exv10w24



 





Exhibit 10.24




ZIX CORPORATION

STOCK OPTION AGREEMENT




     THIS STOCK OPTION AGREEMENT (“Agreement”) is made and entered into as of the date set forth on
the signature page attached hereto (the “Signature Page”) with respect to the stock options granted
by Zix Corporation, a Texas corporation (the “Company”), to the Optionee (“Optionee”) listed on the
signature page hereto.



     WHEREAS, the Company wishes to recognize the contributions of the Optionee to the Company and
to encourage the Optionee’s sense of proprietorship in the Company by owning the Common Stock, par
value $.01 per share (the “Common Stock”), of the Company;



     NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein, the
Company hereby grants to the Optionee a non-qualified stock option (“Option”) to purchase up to
the total number of shares of the Common Stock set forth on the Signature Page at the price per
share (the “Option Price”) as set forth on the Signature Page on the terms and conditions and
subject to the restrictions as set forth in this Agreement and the provisions of the applicable
Zix Corporation stock option plan (which is incorporated herein by reference) (the “Plan”), which
is referenced on the Signature Page. All defined terms contained herein shall have the meanings
ascribed to them in the Plan, except as otherwise provided herein.



1. Definitions.




     a. Acquiring Person. An “Acquiring Person” shall mean 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”
shall 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 Agreement, 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
Agreement shall 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.



     b. Affiliate and Associate. “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act in effect on the date of this Agreement.



     c. Change in Control. A “Change in Control” of the Company shall have occurred if during the term of this Agreement, any of the following events shall occur:




     (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



			
	 	 	 
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reorganization, 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;




     (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 shall 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);




     (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;




     (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;




     (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; or




     (vi) The employment of the Optionee is terminated by the Company without “cause,” as
such term is defined in Paragraph 4 below, following the public announcement by the Company
of the pendency of any of the events specified in clauses (i) through (v) of this
definition of “Change in Control” and prior to the actual occurrence of any of such events.



     d. Continuing Director. A “Continuing Director” shall mean 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) a
member of the Board of Directors of the Company on the date of this Agreement or (b) 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.



			
	 	 	 
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     e. Disability. “Disability” shall mean any medically determinable physical or mental
impairment that, in the opinion of the Committee, based upon medical reports and other
evidence satisfactory to the Committee, can reasonably be expected to prevent the Optionee from
performing substantially all of his or her customary duties of employment (with or without
reasonable accommodation) for a continuous period of not less than 12 months.



     f. Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



g. Resignation. “Resignation” shall mean the voluntary termination by the Optionee of his or her employment relationship with the employing Subsidiary and, if applicable, Company under circumstances other than voluntary Retirement.




     h. Retirement. “Retirement” shall mean the termination of Optionee’s employment in accordance with the requirements of a written retirement plan, policy or rule of the Company that has been duly adopted by the Company or employing Subsidiary, as applicable.


2. Term of Option. The term of this Option shall expire on the expiration date set forth in
the Signature Page (the “stated term”), except as such term may be otherwise shortened by the
other provisions of the Plan or this Agreement.




3. Exercise of Option.




     a. Exercise. This Option shall become exercisable in increments as set forth in the Signature Page. However, this Option shall become exercisable upon the occurrence of a Change
in Control as to all options that have not vested as of the occurrence of the Change in Control. Except as provided in the Plan or Paragraph 4 below, the Option shall not be exercisable
unless Optionee shall, at the time of exercise, be an employee of the Company or a Subsidiary, and once the Option has become exercisable with respect to a certain number of shares as provided
above, it shall thereafter be exercisable as to all of that number of shares, or as to any part thereof, until expiration or termination of this Option. However, this Option may not be exercised as to less
than 100 shares at any one time (or the remaining shares then purchasable under this Option, if less than 100 shares).



     b. Adjustment. In the event there is any adjustment to the Common Stock the Board of Directors or Committee shall make such adjustment as it deems appropriate to the number of shares subject to the Option or to the Option Price, or both.



