##### 



Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 1 of 9
  
 MATT BRODY,
    
    §§Plaintiff,
    
    §
    
    Cause No. 3-04-CV-1931-K§§ZIX CORPORATION, et al.,
    
    §
    
    ECF§Defendants.
    
    §
 ORDER FOR NOTICE AND HEARING
  th




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 2 of 9




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 3 of 9




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 4 of 9




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 5 of 9
  The Wall Street
Journal Investors Business Daily Business Wire




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 6 of 9




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 7 of 9
  Brody, et at. Zix Corp., et al,




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 8 of 9




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Case 3:04-cv-01931
    
    Document 136
    
    Filed 03/18/2008
    
    Page 9 of 9
    /s/ ED KINKEADEED KINKEADEUNITED STATES DISTRICT JUDGE




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##### 



EXHIBIT A(1)
 Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 46 of 88
 
 MATT BRODY,
    
    §§Plaintiff,
    
    §
    
    Cause No. 3-04-CV-1931-K§§ZIX CORPORATION, et al.,
    
    §
    
    ECF§Defendants.
    
    §
 NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT,  MOTION FOR ATTORNEYS FEES AND SETTLEMENT FAIRNESS HEARING
 If you purchased or otherwise acquired Zix Corporation common stock between October
30, 2003 and May 4, 2004, inclusive, and were damaged thereby, then you may be eligible
to receive a payment from a class action settlement.
 A federal court authorized this notice. This is not a solicitation from a lawyer.
 
    
    The settlement will provide a $5.6 million settlement fund for the benefit of investors
who purchased or otherwise acquired shares of Zix Corporation (Zix) common
stock between October 30, 2003 and May 4, 2004, inclusive, and were damaged thereby.
    
    The settlement resolves a lawsuit alleging that Zix and certain of its officers and
directors misled investors about its practices and its operations.
    
    Your legal rights are affected whether you act or do not act. Read this notice
carefully.
  SUBMIT
A CLAIM FORM  BY
, 2008
    
    The only way to get a payment.EXCLUDE
YOURSELF BY
, 2008
    
    Get no payment. This is the only option
that allows you to ever be part of any
other lawsuit against the Defendants and
the other Released Parties about the
Settled Claims.OBJECT BY, 2008
    
    Write to the Court about why you do not
like the settlement, the Plan of
Allocation, the application for an award
of attorneys fees and reimbursement of
expenses, or Lead Plaintiffs application
for reimbursement of time and expenses
(including lost wages).GO TO A HEARING ON, 2008
    
    Ask to speak in Court about the settlement.
 APP 46




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##### 



Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 47 of 88
 DO NOTHING
    
    Get no payment. Give up rights.
 
    
    These rights and options  and the deadlines to exercise them are explained in this
notice.
    
    The Court in charge of this case still has to decide whether to approve the settlement.
Payments will be made if the Court approves the settlement and after appeals, if any, are
resolved. Please be patient.
 SUMMARY NOTICE
 Statement of Plaintiffs Recovery
 1 See
 Statement of Potential Outcome of Case
  
 1
    
    An allegedly damaged share might have been traded more than once during the Class
Period, and the indicated average recovery would be the total for all purchasers of that share. APP 47
 -2-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 48 of 88
   Statement of Attorneys Fees and Costs Sought
  Further Information
  Reasons for the Settlement
   [END OF COVER PAGE]
 APP 48
 -3-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 49 of 88
 WHAT THIS NOTICE CONTAINS
 Table of Contents
 PageSUMMARY NOTICE
    
    
    2Statement of Plaintiffs Recovery
    
    
    2Statement of Potential Outcome of Case
    
    
    2Statement of Attorneys Fees and Costs Sought
    
    
    3Further Information
    
    
    3Reasons for the Settlement
    
    
    3WHAT THIS NOTICE CONTAINS
    
    
    4BASIC INFORMATION
    
    
    71.
    
    
    Why did I get this notice package?
    
    
    72.
    
    
    What is this lawsuit about?.
    
    
    73.
    
    
    Why is this Action a class action?
    
    
    84.
    
    
    Why is there a settlement?
    
