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                                                                    EXHIBIT 10.3

                        SEPARATION AGREEMENT AND RELEASE


        This Separation Agreement and Release ("Agreement") is made by and
between CRITICAL PATH, INC. (the "Company"), and Pierre Van Beneden ("Employee")
(collectively referred to herein as the "Parties") and dated as of October 16,
2002.

        WHEREAS, Employee was employed by the Company and such employment has
terminated;

        WHEREAS, Employee and Company hereby agree to amend and replace in its
entirety that certain Employment Agreement dated as of October 8, 2001 by and
between the Parties ("Employment Agreement"); and

        WHEREAS, Employee and Company hereby agree to the terms and conditions
of a consulting and advisory relationship going forward;

        NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee hereby agree as follows:

1. Termination. Employee's full-time employment as President, including all
payment of regular base salary and eligibility for bonuses, will terminate as of
October 16, 2002 ("Effective Date"), and the Employment Agreement shall
thereafter be null and void and have no further force and effect. As of the
Effective Date, Employee's services to the Company shall continue as strategic
sales consultant ("Consulting Period") through January 17, 2003 ("Termination
Date") but Employee will immediately cease to accrue Paid Time Off. During the
Consulting Period through the Termination Date, Employee shall provide
consulting services as reasonably required by the Company and Employee's
successor in order to facilitate an orderly transition of all pending work. In
addition, during the Consulting Period, Employee shall also provide sales
support with respect to three deals, and to the extent any of these deals close
prior to the end of Q4 2002, then Employee shall receive a 5% commission on
revenue recognizable in Q4 2002, and a 2.5% commission on revenue recognizable
in subsequent periods. Employee's right to indemnification under the Employment
Agreement shall terminate as of the Effective Date.

2. Consideration. Upon the Termination Date and in accordance with the
Employment Agreement, the Company agrees to pay Employee Three Hundred Thousand
Thirty-Seven and Five Hundred dollars and zero cents ($337,500), which equals
nine (9) month's salary at the Employee's current base salary and will be paid
less all applicable withholdings, in accordance with the Company's standard
payroll practices ("Separation Amount").

3. Vesting of Stock Options. (a) Pursuant to the terms of your Employment
Agreement and as of the Effective Date, Company shall accelerate the vesting of
options to purchase Three Hundred Thirty-Three Thousand, Three Hundred and
Thirty-Three (333,333) shares from Option Grant No. 003378 such that a total of
options to purchase

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1,152,777 shares, from Option Grant No.003378 and Option Grant No.003438
combined, shall be fully vested and immediately exercisable on the Effective
Date (together, all vested and accelerated options are hereinafter referred to
as the "Options"). Through the Consulting Period, and provided Employee is
otherwise in compliance with the terms and conditions of this Agreement,
Employee shall continue to vest in the remainder of the previously granted stock
options in accordance with the current vesting schedule under Option Grant No.
003378 and Option Grant No.003438.

        (b) As of the Termination Date, Employee shall cease vesting in all such
stock options previously granted to Employee. Also as of the Termination Date,
such definition of "Options" shall be deemed to include those options vested
through the Consulting Period under both Option Grant No.003378 and Option Gant
No.003438. Employee's right to exercise the Options shall be governed by the
terms and conditions of the applicable Company Stock Option Plans and Stock
Option Agreement(s) between Employee and the Company, including periods after
termination for the exercise of the Options, except as expressly modified by
this Agreement. Employee confirms that he or she has read and understood the
terms and conditions of the Stock Option Plan and his or her Stock Option
Agreement and understands his or her responsibilities contained therein,
including the procedures for exercise of stock options contained therein.
Employee understands that this Agreement varies the expiration of such Options
from that found in the plan and the right to exercise such Options shall expire
on the date twelve (12) months of the Termination Date and no further extension
of such period shall be granted. 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. Company
shall not be responsible for the payment of any exercise price or taxes due in
connection with the exercise of such Options.

4. Benefits. The Parties acknowledge that Employee does not currently have any
employer-sponsored health and welfare benefits and therefore does not have the
right to convert health insurance benefits to individual coverage pursuant to
COBRA upon timely payment of premiums. Nothing in this Agreement is intended to
supercede or modify the terms and conditions of the Company's health benefits
plans. The parties recognize that Company granted certain benefits to Employee
during the term of his employment, including the lease of an automobile and the
lease of an apartment in San Francisco, California, and the Parties agree that
all automobile benefits will terminate as of December 31, 2002 and all apartment
benefits will terminate as of January 15, 2003. Furthermore the Parties agree
that the Company will reimburse Employee for reasonable travel expenses for one
(1) transatlantic trip during the Consulting Period for the purposes of shutting
down his apartment in San Francisco, California.

