the leave
provide for continued service crediting, or
when continued service crediting is required by
applicable law. Your employment terminates in
any event when the approved leave ends if you
fail or refuse to return to active service.
Consistent with the terms of this Agreement and
your Employment Agreement, the Company
determines which leaves count for this purpose,
and when your employment terminates for all
purposes under the Plan.
RESTRICTIONS ON EXERCISE The Company will not permit you to exercise
this option if the issuance of Shares at that
time would violate any law or regulation.
NOTICE OF EXERCISE When you wish to exercise this option, you must
notify the Company by filing the proper "Notice
of Exercise" form at the address given on the
form. Your notice must specify how many Shares
you wish to purchase. Your notice must also
specify how your Shares should be registered
(in your name only or in your and your spouse's
names as community property or as joint tenants
with right of survivorship). The notice will be
effective when received by the Company.
If someone else wants to exercise this option
after your death, that person must prove to the
Company's satisfaction that he or she is
entitled to do so.
FORM OF PAYMENT When you submit your notice of exercise, you
must include payment of the option price for
the Shares you are purchasing.
<PAGE>
Payment may be made in one (or a combination)
of the following forms:
- Your personal check, a cashier's check or
a money order.
- By delivery (on a form prescribed by the
Committee) of an irrevocable direction to a
securities broker to sell Shares and to
deliver all or part of the sale proceeds to
the Company in payment of the aggregate
Exercise Price.
- Payment may be made all or in part with a
full recourse promissory note executed by
you. The interest rate and other terms and
conditions of such note shall be determined
in your employment agreement with the
Company. The Company will require that you
pledge your Shares to the Company for the
purpose of securing the payment of such
note.
WITHHOLDING TAXES You will not be allowed to exercise this option
unless you make acceptable arrangements to pay
any withholding or other taxes that may be due
as a result of the option exercise or the sale
of the Shares acquired upon exercise of this
option.
RESTRICTIONS ON RESALE By signing this Agreement, you agree not to
sell any option Shares at a time when
applicable laws or regulations or Company or
underwriter trading policies prohibit a sale.
You represent and agree that the Shares to be
acquired upon exercising this option will be
acquired for investment, and not with a view to
the sale or distribution thereof.
In the event that the sale of Shares under the
Plan is not registered under the Securities Act
but an exemption is available which requires an
investment representation or other
representation, you shall represent and agree
at the time of exercise to make such
representations as are deemed necessary or
appropriate by the Company and its counsel.
Prior to any Change in Control of the Company,
the shares acquired under this option can be
sold or transferred only pursuant to an SEC
Rule 10b5-1 trading plan that is pre-approved
by the Board of Director's Compensation
Committee.
<PAGE>
TRANSFER OF OPTION Prior to your death, only you may exercise this
option. You cannot transfer or assign this
option. For instance, you may not sell this
option or use it as security for a loan. If you
attempt to do any of these things, this option
will immediately become invalid. You may,
however, dispose of this option in your will.
Regardless of any marital property settlement
agreement, the Company is not obligated to
honor a notice of exercise from your spouse or
former spouse, nor is the Company obligated to
recognize such individual's interest in your
option in any other way.
NO RETENTION RIGHTS Your option or this Agreement do not give you
the right to be retained by the Company (or any
subsidiaries) in any capacity. The Company (and
any subsidiaries) reserves the right to
terminate your Service at any time and for any
reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights as
a shareholder of the Company until a
certificate for your option Shares has been
issued. No adjustments are made for dividends
or other rights if the applicable record date
occurs before your stock certificate is issued,
except as described in the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend
or a similar change in the Company stock, the
number of Shares covered by this option and the
exercise price per share may be adjusted
pursuant to the Plan. Your option shall be
subject to the terms of the agreement of
merger, liquidation or reorganization in the
event the Company is subject to such corporate
activity, except to the extent the foregoing
conflict with or are in any way inconsistent
with Section 8 of your employment agreement.
<PAGE>
FORFEITURE If, at any time within one year after
termination of employment, you engage in any of
the following: (i) your commission of a felony,
an act involving moral turpitude, or an act
constituting common law fraud, in each case
having a material adverse effect on the
business or affairs of the Company or its
affiliates or stockholders; (ii) your willful
or intentional breach of Company confidential
information obligations, in each case having a
material adverse effect on the business or
affairs of the Company or its affiliates or
stockholders; or (iii) your unreasonable
refusal to comply with lawful requests for
cooperation made by the Board of Directors,
then (1) this option shall terminate and be
forfeited effective the date on which you enter
into such activity, unless terminated or
forfeited sooner by operation of another term
or condition of this option or the Plan, (2)
any stock acquired by you pursuant to the
exercise of this option during the Forfeiture
Period (as defined below) shall be forfeited,
and (3) any gain realized by you from the sale
of stock acquired through the exercise of this
option during the Forfeiture Period shall be
paid by you to the Company. The "Forfeiture
Period" shall mean the period commencing six
months prior to your termination of employment
and ending one year from your termination of
employment.
RIGHT OF SET OFF By accepting this Agreement, you consent to a
deduction from any amounts the Company owes you
from time to time, to the extent of the amounts
you owe the Company under the paragraph above.
If the Company does not recover by means of
set-off the full amount you owe it, calculated
as set forth above, you agree to pay
immediately the unpaid balance to the Company
upon the Company's demand.
LEGENDS All certificates representing the Shares issued
upon exercise of this option shall have
endorsed thereon the applicable legends.
APPLICABLE LAW This Agreement will be interpreted and enforced
under the laws of the State of California.
THE PLAN AND OTHER AGREEMENTS The text of the Plan and your employment
agreement are incorporated in this Agreement by
reference. Certain capitalized terms used in
this Agreement are defined in the Plan or your
employment agreement.
<PAGE>
This Agreement, the Plan and your employment
agreement with the Company dated October 8,
2001 constitute the entire understanding
between you and the Company regarding this
option. Any prior agreements, commitments or
negotiations concerning this option are
superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE PLAN, EXCEPT TO THE EXTENT MODIFIED BY
YOUR EMPLOYMENT AGREEMENT WITH THE COMPANY.