    
    8WHO IS IN THE SETTLEMENT
    
    
    85.
    
    
    How do I know if I am part of the settlement?
    
    
    86.
    
    
    Are there exceptions to being included in the Class?
    
    
    97.
    
    
    What if I am still not sure if I am included?
    
    
    9THE SETTLEMENT BENEFITS-WHAT YOU GET
    
    
    98.
    
    
    What does the settlement provide?
    
    
    99.
    
    
    How much will my payment be?
    
    
    9HOW YOU OBTAIN A PAYMENT  SUBMITTING A PROOF OF CLAIM FORM
    
    
    1010.
    
    
    How can I get a payment?
    
    
    10
 APP 49
 -4-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 50 of 88
 Page11.
    
    
    When would I get my payment?
    
    
    1012.
    
    
    What am I giving up to get a payment or to stay in the Class?
    
    
    10EXCLUDING YOURSELF FROM THE SETTLEMENT
    
    
    1213.
    
    
    How do I get out of the proposed settlement?
    
    
    1214.
    
    
    If I do not exclude myself, can I sue the Defendants and the
other Released Parties for the Settled Claims later?
    
    
    1215.
    
    
    If I exclude myself, can I get money from the proposed settlement?
    
    
    13THE LAWYERS REPRESENTING YOU
    
    
    1316.
    
    
    Do I have a lawyer in this case?
    
    
    1317.
    
    
    How will the lawyers be paid?
    
    
    13OBJECTING TO THE SETTLEMENT
    
    
    1318.
    
    
    How do I tell the Court that I do not like the proposed
settlement
the Plan of Allocation, the application for attorneys fees and
reimbursement of expenses or the application for reimbursement to
Lead Plaintiffs?
    
    
    1319.
    
    
    What is the difference between objecting and excluding?
    
    
    15THE COURTS SETTLEMENT FAIRNESS HEARING
    
    
    1520.
    
    
    When and where will the Court decide whether to approve the
proposed settlement?
    
    
    1521.
    
    
    Do I have to come to the hearing?
    
    
    1522.
    
    
    May I speak at the hearing?
    
    
    15IF YOU DO NOTHING
    
    
    1623.
    
    
    What happens if I do nothing at all?
    
    
    16GETTING MORE INFORMATION
    
    
    1624.
    
    
    Are there more details about the proposed settlement?
    
    
    1625.
    
    
    How do I get more information?
    
    
    16PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS
    
    
    17
 APP 50
 -5-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 51 of 88
 PageSPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
    
    
    21
 APP 51
 -6-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 52 of 88
 BASIC INFORMATION
     Matt Brody v. Zix Corp., et al.,
    Matt Brody v. Zix Corp., et al., Hershell Warner Zix Corp., et al., Maurice Silber v.Zix Corp., et al., Charles Dechter v. Zix Corp.,
et a.l., DavidB. Lile v. Zix Corp., et al., Jerome Lievre Zix Corp., et al.,
  APP 52
 -7-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 53 of 88
        WHO IS IN THE SETTLEMENT
   APP 53
 -8-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 54 of 88
     purchased or otherwise acquired
  
 THE SETTLEMENT BENEFITSWHAT YOU GET
     APP 54
 -9-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 55 of 88
 See
 HOW YOU OBTAIN A PAYMENT  SUBMITTING A PROOF OF CLAIM FORM
  2008.
 11.
    
    When would I get my payment?
 2008,
 12.
    
    What am I giving up to get a payment or to stay in the Class?
   APP 55
 -10-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 56 of 88
 et seq.
     APP 56
 -11-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 57 of 88
    EXCLUDING YOURSELF FROM THE SETTLEMENT
  13.
    
    How do I get out of the proposed settlement?
 Brody Zix Corp.,   2008,
 
  14.
    
    If I do not exclude myself, can I sue the Defendants and the other Released Parties for
the Settled Claims later?
 this   2008.
 APP 57
 -12-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 58 of 88
   THE LAWYERS REPRESENTING YOU
    %
   OBJECTING TO THE SETTLEMENT
   APP 58
 -13-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 59 of 88
  Brody Zix Corp.,   2008:
 COURT:
 
 CO-LEAD COUNSEL:
 Christopher L. Nelson, Esq.
    
