FORM OF ZIX CORPORATION OUTSIDE DIRECTOR STOCK OPTION AGREEMENT
Exhibit 10.1
This Outside Director Stock Option Agreement (“Option”) is effective as of the Grant Date
set forth in the Grant Detail section of this Option (“Grant Details”) with respect to the stock
options described in the Grant Details that are granted by Zix Corporation, a Texas corporation
(“Company”), to the Non-Employee Director (“Optionee”) named in the Grant Details.
The Company wishes to recognize Optionee’s contributions to the Company and to encourage
Optionee’s sense of proprietorship in the Company by providing Optionee with the opportunity to
purchase shares of the Company’s common stock, par value $.01 per share (“Common Stock”).
The Company and Optionee therefore agree as follows:
1 Non-Qualified Stock Option Grant
The Company hereby grants to Optionee the options to purchase up to the number of shares of
Common Stock shown as the Quantity in the Grant Details. The Option exercise price is the amount
per share shown as the Exercise Price in the Grant Details. The Option is subject to the terms set
forth in this Option and the terms of the Stock Option Plan described in the Grant Details (the
“Plan”). The Option is intended to be a nonqualified stock option, and it is not to be
characterized or treated as an incentive stock option, under applicable tax laws.
2 Grant Details
Optionee:
Grant Date:
Expiration Date:
Quantity:
Exercise Price:
Stock Option Plan: 2006 Directors’ Stock Option Plan
Vesting Schedule:
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3 Term of Option
This Option automatically expires at 12:00 midnight on Expiration Date described in the Grant
Details. This Option may be terminated earlier by other provisions of the Plan or this Option.
3.1 Departure of Director Other Than for “Cause”
This Option terminates one year after Optionee ceases to be member of the Board, except
that if Optionee was a member of the Board for least five years then this Option will
terminate on the last business day of December of the calendar year in which falls the one
year anniversary of the date on which Optionee ceased to be a member of the Board. This
clause does not apply to Optionee’s departure from the Board within 180 days after a Change
in Control.
3.2 Removal of Director for “Cause”
This Option terminates immediately and automatically if Optionee is removed from the
Board by a vote of the shareholders for Cause.
4 Vesting of Option Shares
This Option will vest and become exercisable with respect to a number of shares of Common
Stock according to the Vesting Schedule described in the Grant Details, except that no shares of
Common Stock will vest and become exercisable during the periods described in section 3.1. Once
this Option has become exercisable with respect to a number of shares of Common Stock (“Vested
Shares”), it will remain exercisable as that number of shares, or any lesser number of shares,
until the expiration or termination of this Option.
4.1 Accelerated Vesting
This Option becomes fully exercisable upon (i) the Optionee being removed from the
Board by a vote of the shareholders other than for Cause; or (ii) upon a Change in Control,
if Optionee is a member of the Board on the date the Change of Control occurs.
5 Adjustment of Option
If the shares subject to this Option are adjustable pursuant to Section 9 of the Plan, the
Committee may make any adjustment that it deems appropriate to the Quantity or the Exercise Price.
5.1 Adjustment of Option for Certain Transactions
Subject to the terms of the Plan, if a merger, consolidation, sale of shares or similar
transaction occurs involving the Company and one or more other persons, and shares of stock,
other securities, cash or property become issuable or deliverable in
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exchange for Common Stock as a part of the transaction, then this Option will be
amended to create a right to purchase or receive (at an aggregate exercise price equal to
the Exercise Price) the amount of shares of stock, other securities, cash or property that
would have been receivable for Common Stock in the transaction if the unexercised Quantity
of shares of Common Stock had been purchased immediately before the consummation of the
transaction.
6 Modification of Option
At any time and from time-to-time, the Committee may execute an instrument providing for
modification, extension or renewal of this Option, provided that no such modification, extension or
renewal may (i) impair this Option holder’s rights in any respect without the written consent of
the holder or (ii) conflict with the provisions of Rule 16b-3 under the Exchange Act.
7 Who May Exercise Option
This Option is exercisable during Optionee’s lifetime only by Optionee. To the extent
exercisable after Optionee’s death, this Option may be exercised only by a person who has obtained
Optionee’s rights under this Option by will or under the laws of descent and distribution or
pursuant to a “qualified domestic relations order” as defined in the Code. If the person exercising
this Option is a transferee of Optionee by will or under the laws of descent and distribution or
pursuant to a “qualified domestic relations order,” the Exercise Notice must be accompanied by
appropriate proof of the right of such transferee to exercise this Option.
8 Method of Exercise
As a condition of exercising this Option with respect to any Vested Shares, Optionee must have
an established brokerage account with the Company’s authorized stock option administrative
brokerage, which is currently ▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Broker”). At the time of exercise, the Broker will
pay to the Company on behalf of Optionee this Option Price times the number of vested shares as to
which this Option is being exercised. Such payment may consist of (a) cash, (b) a certified
cashier’s check or (c) at the Committee’s election, any other consideration that the Committee
determines is consistent with the Plan and applicable law. Optionee must bear any transaction costs
imposed by the Broker.
