Exhibit 10.38
Description of Compensation for Zix Corporation Board of Directors Members
Cash Compensation

–   Cash payment of $2,000 per meeting per director for attendance in person at
Board meetings.   –   Cash payment of $1,000 per meeting per director for
attendance at telephonic Board meetings.   –   Annual cash payment of $5,000 per
director for serving as Chair of a Board committee (assuming attendance of at
least two-thirds of the meetings).   –   Annual cash payment of $3,000 per
director for serving as a member (i.e., not the Chair) of a Board committee
(assuming attendance of at least two-thirds of the meetings).

Stock Option Compensation

–   Initial Stock Option Grants — When a non-employee director is first elected
or appointed to our Board of Directors, the director is granted nonqualified
options to purchase 25,000 shares of our common stock. These options vest
quarterly and pro-rata over one year from the grant date, and the exercise price
is 100% of the common stock price on the grant date.   –   Annual Stock Option
Grants — Also, on an annual basis, each non-employee director that has served on
our Board of Directors for at least six months as of the first business day in
January will be granted nonqualified options to purchase a number of shares of
our common stock equal to the greater of (i) one-half of one percent of the
number of our outstanding             shares (measured as of the prior
December 31) or (ii) 200,000 shares, divided by the greater of (i) five or
(ii) the number of non-employee directors that have served on our Board for at
least 6 months as of the grant date; provided that, the number of shares of
Common Stock covered by any such January option grant shall not exceed 40,000
shares. The options will vest quarterly and pro-rata over three years from the
grant date and the option exercise price will be 100% of our common stock price
on such day.   –   Committee Service Option Grants — Also, on an annual basis,
when an non-employee director is first appointed or elected to serve on the
Board’s Audit Committee, the Compensation Committee, or the Nominating and
Corporate Governance Committee, or their respective successors-in-interest, or
on the day the non-employee director is first appointed (or, if later, the date
the committee first becomes active) to serve on another eligible committee of
the Board, then such director shall be granted for annual service on each such
committee, nonqualified options to purchase 5,000 shares of Common Stock, if
serving as the chair of the committee, or 3,000 shares of Common Stock, if
serving as a member but not the chair of the committee. The options will vest
quarterly and pro-rata over three years from the grant date and the option
exercise price will be 100% of our common stock price on such day.