EXHIBIT 10.48
[CRITICAL PATH LOGO]
February 4, 2004
Mr. James Clark
3075 Welwyn Place
Walnut Creek, CA 94598
Dear Jim,
On behalf of Critical Path, Inc. (the "Company"), I am pleased to offer you the
position of Executive Vice President, Chief Financial Officer. 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 an Executive Vice President, Chief Financial
Officer for the Company, reporting to William E. McGlashan,
Jr., Chief Executive Officer, working out of the Company's
offices in San Francisco, CA, or from your home office. This
is an 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 all of
your business time and attention to the business of the
Company.
START DATE Subject to fulfillment of any conditions imposed by this
letter agreement, you will commence this new position with the
Company on a date to be determined. Kim Trask of our Human
Resources Department will contact you regarding your new hire
orientation.
COMPENSATION Your base salary will be $250,000.00 on an annualized basis.
Your salary will be payable in two equal payments per month
pursuant to the Company's regular payroll practices. Your base
salary will be increased to $300,000.00 once the Company is
EBITDA profitable.
BONUS You will be eligible to participate in the 2004 Critical Path
Bonus Plan, once finalized and approved by our Board of
Directors, at 30% of base salary, on a prorated basis based on
your date of hire.
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 offers you and your eligible dependents 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
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Employee Stock Purchase Plan. A complete overview of benefits
will be presented to you on or around your date of hire.
PAID TIME OFF Members of the executive staff are not eligible to accrue
Paid Time Off (PTO). You should schedule time off for the year
based on your tenure with the Company and the number of days
allowed per year according to our policy, a copy of which will
be given to you at orientation. If you should leave the
Company for any reason, you will not receive any PTO payout on
your final paycheck.
STOCK OPTIONS In connection with the commencement of your employment, the
Company will recommend that the Board Compensation Committee
grant you an option to purchase 350,000 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 12.5% vesting on your six-month
anniversary with the Company, and 1/48th of the original grant
amount vesting monthly thereafter. 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.
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 six (6) months of such Change of Control, all
as such terms are defined in Appendix A.
SEVERANCE To the extent you are terminated for any reason without Cause
(as defined on Appendix A), you will receive, upon
termination, a severance payment equal to six (6) months base
salary.
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 terminate
your employment at any time for any reason or no reason,
without further obligation or liability.
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.
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(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.
OFFER CONDITIONS
This offer is null and void if not accepted or declined by
close of business on February 2, 2004. This offer is also
contingent upon receiving your completed employment
application and the successful results of our independent
verification of your application and reference checks.
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 Donna Spinola in
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
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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: James Clark By: /s/ William E. McGlashan, Jr.
------------------------------------
William E. McGlashan, Jr.
Chairman and Chief Executive Officer
Signed: /s/ James Clark
---------------------------
Date: February 4, 2004
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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
CEO or the Board of Directors of the Company that is consistent with your duties
and responsibilities as set forth in this Agreement, (ii) willful misconduct or
material violation of your fiduciary obligations to the Company , (iii) you
perform your duties in a grossly negligent manner, or (iv) you 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 your position causing such position to be of significantly less
stature or of significantly less responsibility, (2) a material adverse change
in title, (3) a material reduction of employee's base salary, or (4) a material
change in your bonus structure or bonus targets such that your total potential
compensation will necessarily be materially reduced; and (b) within the sixty
(60) day period immediately following any of the foregoing events employee
elects to terminate his employment voluntarily.
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