exv10w5



 





Exhibit 10.5




ZIX CORPORATION 2001 STOCK OPTION PLAN

(Amended and Restated as of June 7, 2007)




     SECTION 1. Purpose. The purpose of the Zix Corporation 2001 Stock Option Plan (hereinafter
called the “2001 Plan”) is to advance the interests of Zix Corporation (hereinafter called the
“Company”) by strengthening the ability of the Company to attract, on its behalf and on behalf of
its Subsidiaries (as hereinafter defined), and retain personnel of high caliber through encouraging
a sense of proprietorship by means of stock ownership.



     SECTION 2. Definitions.



     “Board of Directors” shall mean the Board of Directors of the Company.



     “Code” shall mean the Internal Revenue Code of 1986, as amended from time-to-time.



     “Committee” shall mean a committee of the Board of Directors comprised of at least two
directors or the entire Board of Directors, as the case may be. Members of the Committee shall be
selected by the Board of Directors. To the extent necessary to comply with the requirements of Rule
16b-3, the Committee shall consist of two or more Non-employee Directors. Also, if the requirements
of §162(m) of the Code are intended to be met, the Committee shall consist of two or more “outside
directors” within the meaning of §162(m) of the Code.



     “Common Stock” shall mean the Common Stock of the Company, par value $.01 per share.



     “Date of Grant” shall mean the date on which an Option is granted pursuant to this 2001 Plan.



     “Designated Beneficiary” shall mean the beneficiary designated by the Optionee, in a manner
determined by the Committee, to receive amounts due the Optionee in the event of the Optionee’s
death. In the absence of an effective designation by the Optionee, Designated Beneficiary shall
mean the Optionee’s estate.



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



     “Fair Market Value” shall mean the closing sale price (or average of the quoted closing bid
and asked prices if there is no closing sale price reported) of the Common Stock on the date
specified as reported by The Nasdaq Stock Market, or by the principal national stock exchange on
which the Common Stock is then listed. If there is no reported price information for such date, the
Fair Market Value will be determined by the reported price information for Common Stock on the day
nearest preceding such date.



     “Incentive Stock Option” shall mean a stock option granted under Section 6 that is intended to
meet the requirements of Section 422 of the Code (or any successor provision).



     “Non-employee Director” shall have the meaning given such term in Rule 16b-3.



     “Nonqualified Stock Option” shall mean a stock option granted under Section 6 that is not
intended to be an Incentive Stock Option.



     “Option” shall mean an Incentive Stock Option or a Nonqualified Stock Option.



     “Optionee” shall mean the person to whom an option is granted under the 2001 Plan or who has



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obtained the right to exercise an option in accordance with the provisions of the 2001 Plan.



     “Rule 16b-3” shall mean Rule 16b-3 of the rules and regulations under the Exchange Act as it
may be amended from time-to-time and any successor provision to Rule 16b-3 under the Exchange Act.



     “Subsidiary” shall mean any now existing or hereafter organized or acquired corporation or
other entity of which fifty percent (50%) or more of the issued and outstanding voting stock or
other economic interest is owned or controlled directly or indirectly by the Company or through one
or more Subsidiaries of the Company.



     SECTION 3. Administration. The 2001 Plan shall be administered by the Committee. The
Committee shall have sole and complete authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing the operation of the 2001 Plan as it shall from
time-to-time deem advisable, and to construe, interpret and administer the terms and provisions of
the 2001 Plan and the agreements thereunder. The determinations and interpretations made by the
Committee are final and conclusive.



     SECTION 4. Eligibility. All employees and non-employee consultants and advisors (other than
Non-employee Directors) who, in the opinion of the Committee, have the capacity for contributing in
a substantial measure to the successful performance of the Company are eligible to receive Options
under the 2001 Plan.



     SECTION 5. Maximum Amount Available for Options.