As a condition of exercising this Option with respect to any Vested Shares, each designated
Optionee must provide to the Company (or its designee) at its principal executive office a written
notice satisfying the requirements of this section 0 (“Exercise Notice”). The Exercise Notice must
contain sufficient information to identify this Option being exercised, including Optionee’s name,
Exercise ▇▇▇▇▇, ▇▇▇▇▇ Date and Stock Option Plan. The Exercise Notice must state the number of
Vested Shares for which this Option is being exercised. If the shares of Common Stock that are
being purchased are to be evidenced by more than one stock certificate, the Exercise Notice must
state the number of shares of Common Stock to be indicated on each stock certificate. The Exercise
Notice is deemed to be provided when it is delivered to the Company’s Corporate Secretary. After
receiving the Exercise Notice from Optionee, the
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Company will determine whether this Option is subject to any restrictions and is otherwise
eligible for exercise.
If the Company determines that the designated Option is eligible for exercise, the Company
will, authorize the Broker to allow the Optionee to exercise the Option, and authorize the Optionee
to exercise the Option by contacting the Broker. The Broker will not allow Optionee to exercise the
Option unless Optionee has provided the Exercise Notice to the Company and the Company has
authorized the exercise.
9 Restrictions on Exercise
Notwithstanding anything to the contrary in this Option:
| a) | Company is not obligated to issue fractional Shares. | ||
| b) | Optionee cannot exercise this Option in order to purchase less than 100 Option Shares unless the number of then Vested Shares is less than 100. | ||
| c) | Optionee cannot exercise this Option if exercise or the delivery of Shares would violate any applicable law or any rule of any securities exchange on which the Shares are then listed. | ||
| d) | Optionee cannot exercise this Option if exercise or the delivery of shares would in the Company’s sole discretion constitute a violation of any Company rule or policy, including but not limited to block trades, windows and black-out periods. |
10 Payment and Tax Withholding
As a condition of exercising this Option with respect to any Vested Shares, Optionee must make
prior arrangements for the payment of the Exercise Price and arrangements for any withholding tax
obligations. The Company may take such steps to withhold any taxes that it is required to withhold
in connection with the exercise of this Option.
11 Shares Issued on Option Exercise
The shares of Common Stock purchased upon the exercise of this Option will be registered in
the name of Optionee at the address specified in the Exercise Notice. Any stock certificates issued
will contain an appropriate legend referencing any applicable transfer restrictions.
12 No Rights as Shareholder
Neither Optionee nor any person claiming under or through Optionee has any rights or
privileges of a shareholder of the Company in respect of any of the shares issuable upon the
exercise of this Option, unless and until Option Shares are registered in such person’s name, as
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evidenced by the appropriate entry on the books of the Company or its duly authorized stock
registrar and transfer agent.
13 State and Federal Securities Regulation
No Option Shares will be issued by the Company upon the exercise of this Option unless and
until all legal requirements have been complied with to the satisfaction of the Company and its
counsel. The Company may restrict the periods during which this Option may be exercised if, in the
opinion of the Company and its counsel, such a restriction is desirable to comply with legal
requirements. The Option is subject to the requirement that, if the Company determines in its
discretion that the listing, registration or qualification of this Option Shares upon any
securities exchange or under any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection with, the granting
or exercise of this Option or the issuance or purchase of Option Shares, this Option may not be
exercised in whole or in part until such listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions not acceptable to the Company. The Company has
no obligation to effect or obtain any such listing, registration, qualification, consent or
approval if the Company determines, in its discretion, that such action would not be in the best
interest of the Company. The Company will not be liable to Optionee or anyone claiming under or
through Optionee for damages due to a delay in the delivery or issuance of any Option Shares for
any reason whatsoever, including, but not limited to, a delay caused by listing, registration or
qualification of this Option Shares upon any securities exchange or under any federal or state law
or the effecting or obtaining of any consent or approval of any governmental body with respect to
the granting or exercise of this Option or the issue or purchase of Option Shares.
14 Continued Directorship Not Guaranteed
Nothing in this Option, the Plan, any document describing either of them, or the grant of an
option gives Optionee the right to continue to serve as a director of the Company.
15 No Liability of Option
The Option is not liable for or subject to, in whole or in part, the debts, contracts,
liabilities or torts of Optionee nor is it subject to garnishment, attachment, execution, levy or
other legal or equitable process without the prior written consent of the Company (which consent
the Company may withhold or condition for any reason or for no reason).
16 No Assignment
This Option is not Transferable without the prior written consent of the Company (which
consent the Company may withhold or condition for any reason or for no reason) except that this
Option is Transferrable by will or the laws of descent and distribution or pursuant to a “qualified
domestic relations order” as defined in the Code. Any other attempted Transfer is void and
ineffective for all purposes. Subject to the Transferability limitations in this Option, this
Option
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is binding upon and inure to the benefit of the representatives, executors, successors or
beneficiaries of the parties hereto.
