EXHIBIT 10.27

ZIX CORPORATION

NON-EMPLOYEE DIRECTOR
DEFERRED STOCK UNIT AGREEMENT

This Non-Employee Director Deferred Stock Unit Agreement (this “Agreement”) is
effective as of the Grant Date set forth in the Grant Details section below
(“Grant Details”) with respect to the Deferred Stock Units described in the
Grant Details which are granted by Zix Corporation, a Texas corporation (the
“Company”), to the Non-Employee Director (“Grantee”) named in the Grant
Details.  The Company wishes to recognize Grantee’s contributions to the
Company, and to encourage Grantee's sense of proprietorship in the Company, by
providing Grantee with Deferred Stock Units as described below.

1)

Grant Details

Pursuant to and subject to the Zix Corporation Amended and Restated 2012
Incentive Plan, as amended (the “Plan”), and this Agreement, the Company hereby
grants to Grantee, effective on the grant date indicated below (“Grant Date”),
the number of deferred stock units (“Units”) convertible into the same number of
shares (“Shares”) of the Company’s common stock, par value $0.01 (“Stock”),
indicated below:

Grantee

 

Number of Units

 

Grant Date

 

Vesting Schedule

Quarterly vesting pro rata over one year from the Grant Date

2)

Terms

The number of Units indicated in the Grant Details represents the right to
receive an equal number of Shares of Stock on the terms set forth in this
Agreement. By accepting the Units in accordance with section 22) of this
Agreement, Grantee is deemed to agree to the terms of the Plan and this
Agreement.

3)

Terms of the Plan Govern

The terms contained in the Plan are incorporated into and made a part of this
Agreement. This Agreement is governed by the terms of the Plan and it is subject
to and will be construed in accordance with the Plan. The terms of the Plan
govern and control any conflict between the terms of the Plan and this
Agreement. All capitalized terms not defined in this Agreement have the meanings
ascribed to them in the Plan. This grant of Units and this Agreement are subject

 

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to the terms and conditions of any compensation recoupment policy adopted by the
Board or any committee of the Board from time to time.  

4)

Condition for Grant

As a condition of accepting this grant of Units and this Agreement, Grantee must
have a brokerage account with the Company’s authorized administrative stock
brokerage firm, which is currently Merrill Lynch (“Broker”).

5)

Vesting of Units

The Company will credit the Units to a bookkeeping account on behalf of
Grantee.  Except as otherwise provided herein, the Units will vest and become
non-forfeitable on the earliest to occur of the following:

 

a)

as to particular Units, on the vesting dates described in the Grant Details
(each, a “Vesting Date”), if and only if Grantee remains a member of the Board
as of such Vesting Date;

 

b)

as to all of the Units, upon Grantee ceasing to be a member of the Board by
reason of his or her death or Disability;

 

c)

as to all of the Units, upon Grantee ceasing to be nominated by the Board to
stand for re-election to the Board at the Company’s next annual meeting of
shareholders; or

 

d)

as to all of the Units, as provided in Section 14.6 of the Plan in connection
with a Change in Control.

If Grantee ceases to be a member of the Board prior to a Vesting Date for any
reason other than those contemplated above, Grantee will immediately and
automatically forfeit all right, title and interest in and to any then unvested
Units (i.e., Units for which a Vesting Date has not yet occurred), such unvested
Units automatically will be cancelled, and Grantee will not be entitled to any
consideration for those cancelled Units.

6)

Conversion to Stock

The Company will convert applicable Units, to the extent vested pursuant to
section 5) above, into Shares, and Stock evidencing the conversion of those
Units into Shares will be issued by the Company and registered on the books of
the Company in Grantee’s name as soon as practicable after the earliest to occur
of the following (each a “Payment Date”):  

 

a)

upon the termination of Grantee’s services with the Board for any reason and
under circumstances that constitute a “separation from service” within the
meaning of Section 409A of the Code (together with any Department of Treasury
regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued after the
date hereof, “Section 409A”); or  

 

b)

upon the termination of Grantee’s services with the Board by reason of his or
her death.

 

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For the avoidance of doubt, the Company is entitled to delay issuance of the
Shares for a reasonable period in order to comply with registration requirements
under the 1933 Act, listing requirements under the rules of any stock exchange,
and requirements under any other law or regulation applicable to the issuance of
the Shares.

7)

Restrictions on Transfer

No right or interest of Grantee in the Units or this Agreement can be: (a)
pledged, encumbered, or hypothecated to or in favor of any party other than the
Company or any Subsidiary, or (b) subject to any lien, obligation, or liability
of Grantee to any other party other than the Company or any Subsidiary. The
Units are not assignable or transferable by Grantee other than: (a) upon
Grantee’s death, to a beneficiary under a testamentary trust or will, or by the
laws of descent and distribution, and (b) pursuant to a domestic relations order
that would satisfy Section 414(p)(1)(A) of the Code if it were deemed to apply
to the Units.

8)

Delivery and Form of Shares

As soon as practicable within the thirty (30) day period following any
applicable Payment Date, the Company shall deliver the Shares to Grantee or,
upon Grantee’s reasonable request, to Grantee’s designee. The Company may choose
to deliver the Shares in either certificated or uncertificated form.
Notwithstanding the foregoing, the Company is entitled to delay delivery of the
Shares for a reasonable period in order to comply with registration requirements
under the 1933 Act, listing requirements under the rules of any stock exchange,
and requirements under any other law or regulation applicable to the issuance or
transfer of the Shares.