     (a) The maximum number of shares of Common Stock in respect of which Options may be made under
the 2001 Plan shall be a total of 2,525,000 shares of Common Stock. Of that amount, no participant
may be granted Options for more than 1,000,000 shares of Common Stock in the aggregate during the
term of the 2001 Plan. Options that expire, lapse or are cancelled or forfeited do not count
against theses share limits. Shares of Common Stock may be made available from the authorized but
unissued shares of the Company or from shares reacquired by the Company, including shares purchased
in the open market. In the event that an Option is terminated unexercised as to any shares of
Common Stock covered thereby, such shares shall thereafter be again available for award pursuant to
the 2001 Plan.



     (b) In the event that the Committee shall determine that any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares,
warrants or rights offering to purchase Common Stock at a price substantially below fair market
value, or other similar corporate event affects the Common Stock such that an adjustment is
required in order to preserve the benefits or potential benefits intended to be made available
under the 2001 Plan, then the Committee shall adjust appropriately any or all of (1) the number and
kind of shares which thereafter may be optioned under the 2001 Plan and (2) the grant, exercise or
conversion price and/or number of shares with respect to the Options and/or, if deemed appropriate,
make provision for cash payment to an Optionee; provided, however, that the number
of shares subject to any Option shall always be a whole number.



     SECTION 6. Stock Options.



     (a) Subject to the provisions of the 2001 Plan, the Committee shall have sole and complete
authority to determine the persons to whom Options shall be granted, the number of shares to be
covered by each Option, the option price therefor and the conditions and limitations applicable to
the exercise of the Option.



     (b) The Committee shall have the authority to grant Incentive Stock Options, or to grant
Nonqualified Stock Options, or to grant both types of options. In the case of Incentive Stock
Options, the terms and



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conditions of such grants shall be subject to and comply with the Code and
relevant regulations. Incentive Stock Options to purchase Common Stock may be granted to such
employees of the Company or its Subsidiaries (including any director who is also an employee of the
Company or one of its Subsidiaries) as shall be determined by the Committee. Nonqualified Stock
Options to purchase Common Stock may be granted to such eligible participants as shall be
determined by the Committee. Neither the Company nor any of its Subsidiaries or any of their
respective directors, officers or employees, shall be liable to any Optionee or other person if it
is determined for any reason by the Internal Revenue Service or any court having jurisdiction that
any Incentive Stock Option granted hereunder does not qualify for tax treatment as an Incentive
Stock Option under the then-applicable provisions of the Code.



     (c) The Committee shall, in its discretion, establish the exercise price at the time each
Option is granted, which in the case of Nonqualified Stock Options, shall not be less than 100% of
the Fair Market Value of the Common Stock on the Date of Grant, or in the case of grants of
Incentive Stock Options, shall not be less than 100% of the Fair Market Value of the Common Stock
on the Date of Grant or such greater amount as may be prescribed by the Code.



     (d) Exercise




     (1) Each Option shall be exercisable at such times and subject to such terms and conditions
as the Committee may, in its sole discretion, specify in the applicable grant or thereafter;
provided, however, that in no event may any Option granted hereunder be
exercisable after the expiration of ten years from the Date of Grant. The Committee may impose
such conditions with respect to the exercise of Options, including without limitation, any
relating to the application of federal or state securities laws, as it may deem necessary or
advisable.




     (2) No shares shall be delivered pursuant to any exercise of an Option until payment in
full of the option price therefore is received by the Company. Such payment may be made in cash,
or its equivalent, or, if and to the extent permitted by the Committee or under the terms of the
applicable agreement, by exchanging shares of Common Stock owned by the Optionee (which are not
the subject of any pledge or other security interest), or by a combination of the foregoing,
provided that the combined value of all cash and cash equivalents and the Fair Market Value of
any such Common Stock so tendered to the Company, valued as of the date of such tender, is at
least equal to such 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 may be exercised by a broker-dealer acting on
behalf of an Optionee if (a) the broker-dealer has received from the Optionee 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.




     (3) The Company, in its sole discretion, may lend money to an Optionee, guarantee a loan to
an Optionee or otherwise assist an Optionee to obtain the cash necessary to exercise all or any
portion of an Option granted under the 2001 Plan.