17 Notice
Other than any Exercise Notice, any notice required or permitted to be given under the Plan or
this Option must be in writing and delivered in person or sent by registered or certified mail,
return receipt requested, first-class postage prepaid (i) if to Optionee, at the address shown on
the books and records of the Company or at Optionee’s place of employment, or (ii) if to the
Company, at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate
Secretary, or any other address that is specified in a notice provided by one party to the other
party. Any notice, if sent by registered or certified mail, is deemed to effective upon actual
receipt.
18 Defined Terms
All capitalized terms not defined in this Option have the meanings ascribed to them in the
Plan. Section references are to the sections of this Option unless otherwise specified. All section
titles and captions in this Option are for convenience only, are not be deemed part of this Option,
and in no way define, limit, extend or describe the scope or intent of any provisions of this
Option.
“Acquiring Person” means 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” does 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 Option, 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 Option will 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.
“Affiliate” and “Associate” have the meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
“Cause” means any circumstances described in the Company’s bylaws which permit the termination
of the term of office of a Director of the Company upon the affirmative vote of a majority of the
Company’s Board of Directors.
“Change in Control” means:
| (i) | The Company is merged, consolidated or reorganized into or with another corporation or other legal person and as a result of such merger, consolidation or reorganization, the Company or its shareholders or Affiliates immediately before |
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| 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; or |
| (ii) | The Company sells all or substantially all of its assets to any other corporation or other legal person 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 does 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); or | ||
| (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; or | ||
| (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; or | ||
| (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. |
“Continuing Director” means 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 member of the Board of Directors of the
Company on the date of this Option or 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.
“Option Shares” means shares of Common Stock received upon exercise of this Option.
“Transfer” (or any derivative thereof) means a direct or indirect assignment, sale, transfer,
license, lease, pledge, encumbrance, hypothecation or execution, attachment or similar process.
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19 Miscellaneous
19.1 Governing Law
This Option has been executed by the Company in, and is deemed to be performable in,
the City of Dallas, Dallas County, Texas. This Option is governed by and will be construed,
interpreted and enforced in accordance with the laws of the State of Texas (excluding its
conflict of laws rules).
19.2 Injunctive Relief
In addition to all other rights or remedies available at law or in equity, the Company
is entitled to injunctive and other equitable relief to prevent or enjoin any violation of
the provisions of this Option.
19.3 Consent to Jurisdiction and Venue
With respect to all matters relating to this Option or Option Shares, the parties
consent to the personal jurisdiction of the courts of the State of Texas, and any courts
whose jurisdiction is derivative of the jurisdiction of the courts of the State of Texas,
and to venue in the courts in Dallas County, Texas.
19.4 Entire Agreement
This Option and the Plan together constitute the entire agreement between the parties
pertaining to the subject matter hereof and supersede all prior and contemporaneous
agreements, representations and understandings of the parties. If any provision of this
Option conflicts with the Plan, the terms of the Plan will control.
19.5 Modifications in Writing
Except as provided in sections 5 and 6, no supplement, modification or amendment of
this Option or waiver of any provision of this Option is binding unless it is in a writing
signed by all parties to this Option.
19.6 No Deemed Waivers
No failure by any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Option or to exercise any right or remedy consequent upon a
breach thereof will constitute a waiver of any such breach or any other covenant, duty,
agreement or condition. No waiver of any of provision of this Option will be deemed to
occur, or to constitute a waiver of any other provision of this Option, or to constitute a
continuing waiver, unless that waiver is in a writing signed by the party against whom the
waiver is asserted.
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19.7 Blue-penciling
If any provision of this Option is declared or found to be illegal, unenforceable or
void, in whole or in part, then the parties will be relieved of all obligations arising
under such provision, but only to the extent that it is illegal, unenforceable or void, it
being the intent and agreement of the parties that this Option will be deemed amended by
modifying such provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor another
provision that is legal and enforceable and achieves the same objectives.
19.8 Further Acts
The parties will execute all documents, provide all information and take or refrain
from taking all actions as may be necessary or appropriate to achieve the purposes of this
Option.
20 Option Issued Pursuant to Plan
The Optionee accepts this Option subject to the provisions of this Option and the Plan, which
are incorporated herein, including the provisions that authorize the Committee to administer and
interpret the Plan and provide that the Committee’s determinations and interpretations with respect
to the Plan are final and conclusive and binding on all persons affected thereby.
21 Electronic Signatures
This Option may be digitally signed by Optionee. By accepting this Option on the Broker’s
online system, Optionee agrees to the terms of this Stock Option Agreement together with the
pertinent Plan documents found in the Communications Center on the Broker’s website. By failing to
accept this Option on the Broker’s online system, Optionee forfeits all rights to this Option and
under this Option. Evidence of Optionee’s acceptance of this Option will be captured and stored in
electronic format in the Broker’s database, and that electronic acceptance will create and evidence
a binding contract between Optionee and the Company.
ZIX CORPORATION |
||||
| Date: __________________ | By: | |||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
| Chief Financial Officer | ||||
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