ZIX CORPORATION
STOCK OPTION AGREEMENT
(CEO & Direct Reports)
THIS STOCK OPTION
AGREEMENT (“Agreement”) is made and entered into as of
the date set forth on the signature page attached hereto (the
“Signature Page”) with respect to the stock options
granted by Zix Corporation, a Texas corporation (the
“Company”), to the Optionee (“Optionee”)
listed on the signature page hereto.
WHEREAS, the
Company wishes to recognize the contributions of the Optionee to
the Company and to encourage the Optionee’s sense of
proprietorship in the Company by owning the Common Stock, par value
$.01 per share (the “Common Stock”), of the
Company;
NOW, THEREFORE, in
consideration of the mutual agreements and covenants contained
herein, the Company hereby grants to the Optionee a non-qualified
stock option (“Option”) to purchase up to the total
number of shares of the Common Stock set forth on the Signature
Page at the price per share (the “Option Price”) as set
forth on the Signature Page on the terms and conditions and subject
to the restrictions as set forth in this Agreement and the
provisions of the applicable Zix Corporation stock option plan
(which is incorporated herein by reference) (the
“Plan”), which is referenced on the Signature Page. All
defined terms contained herein shall have the meanings ascribed to
them in the Plan, except as otherwise provided herein.
a.
Acceleration Event . An “Acceleration Event”
shall mean the occurrence of an event described in clause
(A) or (B), as follows: (A) the employment of the
Optionee is terminated by the Company without “cause,”
as such term is defined in any employment agreement, employment
offer letter, severance agreement, or other similar agreement
between the Optionee and the Company (regardless of whether such
agreement exists on the date of this Agreement or is entered into
hereafter), and (B) the occurrence of a Change in
Control.
b.
Acquiring Person . An “Acquiring Person” shall
mean any person (including any “person” as such term is
used in Sections 13(d)(3) or 14(d)(2) of the Exchange Act)
that, together with all Affiliates and Associates of such person,
is the beneficial owner (as the term “beneficial owner”
is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of 10% or more of
the outstanding Common Stock. The term “Acquiring
Person” shall not include the Company, any majority-owned
subsidiary of the Company, any employee benefit plan of the Company
or a majority-owned subsidiary of the Company, or any person to the
extent such person is holding Common Stock for or pursuant to the
terms of any such plan. For the purposes of this Agreement, a
person who becomes an Acquiring Person by acquiring beneficial
ownership of 10% or more of the Common Stock at any time after the
date of this Agreement shall continue to be an Acquiring Person
whether or not such person continues to be the beneficial owner of
10% or more of the outstanding Common Stock.
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c. Affiliate
and Associate . “Affiliate” and
“Associate” shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act in effect on the date of this
Agreement.
d. Change in
Control . A “Change in Control” of the Company
shall have occurred if at any time during the term of this
Agreement, any of the following events shall occur:
(i) The
Company is merged, consolidated or reorganized into or with another
corporation or other legal person, other than an Affiliate, and as
a result of such merger, consolidation or reorganization, the
Company or its shareholders or Affiliates immediately before such
transaction beneficially own, immediately after or as a result of
such transaction, equity securities of the surviving or acquiring
corporation or such corporation’s parent corporation
possessing less than fifty-one percent (51%) of the voting power of
the surviving or acquiring person or such person’s parent
corporation;
(ii) The
Company sells all or substantially all of its assets to any other
corporation or other legal person, other than an Affiliate, and as
a result of such sale, the Company or its shareholders or
Affiliates immediately before such transaction beneficially own,
immediately after or as a result of such transaction, equity
securities of the surviving or acquiring corporation or such
corporation’s parent corporation possessing less than
fifty-one percent (51%) of the voting power of the surviving or
acquiring person or such person’s parent corporation
(provided that this provision shall not apply to a registered
public offering of securities of a subsidiary of the Company, which
offering is not part of a transaction otherwise a part of or
related to a Change in Control);
(iii) Any
Acquiring Person has become the beneficial owner (as the term
“beneficial owner” is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange
Act) of securities which, when added to any securities already
owned by such person, would represent in the aggregate 35% or more
of the then outstanding securities of the Company which are
entitled to vote to elect any class of directors;
(iv) If, at
any time, the Continuing Directors then serving on the Board of
Directors of the Company cease for any reason to constitute at
least a majority thereof;
(v) Any
occurrence that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A or any
successor rule or regulation promulgated under the Exchange Act;
or
(vi) Such
other events that cause a change in control of the Company, as
determined by the Board in its sole discretion.