     (4) The Company shall not be required to issue any fractional shares upon the exercise of
any Options granted under this 2001 Plan. No Optionee nor an Optionee’s legal representatives,
legatees or distributees, as the case may be, will be, or will be deemed to be, a holder of any shares subject to an Option unless and until said Option has been exercised and the purchase
price of the shares in respect



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of which the Option has been exercised has been paid. Unless otherwise provided in the agreement applicable thereto, an Option shall not be exercisable
except by the Optionee or by a person who has obtained the Optionee’s rights under the Option by
will or under the laws of descent and distribution or pursuant to a “qualified domestic
relations order” as defined in the Code.



     (e) No Incentive Stock Options shall be exercisable (a) more than five years (or such other
period of time as from time-to-time provided in the then-applicable provisions of the Code
governing Incentive Stock Options) after the Date of Grant with respect to an Optionee who owns ten
percent or more of the outstanding Common Stock (within the meaning of the Code), and (b) more than
ten years after the Date of Grant with respect to all other Optionees. No Nonqualified Stock
Options shall be exercisable more than ten years after the Date of Grant.



     (f) In no event shall any Option granted to any employee who is classified as “non-exempt”
under the Fair Labor Standards Act of 1938 be exercisable less than six months after the Date of
Grant, except in the case of death, disability, retirement, a change in control or other
circumstances permitted by regulations under the Worker Economic Opportunity Act (“WEOA”). Grants
to such non-exempt employees shall not be based on pre-established performance criteria, except as
specifically permitted under the WEOA. Non- exempt employees shall be notified of the terms of
their Options in accordance with the WEOA, and exercise of such Options must be voluntary.



     SECTION 7. General Provisions.



     (a) The Company and its Subsidiaries shall have the right to deduct from all amounts paid to
an Optionee in cash (whether under the 2001 Plan or otherwise) any taxes required by law to be
withheld in respect of Option exercises under the 2001 Plan. However, if permitted by the Committee
or under the terms of the applicable agreement, the Optionee may pay all or any portion of the
taxes required to be withheld by the Company or its Subsidiaries or paid by the Optionee with
respect to such Common Stock by electing to have the Company or its Subsidiaries withhold shares of
Common Stock, or by delivering previously owned shares of Common Stock, having a Fair Market Value
equal to the amount required to be withheld or paid. The Optionee must make the foregoing election
on or before the date that the amount of tax to be withheld is determined. Any such election is
irrevocable and subject to disapproval by the Committee. If the Optionee is subject to the
provisions of Section 16(b) of the Exchange Act, then any such election shall be subject to the
restrictions imposed by Rule 16b-3.



     (b) Each Option hereunder shall be evidenced in writing, delivered to the Optionee, and shall
specify the terms and conditions thereof and any rules applicable thereto, including, but not
limited to, the effect on such Option of the death, retirement, disability or other termination of
employment of the Optionee and the effect thereon, if any, of a change in control of the Company.



     (c) Unless otherwise provided in the agreement applicable thereto, no Option shall be
assignable or transferable except by will or under the laws of descent and distribution or pursuant
to a “qualified domestic relations order” as defined in the Code, and no right or interest of any
Optionee shall be subject to any lien, obligation or liability of the Optionee.



     (d) No person shall have any claim or right to be granted an Option. Further, the Company and
its Subsidiaries expressly reserve the right at any time to terminate the employment of an Optionee
free from any liability, or any claim under the 2001 Plan, except as provided in any agreement
entered into with respect to an Option. Neither the 2001 Plan nor any Option granted hereunder is intended to
confer upon any Optionee any rights with respect to continuance of employment or other utilization
of his or her services by the Company or by a Subsidiary, nor to interfere in any way with his or
her right or that of his or her employer to terminate his or her employment or other services at
any time (subject to the terms of any applicable contract). The conditions to apply to the exercise
of an Option in the event an Optionee



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ceases to be employed by the Company or a Subsidiary for any reason shall be determined by the Committee or specified in the written agreement evidencing the
Option.




     (e) Subject to the provisions of the applicable Option, no Optionee or Designated Beneficiary
shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed
under the 2001 Plan until he or she has become the holder thereof.



