Document:

exv4w3

 

Exhibit 4.3

[EXECUTION VERSION]

THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND ACCORDINGLY
MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. ZIX CORPORATION (THE “COMPANY”) WILL TRANSFER SUCH WARRANT AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF ONLY UPON RECEIPT OF AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE REGISTRATION PROVISIONS OF SUCH ACT HAVE
BEEN COMPLIED WITH OR THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT
VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.

COMMON STOCK WARRANT CERTIFICATE

ZIX CORPORATION

February 22, 2007

For the Purchase of 145,853 Shares of Common
Stock of Zix Corporation

        FOR VALUE RECEIVED, sanofi-aventis U.S. Inc., a Delaware corporation, or its permitted assigns
(the “Holder”) is hereby granted the right to purchase from Zix Corporation, a Texas corporation
(the “Company”), up to a total of 145,853 shares (the “Warrant Shares”, which number shall be
adjusted from time to time in accordance with Section 2 hereof) of the Company’s common stock, par
value $.01 per share (the “Common Stock”), at a purchase price of $4.48 per share (as adjusted from
time to time in accordance with Section 2 hereof, the “Exercise Price”), exercisable in whole or in
part at any time and from time to time from January 30, 2007 until 6:00 p.m. New York time on the
date that is five (5) years after the date thereof (the “Exercise Period”), on the terms and
conditions set forth in this Warrant (this “Warrant”).

			
	I.	 	Exercise.

        1.1      Exercise of Warrant. This Warrant may be exercised, in whole or in part, at any
time or from time to time, during the Exercise Period by (i) surrendering this Warrant Certificate,
with the form of exercise notice attached hereto as Exhibit A duly executed by the Holder,
to the Company at its principal office, and (ii) (a) making payment to the Company of the aggregate
Exercise Price for the applicable Warrant Shares in cash, by certified check, bank check or wire
transfer to an account designated by the Company, or (b) providing notice to the Company of the
Holder’s election to utilize the cashless exercise feature of this Warrant set forth in Section 1.2
below. The minimum number of shares of Common Stock with respect to which this Warrant may be
exercised, in whole or in part, at any time shall be the lesser of (1) ten percent (10%) of the
total number of Warrant Shares which may be purchased under this Warrant or (2) the maximum number

 

 

of Warrant Shares available for purchase under this Warrant at the time of exercise. Upon any
partial exercise of this Warrant, the Company, at its expense, shall promptly issue to the Holder
for Holder’s surrendered Warrant Certificate a replacement Warrant Certificate identical in all
respects to this Warrant Certificate, except that the number of Warrant Shares shall be reduced
accordingly.

        1.2      Cashless Exercise. The Holder may, in its sole discretion, notify the Company
in an exercise notice of its election to utilize cashless exercise in accordance with the terms
and conditions of Section 1.1 hereof, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

	 	 	 	 	 
	 	 	X = Y [(A-B) / A]
	 
	 	 	 	 
	where:
	 	 	 	 
	 
	 	 	 	 
	 

	 	X =
	 	the number of Warrant Shares to be issued to the Holder.
	 
	 	 	 	 
	 

	 	Y =
	 	the number of Warrant Shares with respect to which this Warrant is
being exercised.
	 
	 	 	 	 
	 

	 	A =
	 	the lower of (i) the average of the closing prices for the twenty (20)
trading days immediately prior to, but not including, the Exercise
Date (as defined in Section 1.3) and (ii) the average of the closing
prices for the five (5) trading days immediately prior to, but not
including, the Exercise Date (as defined in Section 1.3).
	 
	 	 	 	 
	 

	 	B =
	 	the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act (as defined in Section 5.1), it is
intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the date the holding period for this Warrant
commenced.

        1.3      Issuance of Warrant Shares. The Warrant Shares purchased by Holder shall be
issued as of the close of business on the date on which all actions required to be taken by the
Holder and all payments required to be received by the Company pursuant to Section 1.1, if the
Holder is not using cashless exercise pursuant to Section 1.2, shall have been so taken and
received, and the Holder shall be deemed for all corporate purposes to have become the holder of
record of such Warrant Shares as of such date (the “Exercise Date”). Certificates for the Warrant
Shares so purchased shall be delivered to the Holder as soon as practicable (but in no event more
than five (5) days) after the Exercise Date.

			
	II.	 	Adjustments to Warrant.

        The number of Warrant Shares for which this Warrant is exercisable and the Exercise Price
shall be subject to adjustment from time to time as set forth below.

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        2.1      Stock Dividends, Subdivisions and Combinations. If the Company shall, at any
time or from time to time: (a) make (or fix a record date for the holders of shares of its Common
Stock entitled to receive) a dividend payable in, or other distribution of, additional shares of
Common Stock, (b) subdivide its outstanding shares of Common Stock into a larger number of shares
of Common Stock, or (c) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then (i) the number of Warrant Shares issuable upon the exercise of this
Warrant immediately prior to the occurrence of any such event shall be adjusted so that the Holder
of this Warrant upon exercise on or after that date shall be entitled to receive the aggregate
number of Warrant Shares which the Holder of this Warrant would have owned and been entitled to
receive as a result of such event had this Warrant been exercised immediately prior thereto, and
(ii) the Exercise Price in effect immediately prior to such event shall be adjusted by multiplying
such Exercise Price by a fraction, the numerator of which is the aggregate number of Warrant
Shares purchasable upon exercise of this Warrant immediately prior to such event, and the
denominator of which is the aggregate number of Warrant Shares purchasable upon exercise of this
Warrant immediately thereafter.

        2.2      Dividends and Distributions in Other Securities. If the Company shall, at any
time or from time to time, make (or fix a record date for the holders of shares of its Common
Stock entitled to receive) a dividend or other distribution payable in other securities of the
Company or in the securities of any subsidiary of the Company (other than shares of Common Stock),
then lawful and adequate provision shall be made so that the Holder of this Warrant shall be
entitled to receive upon exercise of this Warrant, for the aggregate Exercise Price in effect
prior thereto, in addition to the number of Warrant Shares immediately theretofore issuable upon
exercise of this Warrant, the kind and number of other securities of the Company or securities of
any subsidiary of the Company, which the Holder would have owned and been entitled to receive had
this Warrant been exercised immediately prior to that date.