     c. Method of Exercise. This Option may be exercised only by written notice (the “Exercise Notice”) by the Optionee to the Company at its principal executive office. The
Exercise Notice shall be deemed given when deposited in the U. S. mails, postage prepaid, addressed to the Company at its principal executive office, or if given other than by deposit
in the U.S. mails, when delivered in person to an officer of the Company at that office. The date of exercise of this Option (the “Exercise Date”) shall be the date of the postmark if the notice
is mailed or the date received if the notice is delivered other than by mail. The Exercise Notice



			
	 	 	 
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shall state the number of shares in respect of which this Option is being exercised and, if the
shares for which this Option is being exercised are to be evidenced by more than one stock
certificate, the denominations in which the stock certificates are to be issued. The Exercise
Notice shall be signed by the Optionee and shall include the complete address of such person,
together with such person’s social security number.




     This Option may be exercised either by tendering cash in the amount of the Option Price or,
with the Company’s consent, by tendering shares of Common Stock {which may include shares
previously acquired upon exercise of options granted under the Plan). The Exercise Notice shall be
accompanied by payment of the aggregate Option Price of the shares purchased by cash, a certified
cashier’s check or, at the Company’s option, by delivery of shares of Common Stock having a Fair
Market Value on the date immediately preceding the exercise date equal to the Option Price.



     If the shares to be purchased are covered by an effective registration statement under the
Securities Act of 1933, as amended, any option granted under the Plan may be exercised by a
broker-dealer acting on behalf of an Optionee if (a) the broker-dealer has received from the
Optionee or the Company a fully- and duly-endorsed agreement evidencing such option, together with
instructions signed by the Optionee requesting the Company to deliver the shares of Common Stock
subject to such option to the broker-dealer on behalf of the Optionee and specifying the account
into which such shares should be deposited, (b) adequate provision has been made with respect to
the payment of any withholding taxes due upon such exercise, and (c) the broker-dealer and the
Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any
successor provision.



     The certificates for shares of Common Stock as to which this Option shall have been so
exercised shall be registered in the name of the Optionee and shall be delivered to the Optionee
at the address specified in the Exercise Notice. An option exercise shall be valid only if the
Optionee makes payment or other arrangements relating to the withholding tax obligations discussed
in Paragraph 8. In the event the person exercising this Option is a transferee of the Optionee by
will or under the laws of descent and distribution, the Exercise Notice shall be accompanied by
appropriate proof of the right of such transferee to exercise this Option.



4. Termination of Option.




     In the event an Optionee ceases to be an employee of either the Company or a Subsidiary of
the Company due to death, Retirement, Resignation, Disability or termination by the Company for
any reason other than “cause” (such five events each being a “Qualified Termination”), this Option
may be exercised by. the Optionee or his or her estate, personal representative or beneficiary to
the fullest extent that the Optionee was entitled to exercise the same on the day of such
termination and with respect to all options that are vested as of the day of such employment
termination (including without limitation, those that vest pursuant to the second sentence of
subparagraph 3.a.), (i) at any time within the sixty-day period commencing on the day next
following the effective date of such termination if such termination is due to the Resignation of
the Optionee; or (ii) at any time within the one-year period commencing on the day next



			
	 	 	 
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following such termination in the case of any other Qualified Termination (or in any such case in
(i) or (ii) above, if shorter, only for the remaining stated term of this Option). In the event
that the Optionee’s employment is terminated for any reason other than a Qualified Termination,
this Option shall automatically expire simultaneously with such termination, For purposes of this
Paragraph, (A) “cause” shall mean (i) the failure, in the sole opinion of the Company or a
Subsidiary of the Company that employs Optionee, of Optionee to adequately perform the duties
assigned to Optionee (other than any such failure resulting from Optionee’s Disability); (ii) the
engagement by Optionee in misconduct that, in the sole opinion of the Company or a Subsidiary of
the Company that employs Optionee, is or may have the effect of being materially injurious to the
Company or its Subsidiaries; or (iii) the conviction of Optionee of any felony or crime of moral
turpitude, or (B) if there is an employment agreement, severance agreement, or other similar
agreement between the Optionee and the Company (regardless of whether such agreement exists on
the date of this Agreement or is entered into hereafter) then, notwithstanding the provisions of
clause (A) of this sentence, “cause” shall have the meaning given such term in the employment
agreement, severance agreement, or other similar agreement.




