CRITICAL PATH INC
EXHIBIT 10.42
<DOCUMENT>
<TYPE>EX-10.42
<SEQUENCE>32
<FILENAME>f97295exv10w42.txt
<DESCRIPTION>EXHIBIT 10.42
<TEXT>
<PAGE>

                                                                   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, including,
without limitation, any claims for rights of rescission, personal tax
liabilities, fraud, misrepresentation, breach of fiduciary duty, breach of duty
under applicable state corporate law, and securities fraud under any state or
federal law; any and all claims for wrongful discharge of employment, wages or
other compensation, including but not limited to bonuses and commissions; breach
of contract, both express and implied; breach of a covenant of good faith and
fair dealing, both express and implied; negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
defamation; negligence; personal injury; discrimination, disability
discrimination; violation of public policy; retaliation; harassment; any tort
claims, including wrongful discharge, assault; battery; harassment; invasion of
privacy; false imprisonment; and conversion; any and all claims for violation of
any federal, state or municipal statute, including, but not limited to, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of
1990, the Fair Labor Standards Act, the California Fair Employment and Housing
Act, and Labor Code section 201, et seq., and all as may be amended from time to
time; any and all claims arising out of any other laws and regulations relating
to employment or employment discrimination; and any and all claims for
attorneys' fees and costs. This release extends to any and all administrative or
criminal charges whether before the Division of Labor Standards, Equal
Employment Opportunity Commission or the Department of Fair Employment and
Housing or any other court or agency to which Employee currently is or shall
later become a party. Should Employee ever become a party to any such
proceeding, he shall immediately ask any such administrative agency or court to
withdraw any such charge as to him.

<PAGE>

         The parties acknowledge and agree that all potential or actual disputes
between them with respect to the Employment Agreement have been fully and
finally settled to their complete satisfaction, leaving no disputes,
controversies, claims or grievances of any kind between them. The parties
therefore covenant and agree that, except as may be compelled by legal process,
they will not raise or in any way pursue any claims which are being released and
discharged in this Agreement in any forum of any kind, including, without
limitation, the federal, state or local courts, or federal, state or local
agencies or offices of any kind, be they administrative, regulatory, judicial,
quasi-judicial, or otherwise. The parties further agree that, except as
compelled by legal process, they will not aid, assist, abet or in any way
encourage any third party to in any way pursue any claims which are being
released and discharged in this Agreement. Except pursuant to formal process
with appropriate prior notice to Company's counsel, the parties further agree
that they will not provide documents, information or testimony to any
prospective or actual claimant against one another. The Parties represent and
warrant that they have not, to date, discussed with any third party the
possibility of that third party pursuing claims against the other party; that
they have not encouraged any such pursuit of claims. If either Party at any time
commences or in any manner seeks relief against any of the other Party through
any suit or other legal proceeding, then that Party shall pay in addition to any
other damages caused thereby, all attorneys' fees and costs incurred by the
other Party in defending or otherwise responding to said suit or proceeding.

         Employee agrees that the release set forth in this section shall be and
remain in effect in all respects as a complete general release as to the matters
released. Employee understands and agrees that this Release extinguishes all
claims by the Employee as of the Effective Date whether known or unknown and
foreseen or unforeseen.

         c.       Acknowledgment of Waiver of Claims under ADEA. To the extent
applicable, Employee further acknowledges that he is waiving and releasing any
rights he may have under the Age Discrimination in Employment Act of 1967
("ADEA") and that this waiver and release is knowing and voluntary. Employee and
the Company agree that this waiver and release does not apply to any rights or
claims that may arise under ADEA after the Effective Date. Employee acknowledges
that the consideration given for this waiver and release Agreement is in
addition to anything of value to which Employee was already entitled. To the
extent the ADEA is applicable to Employee, Employee further acknowledges that he
or she has been advised by this writing, as required by the ADEA, that (a) he or
she has the right to and should consult with an attorney prior to executing this
Agreement (although he or she may execute this Agreement voluntarily earlier);
(b) he or she has at least forty-five (45) days within which to consider this
Agreement; (c) Employee has been advised that a roster of all individuals
affected by the current reduction in force plan of the Company is immediately
available to Employee upon request from the Human Resources department; (d) he
or she has seven (7) days following the execution of this Agreement to revoke
the Agreement by sending a written notice to the Company to the attention of
General Counsel, Critical Path, Inc., 350 The Embarcadero, 6th Floor, San
Francisco, California 94105-1204; and (e) this Agreement shall not be effective
until the revocation period has expired, which shall be the eighth day after it
is signed by Employee and Company.

<PAGE>

7.       Confidentiality. Employee understands and agrees that because of his
former senior executive level position with the Company, comments by him
concerning the Company, its plans, prospects, its personnel or any other aspect
of the Company's past or future performance could be understood as being based
on substantial information not available to the public. Accordingly, Employee
agrees to continue to remain in compliance with all terms and conditions of all
Confidentiality Agreements (as defined in Section 8) executed by Employee and
not to otherwise comment on such aspects of the Company after the Effective
Date. In addition, the terms of this Agreement are highly confidential and the
Parties hereto each agree to use their best efforts to maintain in confidence
the existence of this Agreement, the contents and terms of this Agreement, and
the consideration for this Agreement (hereinafter collectively referred to as
"Settlement Information"). Each Party hereto agrees to take every reasonable
precaution to prevent disclosure of any Settlement Information to third parties,
and each agrees that there will be no publicity, directly or indirectly,
concerning any Settlement Information, except where such disclosure is required
by law and as required the by the regulations promulgated under the Securities
and Exchange Act of 1934, as amended. The Parties hereto agree to take every
precaution to disclose Settlement Information only to those employees, officers,
directors, attorneys, accountants, governmental entities, and family members who
have a reasonable need to know of such Settlement Information.