    Marvin Frank, Esq.Schiffrin Barroway Topaz & Kessler, LLP
    
    Murray Frank & Sailer LLP280 King of Prussia Road
    
    275 Madison Avenue, Suite 801Radnor, Pennsylvania 19087
    
    New York, NY 10116
 DEFENDANTS COUNSEL:
 &
  APP 59
 -14-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 60 of 88
   THE COURTS SETTLEMENT FAIRNESS HEARING
   .m.  day,  2008, See
     APP 60
 -15-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 61 of 88
 see Brody v. Zix Corp.,
 IF YOU DO NOTHING
 23.
    
    What happens if I do nothing at all?
 (see (see
 GETTING MORE INFORMATION
 24.
    
    Are there more details about the proposed settlement?
   
  25.
    
    How do I get more information?
 APP 61
 -16-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 62 of 88
  PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS
  s pro rata
    A.
    
    For shares sold between October 30, 2003 and the close of trading on May 4, 2004, there
shall be no Recognized Loss.B.
    
    For shares sold between the opening of trading on May 5, 2004 and the close of trading
August 2, 2004, the Recognized Loss shall be the lesser of:
 (i)
    
    the inflation per share at the time of purchase minus the inflation per
share at the time of sale (where inflation per share at the time of purchase shall be
the
 APP 62
 -17-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 63 of 88
 purchase price times the inflation percentage on the date of purchase and the
inflation per share at the time of sale shall be the sale price times the inflation
percentage on the date of sale), such inflation percentages and prices as set forth
on the Tables below;(ii)
    
    the purchase price minus the sale price; and(iii)
    
    the purchase price per share minus the average closing price per share
up to the date of sale as set forth in Table 2.
 C.
    
    For shares held through the close of trading August 2, 2004, the Recognized Loss shall
be the lesser of:
 (i)
    
    the inflation per share at the time of purchase (where inflation per share at the
time of purchase shall be the purchase price times the inflation percentage on the
date of purchase and the inflation per share at the time of sale shall be the sale
price times the inflation percentage on the date of sale), such inflation
percentages and prices as set forth on the Tables below; and(ii)
    
    the purchase price per share minus the average closing price per share from the
disclosure at the end of the Class Period, on May 4, 2004, through August 2, 2004 of
$7.33, as noted on Table II.
 Table 1: Inflation as a Percentage of the Share Price
 InflationPeriod
    
    Start Date
    
    
    End Date
    
    
    Percentage1
    
    
    10/31/03
    
    
    
    1/19/04
    
    
    
    8.5
    %2
    
    
    1/20/04
    
    
    
    1/20/04
    
    
    
    12.6
    %3
    
    
    1/21/04
    
    
    
    1/25/04
    
    
    
    15.8
    %4
    
    
    1/26/04
    
    
    
    4/11/04
    
    
    
    19.0
    %5
    
    
    4/12/04
    
    
    
    5/4/04
    
    
    
    24.1
    %6
    
    
    5/5/04
    
    
    
    5/5/04
    
    
    
    17.5
    %7
    
    
    5/6/04
    
    
    Current
    
    
    0.0
    %
 Table 2: Average Closing Prices for the 90 Days After the Close of the Class Period
 Closing
    
    
    AverageDate
    
    Price
    
    
    Closing Price5/5/2004
    
    
    11.49
    
    
    
    11.495/6/2004
    
    
    8.89
    
    
    
    10.195/7/2004
    
    
    8.69
    
    
    
    . 9.695/10/2004
    
    
    7.79
    
    
    
    9.225/11/2004
    
    
    7.84
    
    
    
    8.945/12/2004
    
    
    8.33
    
    
    
    8.845/13/2004
    
    
    7.85
    
    
    
    8.705/14/2004
    
    
    7.10
    
    
    
    8.505/17/2004
    
    
    7.17
    
    
    
    8.355/18/2004
    
    
    6.59
    
    
    
    8.175/19/2004
    
    
    7.30
    
    
    
    8.095/20/2004
    
    
    6.78
    
    
    
    7.995/21/2004
    
    
    6.84
    
    
    