     After the Optionee’s death, this Option shall be exercisable only by the executor or
administrator of the Optionee’s estate, or if the Optionee’s estate is not in administration, by the
person or persons to whom the Optionee’s rights shall have passed by the Optionee’s will or
under the laws of descent and distribution of the state where the Optionee was domiciled at the
date of death.


5. No Rights as Shareholder. Neither the Optionee nor any person claiming under or
through the Optionee shall be or have 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
certificates
representing such shares shall have been issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company).



6. State and Federal Securities Regulation. No shares shall be issued by the Company
upon the exercise of this Option unless and until any then-applicable requirements of state and
federal laws and regulatory agencies shall have been fully complied with to the satisfaction of
the Company and its counsel. The Company may suspend for a reasonable period or periods the
time during which this Option may be exercised if, in the opinion of the Company, such
suspension is required to enable the Company to comply or remain in compliance with regulatory
requirements relating to the issuance of shares of Common Stock subject to this Option. This
Option is subject to the requirement that, if at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of the shares of common stock subject
to this Option 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 issue or purchase of shares under
this Option, this Option may not be exercised in whole or in part until such listing,
registration, qualification, consent or approval shall have been effected or obtained free of any conditions not
acceptable to the Company. The Company shall be under no obligation to effect or obtain any
such listing, registration, qualification, consent or approval if the Company shall determine, in
its discretion, that such action would not be in the best interest of the Company. The Company shall




			
	 	 	 
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not be liable for damages due to a delay in the delivery or issuance of any stock certificates for
any reason whatsoever, including, but not limited to, a delay caused by listing, registration or
qualification of the shares of Common Stock subject to an option 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 shares under this Option.



7. Modification of Options. At any time and from time-to-time the Committee may
execute an instrument providing for modification, extension, or renewal of any outstanding
option, provided that no such modification, extension or renewal shall impair this Option in any
respect without the written consent of the holder of this Option.



8. Withholding of Taxes. The Company may make such provisions and take such steps as
it may deem necessary or appropriate for the withholding of any taxes which the Company or any
Subsidiary is required by any law or regulation of any governmental authority, whether federal,
state or local, domestic or foreign, to withhold in connection with any option, including, but not
limited to, the withholding of the issuance of all or any portion of the shares of Common Stock
subject to this Option until the Optionee reimburses the Company or the applicable Subsidiary
for the amount the Company or the applicable Subsidiary is required to withhold with respect to
such taxes, canceling any portion of the issuance in an amount sufficient to reimburse the
Company or the applicable Subsidiary for the amount it is required to so withhold, or taking any
other action reasonably required to satisfy the withholding obligation of the Company or the
applicable Subsidiary.



9. Continued Employment Not Presumed. Nothing in this Agreement, the Plan or any
document describing it nor the grant of an Option shall give the Optionee the right to continue in
employment with the Company or any of its Subsidiaries or affect the right of the Company or a
Subsidiary to terminate the employment of the Optionee with or without cause.




