AMENDMENT TO EMPLOYMENT AGREEMENT AND RELEASE OF CLAIMS

 

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                                                                   EXHIBIT 10.42

 

                        AMENDMENT TO EMPLOYMENT AGREEMENT

                              AND RELEASE OF CLAIMS

 

         This Amendment to Employment Agreement and Release of Claims

("Agreement") is made by and between CRITICAL PATH, INC. (the "Company"), and

Bernard Harguindeguy ("Employee") (collectively referred to herein as the

"Parties") and dated as of May 16, 2003.

 

         WHEREAS, Employee has been employed by the Company pursuant to an

Employment Agreement by and between the Parties dated as of January 14, 2002

("Employment Agreement");

 

         WHEREAS, Employee and Company hereby agree to terminate certain terms

and conditions of such Employment Agreement, and amend and replace in its

entirety that certain Employment Agreement; and

 

         WHEREAS, Employee and Company hereby agree to the terms and conditions

of a modified employment relationship going forward;

 

         NOW THEREFORE, in consideration of the mutual promises made herein, the

Company and Employee hereby agree as follows:

 

1.       Modification of Employment. Employee's full-time employment as

Executive Vice President and Chief Marketing Officer, including all payment of

regular base salary and eligibility for bonuses, will terminate as of May 16,

2003 ("Effective Date"), and the Employment Agreement shall thereafter be null

and void and have no further force and effect, except as specifically

contemplated and described herein. As of the Effective Date, Employee's services

to the Company shall continue as General Manager, Identity Management, reporting

to Bill McGlashan. As of the Effective Date, Employee shall provide services in

this capacity and shall be compensated in accordance with a new Compensation

Plan ("Plan"), as mutually identified, agreed and determined by the Parties, no

later than June 20, 2003. Such Plan shall be appended to this Agreement in the

form of EXHIBIT A hereto, as soon as such Plan is finalized and shall thereafter

be incorporated by reference and form a part of this Agreement. The failure for

any reason to finalize the plan shall not affect any provision of this Agreement

or the validity of any release given hereunder.. Employee shall continue to be

covered by all employee health and welfare benefit plans pursuant to the terms

and conditions of the Employment Agreement other than Paid Time Off which ceased

accruing as of January 2003. Employee's right to continued indemnification under

the Employment Agreement shall terminate as of the Effective Date.

 

2.       Consideration. Upon the Effective Date, the Company agrees to pay

Employee three-hundred thousand dollars and zero cents ($300,000.00), which

equals twelve (12) month's salary at the Employee's then current base salary and

will be paid less all the

 

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applicable withholdings, in accordance with the Company's standard payroll

practices (the "Employment Agreement Amount").

 

3.       Vesting of Stock Options. As of the Effective Date, you shall continue

to vest in all previously granted options to purchase shares of Company common

stock in accordance with the applicable vesting schedules found in each Stock

Option Agreement and as provided in the Employment Agreement. Nothing in this

Agreement is intended to otherwise supersede or modify the terms and conditions

of the Company's Stock Option Plans or any agreements issued in connection with

those plans including any provision contained in any agreement (including the

Employment Agreement) for accelerated vesting and/or any change of control

arrangement.

 

4.       Benefits. Employee shall continue to receive all applicable health and

welfare benefit plans as previously provided. Nothing in this Agreement is

intended to supercede or modify the terms and conditions of the Company's health

benefits plans. The other benefits provided for under the Employment Agreement

which shall continue under this Agreement shall include reimbursement for

amounts used for the lease of an automobile, parking and commute fuel expenses.

 

5.       Payment of Salary. On the Effective Date, Company shall pay Employee

for final earned but unpaid salary through the Effective Date. Company will

continue to reimburse Employee for approved business related expenses incurred

in accordance with the current Company travel and expense policies applicable to

Employee and properly submitted. In addition, Company shall pay Employee any

salary, variable compensation or other amounts as agreed in the Plan. However,

if the Plan is not agreed upon, Employee shall have no claim for salary, wages

or any other amounts due other than as expressly set forth in this Agreement.

 

6.       Release of Claims.

 

         a.       Civil Code Section 1542. In connection with all releases given

under this Agreement ("Release"), Employee expressly waives any rights or

benefits under Section 1542 of the California Civil Code, or any other

equivalent statute. California Civil Code Section 1542 (or similar state

statutes), provides as follows:

 

                  A GENERAL RELEASE DOES NOT EXTEND TO

                  CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR

                  SUSPECT TO EXIST IN HIS FAVOR AT THE TIME

                  OF EXECUTING THE RELEASE, WHICH IF KNOWN

                  BY HIM MUST HAVE MATERIALLY AFFECTED HIS

                  SETTLEMENT WITH THE DEBTOR.

 

Without limiting the generality of the foregoing, Employee fully understands

that if any fact, with respect to any matter, covered by this Release is found

hereafter to be other

 

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than or different from the facts now believed by him to be true, he expressly

agrees that this Release shall be and remain effective, notwithstanding such

difference in the facts.

 

         b.       Release. Employee agrees that the Employment Agreement Amount

represents adequate consideration for the purpose of this Release and such

Employment Agreement Amount constitutes settlement in full of all outstanding

obligations owed to Employee by the Company under the Employment Agreement.

Except for the promises or obligations made or undertaken in this Agreement and

in exchange for the payments and other consideration provided hereunder,

Employee, on behalf of himself, and his respective heirs, family members,

executors, and assigns, hereby fully and forever releases, acquits, and

discharges the Company and its respective officers, directors, employees,

investors, shareholders, administrators, affiliates, divisions, subsidiaries,

predecessor and successor corporations, and assigns, from, and agrees not to sue

concerning, any claim, duty, obligation or cause of action relating to any

matters of any kind, whether presently known or unknown, suspected or

unsuspected, that he or she may possess arising from any omissions, acts or

facts that have occurred up until the Effective Date, including, without

limitation, any and all claims relating to or arising from Employee's employment

relationship with the Company and the termination or modification of that

relationship; any and all claims relating to, or arising from, Employee's right

to purchase, or actual purchase of shares of stock of the Company, includ