Exhibit 10.6
CRITICAL PATH, INC.
AMENDED AND RESTATED 1998 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Critical Path, Inc., a California corporation (the "Company"), granted an Option
on May 8, 2002 to purchase shares of its common stock (the "Shares") to the
Optionee named below. The terms and conditions of that Option grant are set
forth in this cover sheet, the attachment, the Company's 1998 Stock Option Plan
(the "Plan") and in the Optionee's employment agreement with the Company dated
August 1, 2001 as may be amended and in effect from time to time.
Date of Option Grant: May 8, 2002
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Name of Optionee: Xxxxxxx XxXxxxxxx, Xx.
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Optionee's Social Security Number:
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Number of Shares Covered by Option: 1,000,000
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Exercise Price per Share: $1.74
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Vesting Start Date: May 8, 2002
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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/ Xxxxxxx XxXxxxxxx
______________________________________________________________________
(Signature)
Company: ______________________________________________________________________
(Signature)
Title: ________________________________________
Attachment
CRITICAL PATH, INC.
AMENDED AND RESTATED 1998 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
NONSTATUTORY STOCK This option is not intended to be an incentive stock
OPTION option under section 422 of the Internal Revenue Code
and will be interpreted accordingly.
VESTING The option is immediately exercisable. The Shares
under this option will vest in accordance with the
vesting schedule indicated below:
NUMBER OF OPTIONS VESTING EVENT
1,000,000 Vesting in one-third of the Shares under this option
on the first anniversary of the Vesting Start Date
listed on the cover sheet to this Agreement and
vesting thereafter in equal quarterly installments
from the first anniversary of the Vesting Start Date
for a period of two (2) years subject to continued
employment with the Company during that period and all
other terms and conditions as described herein. Shares
that are not yet vested under this Agreement are
referred to as Restricted Shares.
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 or upon a termination for Cause (as such
terms are defined in your employment agreement with
the Company).
Repurchase Right If your employment and service as a Company director
both terminate for any reason, then your Shares will
be automatically repurchased by the Company to the
extent that they have not vested before the
termination date and do not vest as a result of the
termination. This means that the Restricted Shares
will immediately revert to the Company. You will
receive a payment for Restricted Shares that are
repurchased equal to the price you paid per share.
The Company determines when your employment or service
terminates for purposes of computing your vested
Shares and the date of repurchase.
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In the event of a Change in Control of the Company,
100% of your then-unvested Option Shares (meaning 100%
of your unvested Option Shares that are otherwise
scheduled to vest 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.
For purposes of this Agreement, a "Change in Control"
of the Company shall be defined as the occurrence of
any one of the following:
(i) the consummation of a merger or consolidation
of the Company with or into another entity or
any other corporate reorganization, if more
than 50% of the combined voting power of the
continuing or surviving entity's securities
outstanding immediately after such merger,
consolidation or other reorganization is
owned by persons who were not shareholders of
the Company immediately prior to such merger,
consolidation or other reorganization;
(ii) the sale, transfer or other disposition of
all or substantially all of the Company's
assets;
(iii) the dissolution, liquidation or winding up of
the Company;
(iv) any transaction as a result of which any
person is the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange
Act of 1934), directly or indirectly, of
securities of the Company representing at
least 20% of the total voting power
represented by the Company's then outstanding
voting securities.
For purposes of this section, the term "person" shall
have the same meaning as when used in sections 13(d)
and 14(d) of the Securities Exchange Act but shall
exclude: (A) trustee or other fiduciary holding
securities under an employee benefit plan of the
Company or a subsidiary of the Company; (B) a
corporation owned directly or indirectly by the
shareholders of the Company in substantially the same
proportions as their ownership of the common stock of
the Company; and (C) the Company.
A transaction shall not constitute a Change in Control
if its sole purpose is to change the state of the
Company's incorporation or to create a holding company
that will be owned in substantially the same
proportions by the persons who held the Company's
securities immediately before such transactions.
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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 in this Agreement.
REGULAR If your employment and your service as a Company
TERMINATION 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 and any unvested, exercised Shares
shall revert to the Company pursuant to its repurchase
right.
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.
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RESTRICTIONS ON The Company will not permit you to exercise this
EXERCISE 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. 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 vested Shares and to deliver all or part of
the sale proceeds to the Company in payment of the
aggregate Exercise Price.
- By delivery (on a form prescribed by the Committee)
of your full-recourse promissory 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 By signing this Agreement, you agree not to sell any
ON RESALE 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
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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.
STOCK CERTIFICATES Your Restricted Shares will be held for you by the
Company. After shares have vested, a stock certificate
for those shares will be released to you.
83(b) ELECTION The acquisition of the Shares may result in adverse
tax consequences that may be avoided or mitigated by
filing an election under Code Section 83(b). Such
election may be filed only within 30 days after the
date of purchase. The form for making the
Section 83(b) election is attached. YOU SHOULD
CONSULT WITH YOUR TAX ADVISOR TO DETERMINE THE TAX
CONSEQUENCES OF ACQUIRING THE SHARES AND THE
ADVANTAGES AND DISADVANTAGES OF FILING THE
Section 83(b) ELECTION. YOU ACKNOWLEDGE THAT IT IS
YOUR SOLE RESPONSIBILITY TO FILE A TIMELY ELECTION
UNDER SECTION 83(b).
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 does 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.
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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.
FORFEITURE If, at any time within one year after termination of
employment, you engage in either of the following:
(i) your commission of a felony 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; or (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; 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.
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THE PLAN AND OTHER The text of the Plan and your employment agreement are
AGREEMENTS incorporated in this Agreement by reference. Certain
capitalized terms used in this Agreement are defined
in the Plan or your employment agreement.
This Agreement, the Plan and your employment agreement
with the Company dated August 1, 2001, as may be
amended and in effect from time to time, 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 AND THIS AGREEMENT.
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