EXHIBIT 10.9
ZIX CORPORATION 2003 NEW EMPLOYEE STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Zix Corporation 2003 New Employee Stock Option Plan
(hereinafter called the "Plan") is to advance the interests of Zix Corporation
(hereinafter called the "Company") by strengthening the ability of the Company
to attract, on its behalf and on behalf of its Subsidiaries (as hereinafter
defined), personnel of high caliber through encouraging a sense of
proprietorship by means of stock ownership. The Plan, as written and as
administered by the Committee, is intended to comply with NASD Rule
4350(i)(1)(A)(iv), which provides that shareholder approval is not required for
issuer equity issuances to certain employees.
SECTION 2. DEFINITIONS
"Board of Directors" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time-to-time.
"Committee" shall mean a committee of the Board of Directors comprised
of a majority of Independent Directors or a majority of the Company's
Independent Directors, as the case may be.
"Common Stock" shall mean the Common Stock of the Company, par value
$.01 per share.
"Date of Grant" shall mean the date on which an Option is granted
pursuant to this Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the closing sale price (or average of
the quoted closing bid and asked prices if there is no closing sale price
reported) of the Common Stock on the date specified as reported by the Nasdaq
National 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.
"Independent Director" shall have the meaning given such term in NASDAQ
Rule 4200(a)(14).
"Nonqualified Stock Option" shall mean a stock option granted under
Section 6 that is not intended to be an incentive stock option.
"Option" shall mean an option granted under the Plan.
"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.
"Subsidiary" shall mean any now existing or hereafter organized or
acquired corporation or other entity of which fifty percent (50%) or more of the
issued and outstanding voting stock or other economic interest is owned or
controlled directly or indirectly by the Company or through one or more
Subsidiaries of the Company.
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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.
SECTION 4. ELIGIBILITY
The following persons are eligible to receive options under the Plan:
employees (other than officers or directors) of the Company or a Subsidiary that
were not previously an employee or director of the Company or a Subsidiary, or
if previously such, have experienced a bona fide period of non-employment with
the Company and its Subsidiaries, in each case, if the option grant is in
connection with such person entering into employment with the Company or a
Subsidiary and is offered to them as an inducement for them to enter into such
employment.
SECTION 5. MAXIMUM AMOUNT AVAILABLE FOR OPTIONS
(a) The maximum number of shares of Common Stock in respect of which
Options may be made under the Plan shall be a total of 500,000 shares of Common
Stock. Options that expire, lapse or are cancelled or forfeited nonetheless
continue to count against the 500,000 share limit. Shares of Common Stock may be
made available from the authorized but unissued shares of the Company or from
shares reacquired by the Company, including shares purchased in the open market.
In the event that an Option is terminated unexercised as to any shares of Common
Stock covered thereby, such shares shall thereafter be again available for award
pursuant to the Plan.
(b) In the event that the Committee shall determine that any stock
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, warrants or rights offering to
purchase Common Stock at a price substantially below fair market value, or other
similar corporate event affects the Common Stock such that an adjustment is
required in order to preserve the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall adjust appropriately any
or all of (1) the number and kind of shares which thereafter may be optioned
under the Plan and (2) the grant, exercise or conversion price and/or number of
shares with respect to the Options and/or, if deemed appropriate, make provision
for cash payment to an Optionee; provided, however, that the number of shares
subject to any Option shall always be a whole number.
SECTION 6. STOCK OPTIONS
(a) Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the persons to whom Options shall be
granted, the number of shares to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the exercise of the
Option.
(b) The Committee shall have the authority to grant Nonqualified Stock
Options only. Nonqualified Stock Options to purchase Common Stock may be granted
to such eligible participants as shall be determined by the Committee.
(c) The Committee shall, in its discretion, establish the exercise
price at the time each Option is granted, which in the case of Nonqualified
Stock Options, shall not be less than 100% of the Fair Market Value of the
Common Stock on the Date of Grant. The exercise price of any outstanding Options
may not be repriced without the approval of the Company's stockholders (obtained
in accordance with applicable law), given in each specified instance.
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(d) Exercise
(1) Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable grant or thereafter; provided,
however, that in no event may any Option granted hereunder be
exercisable after the expiration of ten years from the Date of Grant,
unless otherwise permitted by the Committee. The Committee may impose
such conditions with respect to the exercise of Options, including
without limitation, any relating to the application of federal or state
securities laws, as it may deem necessary or advisable.
(2) No shares shall be delivered pursuant to any exercise
of an Option until payment in full of the option price therefore is
received by the Company. Such payment may be made in cash, or its
equivalent, or, if and to the extent permitted by the Committee or
under the terms of the applicable agreement, by exchanging shares of
Common Stock owned by the Optionee (which are not the subject of any
pledge or other security interest), or by a combination of the
foregoing, provided that the combined value of all cash and cash
equivalents and the Fair Market Value of any such Common Stock so
tendered to the Company, valued as of the date of such tender, is at
least equal to such option price.
If the shares to be purchased are covered by an effective
registration statement under the Securities Act of 1933, as amended,
any Option may be exercised by a broker-dealer acting on behalf of an
Optionee if (a) the broker-dealer has received from the Optionee
instructions signed by the Optionee requesting the Company to deliver
the shares of Common Stock subject to such Option to the broker-dealer
on behalf of the Optionee and specifying the account into which such
shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise,
and (c) the broker-dealer and the Optionee have otherwise complied with
Section 220.3(e)(4) of Regulation T, 12 CFR Part 220, or any successor
provision.
