(4) the commission of acts by Employee of moral turpitude that are injurious to the Company;(5) a breach by Employee of the “confidentiality and invention” agreement between the Company andEmployee; (6) a breach by Employee of Employee’s obligations under this Agreement; or (7) a breachby Employee of the Company’s “Code of Ethics for Senior Officers,” as currently in effect oramended from time-to-time. For purposes of this definition, no act, or failure to act, onEmployee’s part shall be considered “intentional” unless done, or omitted to be done, by him not ingood faith and without reasonable belief that his action or omission was in, or not opposed to, thebest interest of the Company.     Notwithstanding the foregoing, Employee shall not be deemed to have been terminated for Causewithout (1) reasonable written notice to Employee, setting forth the reasons for the Company’sintention to terminate for Cause; (2) an opportunity for Employee to be heard before the Board (oran authorized representative thereof); and (3) delivery to Employee of a written notice oftermination from the Board (or its authorized representative) finding that, in the good faithopinion of the Board (or its authorized representative), Employee engaged in the conduct set forthabove in clause (1) or (2) of the preceding paragraph or an event specified in clause (3), (4),(5), (6) or (7) of the preceding paragraph has occurred.     D. Change in Control. A “Change in Control” of the Company shall have occurred if anyof the following events shall occur during the term of Employee’s employment:     (1) The Company is merged, consolidated or reorganized into or with anothercorporation 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 immediatelybefore such transaction beneficially own, immediately after or as a result of suchtransaction, equity securities of the surviving or acquiring corporation or suchcorporation’s parent corporation possessing less than 51% of the voting power of thesurviving or acquiring person or such person’s parent corporation;     (2) The Company sells all or substantially all of its assets to any other corporationor other legal person, other than an Affiliate, and as a result of such sale, the Companyor its shareholders or Affiliates immediately before such transaction beneficially own,immediately after or as a result of such transaction, equity securities of the surviving oracquiring corporation or such corporation’s parent corporation possessing less than 51% ofthe 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 securitiesof a subsidiary of the Company, which offering is not part of a transaction otherwise apart of or related to a Change in Control);     (3) Any Acquiring Person has become the beneficial owner (as the term “beneficialowner” is defined under Rule 13d-3 or any successor rule or regulation promulgated underthe Exchange Act) of securities which, when added
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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 toelect any class of directors;     (4) If, at any time, the Continuing Directors then serving on the Board cease for anyreason to constitute at least a majority thereof;     (5) Any occurrence that would be required to be reported in response to Item 6(e) ofSchedule 14A of Regulation 14A or any successor rule or regulation promulgated under theExchange Act; or     (6) Such other events that cause a Change in Control of the Company, as determined bythe Board in its sole discretion.     E. Continuing Director**.**A “Continuing Director” shall mean a director of the Companywho (1) is not an Acquiring Person or an Affiliate or Associate thereof, or a representative of anAcquiring Person or nominated for election by an Acquiring Person, and (2) was either (a) a memberof the Board on the date of this Agreement or (b) subsequently became a director of the Company andwhose initial election or initial nomination for election by the Company’s shareholders wasapproved by a majority of the Continuing Directors then on the Board.     F. Company. The “Company” shall mean Zix Corporation, a Texas corporation, or itssuccessors-in-interest, as the context requires.     G. Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, asamended.2. Termination Without Cause Payment. If the Company terminates Employee’s employmentother than for Cause, the Company shall pay to Employee an amount equal to nine (9) monthsof Employee’s base salary, using Employee’s highest monthly base salary during the term ofEmployee’s employment (the “Termination Without Cause Payment”), subject to receiving a releasereasonably satisfactory to the Company relating to employment matters.3. Change In Control Payment. If Employee resigns from employment with the Company on orbefore the 180th day following a Change in Control (with the day immediately followingthe occurrence of the Change in Control being day “1”), the Company shall pay to Employee an amountequal to nine (9) months of Employee’s base salary, using Employee’s highest monthly base salaryduring the term of Employee’s employment (the “Change In Control Payment”), subject to receiving arelease reasonably satisfactory to the Company relating to employment matters.4. Mode of Payment; Acceptance; No Overlapping Payments. The payments provided for inSections 2 and 3 shall, in the Company’s discretion, be paid either in nine (9) equal monthly cashpayments beginning within 30 days of the occurrence of the applicable event, or in a lump sum cashpayment paid within 30 days of the occurrence of the applicable
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event. Regardless of the manner in which the applicable payment is made, the Employee shall beresponsible for all applicable withholdings for taxes and other withholdings required by applicablelaw and any amounts owed by Employee to Company, and Employee shall pay the same to the Companypromptly upon demand if not otherwise withheld. The Company’s obligation to make the paymentsprovided for in Sections 2 and 3 is absolute, and such payments shall not be mitigated or offset byvirtue of Employee obtaining new employment or failing to seek new employment. Acceptance byEmployee of the Termination Without Cause Payment (Section 2) or Change In Control Payment (Section3), as applicable, shall constitute a release by Employee of the Company and its affiliates,shareholders, officers, employees, directors and other agents from all claims arising out of,relating to, or in connection with, Employee’s employment with, or separation from employment with,the Company and its Affiliates.     Employee shall be entitled to receive pursuant to this Agreement only one of either (a) oneTermination Without Cause Payment (Section 2) or (b) one Change In Control Payment (Section 3),*i.e.