    7.90
 APP 63
 -18-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 64 of 88
 Closing
    
    
    AverageDate
    
    Price
    
    
    Closing Price5/24/2004
    
    
    7.11
    
    
    
    7.845/25/2004
    
    
    7.57
    
    
    
    7.825/26/2004
    
    
    7.50
    
    
    
    7.805/27/2004
    
    
    7.95
    
    
    
    7.815/28/2004
    
    
    8.94
    
    
    
    7.876/1/2004
    
    
    8.49
    
    
    
    7.916/2/2004
    
    
    8.83
    
    
    
    7.956/3/2004
    
    
    8.43
    
    
    
    7.986/4/2004
    
    
    8.05
    
    
    
    7.986/7/2004
    
    
    8.29
    
    
    
    7.996/8/2004
    
    
    8.43
    
    
    
    8.016/9/2004
    
    
    8.20
    
    
    
    8.026/10/2004
    
    
    8.09
    
    
    
    8.026/14/2004
    
    
    7.91
    
    
    
    8.026/15/2004
    
    
    8.00
    
    
    
    8.026/16/2004
    
    
    8.50
    
    
    
    8.036/17/2004
    
    
    8.41
    
    
    
    8.056/18/2004
    
    
    8.50
    
    
    
    8.066/21/2004
    
    
    8.12
    
    
    
    8.066/22/2004
    
    
    8.39
    
    
    
    8.076/23/2004
    
    
    8.40
    
    
    
    8.086/24/2004
    
    
    8.37
    
    
    
    8.096/25/2004
    
    
    8.66
    
    
    
    8.116/28/2004
    
    
    8.03
    
    
    
    8.106/29/2004
    
    
    7.65
    
    
    
    8.096/30/2004
    
    
    7.89
    
    
    
    8.097/1/2004
    
    
    7.70
    
    
    
    8.087/2/2004
    
    
    7.59
    
    
    
    8.067/6/2004
    
    
    7.18
    
    
    
    8.047/7/2004
    
    
    6.80
    
    
    
    8.017/8/2004
    
    
    5.96
    
    
    
    7.977/9/2004
    
    
    6.03
    
    
    
    7.937/12/2004
    
    
    5.63
    
    
    
    7.887/13/2004
    
    
    6.00
    
    
    
    7.847/14/2004
    
    
    5.90
    
    
    
    7.807/15/2004
    
    
    5.67
    
    
    
    7.757/16/2004
    
    
    5.81
    
    
    
    7.717/19/2004
    
    
    5.43
    
    
    
    7.677/20/2004
    
    
    5.77
    
    
    
    7.637/21/2004
    
    
    6.03
    
    
    
    7.607/22/2004
    
    
    5.86
    
    
    
    7.577/23/2004
    
    
    5.44
    
    
    
    7.537/26/2004
    
    
    4.96
    
    
    
    7.487/27/2004
    
    
    5.43
    
    
    
    7.457/28/2004
    
    
    5.39
    
    
    
    7.417/29/2004
    
    
    5.77
    
    
    
    7.397/30/2004
    
    
    5.86
    
    
    
    7.368/2/2004
    
    
    5.72
    
    
    
    7.33
  APP 64
 -19-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 65 of 88
    a pro rota
   APP 65
 -20-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 66 of 88
   SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
  
  
 By Order of the CourtCLERK OF THE COURT APP 66
 -21-




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EXHIBIT A(2)
 Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 68 of 88
 
 MATT BRODY,
    
    §§Plaintiff,
    
    §
    
    Cause No. 3-04-CV-1931-K§§ZIX CORPORATION, et al.,
    
    §
    
    ECF§Defendants.
    