5. Payment of Salary. On the Effective Date, Company shall pay Employee for
final earned but unpaid salary and commission. On or before the Termination
Date, the Company will pay all earned but unpaid Paid Time Off accrued by
Employee through the Effective Date. Company will reimburse Employee for all
approved business related expenses accrued through the Termination Date in
connection with the consulting services to be provided under this Agreement, to
the extent that they are incurred in

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accordance with the current Company travel and expense policies and are properly
submitted no later than ten (10) business days after the Termination Date.

6. Release of Claims.

        a. Civil Code Section 1542. In connection with all releases effected by
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
               HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
               WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
               HER SETTLEMENT WITH THE DEBTOR.


Employee fully understands that if any fact, with respect to any matter, covered
by this Release is found hereafter to be other than or different from the facts
now believed by them to be true, he expressly accept and assume that this
Release shall be and remain effective, notwithstanding such difference in the
facts.

        b. Release. Employee agrees that the Separation Amount represents
adequate consideration for the purpose of this Release and such Separation
Amount constitutes settlement in full of all outstanding obligations owed to
Employee by the Company. 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 Termination Date
including, without limitation, any and all claims relating to or arising from
Employee's employment relationship with the Company and the termination 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;

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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, she shall immediately ask any such administrative agency or court to
withdraw any such charge as to her

        The parties acknowledge and agree that all potential or actual disputes
between them 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 represents and
warrants 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 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

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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.

7. Confidentiality. Employee understands and agrees that because of his former
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 not to comment on such
aspects of the Company during the Consulting Period or after the Termination
Date except that he may describe his accomplishments at the Company to
prospective employers and others for purposes of establishing his credentials.
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. Employee
shall promptly return all the Company property and confidential and proprietary
information in his possession to the Company on or before

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the Termination Date. A copy of this Confidentiality Agreement shall be made
available to Employee upon request.

9. Insider Trading. Employee acknowledges that through the Termination Date and
for a period of three months thereafter, Employee shall 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, and such Employee's
trading activities and conduct will continue to be governed by the terms of the
Company Insider Trading Policy.

10. Cooperation. Employee agrees to cooperate with Company in investigating,
preparing or testifying on any threatened or pending claims, actions,
proceedings, whether investigative, administrative, civil or criminal, involving
or affecting the Company or any of its subsidiaries or predecessor companies or
affiliates. Employee's reasonable, pre-approved out-of-pocket expenses
associated with any such assistance shall be reimbursed in connection with these
activities as agreed herein.

11. Advisory Board. As of the Effective Date, Employee shall join the Advisory
Board of the Company providing support to the Chief Executive Officer of the
Company. Such Advisory Board shall meet formally meet once per year and provide
other support and counsel to the Chief Executive Officer and other members of
the senior management on ad hoc as needed basis. Such service on the Advisory
Board shall continue after the Termination Date until such time as mutually
agreed by the Parties. Employee recognizes that he will receive no compensation
in connection with service on the Advisory Board.

12. Non-solicitation of Customers and Employees. Employee agrees that all
customers of the Company shall remain customers or clients of the Company and
not Employee. Employee agrees that for the Consulting Period and for a period of
one (1) year from the Termination Date, Employee shall not, on behalf of a
direct competitor in the messaging market either directly or indirectly, solicit
business, as to products or services competitive with those of the Company, from
any of the Company's customers or prospective customers. Employee acknowledges
and understands that the Company has expended substantial time and effort and
resources in assembling, training and managing its present staff of personnel,
which constitutes a significant asset of the Company. Accordingly, Employee
agrees that for the Consulting Period and for one (1) year from the Termination
Date Employee shall not directly or indirectly induce or solicit or encourage
any of the Company's employees to leave their employment with the Company,
provided that such restrictions shall not apply to newspaper and similar
advertisements.

13. No Admission of Liability. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of all claims. No action taken
by the Parties hereto, or either of them, either previously or in connection
with this Agreement shall be deemed or construed to be (a) an admission of the
truth or falsity of any claims heretofore made or (b) an acknowledgment or
admission by either party of any fault or liability whatsoever to the other
party or to any third party.

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14. 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, or by a judge to be mutually
agreed upon. 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 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, and 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. 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 the Confidentiality Agreement (as defined herein). 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. Any and all such prior agreements and

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

20. 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.

21. 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.

22. 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.

23. 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 October 16, 2002       By       /s/ William McGlashan
                                      ------------------------------------------
                                    Name:   William E. McGlashan, Jr.
                                    Title:  Chief Executive Officer and
                                            Chairman of the Board of Directors


Dated: As of October 16, 2002       By      /s/ Pierre Van Beneden
                                      ------------------------------------------
                                            Pierre Van Beneden