8.       Proprietary Information and Inventions Agreement and/or Non-Disclosure
Agreement. Employee acknowledges and is reminded of, and affirms his agreement
to abide by, the terms and conditions of a previously executed Proprietary
Information and Inventions Agreement and/or a Non-Disclosure Agreement (together
the "Confidentiality Agreement") between the Parties. Employee further agrees
and understands that he may not disclose to any person or entity any
confidential information in violation of the Confidentiality Agreement, whether
directly or indirectly, or use or misuse such information in any way. A copy of
this Confidentiality Agreement shall be made available to Employee upon request.

9.       Insider Trading. Employee acknowledges that Employee may continue to be
considered an "Affiliate" of the Company as such meaning is defined under the
U.S. Securities and Exchange Act of 1934, as amended, for a certain period after
the Effective Date and that such Employee's trading activities and conduct will
continue to be governed by the terms of the Company Insider Trading Policy.

10.      Intentionally Deleted.

11.      Arbitration. The Parties agree that any and all future disputes or
claims arising out of the terms of this Agreement, their interpretation, its
breach, and any of the matters herein released, shall be subject to binding
arbitration in San Francisco County, California, before the American Arbitration
Association under its Employment Dispute Resolution Rules. In addition to
arbitration, the Company is entitled to enforce the terms of this Agreement by
seeking injunctive relief in any court of competent jurisdiction. The Parties
agree that the prevailing party in any arbitration shall be entitled to
injunctive

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relief in any court of competent jurisdiction to enforce the arbitration award.
The Company shall bear the costs of the arbitration except that Employee may be
required to pay costs to the same extent as in a civil action filed in the State
of California, unless the arbitrator orders otherwise. Parties agree that the
prevailing party in any claim for injunctive relief shall pay each of their own
attorney's fees and costs.

12.      Non-Disparagement. Each party agrees to refrain from any defamation,
libel or slander of the other, or tortious interference with the contracts and
relationships of the other. Employee agrees that he or she will refrain from
disparaging the Company's business and any and all of its past or present
officers, director or other employees.

13.      Authority. The Company represents and warrants that the undersigned has
the authority to act on behalf of the Company and to bind the Company and all
who may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he or she has the capacity to act on his or her own
behalf and on behalf of all who might claim through him or her to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents
that there are no liens, or claims of lien, or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

14.      No Representations. Neither party has relied upon any representations
or statements made by the other party hereto which are not specifically set
forth in this Agreement.

15.      Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision. Such provision shall be modified by the court so as to be rendered
enforceable insofar as possible consistent with the intent of the Parties to all
remaining portions of the Agreement.

16.      Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning Employee's employment
with and separation from the Company, and supersedes and replaces any and all
prior agreements and understandings, whether oral or written, concerning
Employee's relationship with the Company and his or her compensation by the
Company, except for (i) the Confidentiality Agreement (as defined herein), (ii)
any prior agreement or understanding to indemnify Employee as against third
party claims which may arise in connection with Employee's service as an
executive officer, including but not limited to employee's Indemnification
Agreement and (iii) employee's stock option agreements and the provisions of any
other agreement related to such stock option agreements. Parole evidence shall
be inadmissible to show agreement by and between the Parties as to any term or
condition contrary to or in addition to the terms and conditions hereof,
including without limitation any intermediate drafts of this Agreement. Any and
all such prior agreements and understandings with respect to the subject matter
herein, including agreements for compensation, including bonuses and
commissions, are also hereby terminated and of no further force and effect, and
Employee hereby expressly disclaims

<PAGE>

any and all rights in connection with any previous agreements, if any, whether
oral or written.

17.      No Oral Modification. This Agreement may only be amended in writing
signed by Employee and the Chief Executive Officer or Chief Financial Officer of
the Company.

18.      Governing Law. This Agreement shall be governed by the laws of the
State of California. Both Parties submit to jurisdiction in California and
further agree that any cause of action arising under this Agreement shall be
brought before an arbitrator in a court in San Francisco County, California.

19.      Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

20.      Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. Employee
acknowledges that: (a) he or she has read this Agreement; (b) has been
represented in the preparation, negotiation, and execution of this Agreement by
legal counsel of his or her own choice or that he or she has voluntarily
declined to seek such counsel; (c) understands the terms and consequences of
this Agreement and of the releases it contains; (d) is fully aware of the legal
and binding effect of this Agreement.

         IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date set forth on the first page of this Agreement.

Dated: As of May 16, 2003           By /s/ Paul H. Bartlett
                                      ------------------------------------
                                      Name:  Paul H. Bartlett
                                      Title: Chief Financial Officer & EVP of
                                             Corporate Development

Dated: As of May 16, 2003           By /s/ Bernard Harguindeguy
                                      ------------------------------------
                                           Bernard Harguindeguy

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