        2.3      Cash Dividends and Distributions. If the Company shall, at any time or from time
to time, make (or fix a record date for the holders of shares of its Common Stock entitled to
receive) a dividend payable in, or other distribution of cash, then the number of Warrant Shares
issuable upon the exercise of the Warrant, for the aggregate Exercise Price in effect prior
thereto, immediately prior to the occurrence of any such event shall be increased by: (i) the
amount of the dividend the Holder of this Warrant would have received had the Holder exercised its
warrant immediately prior to the record date (or, if no record date has been set the date of
distribution or dividend), divided by (ii) the Current Market Price of the Company’s Common Stock.
As used in this Warrant the term “Current Market Price” means with respect to any security: (a)
for so long as the issuer is a Public Entity (as hereafter defined), and the security is traded on
an organized exchange the average closing price of the security on the stock exchange where the
security is traded or the last bid price as quoted on the NASDAQ for the immediately preceding
five (5) trading days; and (b) for so long as the issuer is not a Public Entity or the security is
not traded on an organized exchange, the price per share of the security as determined in good
faith by the Company’s board of directors. If such valuation is objected to by the Holder of this
Warrant, such valuation will be made by a reputable investment bank of national standing mutually
selected by the Holder and the Company, the expense of which will be paid by the Company. “Public
Entity” will mean: (i) an entity that has registered its Common Stock pursuant to Section 12(b) or
Section 12(g) of the Securities Exchange Act of 1934, as amended, and (ii) the aggregate market
value of Common Stock which is then available for public trading is not less than Ten Million
Dollars

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($10,000,000), computed by reference to the closing price of the Common Stock on the stock
exchange where the Common Stock is traded or the last bid price as quoted on the NASDAQ.

        2.4      Reorganizations, Mergers, Consolidations or Sales of Assets. If any of the
following transactions (each, a “Special Transaction”) shall become effective: (a) a capital
reorganization, whether by reclassification, exchange, substitution or otherwise (other than a
stock or cash dividend, subdivision, combination or other distribution provided for elsewhere in
this Section 2), (b) a consolidation or merger of the Company with another entity, or (c) a sale
or conveyance of all or substantially all of the Company’s assets; then as a condition of any such
Special Transaction, lawful and adequate provision shall be made so that the Holder of this
Warrant shall thereafter have the right to purchase and receive upon exercise of this Warrant, in
lieu of the Warrant Shares immediately theretofore issuable upon exercise of this Warrant, for the
aggregate Exercise Price in effect immediately prior to such consummation, such shares of stock,
other securities, cash or other assets as may be issued or payable in and pursuant to the terms of
such Special Transaction to the holders of shares of Common Stock for which this Warrant could
have been exercised immediately prior to such Special Transaction. In connection with any Special
Transaction, appropriate provision shall be made with respect to the rights and interests of the
Holder of this Warrant to the end that the provisions of this Warrant (including without
limitation the provisions of this Section 2), shall thereafter be applicable, as nearly as may be
practicable, to any shares of stock, other securities, cash or other assets thereafter deliverable
upon the exercise of this Warrant.

        2.5      Notice. In the event that:

        (a)      the Company shall fix a record date for the holders of shares of its Common Stock
for the purpose of entitling them to receive any dividend or other distribution of shares
of Common Stock or other securities of the Company; or

        (b)      the Company shall enter into any agreement or adopt any plan for a Special
Transaction; or

        (c)      the Company shall adopt any plan for or otherwise shall become subject to any
voluntary or involuntary dissolution, liquidation or winding up of the Company; or

        (d)      the Company shall propose to take any other action which would require an
adjustment pursuant to Sections 2.1 through 2.4,

then, and in each such case, the Company shall mail or cause to be mailed to the Holder of this
Warrant a notice specifying, as the case may be: (i) the date on which a record is to be fixed for
the purpose of such dividend or distribution, and stating the amount and character of such
dividend or distribution, or (ii) the date on which such reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up or other action is to become effective, and the
time, if any, to be fixed, as to which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for securities or other property deliverable upon such
reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up or other
action. Such notice shall be mailed at least twenty (20) days prior to the date therein specified
and this Warrant may be exercised prior to said date during the Exercise Period.

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        2.6      Fractional Interests. The Company shall not be required to issue fractions of
shares of Common Stock upon the exercise of this Warrant. If any fraction of a share of Common
Stock would be issuable upon the exercise of this Warrant, the Company shall, in lieu of such
issuance, purchase such fraction for an amount in cash equal to the current value of such
fraction, computed on the basis of the Current Market Price of the Common Stock on the last
business day prior to the date of exercise upon which such a sale of Common Stock shall have been
effected.

        2.7      Effect of Alternate Securities. If at any time, as a result of an adjustment
made pursuant to this Section 2, the Holder of this Warrant shall thereafter become entitled to
receive any securities of the Company other than shares of Common Stock, then the number of such
other securities receivable upon exercise of this Warrant shall be subject to adjustment from time
to time on terms as nearly equivalent as practicable to the provisions with respect to the Warrant
Shares as contained in this Section 2.

        2.8      Successive Application; Readjustment. The provisions of this Section 2 shall
similarly apply from time to time to successive events covered by this Section. If the Company
shall fix a record date for the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution and shall, thereafter and before the distribution to
shareholders thereof, legally abandon its plan to pay or deliver such dividend or distribution,
then thereafter no adjustment shall be required by reason of the taking of such record date and
any such adjustment previously made in respect thereof shall be rescinded and annulled.

        2.9      Certificate as to Adjustments. In the event of an adjustment in the number of
Warrant Shares or in the Exercise Price, the Company at its expense will promptly compute such
adjustment in accordance with the terms of this Warrant and prepare a certificate executed by an
executive officer of the Company setting forth such adjustment and showing in detail the facts
upon which such adjustment is based. The Company will forthwith mail a copy of each such
certificate to the Holder.

			
	III.	 	Rights of the Holder.

     3.1      No Rights as Shareholder. The Holder shall not, solely by virtue of this Warrant
and prior to the issuance of the Warrant Shares upon due exercise hereof, be entitled to any
rights of a shareholder in the Company.

     3.2      No Impairment; Certain Covenants. The Company shall not by any action including,
without limitation, amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate to protect the rights of the
Holder against impairment. Without limiting the generality of the foregoing, the Company will (a)
take all such action as may be necessary or appropriate in order that the Warrant Shares will,
upon issuance in accordance with the terms hereof and the payment of the Exercise Price therefor,
be duly authorized, validly issued and outstanding, fully paid and non-assessable, and free from
all taxes, liens and charges with respect to the issuance thereof, (b) at all times during the
Exercise Period have authorized and reserved sufficient shares of Common Stock to provide for the
exercise of this Warrant in full, and (c) use its best efforts to obtain all such authorizations,
exemptions or

5

 

consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

        3.3      Register. The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to Holder), a register for
this Warrant in which the Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each assignee and/or transferee.
The Company may treat the person in whose name this Warrant is registered on the register as the
owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all
events recognizing any transfers made in accordance with the terms of this Warrant.

			
	IV.	 	Representations and Warranties of the Company.

        The Company represents and warrants to and agrees with the Holder as follows:

        4.1      Sufficient Shares. The Company has authorized sufficient shares of Common Stock
to fulfill the Company’s obligations under this Warrant and all of the other warrants, options and
convertible securities issued by the Company. On exercise of this Warrant and satisfaction of the
Exercise Price, the Warrant Shares issued to the Holder will be validly issued, fully paid,
non-assessable and free and clear of all liens, claims and encumbrances, except any liens, claims,
or encumbrances permitted by or imposed by the Holder.

        4.2      Authority. The Company has taken all necessary action to authorize the execution
and delivery of this Warrant and the issuance of the Warrant Shares on the exercise of this
Warrant. This Warrant is a valid, binding and enforceable obligation of the Company. The
execution, delivery and performance of this Warrant will not violate: (a) any provision of the
organizational documents or charter of the Company; (b) any order, writ, injunction or decree of
any court, administrative agency or governmental body applicable to the Company or the Common
Stock; or (c) any contract, lease, note, bond, mortgage or other agreement to which the Company is
a party, by which the Company is bound or to which any of the Company’s assets are subject.

			
	V.	 	Restrictive Legend.

        5.1      This Warrant is being acquired and any Warrant Shares to be acquired by the Holder
pursuant to this Warrant (collectively, “Securities”) will be acquired for investment for the
Holder’s own account and not for resale in connection with any distribution of such Securities
within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). The
Securities will not be sold, transferred or otherwise disposed of without registration under the
Securities Act and state securities laws or qualification for exemptions therefrom. The Holder
agrees that, until the Company has caused the registration of such shares under the Securities
Act, each certificate evidencing the Warrant Shares may be inscribed with a legend to the
foregoing effect, which legend will be as follows:

The shares represented by this certificate have been acquired solely
for investment purposes and have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any
state. The shares may not be sold, transferred, assigned or
otherwise disposed of unless and until such shares are first
registered under the

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Securities Act of 1933, as amended, all
applicable state securities laws and all rules and regulations
promulgated thereunder or unless and until the holder hereof
provides either (i) information reasonably satisfactory to the
Company that such registration is not required or (ii) an opinion of
counsel reasonably acceptable to the Company to the effect that such
registration is not required.

			
	VI.	 	Transfer or Loss of Warrant.

        6.1      Transfer. Subject to compliance with federal and state securities laws, the
Holder may sell, assign, transfer or otherwise dispose of all or any portion of this Warrant or
the Warrant Shares acquired upon any exercise hereof at any time and from time to time. Upon the
sale, assignment, transfer or other disposition of all or any portion of this Warrant, the Holder
shall deliver to Company a written notice of such in the form attached hereto as Exhibit B
duly executed by Holder which includes the identity and address of any purchaser, assignor, or
transferee. On such delivery, the Company will, subject to conditions set forth herein, execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and this Warrant will promptly be
canceled. The conditions to transferability specified in this Warrant are intended to provide
certain protections to the Holder and the Company and to ensure compliance with the provisions of
the Securities Act and applicable state securities laws in respect of the transfer of any Warrant
or any Warrant Shares and are to be strictly construed.

        6.2      Lost, Stolen, Destroyed or Mutilated Warrants. In case any Warrant is mutilated,
lost, stolen or destroyed, the Company agrees to issue a new Warrant of like date, tenor and
denomination and deliver the same in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or in lieu of any Warrant lost, stolen or destroyed, on
receipt of evidence reasonably satisfactory to the Company of the loss, theft or destruction of
such Warrant.

			
	VII.	 	Miscellaneous.

        7.1      Notices. Any notice, demand or communication required or permitted to be given
by any provision of this Warrant must be in writing and will be deemed to have been given and
received when delivered personally or by telefacsimile to the party designated to receive such
notice, or on the date following the day sent by overnight courier, or on the third (3rd) business
day after the same is sent by certified mail, postage and charges prepaid, directed to the
following addresses or to such other or additional addresses as any party might designate by
written notice to the other parties:

	 	 	 	 	 
	 

	 	To the Company:
	 	Zix Corporation
	 

	 	 	 	2711 North Haskell Avenue
	 

	 	 	 	Suite 2200, LB 36
	 

	 	 	 	Dallas, Texas 75204-2960
	 

	 	 	 	Attn: Legal Department
	 

	 	 	 	Fax: (214) 370-2000

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	 	To the Holder:
	 	sanofi-aventis U.S. Inc.
	 

	 	 	 	55 Corporate Drive
	 

	 	 	 	Bridgewater, New Jersey 08807
	 

	 	 	 	Mail Stop: 55A-320B
	 

	 	 	 	Attention: Treasury Department
	 

	 	 	 	Facsimile No.: (908) 243-7405
	 
	 	 	 	 
	 

	 	With a copy to:
	 	General Counsel’s office
	 

	 	 	 	Mail Stop: 55A-525A
	 

	 	 	 	Facsimile No.: (908) 927-8636

        7.2      Expenses; Taxes. Any sales tax, stamp duty, deed transfer or other tax (except
only taxes based on the income of Holder) arising out of the issuance and sale of this Warrant or
the Warrant Shares issuable upon exercise of this Warrant and consummation of the transactions
contemplated by this Warrant Certificate shall be paid by the Company.

        7.3      Amendment; Waiver. This Warrant Certificate may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by the Company and the
Holder. No failure to exercise, and no delay in exercising, any right, power or privilege under
this Warrant Certificate shall operate as a waiver, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude the exercise of any other right, power or
privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor shall any waiver be implied
from any course of dealing between the Company and the Holder. No extension of time for
performance of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations or any other acts.

        7.4      Headings. The headings contained in this Warrant Certificate are for convenience
of reference only and are not to be given any legal effect and shall not affect the meaning or
interpretation of this Warrant Certificate.

        7.5      Governing Law. This Warrant is being delivered and is intended to be performed
in the State of New York and will be construed and enforced in accordance with, and the rights of
the parties will be governed by, the law of such state, without regard to its conflict of laws
principles.

        7.6      Severability. Should any part of this Warrant for any reason be declared
invalid, such decision shall not affect the validity of any remaining portion, which remaining
portion shall remain in full force and effect as if this Warrant had been executed with the
invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto
that they would have executed and accepted the remaining portion of this Warrant without including
therein any such part, parts or portion which may, for any reason, be hereafter declared invalid.

[Remainder of page intentionally left blank]

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        IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed
and delivered as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	ZIX CORPORATION,	 	 
	 	 	a Texas corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	     /s/ Ronald A. Woessner	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	 Ronald A. Woessner
 

	 	 
	 

	 	 	 	Title:
	 	 Senior Vice President
 

	 	 

SIGNATURE PAGE TO WARRANT

 

 

EXHIBIT A

EXERCISE NOTICE

[To be executed only upon exercise of Warrant]

        The undersigned registered owner of the attached Warrant Certificate irrevocably exercises
this Warrant for the purchase of the number of shares of Common Stock of Zix Corporation (the
“Company”) as is set forth below, and herewith makes payment therefor, all at the price and on the
terms and conditions specified in the attached Warrant Certificate and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to the person specified below whose
address is set forth below, and, if such shares of Common Stock shall not include all of the
shares of Common Stock now and hereafter issuable as provided in the attached Warrant Certificate,
then the Company shall, at its own expense, promptly issue to the undersigned a new Warrant
Certificate of like tenor and date for the balance of the shares of Common Stock issuable
thereunder.

	 
	Date:                                         

	 

	Amount of Shares Purchased:                                              

	 

	Aggregate Purchase Price:         $                                              OR
            Cashless Exercise

	 	 	 
	Printed Name of Registered Holder:
	 	 
	 

	 	 
	 
	 	 
	Signature of Registered Holder:
	 	 
	 

	 	 

	 	 	 
	NOTICE:

	 	The signature on this Exercise Notice
must correspond with the name as written
upon the face of the attached Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.

Stock Certificates to be issued and registered in the following name, and delivered to the
following address:

	 	 	 	 	 	 	 
	 	 	 
	 

	 	(Name)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	(Street Address)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	(City)
	 	(State)
	 	(Zip Code)

 

 

EXHIBIT B

ASSIGNMENT NOTICE

[To be executed only upon transfer of Warrant]

        FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the person named
below, whose address is set forth below, the rights represented by the attached Warrant
Certificate to purchase the number of shares of Common Stock of Zix Corporation (the “Company”) as
is set forth below, to which the attached Warrant Certificate relates, and appoints        
                                  
attorney to transfer such rights on the books of the Company with full power of
substitution in the premises. If such shares of Common Stock of the Company shall not include all
of the shares of Common Stock now and hereafter issuable as provided in the attached Warrant
Certificate, then the Company, at its own expense, shall promptly issue to the undersigned a new
Warrant Certificate of like tenor and date for the balance of the Common Stock issuable
thereunder.

	 
	Date:                                         

	 

	Number of Shares Assigned:                                                  

	 	 	 
	Printed Name of Registered Holder:
	 	 
	 

	 	 
	 
	 	 
	Signature of Registered Holder:
	 	 
	 

	 	 

	 	 	 	 	 
	 

	 	NOTICE:
	 	The signature on this Assignment Notice must
correspond with the name as written upon the face of
the attached Warrant Certificate in every
particular, without alteration or enlargement or any
change whatsoever.

Warrant Certificate for transferred Warrants to be issued and registered in the following name,
and delivered to the following address:

	 	 	 	 	 	 	 
	 	 	 
	 

	 	(Name)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	(Street Address)	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	(City)
	 	(State)
	 	(Zip Code)exv10w43

 

Exhibit 10.43

SEPARATION AGREEMENT AND RELEASE

     This Separation Agreement and Release (“Agreement”) is made by and between Nancy H. Handel
(“Employee”) and Applied Materials, Inc. (the “Company”) (collectively referred to as the “Parties”
or individually referred to as a “Party”).

RECITALS

     WHEREAS, Employee is employed by the Company;

     WHEREAS, Employee will retire from employment with the Company effective on January 5, 2007
(the “Retirement Date”);

     WHEREAS, Employee has been granted performance shares which will cease vesting as of the
Retirement Date, with all unvested performance shares to be forfeited as of the Retirement Date;

     WHEREAS, the Company and Employee wish to provide for an orderly transition of Employee’s
duties and responsibilities until the Retirement Date (the “Transition Period”), and Employee has
agreed to cooperate with the Company, make herself available, and otherwise provide services during
the Transition Period to facilitate the transition of her duties and responsibilities; and,

     WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that Employee may have against the Company and any of the
Releasees as defined below, including, but not limited to, any and all claims arising out of, or in
any way related to, Employee’s employment with, or separation from, the Company.

     NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee
hereby agree as follows:

COVENANTS

     1. Consideration.

          a. Bonus. The Company agrees to pay Employee a bonus for fiscal year 2006 in a lump
sum equivalent to the product of four hundred and forty thousand dollars ($440,000) multiplied by
the bonus target of 1.25 multiplied by the average multiple for the Company’s Senior Executive
Bonus Plan, less applicable withholdings. This bonus payment shall be paid to Employee on or about
December 22, 2006 or within two (2) business days following the Effective Date of this Agreement,
whichever occurs later.

          b. Salary During Transition Period. The Company agrees to continue paying Employee
her current salary through the Transition Period provided that Employee continues to perform the
requested services for the Company during the Transition Period.

Page 1

 

          c. Installment Payments. The Company agrees to pay Employee a total of one million,
three hundred and seventy-five thousand dollars ($1,375,000), less applicable withholdings. This
payment shall be paid in two equal installments, with the first installment paid to be paid to
Employee on December 15, 2006 or within two (2) business days following the Effective Date of this
Agreement, whichever occurs later, and, provided that Employee continues to perform the requested
services for the Company during the Transition Period, the second installment will be paid to
Employee on the Retirement Date or within two (2) business days following the Effective Date of
this Agreement, whichever occurs later.

          d. Options. All outstanding stock options granted to Employee that are listed on
Exhibit B hereto (the “Outstanding Stock Options”) shall remain outstanding and exercisable (to the
extent vested as of or upon the Retirement Date) until the earlier of (i) the expiration of maximum
term of the applicable Outstanding Stock Option or (ii) December 31, 2007, and shall otherwise be
exercisable in accordance with and subject to the terms and conditions of the equity incentive
plans under which they were granted and the terms of the applicable option agreement between
Employee and the Company. The Outstanding Stock Options shall vest immediately on the Retirement
Date as to: (i) the number of shares that would have otherwise vested had Employee continued as an
employee of the Company from the Retirement Date through January 31, 2008; and (ii) fifty percent
(50%) of the number of shares that would have otherwise vested had Employee continued as an
employee of the Company from February 1, 2008 through January 31, 2009, as set forth on Exhibit B
attached hereto.

          e. Consulting. Commencing on January 6, 2007, Employee shall make herself available
to serve as a consultant to the Company through January 6, 2008, pursuant to the written consulting
agreement (the “Consulting Agreement”) attached hereto as Exhibit A. The Company and Employee
shall execute Exhibit A at the same time that they execute this Agreement.

          f. Health Insurance. Employee and her eligible dependents shall be eligible for the
Company’s Bridge to Medicare Plan as provided under, and in accordance with, the terms of such
plan.

     2. Benefits. Employee’s health insurance benefits shall cease on January 31, 2007,
subject to Employee’s right to continue her health insurance under COBRA and/or to participate in
the Company’s Bridge to Medicare program. Except as otherwise provided herein, Employee’s
participation in all benefits and incidents of employment, including, but not limited to, the
accrual of bonuses, vacation, vesting (including, but not limited to, vesting of equity awards),
and paid time off, will cease as of the Retirement Date.

     3. Payment of Salary. Employee acknowledges and represents that the Company has paid
or provided her with all salary, wages, bonuses, accrued vacation/paid time off, housing
allowances, relocation costs, interest, severance, outplacement costs, fees, stock, stock options,
vesting, commissions, and any and all other benefits and compensation due to Employee.

     4. Release of Claims. Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the Company and its current
and former: officers, directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, divisions, and subsidiaries, and predecessor and successor corporations
and assigns (the

Page 2

 

“Releasees”). Employee, on her own behalf, and on behalf of her respective heirs, family
members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees
not to sue concerning, or in any manner to institute, prosecute or pursue, any claim, complaint,
charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently
known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees
arising from any omissions, acts, facts, or damages that have occurred up until and including the
Effective Date of this Agreement, including, without limitation:

          a. any and all claims relating to or arising from Employee’s employment relationship with the
Company and the termination of that relationship;

          b. any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;

          c. any and all claims for wrongful discharge of employment; termination in violation of public
policy; discrimination; harassment; retaliation; breach of contract, both express and implied;
breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel;
negligent or intentional infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; unfair business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; conversion; and workers’ compensation
and disability benefits;

          d. any and all claims for violation of any federal, state, or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the
Americans with Disabilities Act of 1990; the Fair Labor Standards Act, except as prohibited by law;
the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers
Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment
and Retraining Notification Act; the Family and Medical Leave Act, except as prohibited by law; the
Sarbanes-Oxley Act of 2002; the California Family Rights Act; the California Labor Code, except as
prohibited by law; the California Workers’ Compensation Act, except as prohibited by law; and the
California Fair Employment and Housing Act;

          e. any and all claims for violation of the federal or any state constitution;

          f. any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;

          g. any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and

          h. any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this section shall be and remain in effect in all
respects

Page 3

 

as a complete general release as to the matters released. This release does not extend to any
obligations incurred under this Agreement. This release does not release claims that cannot be
released as a matter of law, including, but not limited to, claims under Division 3, Article 2 of
the California Labor Code (which includes California Labor Code section 2802 regarding indemnity
for necessary expenditures or losses by employee) and claims prohibited from release as set forth
in California Labor Code section 206.5 (specifically “any claim or right on account of wages due,
or to become due, or made as an advance on wages to be earned, unless payment of such wages has
been made”).

     5. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that she is
waiving and releasing any rights she may have under the Age Discrimination in Employment Act of
1967 (“ADEA”), and that this waiver and release is knowing and voluntary. Employee agrees that
this waiver and release does not apply to any rights or claims that may arise under the ADEA after
the Effective Date of this Agreement. Employee acknowledges that the consideration given for this
waiver and release is in addition to anything of value to which Employee was already entitled.
Employee further acknowledges that she has been advised by this writing that: (a) she should
consult with an attorney prior to executing this Agreement; (b) she has twenty-one (21)
days within which to consider this Agreement; (c) she has seven (7) days following her execution of
this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the
revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this Agreement and returns it
to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
she has freely and voluntarily chosen to waive the time period allotted for considering this
Agreement.

     6. California Civil Code Section 1542. Employee acknowledges that she has been
advised to consult with legal counsel and is familiar with the provisions of California Civil Code
Section 1542, a statute that otherwise prohibits unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

     Employee, being aware of said code section, agrees to expressly waive any rights she may have
thereunder, as well as under any other statute or common law principles of similar effect.

     7. No Pending or Future Lawsuits. Employee represents that she has no lawsuits,
claims, or actions pending in her name, or on behalf of any other person or entity, against the
Company or any of the other Releasees. Employee also represents that she does not intend to bring
any claims on her own behalf or on behalf of any other person or entity against the Company or any
of the other Releasees.

Page 4

 

     8. Trade Secrets and Confidential Information/Company Property. Employee agrees that
she will not use the Company’s trade secrets or confidential and proprietary information except as
needed in connection with the performance of her duties for the Company and that she will not
disclose the Company’s trade secrets or confidential and proprietary information to anyone outside
the Company. Employee’s signature on this Agreement constitutes her certification under penalty of
perjury that she has used her best efforts to return all documents and other items provided to
Employee by the Company, developed or obtained by Employee in connection with her employment with
the Company, or otherwise belonging to the Company.

     9. No Cooperation. Employee agrees not to act in any manner that might damage the
business of the Company. Employee further agrees that she will not knowingly counsel or assist any
attorneys or their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints by any third party against the Company or any of the
Releasees, unless under a subpoena or other court order to do so or in the context of a legal
action by Employee challenging or seeking a determination in good faith of the validity of the
waiver herein under the ADEA. Employee agrees both to immediately notify the Company upon receipt
of any such subpoena or court order, and to furnish, within three (3) business days of its receipt,
a copy of such subpoena or other court order.

     10. Non-Disparagement. Employee agrees to refrain from any disparagement, defamation,
libel, or slander of any of the Releasees, and agrees to refrain from any tortious interference
with the contracts and relationships of any of the Releasees. Employee shall direct any inquiries
by potential future employers to the Company’s human resources department, which shall use its best
efforts to provide only the Employee’s last position and dates of employment. The Parties further
agree that each Party shall have the opportunity to review and approve any press release or other
publicly distributed communication regarding Employee’s departure from the Company or Employee’s
Consulting Agreement with the Company prior to the publication or release of such communication.

     11. Breach. Employee acknowledges and agrees that any material breach of this
Agreement or the Consulting Agreement shall entitle the Company immediately to recover and cease
providing the consideration provided to Employee under this Agreement, unless such breach
constitutes a legal action by Employee challenging or seeking a determination in good faith of the
validity of the waiver herein under the ADEA. Except as provided by law, Employee also shall be
responsible to the Company for all costs, attorneys’ fees, and any and all damages incurred by the
Company in: (a) enforcing Employee’s obligations under this Agreement and the Consulting Agreement,
including the bringing of any action to recover the consideration, and (b) defending against a
claim or suit brought or pursued by Employee in violation of the terms of this Agreement.

     12. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or potential disputed
claims. No action taken by the Company hereto, either previously or in connection with this
Agreement, shall be deemed or construed to be: (a) an admission of the truth or falsity of any
potential claims; or (b) an acknowledgment or admission by the Company of any fault or liability
whatsoever to Employee or to any third party.

Page 5

 

     13. Costs. The Parties shall each bear their own costs, attorneys’ fees, and other
fees incurred in connection with the preparation of this Agreement.

     14. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS
OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT
TO ARBITRATION IN SANTA CLARA COUNTY, BEFORE JAMS PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES &
PROCEDURES (THE “JAMS RULES”). THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN
ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE
ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT
REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES
CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE ARBITRATOR MAY GRANT
INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE DECISION OF THE ARBITRATOR SHALL BE FINAL,
CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING
PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT
JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO
HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE
FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER
PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE.

     15. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payments provided to Employee or made on her behalf under the terms
of this Agreement. Employee agrees and understands that she is responsible for payment, if any, of
local, state, and/or federal taxes on the payments made hereunder by the Company and any penalties
or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from
any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or
recoveries by any government agency against the Company for any amounts claimed due on account of
(a) Employee’s failure to pay or the Company’s failure to withhold, or Employee’s delayed payment
of, federal or state taxes, or (b) damages sustained by the Company by reason of any such claims,
including attorneys’ fees and costs.

     16. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement, so long as this Agreement has been approved by the
Company’s Compensation Committee. Employee represents and warrants that she has the capacity to
act on her own behalf and on behalf of all who might claim through her to bind them to the terms
and conditions of this Agreement. Each Party warrants and represents that there are no liens or
claims of lien or assignments in law or equity or otherwise of or against any of the claims or
causes of action released herein.

Page 6

 

     17. No Representations. Employee represents that she has had an opportunity to
consult with an attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement. Employee has not relied upon any representations or statements made
by the Company that are not specifically set forth in this Agreement.

     18. Severability. In the event that any provision or any portion of any provision
hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force and effect without said
provision or portion of provision.

     19. Attorneys’ Fees. Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein under the ADEA, in the event that
either Party brings an action to enforce or effect its rights under this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with
such an action. This paragraph supersedes any conflicts or inconsistencies with paragraph 11, p. 5.

     20. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of this Agreement and
Employee’s employment with and separation from the Company and the events leading thereto and
associated therewith, and supersedes and replaces any and all prior agreements and understandings
concerning the subject matter of this Agreement and Employee’s relationship with the Company, with
the exception of the equity incentive plans and the applicable stock option agreements between
Employee and the Company.

     21. No Oral Modification. This Agreement may only be amended in a writing signed by
Employee and the Company’s Chief Executive Officer.

     22. Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions.

     23. Effective Date. This Agreement will become effective after the Parties have
signed this Agreement and the Consulting Agreement and after seven (7) days have passed since
Employee signed the Agreement, assuming it is not revoked by Employee before that date (the
“Effective Date”).

     24. Counterparts. This Agreement may be executed in counterparts and by facsimile,
and each counterpart and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the undersigned.

     25. Voluntary Execution of Agreement. Employee understands and agrees that she
executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of
the Company or any third party. Employee acknowledges that:

	 	(a)	 	she has read this Agreement;

Page 7

 

	 	(b)	 	she has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of her own choice or has elected
not to retain legal counsel;
	 
	 	(c)	 	she understands the terms and consequences of this Agreement and
of the releases it contains; and
	 
	 	(d)	 	she is fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.

	 	 	 	 	 	 	 
	 	 	NANCY H. HANDEL, an individual	 	 
	 
	 	 	 	 	 	 
	Dated: December 15, 2006	 	     /s/ Nancy H. Handel	 	 
	 	 	 	 	 
	 	 	Nancy H. Handel	 	 
	 
	 	 	 	 	 	 
	 	 	APPLIED MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 
	Dated: December 15, 2006

	 	By
	 	     /s/ Michael R. Splinter	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Michael R. Splinter

President and Chief Executive Officer	 	 

Page 8

 

Exhibit A

CONSULTING AGREEMENT

     This Consulting Agreement (“Agreement”) is made and entered into by and between Applied
Materials, Inc. (the “Company”), and Nancy H. Handel (“Consultant”) (collectively referred to as
the “Parties” or individually referred to as a “Party”).

     WHEREAS, the Company desires to retain Consultant as an independent contractor to perform
consulting services for the Company, and Consultant is willing to perform such services, on terms
set forth more fully below; and

     WHEREAS, even if Consultant makes a concerted effort to respect her continuing obligations to
protect the confidentiality of the Company’s trade secrets and proprietary information, it simply
will not be possible for her to perform any consulting or job responsibilities at the Company’s
competitors and protect the confidentiality of the Company’s trade secrets and proprietary
information.

