EXHIBIT 10.9
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 November 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
1998 Stock Option Plan (the "Plan") and in the Optionee's employment agreement
with the Company dated August 13, 2001 as may be amended and in effect from time
to time.
Date of Option Grant: November 8, 2001
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Name of Optionee: Xxxxx Xxxxxx
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Optionee's Social Security Number:
Number of Shares Covered by Option: 2,710,000
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Exercise Price per Share: $1.13
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Vesting Start Date: November 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/ Xxxxx Xxxxxx
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(Signature)
Company: /s/ Xxxxxxx XxXxxxxxx
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(Signature)
Title: Interim Chief Executive Officer
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Attachment
CRITICAL PATH, INC.
AMENDED AND RESTATED 1998 STOCK 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 The Shares under this option will vest in
accordance with the vesting schedule indicated
below:
NUMBER OF OPTIONS VESTING EVENT
(i) 1,084,000 Vested upon date of option grant.
(ii) 542,000 Monthly vesting on a pro-rata basis between
January 1, 2001 and December 31, 2004 with
earlier full vesting if the daily closing sale
price of the Company (as reported by NASDAQ)
exceeds an average of $5.00 per share (or as
adjusted for any future stock splits, stock
dividends, recapitalization, or similar events)
for at least 22 consecutive trading days
provided this goal is completely achieved by
July 1, 2002.
(iii) 542,000 Monthly vesting on a pro-rata basis between
January 1, 2001 and December 31, 2004 with
earlier full vesting upon the retention of six
(6) months employment of the new CEO (as CEO)
who was hired by you pursuant to Section 3(a) in
your employment agreement with the Company.
(iv) 542,000 Vested on December 31, 2004 with earlier full
vesting upon the Company's attainment of
positive Earnings Before Interest Taxes
Depreciation and Amortization ("EBITDA") for any
fiscal quarter provided such positive EBITDA
occurs for a fiscal quarter in or before the end
of the second fiscal quarter of 2002. EBITDA
will be determined by the Company's independent
public accountants using the Company's financial
statements as reported in filings with the
Securities and Exchange Commission ("SEC").
Earnings, for EBITDA determination purposes,
will include revenue from only normal business
operations and will not include any
extraordinary or nonrecurring income or revenue
items.
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 without Good
Reason or 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 above performance-based acceleration
triggers will cease to be applicable upon your
prior cessation of employment for any reason.
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 CAUSE account of Cause,
then your option will expire immediately.
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. 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.
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.
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, 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; 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; 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.
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.