10. Non-Competition Covenants.




     a. The provisions of this subparagraph a. shall apply both during normal working hours and at
all other times including, but not limited to, nights, weekends and vacation time, while Optionee
is employed by the Company or any Subsidiary. Optionee shall not directly or indirectly (i) engage
in any employment, business, or activity that is competitive with the business of the Company or
any Subsidiary, (ii) assist any other person or organization in competing with, or in preparing to
engage in competition with, the business of the Company or any Subsidiary. Direct competition
shall include, but not be limited to, the design, development, production, promotion or sale of
products, software, or services competitive with those of the Company or any Subsidiary, In
addition, Optionee shall not directly or indirectly (i) engage in any employment, business, or
activity that is competitive with either (A) the proposed business of the Subsidiary that
employs Optionee (“Employing Subsidiary”) or (B) any proposed business of any of the Company’s
other Subsidiaries (the “Non-Employing Subsidiaries”) of which Optionee has actual knowledge, or
(ii) assist any other person or organization in competing with, or in preparing to engage in
competition with, either (A) the proposed business of the Employing



			
	 	 	 
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Subsidiary or (B) any proposed business of any Non-Employing Subsidiary of which Optionee has
actual knowledge.




     b. The provisions of this subparagraph b. shall apply during Optionee’s employment with the Company or any Subsidiary and for a period of twelve months after Optionee ceases to
be employed by the Company or any Subsidiary. Optionee shall not directly or indirectly
solicit to conduct any Competitive Business with, or conduct any Competitive Business with, any (i)
then-current customer of the Employing Subsidiary or (ii) any person that has been a customer
of the Employing Subsidiary within the six months prior to the time of Optionee’s separation from
employment. The phrase “Competitive Business” means the line(s) of business(es) conducted by
the Employing Subsidiary.



     c. The provisions of this subparagraph c. shall apply during Optionee’s employment with the Company or any Subsidiary and for a period of 12 months after Optionee’s separation
from employment. Optionee shall not directly or indirectly solicit to hire, or cause to be
hired, any employee of the Company or any Subsidiary as an employee or agent of, or consultant to,
any business enterprise that Optionee is associated with.



     d. Each non-competition covenant of Optionee contained in the preceding provisions
of this Paragraph 10 (the “non-competition covenant”) shall be construed as an agreement
independent of any other provision of this Agreement and the existence of any claim or cause
of
action of Optionee against the Company or any Subsidiary, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or
any
Subsidiary of such non-competition covenant.



     e. The Company and Optionee have in good faith used their best efforts to make each non-competition covenant contained in the preceding provisions of this Paragraph 10
reasonable in both scope and in duration. It is not anticipated, nor is it intended, by either
party to this Agreement that any court or other tribunal having jurisdiction over the matter will
find it necessary to reform any non-competition covenant to make it reasonable in both scope and in
duration, or otherwise. If any non-competition covenant is deemed by a tribunal having
jurisdiction over the matter to be unlawful or unenforceable, such provision will be deemed
severable from this Agreement and such provision will be limited or eliminated to the minimum
extent necessary so that the remaining provisions of this Agreement shall otherwise remain in
full force and effect and be enforceable. Furthermore, in lieu of such unlawful or
unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar
in terms as may be possible and be enforceable.



     f. Optionee is agreeing to the provisions of this Paragraph 10 in consideration of the
grant of this Option. The provisions of this Paragraph 10 shall be valid and enforceable by
the
Company and its Subsidiaries, regardless of whether or not any of this Option granted
hereunder
actually becomes exercisable, or whether or not Optionee actually exercises any rights under
this
Option. In the event of any conflict or inconsistency between any provision of this Paragraph
10
and any similar or analogous provision of any other agreement (either currently in effect or
that
may be entered into in the future) between Optionee, on the one hand, and the Company or any



			
	 	 	 
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Subsidiary, on the other hand, whichever provision is most favorable to the Company or such
Subsidiary shall govern.



11. Option Issued Pursuant to Plan. This Option is issued pursuant to and subject to the
terms and conditions and the restrictions as set forth in the Plan, and in the event of any
inconsistency, the provisions of the Plan shall govern, provided that no amendment shall be made
to the Plan subsequent to the date hereof that impairs the Optionee’s rights under this Option
without the Optionee’s written consent.