(3) The Company, in its sole discretion, may lend money
to an Optionee, guarantee a loan to an Optionee or otherwise assist an
Optionee to obtain the cash necessary to exercise all or any portion of
an Option granted under the Plan.
(4) The Company shall not be required to issue any
fractional shares upon the exercise of any Options granted under this
Plan. No Optionee nor an Optionee's legal representatives, legatees or
distributees, as the case may be, will be, or will be deemed to be, a
holder of any shares subject to an Option unless and until said Option
has been exercised and the purchase price of the shares in respect of
which the Option has been exercised has been paid. Unless otherwise
provided in the agreement applicable thereto, an Option shall not be
exercisable except by the Optionee or by a person who has obtained the
Optionee's rights under the Option by will or under the laws of descent
and distribution or pursuant to a "qualified domestic relations order"
as defined in the Code.
(e) In no event shall any Option granted to any employee who is
classified as "non-exempt" under the Fair Labor Standards Act of 1938 be
exercisable less than six months after the Date of Grant, except in the case of
death, disability, retirement, a change in control or other circumstances
permitted by regulations under the Worker Economic Opportunity Act ("WEOA").
Grants to such non-exempt employees shall not be based on pre-established
performance criteria, except as specifically permitted under the WEOA.
Non-exempt employees shall be notified of the terms of their Options in
accordance with the WEOA, and exercise of such Options must be voluntary.
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SECTION 7. GENERAL PROVISIONS
(a) The Company and its Subsidiaries shall have the right to deduct
from all amounts paid to an Optionee in cash (whether under the Plan or
otherwise) any taxes required by law to be withheld in respect of Option
exercises under the Plan. However, if permitted by the Committee or under the
terms of the applicable agreement, the Optionee may pay all or any portion of
the taxes required to be withheld by the Company or its Subsidiaries or paid by
the Optionee with respect to such Common Stock by electing to have the Company
or its Subsidiaries withhold shares of Common Stock, or by delivering previously
owned shares of Common Stock, having a Fair Market Value equal to the amount
required to be withheld or paid. The Optionee must make the foregoing election
on or before the date that the amount of tax to be withheld is determined. Any
such election is irrevocable and subject to disapproval by the Committee.
(b) Each Option hereunder shall be evidenced in writing, delivered to
the Optionee, and shall specify the terms and conditions thereof and any rules
applicable thereto, including, but not limited to, the effect on such Option of
the death, retirement, disability or other termination of employment of the
Optionee and the effect thereon, if any, of a change in control of the Company.
(c) Unless otherwise provided in the agreement applicable thereto, no
Option shall be assignable or transferable except by will or under the laws of
descent and distribution or pursuant to a "qualified domestic relations order"
as defined in the Code, and no right or interest of any Optionee shall be
subject to any lien, obligation or liability of the Optionee.
(d) No person shall have any claim or right to be granted an Option.
Further, the Company and its Subsidiaries expressly reserve the right at any
time to terminate the employment of an Optionee free from any liability, or any
claim under the Plan. Neither the Plan nor any Option granted hereunder is
intended to confer upon any Optionee any rights with respect to continuance of
employment or other utilization of his or her services by the Company or by a
Subsidiary, nor to interfere in any way with his or her right or that of his or
her employer to terminate his or her employment or other services at any time.
The conditions to apply to the exercise of an Option in the event an Optionee
ceases to be employed by the Company or a Subsidiary for any reason shall be
determined by the Committee or specified in the written agreement evidencing the
Option.
(e) Subject to the provisions of the applicable Option, no Optionee or
permitted assignee 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.
(f) 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.
(g) Restrictions on Issuance of Shares
(1) The Company shall not be obligated to sell or issue
any Shares upon the exercise of any Option granted under the Plan
unless: (i) the shares pertaining to such Option have been registered
under applicable federal and state securities laws or are exempt from
such registration; (ii) the prior approval of such sale or issuance has
been obtained from any state regulatory body having jurisdiction; and
(iii) in the event the Common Stock has been listed on any exchange,
the shares pertaining to such Option have been duly listed on such
exchange in accordance with the procedure specified therefor. The
Company shall be under no obligation to effect or obtain any listing,
registration, qualification, consent or approval with respect to shares
pertaining to any
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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.
(2) The Company shall not be liable for damages due to a
delay in the delivery or issuance of any stock certificates for any
reason whatsoever, including, but not limited to, a delay caused by
listing, registration or qualification of the shares of Common Stock
pertaining to any Option granted under the 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.
(h) The Board of Directors or 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
applicable agreement.
(i) The Board of Directors 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 stockholder approval is necessary to comply
with any tax or regulatory requirement or listing rules. The Plan has not been
submitted for stockholder approval.
(j) To preserve an Optionee's rights under an Option in the event of a
change in control of the Company or an Optionee's separation from employment,
the Committee in its discretion may, at the time an Option is made or any time
thereafter, take one or more of the following actions: (i) provide for the
acceleration of any time period relating to the exercise of the Option, (ii)
provide for the purchase of the Option, upon the Optionee's request, for an
amount of cash or other property that could have been received upon the exercise
or realization of the Option had the Option been currently exercisable or
payable, (iii) adjust the terms of the Option in a manner determined by the
Committee to reflect the change in control or to prevent the imposition of an
excise tax under section 280G(b) of the Code, (iv) cause the Option to be
assumed, or new rights substituted therefor, by another entity, or (v) make such
other provision as the Committee may consider equitable and in the best
interests of the Company.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed on
its behalf as of the 1st day of October 2003.
ZIX CORPORATION
By: Ronald A. Woessner
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Title: SVP
Date: 1/15/04
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