9)

Voting Rights; Grantee Rights

Grantee will not have voting or any other rights as a shareholder of the Company
with respect to Units. Upon conversion of Units into Shares of Stock, Grantee
will obtain full voting rights as a shareholder of the Company with respect to
those Shares. This Agreement creates only a contractual obligation on the
Company as to amounts payable and shall not be construed as creating a trust.
Grantee shall only have the rights of a general unsecured creditor of the
Company with respect to the amounts credited and benefits payable, if any, with
respect to the Units, and rights no greater than the right to receive Shares as
a general unsecured creditor with respect to the Units as and when payable
hereunder.

10)

Dividend Equivalents

If one or more cash dividends is paid with respect to Stock before the Payment
Date of Units, Grantee will receive additional Units equal to (a) the dollar
amount or fair market value of the dividend per Share of Stock multiplied by the
number of Units, divided by (b) the Fair Market Value of the Stock on the
dividend payment date. The additional Units will be subject to the same vesting
schedule, forfeiture and other terms that apply to the original Units.

 

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11)

Successors

This Agreement is binding upon any successor of the Company.

12)

Notice

Notices under this Agreement must be in writing, delivered personally or sent by
registered or certified U.S. mail, return receipt requested, postage prepaid.
Notices to the Company must be addressed to Zix Corporation, 2711 North Haskell
Avenue, Suite 2200, LB 36, Dallas, Texas 75204-2960, Attn: Corporate Secretary,
or any other address designated by the Company in a written notice to Grantee.
Notices to Grantee will be directed to the address of Grantee then currently on
file with the Company, or at any other address given by Grantee in a written
notice to the Company.

13)

Payment

Grantee is required to make arrangements to satisfy any and all taxes with
respect to any taxable event arising as a result of the vesting or settlement of
any Units.

14)

Continued Directorship Not Guaranteed

Nothing in this Agreement, the Plan or any document describing the Plan or this
Agreement, nor the grant of any Units, gives Grantee any right to continue to
serve as a director of the Company.

15)

Governing Law

This Agreement 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).

16)

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 Agreement.

17)

Amendment; Termination

The Committee may amend or terminate this Agreement without approval of Grantee;
provided, however, that such amendment, modification or termination shall not,
without Grantee’s consent, reduce or diminish the value of the Units determined
as if they were fully vested on the date of such amendment or termination.

18)

Modifications in Writing

No amendment of this Agreement or waiver of any provision of this Agreement is
binding on the Company unless it is in a writing signed by the Company.

19)

No Deemed Waivers

No failure by the Company to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof will constitute a waiver of any such
breach or any other covenant,

 

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duty, agreement or condition. No waiver of any provision of this Agreement will
be deemed to occur, or to constitute a waiver of any other provision of this
Agreement, or to constitute a continuing waiver, unless that waiver is in a
writing signed by the party against whom the waiver is asserted.

20)

Blue-penciling

If any provision of this Agreement 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 Agreement 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.

21)

Further Acts

Grantee will execute all documents, provide all information and take or refrain
from taking all actions as the Company deems necessary or appropriate to achieve
the purposes of this Agreement.

22)

Electronic Signatures

This Agreement may be digitally signed by Grantee. By accepting the Units on the
Broker’s online system, Grantee agrees to the terms of this Agreement together
with the pertinent Plan documents found in the Communications Center on the
Broker’s website. By failing to accept the Units on the Broker’s online system,
Grantee forfeits all rights to the Units. Evidence of Grantee’s acceptance of
the Units 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 Grantee and the Company.  

23)

Section 409A

 

a)

The parties hereto acknowledge and agree that, to the extent applicable, this
Agreement shall be interpreted in accordance with, and incorporate the terms and
conditions required by, Section 409A. Notwithstanding any provision of this
Agreement to the contrary, in the event that the Company determines that any
amounts payable hereunder will be immediately taxable to Grantee under Section
409A, the Company reserves the right (without any obligation to do so or to
indemnify Grantee for failure to do so) to (i) adopt such amendments to this
Agreement and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Company determines to be necessary or
appropriate to preserve the intended tax treatment of the benefits provided by
this Agreement, to preserve the economic benefits of this Agreement and to avoid
less favorable accounting or tax consequences for the Company and/or (ii) take
such other actions as the Company determines to be necessary or appropriate to
exempt the amounts payable hereunder from Section 409A or to comply with the
requirements of Section 409A and thereby avoid the application of penalty taxes
thereunder. No provision of this Agreement shall be interpreted or construed to
transfer any liability for failure to comply with the requirements of Section
409A from Grantee or any other individual to the Company or any of its
Affiliates, employees or agents. Grantee shall be solely responsible and liable
for the satisfaction

 

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of all taxes and penalties that may be imposed on Grantee or for Grantee’s
account in connection with this Agreement (including any taxes and penalties
under Section 409A), and neither the Company nor any of its Affiliates shall
have any obligation to indemnify or otherwise hold Grantee harmless from any or
all such taxes or penalties.

 

b)

Notwithstanding any provision to the contrary in this Agreement, if Grantee is
deemed at the time of Grantee’s “separation from service” (within the meaning of
Section 409A) to be a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code, then, unless the Board determines otherwise, any
portion of any payments, benefits or other consideration under this Agreement
that are determined to be subject to the additional tax provided by Section
409A(a)(1)(B) of the Code if not delayed as required by Section 409A(a)(2)(B)(i)
of the Code shall be delayed until the earlier of (i) seven months after Grantee
has separated from service with the Company or (ii) the date of Grantee’s
death.  

 

ZIX CORPORATION

 

By:

Its: