Document:

exv10w40

 

Exhibit 10.40

Form of Restricted Stock Unit Agreement pursuant to the 2005 Stock Incentive Plan

THE ADVISORY BOARD COMPANY

2005 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

	(1)	 	Grant. Pursuant to the provisions of The Advisory Board 2005 Stock Incentive Plan
(the “Plan”), you have been granted a Restricted Stock Unit Award of ___Restricted Stock
Units (“RSU’s”). The grant to you of the RSU’s is subject to the following provisions, as
well as to the Standard Terms and Conditions for Restricted Stock Units (“the Standard Terms
and Conditions”), a copy of which is attached hereto:

	(2)	 	Basic Principles. The initial value of one share of Company stock for purposes of
determining the value of each RSU is $                    . At such time as the RSU becomes payable
to you, the award may be settled all or partly in cash or all or partly in shares of the
Company’s stock, as will be determined in the sole discretion of the Administrator of the Plan
at such time. In addition, the award to be paid to you will be subject to applicable Federal
and local tax withholding. When the RSU becomes payable to you, the resulting compensation
will not increase or otherwise affect your benefits under any other benefit program
maintained by The Advisory Board Company.

	(3)	 	Vesting Rules. Your ability to receive a payment in respect of an RSU will depend
upon the vesting provisions associated with the RSU. Subject to the Tax Deferral Opportunity
discussion set forth in (4), below, your RSU’s will be paid to you as they become vested. In
the event that you terminate employment for any reason other than (i) death, (ii) disability,
(iii) retirement or (iv) a termination after a Change-in-Control of the Company (as defined in
the Standard Terms and Conditions) for any reason other than for Cause (as defined in the
Standard Terms and Conditions) or voluntary resignation by the Participant, all of your
previously unvested RSU’s will be forfeited. If you were to terminate employment for one of
the four reasons set forth above, your previously unvested RSU’s would become fully vested as
of the date of the termination of employment and, subject to the deferral features set forth
below, you will receive a payment in respect of the RSU’s based upon their value at the time
of your termination of employment. If you are a “key employee”, as defined in applicable
Federal tax law, the Company shall be entitled to defer payment to you for six months
following the date of your termination of employment.

     If you have not terminated employment, your RSU’s will be subject to the following vesting
schedule:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	% of RSU’s
	Date of Termination	 	 	 	 	 	Vested
	On or before

	 	 	 	 	 	 	 	 	0	%
	 	 	 	 	 	 	 	 	 
	On or after

	 	 	 	but before
	 	 	 	 	25	%
	 

	 	 
	 	 	 	 	 	 	 	 
	On or after

	 	 	 	but before
	 	 	 	 	50	%
	 

	 	 
	 	 	 	 	 	 	 	 
	On or after

	 	 	 	but before
	 	 	 	 	75	%
	 

	 	 
	 	 	 	 	 	 	 	 
	On or after

	 	 	 	 	 	 	 	 	100	%
	 	 	 	 	 	 	 	 	 

	(4)	 	Tax Deferral Opportunity. Normally, an RSU will become payable as soon as it vests.
Under the current provisions of Section 409A of the Internal Revenue Code of 1986, as amended,
you will have the ability to defer recognition of gain for income tax purposes upon the
vesting of an RSU. The vested RSU will still create employment tax (FICA and FUTA) liability.
However, the ability to elect deferred compensation is very limited and is subject to some
very strict rules.

	 	(a)	 	Immediate Election. You may elect to defer recognition of gain by deferring
the payment to you of your RSU award until a date after the RSU award vests by making an
election no later than                     , which is within 30 days of this initial award. Your
election can involve all RSU’s granted to you or may be limited to RSU’s that would
otherwise vest at one or more of the times identified in the above-referenced vesting
schedule. If you elect to defer the payment of an RSU and terminate employment
prior to the date the RSU is otherwise vested and your termination is not
attributable to one of the four events described above, no amount will be payable
to you in respect of the RSU. In other words, the election to defer payment of the RSU has
no effect on the vesting rules with respect to the RSU.
	 
	 	 	 	If you elect to defer payment of an RSU but terminate employment and your termination is
not attributable to one of the four events described above after the RSU has
become vested, the RSU payment will be made to you on the deferred date that you elected. In
other words, the payment for the RSU will still be deferred after your termination of
employment in accordance with your deferral election unless the termination of
employment is due to death or disability. If the termination of employment is due to death
or disability, the payment will be made to you as soon as practicable.

 

 

	 	 	 	The deferral election that can be used with respect to this Immediate Election can be
effectuated by completion of the schedule set forth below or similar document:
	 
	 	 	 	Check if Applicable
	 
	 	 	 	/          / I hereby elect to defer payment in respect of any RSU that would otherwise vest on
                     until the following date or event                     .
	 
	 	 	 	/          / I hereby elect to defer payment in respect of any RSU that would otherwise vest on
                     until the following date or event                     .
	 
	 	 	 	/          / I hereby elect to defer payment in respect of any RSU that would otherwise vest on
                     until the following date or event                     .
	 
	 	 	 	/          / I hereby elect to defer payment in respect of any RSU that would otherwise vest on
                     until the following date or event                     .
	 
	 	(b)	 	Subsequent Elections. In the event that you do not make an election pursuant
to the Immediate Election matrix set forth above, you will have the opportunity to make a
Supplemental Election at a later date. In addition, if you made an Immediate Election, you
can modify this election pursuant to a Subsequent Election. However, the rules with
respect to Subsequent Elections are more restrictive than the rules associated with
the Immediate Election. Any Subsequent Election to change a prior deferral election or to
make a new deferral election must be made no less than 12 full months prior to the date the
RSU in question would otherwise be payable. In addition, the election must provide for an
additional deferral period of at least five years. For example, if you wish to make a
Subsequent Election with respect to an RSU that would otherwise be payable on March 10,
2008, you would have to make your deferral election prior to March 10, 2007 with respect to
the RSU and the deferral period would have to be no less than 5 years (at least through
March 10, 2013). If you make a Subsequent Election but you die prior to the date elected
in the Subsequent Election, the payment will be made as soon as practicable after your
death.

     By executing this Agreement, you hereby agree that the grant of your RSU award is subject to
all the provisions of The Advisory Board Company 2005 Stock Incentive Plan and to the Standard
Terms and Conditions. You also agree to any Immediate Election you made above. Should you have
any questions with respect to this document or the rules pertaining to the RSU, please contact a
company representative.

Acknowledged

	 	 	 	 	 	 	 	 	 
	THE ADVISORY BOARD COMPANY	 	 	 	THE RECIPIENT
	 
	By:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	Title:

	 	 	 	 	 	Address:
	 	2445 M Street, NW
	 

	 	 	 	 	 	 	 	Washington, DC 20037exv10w1

 

Exhibit 10.1

ZIX CORPORATION 2006 DIRECTORS’ STOCK OPTION PLAN

Section 1. Purpose

     The purpose of the Zix Corporation 2006 Directors’ Stock Option Plan (hereinafter called the
“Plan”) is to advance the interests of Zix Corporation, a Texas corporation (hereinafter called the
“Company”), by strengthening the ability of the Company to attract, on its behalf, and retain
Non-Employee Directors (as defined below) of high caliber through encouraging a sense of
proprietorship by means of stock ownership.

Section 2. Definitions

     “Board” 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 the entire Board of Directors, or if the administration of the Plan has
been delegated to a committee of the Board, a committee selected by the Board and comprised of at
least two directors. To the extent necessary to comply with applicable rules and regulations, the
Committee shall consist of two or more independent directors.

     “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 under the 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.

     “Fair Market Value” shall mean the closing sales price (or average of the quoted closing bid
and asked prices if there is no closing sales 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.

     “Non-Employee Director” shall mean a member of the Board who is not an employee of the Company
or a subsidiary.

     “Option” shall mean a nonqualified option to purchase shares of the Company’s Common Stock.

     “Optionee” shall mean the person to whom an Option is granted under the Plan or who has
obtained the right to exercise an Option in accordance with the provisions of the Plan.

Section 3. Administration

     The 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 Plan as it shall from time-to-time deem advisable, and to construe, interpret
and administer the terms and provisions of the Plan and the agreements thereunder. The
determinations and interpretations made by the Committee are final and conclusive and binding on
all persons.

Section 4. Eligibility

     All Non-Employee Directors shall be eligible to receive awards of Options under the Plan.

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Section 5. Maximum Amount Available for Awards

     Subject to the provisions of Section 9, the maximum number of shares of Common Stock in
respect of which Options may be granted under the Plan shall be 750,000 shares of Common Stock.
Shares of Common Stock may be made available from 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 Plan.

Section 6. Stock Options

     (a) During the term of the Plan, on the day that any Non-Employee Director is first appointed
or elected to the Board, such director shall be granted nonqualified Options to purchase 25,000
shares of Common Stock. The Options shall vest quarterly and pro-rata over one year from the date
of grant. Also, on the first business day in January of each year during the term of the Plan, each
Non-Employee Director that has served on the Board for at least six months as of the grant date
shall be granted nonqualified Options to purchase a number of shares of Common Stock equal to the
greater of (i) one-half of one percent of the number of the Company’s outstanding Common Stock
shares (measured as of the immediately preceding December 31) or (ii) 200,000 shares of Common
Stock, divided by the greater of (A) five or (B) the number of Non-Employee Directors that have
served on the Board for at least six months as of the Date of Grant; provided that, the number of
shares of Common Stock covered by any such January option grant shall not exceed 40,000 shares; and
provided further that, this 40,000 share limitation is exclusive of the option grants noted in
Section 6(b) below. The Options shall vest quarterly and pro-rata over three years from the grant
date. The exercise price of the 25,000 share option grants and of the January share option grants
shall be 100% of the Fair Market Value of the Common Stock on the Date of Grant. The Options may
not be exercised after the tenth anniversary of the Date of Grant.

     (b) The following grants to each Non-Employee Director that served on the Board for at least
six months as of January 1, 2006, are hereby made:

	 	•	 	A grant covering 38,838 shares, at an exercise price of $1.93 per share.
	 
	 	•	 	The Options granted pursuant to this Section 6(b) shall vest as follows: 1/12
of the shares of Common Stock subject to each Option grant (i.e., 3,327 shares)
shall vest on the date the Plan is approved by the Company’s shareholders, and the
balance of the shares of Common Stock subject to each such Option grant shall vest
quarterly and pro-rata in 11 equal tranches, with the first such option tranche
vesting on July 3, 2006 and the last such option tranche vesting on January 3,
2009.

     (c) Each Option hereunder shall be evidenced in writing, delivered to the Optionee, and shall
be exercisable at such times and subject to such terms and conditions as specified in the
applicable grant and agreement.

     (d) The Committee may impose such conditions with respect to the exercise of Options (that are
consistent with the foregoing principles), including without limitation, any relating to the
application of federal or state securities laws and any relating to the exercisability of the
Option following separation from service on the Board, as it may deem necessary or advisable. For
a director that separates from service in good standing and that has served on the Company’s Board
of Directors at least five years as of the date of the separation from service, any options granted
to such director, whether under the Plan or any predecessor plan providing for option grants to the
Company’s Board, and that are vested as of the separation from service date, may be exercised
through the last business day of December of the calendar year in which the one year anniversary of
the director’s separation from service occurs.

2

 

     (e) No shares shall be delivered pursuant to any exercise of an Option until cash payment in
full of the option price therefor is received by the Company. If the shares to be purchased are
covered by an effective registration statement under the Securities Act of 1933, any Option may be
exercised by a broker-dealer acting on behalf of an Optionee if (i) 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, (ii) adequate provision has been
made with respect to the payment of any withholding taxes due upon such exercise, and (iii) 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 Company shall have the right to deduct from all
amounts paid to an Optionee in cash (whether under the Plan or otherwise) any taxes the Company
withholds in respect of Options under the Plan.

     (f) The Company shall not be required to issue any fractional shares upon the exercise of any
Options granted under the Plan. No Optionee or such 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 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, and
no right or interest of any Optionee shall be subject to any lien, obligation or liability of the
Optionee.

Section 7. Plan Amendments

     The Board may amend, abandon, suspend or terminate the 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 if such amendment is material or if stockholder approval is
necessary to comply with any tax or regulatory requirement.

Section 8. Restrictions on Issuance of Options and Option Shares

     The Company shall not be obligated to issue any shares upon the exercise of any Option granted
under the Plan unless: (a) the shares pertaining to such Option have been registered under
applicable securities laws or are exempt from such registration; (b) if required, the prior
approval of such sale or issuance has been obtained from any state regulatory body having
jurisdiction; and (c) 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 Plan. If the shares to be issued upon the exercise of any Option granted under
the 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.

     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 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.

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

3

 

Section 9. Adjustment to Shares

     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
Plan, then the Committee shall adjust appropriately any or all of (a) the number and kind of shares
that thereafter may be optioned under the Plan, (b) the number and kind of shares subject of
Options and (c) the exercise price with respect to any of the foregoing and/or, if deemed
appropriate, make provision for cash payment to an Optionee or a person who has an outstanding
Option; provided, however, that the number of shares subject to any Option shall always be a whole
number.

Section 10. Effective Date; Term

     The Plan, including the option grants provided for in Section 6(b), shall be subject to the
approval of the Company’s shareholders, and shall be null and void if not approved by the Company’s
shareholders. No Options may be granted under the Plan after the tenth year anniversary of the
Adoption Date as specified below.

Section 11. General Provisions

     (a) Neither the Plan nor any Option granted hereunder is intended to confer upon any Optionee
any rights with respect to continuance of the utilization of his or her services by the Company,
nor to interfere in any way with his or her right or that of the Company to terminate his or her
services at any time (subject to the terms of any applicable contract, law, regulation, and the
articles and bylaws of the Company).

     (b) 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 Plan until he or she has become the
holder thereof.

     (c) The validity, construction, interpretation, administration and effect of the Plan and of
its rules and regulations, and rights relating to the 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.

     IN WITNESS WHEREOF, the Company has caused this Plan to be adopted and executed on its behalf
as of the 9th day of March 2006 (the “Adoption Date’).

	 	 	 
	Zix Corporation
	 
	 	 
	By:

	 	     /s/ Ronald A. Woessner
	 

	 	 
	 
	 	 
	Title:

	 	     Sr. Vice President
	 

	 	 
	 
	 	 
	Date:

	 	     March 9, 2006
	 

	 	 

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