Exhibit 10.3
ZIX CORPORATION 2004 STOCK OPTION PLAN
(Amended and Restated as of June 7, 2007)
Section 1. Purpose
The purpose of the Zix Corporation
2004 Stock Option Plan (hereinafter called the “Plan”)
is to advance the interests of Zix Corporation (hereinafter called
the “Company”) by strengthening the ability of the
Company to attract, on its behalf and on behalf of its Subsidiaries
(as hereinafter defined), and retain personnel of high caliber
through encouraging a sense of proprietorship by means of stock
ownership.
Section 2. Definitions
“Board of Directors”
shall mean the Board of Directors of the Company.
“Code” shall mean the
Internal Revenue Code of 1986, as amended from time-to-time.
“Committee” shall mean a
committee of the Board of Directors comprised of at least two
directors or the entire Board of Directors, as the case may be.
Members of the Committee shall be selected by the Board of
Directors. To the extent necessary to comply with the requirements
of applicable rules and regulations, the Committee shall consist of
two or more “independent” directors. Also, if the
requirements of §162(m) of the Code are intended to be met,
the Committee shall consist of two or more “outside
directors” within the meaning of § 162(m) of the
Code.
“Common Stock” shall mean
the common stock of the Company, par value $.01 per share.
“Date of Grant” shall
mean the date on which an Option is granted pursuant to this
Plan.
“Designated Beneficiary”
shall mean the beneficiary designated by the Optionee, in a manner
determined by the Committee, to receive amounts due the Optionee in
the event of the Optionee’s death. In the absence of an
effective designation by the Optionee, Designated Beneficiary shall
mean the Optionee’s estate.
“Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended.
“Fair Market Value” shall
mean the closing sale price (or average of the quoted closing bid
and asked prices if there is no closing sale price reported) of the
Common Stock on the date specified as reported by the Nasdaq Stock
Market, or by the principal national stock exchange on which the
Common Stock is then listed. If there is no reported price
information for such date, the Fair Market Value will be determined
by the reported price information for Common Stock on the day
nearest preceding such date.
“Incentive Stock Option”
shall mean a stock option granted under Section 6 that is
intended to meet the requirements of Section 422 of the Code
(or any successor provision).
“Nonqualified Stock
Option” shall mean a stock option granted under
Section 6 that is not intended to be an Incentive Stock
Option.
“Option” shall mean an
Incentive Stock Option or a Nonqualified Stock Option.
1
“Optionee” shall mean the
person to whom an option is granted under the Plan or who has
obtained the right to exercise an option in accordance with the
provisions of the Plan.
“Subsidiary” shall mean
any now existing or hereafter organized or acquired corporation or
other entity of which fifty percent (50%) or more of the issued and
outstanding voting stock or other economic interest is owned or
controlled directly or indirectly by the Company or through one or
more Subsidiaries of the Company.
Section 3. Administration
The Plan shall be administered by the
Committee. The Committee shall have sole and complete authority to
adopt, alter and repeal such administrative rules, guidelines and
practices governing the operation of the Plan as it shall from
time-to-time deem advisable, and to construe, interpret and
administer the terms and provisions of the Plan and the agreements
thereunder. The determinations and interpretations made by the
Committee are final and conclusive.
Section 4. Eligibility
All employees and non-employee
consultants and advisors (other than non-employee directors) of the
Company or any Subsidiary who, in the opinion of the Committee,
have the capacity for contributing in a substantial measure to the
successful performance of the Company are eligible to receive
Options under the Plan.
Section 5. Maximum Amount Available for Options
(a) The maximum number of shares
of Common Stock in respect of which Options may be made under the
Plan shall be a total of 5.0 million shares of Common Stock.
Of that amount, no participant may be granted Options for more than
2.4 million shares of Common Stock in the aggregate during the
term of the Plan. No more than 2.4 million shares of Common
Stock in the aggregate during the term of the Plan may be issued
pursuant to Incentive Stock Options. Shares of Common Stock may be
made available from the authorized but unissued shares of the
Company or from shares reacquired by the Company, including shares
purchased in the open market. In the event that an Option is
terminated unexercised as to any shares of Common Stock covered
thereby, such shares shall thereafter be again available for award
pursuant to the Plan.
(b) In the event that the
Committee shall determine that any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, warrants or rights
offering to purchase Common Stock at a price substantially below
fair market value, or other similar corporate event affects the
Common Stock such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall adjust
appropriately any or all of (1) the number and kind of shares
which thereafter may be optioned under the Plan and (2) the
grant, exercise or conversion price and/or number of shares with
respect to the Options and/or, if deemed appropriate, make
provision for cash payment to an Optionee; provided, however, that
the number of shares subject to any Option shall always be a whole
number.
Section 6. Stock Options
(a) Subject to the provisions of
the Plan, the Committee shall have sole and complete authority to
determine the persons to whom Options shall be granted, the number
of shares to be covered by each Option, the option price therefor
and the conditions and limitations applicable to the exercise of
the Option.
2
(b) The Committee shall have the
authority to grant Incentive Stock Options, or to grant
Nonqualified Stock Options, or to grant both types of options. In
the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with the Code and
relevant regulations. Incentive Stock Options to purchase Common
Stock may be granted to such employees of the Company or its
Subsidiaries (including any director who is also an employee of the
Company or one of its Subsidiaries) as shall be determined by the
Committee. Nonqualified Stock Options to purchase Common Stock may
be granted to such eligible participants as shall be determined by
the Committee. Neither the Company nor any of its Subsidiaries or
any of their respective directors, officers or employees, shall be
liable to any Optionee or other person if it is determined for any
reason by the Internal Revenue Service or any court having
jurisdiction that any Incentive Stock Option granted hereunder does
not qualify for tax treatment as an Incentive Stock Option under
the then-applicable provisions of the Code.
(c) The Committee shall, in its
discretion, establish the exercise price at the time each Option is
granted, which in the case of Nonqualified Stock Options, shall not
be less than 100% of the Fair Market Value of the Common Stock on
the Date of Grant, or in the case of grants of Incentive Stock
Options, shall not be less than 100% of the Fair Market Value of
the Common Stock on the Date of Grant or such greater amount as may
be prescribed by the Code.
(d) Exercise
(1) Each Option shall be exercisable
at such times and subject to such terms and conditions as the
Committee may, in its sole discretion, specify in the applicable
grant or thereafter; provided, however, that in no event may any
Option granted hereu
| 