     NOW THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as
follows:

     1. SERVICES AND COMPENSATION

          (a) Consultant agrees to make herself available for up to a maximum of five (5) days per month
to perform such assignments as may reasonably be assigned to her by the Company (the “Services”).

          (b) The Company agrees to pay Consultant a fee of Ten Thousand Dollars ($10,000.00) per month
for the Consulting Term, as defined below, provided that Consultant provides the requested Services
during the Consulting Term. This monthly payment will be paid no later than the first business day
of the month following each month in which Consultant performed the Services.

     2. CONFIDENTIALITY

          (a) Definition. “Confidential Information” means any Company proprietary information,
technical data, trade secrets or know-how, including, but not limited to, research, product plans,
products, services, customers, customer lists, markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware configuration
information, marketing, finances, or other business information disclosed by the Company either
directly or indirectly in writing, orally, or by drawings or inspection of parts or equipment.

          (b) Non-Use and Non-Disclosure. Consultant will not, during or subsequent to the term
of this Agreement, use the Company’s Confidential Information for any purpose whatsoever other than
the performance of the Services on behalf of the Company or disclose the Company’s Confidential
Information to any third party. It is understood that said Confidential Information

Page 9

 

shall remain the sole property of the Company. Consultant further agrees to take all
reasonable precautions to prevent any unauthorized disclosure of such Confidential Information
including, but not limited to, having each employee of Consultant, if any, with access to any
Confidential Information, execute a nondisclosure agreement containing provisions in the Company’s
favor identical to Sections 2, 3, and 4 of this Agreement. Confidential Information does not
include information which (i) is known to Consultant at the time of disclosure to Consultant by the
Company as evidenced by written records of Consultant, (ii) has become publicly known and made
generally available through no wrongful act of Consultant, or (iii) has been rightfully received by
Consultant from a third party who is authorized to make such disclosure.

          (c) Former Employer’s Confidential Information. Consultant agrees that Consultant
will not, during the term of this Agreement, improperly use or disclose any proprietary information
or trade secrets of any former or current employer or other person or entity with which Consultant
has an agreement or duty to keep in confidence information acquired by Consultant, if any, and that
Consultant will not bring onto the premises of the Company any unpublished document or proprietary
information belonging to such employer, person, or entity unless consented to in writing by such
employer, person, or entity. Consultant will indemnify the Company and hold it harmless from and
against all claims, liabilities, damages, and expenses, including reasonable attorneys’ fees and
costs of suit, arising out of or in connection with any violation or claimed violation of a third
party’s rights resulting in whole or in part from the Company’s use of the work product of
Consultant under this Agreement.

          (d) Third Party Confidential Information. Consultant recognizes that the Company has
received and in the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. Consultant agrees that Consultant
owes the Company and such third parties, during the term of this Agreement and thereafter, a duty
to hold all such confidential or proprietary information in the strictest confidence and not to
disclose it to any person, firm, or corporation or to use it except as necessary in carrying out
the Services for the Company consistent with the Company’s agreement with such third party.

          (e) Return of Materials. Upon the termination of this Agreement, or upon Company’s
earlier request, Consultant will deliver to the Company all of the Company’s property or
Confidential Information that Consultant may have in Consultant’s possession or control.

          3. OWNERSHIP

          (a) Assignment. Consultant agrees that all copyrightable material, notes, records,
drawings, designs, inventions, improvements, developments, discoveries, and trade secrets
(collectively, “Inventions”) conceived, made, or discovered by Consultant, solely or in
collaboration with others, during the period of this Agreement, which relate in any manner to the
business of the Company that Consultant may be directed to undertake, investigate, or experiment
with, or which Consultant may become associated with in work, investigation, or experimentation in
the line of business of Company in performing the Services hereunder, are the sole property of the
Company. Consultant further agrees to assign (or cause to be assigned) and does hereby assign
fully to the Company all Inventions and any copyrights, patents, or other intellectual property
rights relating thereto.

Page 10

 

          (b) Further Assurances. Consultant agrees to assist Company, or its designee, at the
Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any
copyrights, patents, or other intellectual property rights relating thereto in any and all
countries, including the disclosure to the Company of all pertinent information and data with
respect thereto, the execution of all applications, specifications, oaths, assignments, and all
other instruments which the Company shall deem necessary in order to apply for and obtain such
rights and in order to assign and convey to the Company, its successors, assigns, and nominees the
sole and exclusive right, title, and interest in and to such Inventions, and any copyrights,
patents, or other intellectual property rights relating thereto. Consultant further agrees that
Consultant’s obligation to execute or cause to be executed, when it is in Consultant’s power to do
so, any such instrument or papers shall continue after the termination of this Agreement.

          (c) Pre-Existing Materials. Consultant agrees that if in the course of performing the
Services, Consultant incorporates into any Invention developed hereunder any invention,
improvement, development, concept, discovery, or other proprietary information owned by Consultant
or in which Consultant has an interest, (i) Consultant shall inform Company, in writing before
incorporating such invention, improvement, development, concept, discovery, or other proprietary
information into any Invention; and (ii) the Company is hereby granted and shall have a
nonexclusive, royalty-free, perpetual, irrevocable, worldwide license to make, have made, modify,
use, and sell such item as part of or in connection with such Invention. Consultant shall not
incorporate any invention, improvement, development, concept, discovery, or other proprietary
information owned by any third party into any Invention without Company’s prior written permission.

          (d) Attorney in Fact. Consultant agrees that if the Company is unable because of
Consultant’s unavailability, dissolution, mental or physical incapacity, or for any other reason,
to secure Consultant’s signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering the Inventions assigned to the Company above,
then Consultant hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Consultant’s agent and attorney in fact, to act for and in Consultant’s
behalf and stead to execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of patents and copyright registrations thereon with
the same legal force and effect as if executed by Consultant.

     4. CONFLICTING OBLIGATIONS

          Consultant certifies that Consultant has no outstanding agreement or obligation that is in
conflict with any of the provisions of this Agreement, or that would preclude Consultant from
complying with the provisions hereof, and further certifies that Consultant will not enter into any
such conflicting agreement during the term of this Agreement.

     5. TERM AND TERMINATION

          (a) Term. This Agreement will commence on January 6, 2007 and will terminate on
January 6, 2008, unless it is terminated before that time as provided below (the “Consulting
Term”).