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e.
Continuing Director . A “Continuing
Director” shall mean a director of the Company who
(i) is not an Acquiring Person or an Affiliate or Associate
thereof, or a representative of an Acquiring Person or nominated
for election by an Acquiring Person, and (ii) was either
(a) a member of the Board of Directors of the Company on the
date of this Agreement or (b) subsequently became a director
of the Company and whose initial election or initial nomination for
election by the Company’s shareholders was approved by a
majority of the Continuing Directors then on the Board of Directors
of the Company.
f.
Disability . “Disability” shall mean any
medically determinable physical or mental impairment that, in the
opinion of the Committee, based upon medical reports and other
evidence satisfactory to the Committee, can reasonably be expected
to prevent the Optionee from performing substantially all of his or
her customary duties of employment (with or without reasonable
accommodation) for a continuous period of not less than
12 months.
g.
Exchange Act . “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.
h.
Resignation. “Resignation” shall mean the
voluntary termination by the Optionee of his or her employment
relationship with the employing Subsidiary and, if applicable,
Company under circumstances other than voluntary
Retirement.
i.
Retirement . “Retirement” shall mean the
termination of Optionee’s employment in accordance with the
requirements of a written retirement plan, policy or rule of the
Company that has been duly adopted by the Company or employing
Subsidiary, as applicable.
2. Term
of Option . The term of this Option shall expire on the
expiration date set forth in the Signature Page (the “stated
term”), except as such term may be otherwise shortened by the
other provisions of the Plan or this Agreement.
a.
Exercise . This Option shall become exercisable in
increments as set forth in the Signature Page. However, this Option
shall become exercisable in full upon the occurrence of an
Acceleration Event as to all options that have not vested as of the
occurrence of the Acceleration Event. Except as provided in the
Plan or Paragraph 4 below, the Option shall not be exercisable
unless Optionee shall, at the time of exercise, be an employee of
the Company or a Subsidiary, and once the Option has become
exercisable with respect to a certain number of shares as provided
above, it shall thereafter be exercisable as to all of that number
of shares, or as to any part thereof, until expiration or
termination of this Option. However, this Option may not be
exercised as to less than 100 shares at any one time (or the
remaining shares then purchasable under this Option, if less than
100 shares).
b.
Adjustment . In the event there is any adjustment to the
Common Stock the Board of Directors or Committee shall make such
adjustment as it deems appropriate to the number of shares subject
to the Option or to the Option Price, or both.
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c. Method
of Exercise . This Option may be exercised only by written
notice (the “Exercise Notice”) by the Optionee to the
Company (or its designee) at its principal executive office. The
Exercise Notice shall be deemed given when deposited in the U. S.
mails, postage prepaid, addressed to the Company at its principal
executive office (or its designee), or if given other than by
deposit in the U.S. mails, when delivered in person to an officer
of the Company at that office. The date of exercise of this Option
(the “Exercise Date”) shall be the date of the postmark
if the notice is mailed or the date received if the notice is
delivered other than by mail. The Exercise Notice shall state the
number of shares in respect of which this Option is being exercised
and, if the shares for which this Option is being exercised are to
be evidenced by more than one stock certificate, the denominations
in which the stock certificates are to be issued. The Exercise
Notice shall be signed by the Optionee and shall include the
complete address of such person, together with such person’s
social security number.
This Option may be
exercised either by tendering cash in the amount of the Option
Price or, with the Company’s consent, by tendering shares of
Common Stock (which may include shares previously acquired upon
exercise of options granted under the Plan). The Exercise Notice
shall be accompanied by payment of the aggregate Option Price of
the shares purchased by cash, a certified cashier’s check or,
with the Company’s consent, by delivery of shares of Common
Stock having a Fair Market Value on the date immediately preceding
the exercise date equal to the Option Price.
If the shares to
be purchased are covered by an effective registration statement
under the Securities Act of 1933, as amended, any option granted
under the Plan may be exercised by a broker-dealer acting on behalf
of an Optionee if (a) the broker-dealer has received from the
Optionee or the Company a fully- and duly-endorsed agreement
evidencing such option, together with instructions signed by the
Optionee requesting the Company to deliver the shares of Common
Stock subject to such option to the broker-dealer on behalf of the
Optionee and specifying the account into which such shares should
be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such
exercise, and (c) the broker-dealer and the Optionee have
otherwise complied with Section 220.3(e)(4) of
Regulation T, 12 CFR Part 220, or any successor
provision.
The certificates
for shares of Common Stock as to which this Option shall have
be
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