     (f) The validity, construction, interpretation, administration and effect of the 2001 Plan and
of its rules and regulations, and rights relating to the 2001 Plan, shall be determined solely in
accordance with the laws of the State of Texas (without giving effect to its conflicts of laws
rules) and, to the extent applicable, federal law.



     (g) The 2001 Plan was originally effective on May 15, 2001. No Options may be granted under
the 2001 Plan after May 14, 2011; however, all previous Options issued that have not expired under
their original terms or will not then expire at the time the 2001 Plan expires will remain
outstanding.



     (h) Restrictions on Issuance of Shares




     (1) The Company shall not be obligated to sell or issue any Shares upon the exercise of any
Option granted under the 2001 Plan unless: (i) the shares pertaining to such Option have been
registered under applicable federal and state securities laws or are exempt from such
registration; (ii) the prior approval of such sale or issuance has been obtained from any state
regulatory body having jurisdiction; and (iii) in the event the Common Stock has been listed on
any exchange, the shares pertaining to such Option have been duly listed on such exchange in
accordance with the procedure specified therefor. The Company shall be under no obligation to
effect or obtain any listing, registration, qualification, consent or approval with respect to shares pertaining to any Option granted under the 2001 Plan. If the shares to be issued upon the
exercise of any Option granted under the 2001 Plan are intended to be issued by the Company in
reliance upon the exemptions from the registration requirements of applicable federal and state
securities laws, the recipient of the Option, if so requested by the Company, shall furnish to
the Company such evidence and representations, including an opinion of counsel, satisfactory to
it, as the Company may reasonably request.




     (2) The Company shall 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 pertaining to any
Option granted under the 2001 Plan 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.



     (i) The Board of Directors or Committee may impose such other restrictions on the ownership
and transfer of shares issued pursuant to the 2001 Plan as it deems desirable; any such
restrictions shall be set forth in the applicable agreement.



     (j) The Board of Directors may amend, abandon, suspend or terminate the 2001 Plan or any
portion thereof at any time in such respects as it may deem advisable in its sole discretion,
provided that no amendment shall be made without stockholder approval (including an increase in the
maximum number of shares of Common Stock in respect of which Options may be made under the 2001
Plan) if such stockholder approval is necessary to comply with any tax or regulatory requirement or exchange
listing rules, including for these purposes any approval requirement that is a prerequisite for
exemptive relief under Section 16(b) of the Exchange Act.



     (k) To preserve an Optionee’s rights under an Option in the event of a change in control of
the Company or an Optionee’s separation from employment, the Committee in its discretion may, at
the time



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an Option is made or any time thereafter, take one or more of the following actions: (i)
provide for the acceleration of any time period relating to the exercise of the Option, (ii)
provide for the purchase of the Option, upon the Optionee’s request, for an amount of cash or other
property that could have been received upon the exercise or realization of the Option had the
Option been currently exercisable or payable, (iii) adjust the terms of the Option in a manner
determined by the Committee to reflect the change in control or to prevent the imposition of an
excise tax under section 280G(b) of the Code, (iv) cause the Option to be assumed, or new rights
substituted therefor, by another entity, or (v) make such other provision as the Committee may
consider equitable and in the best interests of the Company.




     (l) Without limiting the generality of the authority given the Committee elsewhere in the
Plan, the Committee in its discretion has the authority to amend an outstanding option from
time-to-time, as follows:




	 	(i)	 	to provide for the acceleration of the vesting of the Option in the event of a
change in control of the Company or in connection with an Optionee’s separation from
employment with the Company or other separation from service with the Company;
	 
	 	(ii)	 	to provide for one or more stated periods of time to exercise vested options
following the Optionee’s separation from employment with the Company or other
separation from service with the Company; or
	 
	 	(iii)	 	to provide for such other changes as the Committee may, in its discretion,
determine to be appropriate.




AMENDED AND RESTATED as of June 7, 2007.




	 	 	 	 	 
	 	 	Zix Corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ronald A. Woessner
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	SVP
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:
	 	6/7/07
	 

	 	 	 	 






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