          (b) Termination. The Consultant may terminate this Agreement at any time. The
Company may terminate this Agreement immediately if Consultant breaches Sections 1, 2, 3, 4, 6,

Page 11

 

or 7 of this Agreement. Upon termination of this Agreement, the Company’s obligation to
provide Consultant with any payments or fees as set forth in Section 1 above shall cease
immediately, and no further payments will be due to Consultant by the Company.

          (c) Survival. Upon such termination, all rights and duties of the parties toward each
other shall cease, except Sections 2 (Confidentiality), 3 (Ownership), 9 (Independent Contractors),
and 10 (Benefits) shall survive termination of this Agreement.

     6. DUTY OF LOYALTY AND CONFIDENTIALITY

          (a) Given Consultant’s detailed access to and knowledge of the Company’s Confidential
Information and the nature of the work that she is expected to perform during the Consulting Term,
Consultant acknowledges and agrees that Consultant cannot work as an employee or consultant at any
of the Company’s major public competitors during the Consulting Term. Consultant acknowledges and
agrees that, even if Consultant makes a concerted effort to respect her continuing obligations to
protect the confidentiality of the Company’s Confidential Information, it simply will not be
possible for her to simultaneously: (i) perform any consulting or job responsibilities at any of
the Company’s major public competitors; and (ii) protect the confidentiality of the Company’s
Confidential Information. The Company’s Confidential Information would inevitably be disclosed in
the performance of Consultant’s consulting or job duties at any of the Company’s major public
competitors to the severe detriment of the Company. Accordingly, as consideration for the
Consulting Agreement, Consultant agrees that during the Consulting Term, Consultant shall not
become an employee or consultant to any of the Company’s major public competitors.

          (b) Given Consultant’s detailed access to and knowledge of the Company’s Confidential
Information, and as further consideration for the Consulting Agreement, Consultant agrees that,
during the Consulting Term, she shall not either directly or indirectly, solicit, call upon, or
encourage any of the Company’s customers to do business with Consultant or any of the Company’s
competitors. Consultant further agrees that, during the Consulting Term, she shall not either
directly or indirectly, solicit, induce, recruit, or encourage any of the Company’s employees to
leave their employment, or take away such employees, or attempt to solicit, induce, or recruit
employees of the Company, either for herself or for any of the Company’s competitors.

     7. ASSIGNMENT

          Neither this Agreement nor any right hereunder or interest herein may be assigned or
transferred by Consultant without the express written consent of the Company.

     8. INDEPENDENT CONTRACTOR

          It is the express intention of the parties that Consultant is an independent contractor.
Nothing in this Agreement shall in any way be construed to constitute Consultant as an agent,
employee, or representative of the Company, but Consultant shall perform the Services hereunder as
an independent contractor. Consultant agrees to furnish (or reimburse the Company for) all tools
and materials necessary to accomplish this contract, and shall incur all expenses associated with
performance. Consultant acknowledges and agrees that Consultant is obligated to report as income
all compensation received by Consultant pursuant to this Agreement, and Consultant agrees to and

Page 12

 

acknowledges the obligation to pay all self-employment and other taxes thereon. Consultant
further agrees to indemnify and hold harmless the Company and its directors, officers, and
employees from and against all taxes, losses, damages, liabilities, costs, and expenses, including
attorney’s fees and other legal expenses, arising directly or indirectly from (i) any negligent,
reckless, or intentionally wrongful act of Consultant or Consultant’s assistants, employees, or
agents, (ii) a determination by a court or agency that the Consultant is not an independent
contractor, or (iii) any breach by the Consultant or Consultant’s assistants, employees, or agents
of any of the covenants contained in this Agreement.

     9. BENEFITS

     Consultant acknowledges and agrees and it is the intent of the parties hereto that Consultant
receive no Company-sponsored benefits from the Company either as a Consultant or employee. Such
benefits include, but are not limited to, paid vacation, sick leave, medical insurance, and 401(k)
participation. If Consultant is reclassified by a state or federal agency or court as an employee,
Consultant will become a reclassified employee and will receive no benefits except those mandated
by state or federal law, even if by the terms of the Company’s benefit plans in effect at the time
of such reclassification Consultant would otherwise be eligible for such benefits.

     10. ARBITRATION AND EQUITABLE RELIEF

          THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF, RELATING TO, OR RESULTING FROM THE
TERMS OF THIS AGREEMENT AND THEIR INTERPRETATION SHALL BE SUBJECT TO BINDING ARBITRATION IN SAN
DIEGO COUNTY, CALIFORNIA BEFORE JAMS, PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES
(“JAMS RULES”). THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH
CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY
SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH
CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE ARBITRATOR MAY GRANT INJUNCTIONS AND
OTHER RELIEF IN SUCH DISPUTES. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND
BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY
ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO
ENFORCE THE ARBITRATION AWARD. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE
BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.

     11. GOVERNING LAW

     This Agreement shall be governed by the internal substantive laws, but not the choice-of-law
rules, of the State of California.

Page 13

 

     12. ENTIRE AGREEMENT

     This Agreement represents the entire agreement and understanding between the Company and
Consultant concerning Consultant’s relationship with the Company and the termination of that
relationship and the events leading thereto and associated therewith, and supersedes and replaces
any and all prior agreements and understandings concerning Consultant’s relationship with the
Company, with the exception of the Separation Agreement and Release and the Company’s Stock
Agreements, which shall remain in full force and effect.

     13. MODIFICATION

          This Agreement may only be amended in a writing signed by Consultant and the Company’s Chief
Executive Officer.

     14. ATTORNEYS’ FEES

          In the event that either Party brings an action to enforce or effect its rights under this
Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the
costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in
connection with such an action.

     15. SEVERABILITY

          The invalidity or unenforceability of any provision of this Agreement, or any terms thereof,
shall not affect the validity of this Agreement as a whole, which shall at all times remain in full
force and effect.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	NANCY H. HANDEL, an individual	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:	 	December 15, 2006	 	 	 	/s/ Nancy H. Handel	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Nancy H. Handel	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	APPLIED MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	December 15, 2006
	 	 	 	By
	 	     /s/ Michael R. Splinter	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Michael R. Splinter	 	 
	 

	 	 	 	 	 	 	 	President and Chief Executive Officer	 	 

Page 14

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