12. No Liability of Option. This Option is not liable for or subject to, in whole or in
part,
the debts, contracts, liabilities or torts of the Optionee nor shall it be subject to garnishment,
attachment, execution, levy or other legal or equitable process.



13. No Assignment. This Option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during the Optionee’s lifetime only by Optionee.
Without limiting the generality of the foregoing, this Option may not be assigned, transferred
(except as aforesaid), pledged or hypothecated in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment, or similar process, without the
prior
written consent of the Company. Any attempted assignment, transfer, pledge, or hypothecation
contrary to the provisions hereof shall be void and ineffective for all purposes.



14. Governing Law. This Agreement has been executed in, and shall be deemed to be
performable in, Dallas, Dallas County, Texas, The parties agree that this Agreement shall be
governed by and construed in accordance with the laws of the State of Texas (excluding its
conflict of laws rules). The parties further agree that 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,
shall
have personal jurisdiction over all parties to this Agreement.



15. Entire Agreement. By signing the Signature Page, the Optionee agrees to the terms of
this Option. Except for the Plan, this Agreement constitutes the entire agreement between the
partie’s pertaining to the subject matter hereof and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the party to be
charged therewith. No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver.



16. Notice. Other than any Exercise Notice, any notice required or permitted to be given
under the Plan or this Agreement shall be in writing and delivered in person or sent by registered
or certified mail, return receipt requested, first-class postage prepaid, (i) if to the Optionee,
at the address shown on the books and records of the Company or at the Optionee’s place of
employment, or (ii) if to the Company, at 2711 N. Haskell Avenue, Suite 2200, LB 36, Dallas,
Texas 75204-2960: Attention: Treasurer, or any other address that may be given by either party
to the other party by notice pursuant to this Paragraph. Any notice other than any Exercise




			
	 	 	 
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Notice, if delivered in person or sent by registered or certified mail, shall be deemed to have
been given when received.




	 	 	 	 	 
	 	ZIX CORPORATION

 	 
	Date:  4-27-07 	By:  	/s/ Barry W. Wilson
 	 
	 	 	Barry W.Wilson 	 
	 	 	Chief Financial Officer and Treasurer 	 
	 



			
	 	 	 
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	Zix Corporation (TX)
	 	 
	2711 N. Haskell Avenue

	 	Signature Page
	Suite 2200

	 	Sign and return to the legal department
	Dallas, Texas 75204
	 	 
	United States
	 	 






Issuance Information




	 	 	 
	Effective Date of Grant:
	 	December 18, 2006
	Name of Optionee:
	 	Spurr, Rick
	Number of Shares:
	 	400,000.00
	Exercise Price:
	 	 $1.50
	Plan Name:
	 	2001 Stock Option Plan
	Expiration Date:
	 	December 17, 2016






	 	 	 	 	 	 	 
	Vesting Schedule:	 	Number of Shares:	 	Vest Date:
	 

	 	 	33,333.33	 	 	March 18, 2007
	 

	 	 	33,333.33	 	 	June 18, 2007
	 

	 	 	33,333.33	 	 	September 18, 2007
	 

	 	 	33,333.33	 	 	December 18, 2007
	 

	 	 	33,333.33	 	 	March 18, 2008
	 

	 	 	33,333.33	 	 	June 18, 2008
	 

	 	 	33,333.33	 	 	September 18, 2008
	 

	 	 	33,333.33	 	 	December 18, 2008
	 

	 	 	33,333.33	 	 	March 18, 2009
	 

	 	 	33,333.33	 	 	June 18, 2009
	 

	 	 	33,333.33	 	 	September 18, 2009
	 

	 	 	33,333.33	 	 	December 18, 2009






	 	 	 	 	 	 	 	 	 
	/s/ Richard D. Spurr
 


	 	 	 	Date:
	 	4-30-07 
	 	 
	Optionee Signature