*, not more than one of any of such payments is payable pursuant to this Agreement.5. Conflict of Interest. Without limiting the Employee’s obligations to comply with theCompany’s Code of Conduct and Code of Ethics, Employee agrees that during the term of Employee’semployment, Employee shall not:     A. Engage, either directly or indirectly, in any activity which may involve a conflict ofinterest with the Company or its Affiliates (a “Conflict of Interest”), including ownership in anysupplier, contractor, subcontractor, customer or other entity with which the Company does business(other than as a shareholder of less than one percent (1%) of a publicly-traded or private class ofequity ownership); and     B. Employee shall not accept any material payment, service, loan, gift, trip, entertainment orother favor from a supplier, contractor, subcontractor, customer or other entity with which theCompany does business, and Employee shall promptly inform the Board as to each offer received byEmployee to engage in any such activity.Employee agrees to disclose to the Company any other facts of which Employee becomes aware thatmight involve or give rise to a Conflict of Interest or potential Conflict of Interest.6. Non-competition. Beginning the date that Employee separates from employment with theCompany and through the nine (9) month anniversary of such separation from employment date,Employee shall not:     A. Directly or indirectly, compete with the Company’s Email Encryption business ore-Prescribing business or any other material line of business being conducted by the Company(“Other Material Business”), in each case, as the Email Encryption line of business, e-Prescribingline of business, or Other Material Business line of business is comprised as of the date of theEmployee’s separation from employment. For purposes of this Agreement, “Competition” shallinclude, without limitation, engaging, directly or
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indirectly, in any business, whether as proprietor, partner, joint venturer, employee, agent,officer, director, consultant, advisor, or holder of more than one percent (1%) of any publiclytraded or private class of equity ownership of a business enterprise, that is competitive with theCompany’s Email Encryption business or e-Prescribing business or Other Material Business;     B. Directly or indirectly, solicit to do, or do, competing business with (i) any person thatis a customer of the Company’s Email Encryption business or e-Prescribing business or OtherMaterial Business as of the date of the Employee’s separation from employment, or (ii) any personthat has been a customer of the Company’s Email Encryption business or e-Prescribing business orOther Material Business within the six months preceding such date; or     C. Directly or indirectly, solicit to hire, or hire, any person that is an employee of theCompany (including its affiliated companies) as of the date of the Employee’s separation fromemployment, or was an employee within the 3 month period preceding such date, except by way of*bona-fide*general advertising.     Although the Company and Employee have, in good faith, used their best efforts to make thecovenants of this Section reasonable in all pertinent respects, and it is not anticipated, nor isit intended, by either party to this Agreement that any arbitrator or court will find it necessaryto reform any of such covenants to make it reasonable in all pertinent respects, the Company andEmployee understand and agree that if an arbitrator or court determines it necessary to reform anyof such covenants to make it reasonable in all pertinent respects, damages, if any, for a breachof the non-competition covenant, as so reformed, shall be deemed to accrue to the Company as andfrom the date of such a breach only and so far as the damages for such breach related to an actionthat accrued within the scope of the covenant as so reformed.7. Miscellaneous.     A. Pending Litigation; Indemnification. During Employee’s employment and followingEmployee’s separation from employment, with respect to any lawsuits currently pending or hereafterasserted against the Company that pertain to (i) matters reasonably within the purview ofEmployee’s job responsibilities while employed with the Company or (ii) matters for which theEmployee has particular knowledge, Employee agrees to cooperate reasonably in the defense of thelitigation thereof, including signing affidavits and making himself or herself available forinterviews, deposition preparation, deposition, and trial. If Employee is requested to assistwith litigation activities following Employee’s separation from employment other than thoselitigation activities in which Employee would be required to participate as a named party, theCompany agrees to pay all reasonable documented out-of-pocket costs and lost income up to a maximumof $1,000 per day incurred in connection with such activities. Without the Company’s prior consent,Employee agrees not to comment publicly on any such litigation or any of the issues in thelitigation. Without the Company’s prior consent, Employee also agrees not to discuss any suchlitigation, or cooperate, with the plaintiffs, their attorneys, or their representatives. TheCompany acknowledges that the Employee
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has certain rights to indemnification as an officer of the Company as set forth in theCompany’s Restated Bylaws if the Employee is named as a party in litigation.     B. Waiver. No waiver of any provision of this Agreement shall be deemed, or shallconstitute, a waiver of any other provision, whether or not similar, nor shall any waiverconstitute a waiver of any continuing or succeeding breach of such provision, a waiver of theprovision itself, or a waiver of any right under this Agreement. No waiver shall be binding unlessexecuted in writing by the party making the waiver.     C. Limitation of Rights. Nothing in this Agreement, except as specifically stated inthis Agreement, is intended to confer any rights or remedies under or by reason of this Agreementon any persons other than the parties to it and their respective permitted successors and assignsand other legal representatives.     D. Remedies. Employee hereby agrees that a violation of the provisions of Section 5,Section 6, or Section 7.A. would cause irreparable injury to the Company for which it would have noadequate remedy at law. Accordingly, in the event of any such violation, the Company shall beentitled to preliminary and other injunctive relief. Any such injunctive relief shall be inaddition to any other remedies to which the Company may be entitled at law or in equity, orotherwise.     E. Notice. Any consent, notice, demand, or other communication regarding any paymentrequired or permitted hereby must be in writing to be effective and shall be deemed to have beenreceived on the date delivered, if personally delivered, or the date received, if deliveredotherwise, addressed to the applicable party at the address for such party set forth below or atsuch other address as such party may designate by like notice:The Company:Zix Corporation