    §
 PROOF OF CLAIM AND RELEASE
 , 2008.
    2008
 
 2008
 APP 68




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 69 of 88
 CLAIMANTS STATEMENT
     APP 69
 -2-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 70 of 88
     APP 70
 -3-




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##### 



Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 71 of 88
    
 
 City
    
    State                                                                Zip CodeForeign Province
    
    Foreign Country(Daytime)Area Code
    
    Telephone Number(Evening)Area Code
    
    Telephone Number
  APP 71
 -4-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 72 of 88
 o     Individual/Sole Proprietor
    
    o     Joint Owners
    
    o     Pension Plano     Corporation
    
    o     Partnership
    
    o     Trusto     IRA
    
    o     Other (describe: )
  Social Security Number
    
    or
    
    Taxpayer Identification Number
 
 OPENING POSITION:
 PURCHASES/ACQUISITIONS DURING THE CLASS PERIOD:
 Aggregate CostNumber of Shares of
    
    Purchase/Acquisition
    
    (includingDate(s) of Purchase/Acquisition (List
    
    Common Stock
    
    Price Per Share of
    
    commissions, taxes,Chronologically)  (Month/Day/Year)
    
    Purchased/Acquired
    
    Common Stock
    
    and fees)__/ ___/ ___
    
    
    
    
    
    $
    
    
    
    $__/ ___/ ___
    
    
    
    
    
    $
    
    
    
    $__/ ___/ ___
    
    
    
    
    
    $
    
    
    
    $__/ ___/ ___
    
    
    
    
    
    $
    
    
    
    $__/ ___/ ___
    
    
    
    
    
    $
    
    
    
    $
 POST-CLASS PERIOD PURCHASES/ACQUISITIONS:
 APP 72
 -5-




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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 73 of 88
 
 SALES:
 Amount ReceivedDate(s) of Sale (List
    
    Number of Shares of
    
    Sale Price Per Share
    
    (net of commissions,Chronologically) (Month/Day/Year)
    
    Common Stock Sold
    
    of Common Stock
    
    taxes, and fees)__/ ___/ ___
    
    
    
    $
    
    $__/ ___/ ___
    
    
    
    $
    
    $__/ ___/ ___
    
    
    
    $
    
    $__/ ___/ ___
    
    
    
    $
    
    $__/ ___/ ___
    
    
    
    $
    
    $
 14. CLOSING POSITION:
    Social Security Number (for individuals) or
 Taxpayer Identification Number 
(for estates, trusts, corporations, etc.)
  APP 73
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Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 74 of 88
    
 Signature of Claimant (If this claim is being made on
behalf of Joint Claimants, then each must sign)(Signature)(Signature)(Capacity of person(s) signing, e.g. beneficial
purchaser(s), executor, administrator, trustee, etc.) APP 74
 -7-




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##### 



Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 75 of 88
 2008,
 
 2008,
  REMINDER CHECKLIST
 1.
    
    o
    
    Please be sure to sign this Proof of Claim on page [___]. If this Proof of Claim
is submitted on behalf of joint claimants, then both claimants must sign.2.
    
    o
    
    Please remember to attach supporting documents. Do NOT send any stock
certificates. Keep copies of everything you submit.3.
    
    o
    
    Do NOT use highlighter on the Proof of Claim or any supporting documents.4.
    
    o
    
    If you move after submitting this Proof of Claim, please notify the Claims
Administrator of the change in your address.
 NOTE: RECEIPT ACKNOWLEDGMENT NEEDED
  APP 75
 -8-




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##### 



EXHIBIT A(3)
 Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 77 of 88
 
 MATT BRODY,
    
    §§Plaintiff,
    
    §
    
    Cause No. 3-04-CV-1931-K§§ZIX CORPORATION, et al.,
    
    §
    
    ECF§Defendants.
    
    §
 SUMMARY NOTICE OF PENDENCY OF CLASS ACTION AND  PROPOSED SETTLEMENT
 TO:
    
    ALL PERSONS AND ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED ZIX CORPORATION COMMON STOCK
BETWEEN OCTOBER 30, 2003 AND MAY 4, 2004, INCLUSIVE, AND WHO WERE DAMAGED THEREBY (THE
CLASS).
 
  APP 77




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##### 



Case 3:04-cv-01931
    
    Document 135
    
    Filed 03/11/2008
    
    Page 78 of 88
  In re Zix Securities Settlement  c/o Epiq Systems
Claims Administrator
P.O. Box 4390
Portland, OR 97208-4390
(866) 523-4842
  Co-Lead Counsel
 
 
 
  By Order of The Court APP 78
 2