AMENDED AND RESTATED SEVERANCE AGREEMENT
Exhibit 10.27
Execution Version
AMENDED AND RESTATED SEVERANCE AGREEMENT
THIS AMENDED AND RESTATED SEVERANCE AGREEMENT (this “Agreement”), entered into as of December
18, 2008, is made and entered into between Zix Corporation, a Texas corporation (the “Company”),
and Xxxxxxx X. Xxxxx (“Employee”) and hereby amends and restates that certain severance agreement,
dated December 10, 2007 between the parties.
WHEREAS, Employee is currently employed by the Company;
WHEREAS, Employee is willing to continue working for the Company on an “at-will” basis;
NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein contained, the parties agree as follows:
1. Definitions.
A. Acquiring Person. An “Acquiring Person” shall mean any person (including any
“person” as such term is used in Sections 13(d)(3) or 14(d)(2) of the Exchange Act that, together
with all Affiliates and Associates of such person, is the beneficial owner (as the term “beneficial
owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act)) of 10% or more of the outstanding Common Stock. The term “Acquiring Person” shall
not include the Company, any majority-owned subsidiary of the Company, any employee benefit plan of
the Company or a majority—owned subsidiary of the Company, or any person to the extent such person
is holding Common Stock for or pursuant to the terms of any such plan. For the purposes of this
Agreement, a person who becomes an Acquiring Person by acquiring beneficial ownership of 10% or
more of the Common Stock at any time after the date of this Agreement shall continue to be an
Acquiring Person whether or not such person continues to be the beneficial owner of 10% or more of
the outstanding Common Stock.
B. Affiliate and Associate. “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act in effect on the date of this Agreement.
C. Cause. “Cause” shall mean any of the following shall have occurred: (1) the
intentional and continued failure by Employee to substantially perform Employee’s employment
duties, such intentional action involving willful and deliberate malfeasance or gross negligence in
the performance of Employee’s duties (other than any such failure resulting from Employee’s
incapacity due to physical or mental illness), after written demand for substantial performance is
delivered by the Company’s Board of Directors (hereinafter, referred to as the “Board”) that
specifically identifies the manner in which the Board of Directors believes Employee has not
substantially performed Employee’s duties and that is not cured within five business days after
notice thereof by the Company to Employee; (2) the intentional engaging by Employee in misconduct
that is materially injurious to the Company; (3) the conviction of Employee or a plea of nolo
contendere, or the substantial equivalent to either of the foregoing, of or with respect to, any
felony; (4) the commission of acts by Employee of moral turpitude that are injurious to the
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Company; (5) a breach by Employee of the “confidentiality and invention” agreement between the
Company and Employee; (6) a breach by Employee of Section 8 of this Agreement; or (7) a breach by
Employee of the Company’s “Code of Ethics for Senior Officers,” as currently in effect or amended
from time-to-time. For purposes of this definition, no act, or failure to act, on Employee’s part
shall be considered “intentional” unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in, or not opposed to, the best interest
of the Company.
Notwithstanding the foregoing, Employee shall not be deemed to have been terminated for Cause
without (1) reasonable written notice to Employee, setting forth the reasons for the Company’s
intention to terminate for Cause; (2) an opportunity for Employee, together with his counsel, to be
heard before the Board (or an authorized representative thereof; and (3) delivery to Employee of a
written notice of termination from the Board (or its authorized representative) finding that, in
the good faith opinion of the Board (or its authorized representative), Employee engaged in the
conduct set forth above in clause (1) or (2) of the preceding paragraph or an event specified in
clause (3), (4), (5), (6) or (7) of the preceding paragraph has occurred.
D. Change in Control. A “Change in Control” of the Company shall have occurred if any
of the following events shall occur during the term of Employee’s employment;
(1) The Company is merged, consolidated or reorganized into or with another corporation
or other legal person, other than an Affiliate, and as a result of such merger,
consolidation or reorganization, the Company or its shareholders or Affiliates immediately
before such transaction beneficially own, immediately after or as a result of such
transaction, equity securities of the surviving or acquiring corporation or such
corporation’s parent corporation possessing less than 51% of the voting power of the
surviving or acquiring person or such person’s parent corporation;
(2) The Company sells all or substantially all of its assets to any other corporation
or other legal person, other than an Affiliate, and as a result of such sale, the Company or
its shareholders or Affiliates immediately before such transaction beneficially own,
immediately after or as a result of such transaction, equity securities of the surviving or
acquiring corporation or such corporation’s parent corporation possessing less than 51% of
the voting power of the surviving or acquiring person or such person’s parent corporation
(provided that this provision shall not apply to a registered public offering of securities
of a subsidiary of the Company, which offering is not part of a transaction otherwise a part
of or related to a Change in Control);
(3) Any Acquiring Person has become the beneficial owner (as the term “beneficial
owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities which, when added to any securities already owned by such
person, would represent in the aggregate 35% or more of the then outstanding securities of
the Company which are entitled to vote to elect any class of directors;
(4) If, at any time, the Continuing Directors then serving on the Board cease for any
reason to constitute at least a majority thereof;
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(5) Any occurrence that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A or any successor rule or regulation promulgated under the
Exchange Act; or
(6) Such other events that cause a Change in Control of the Company, as determined by
the Board in its sole discretion.
E. Continuing Director. A “Continuing Director” shall mean a director of the Company
who (1) is not an Acquiring Person or an Affiliate or Associate thereof, or a representative of an
Acquiring Person or nominated for election by an Acquiring Person, and (2) was either (a) a member
of the Board on the date of this Agreement or (b) subsequently became a director of the Company and
whose initial election or initial nomination for election by the Company’s shareholders was
approved by a majority of the Continuing Directors then on the Board.
F. Company. The “Company” shall mean Zix Corporation, a Texas corporation, or its
successors in interest, as the context requires.
G. Disability. “Disability” shall mean that Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months.
H. Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
I. Good Reason. “Good Reason” shall mean (1) any material diminution in Employee’s
duties, it being understood and agreed that if all or substantially all of the assets of the
Company’s e-Prescribing line of business, the Company’s Email Encryption line of business, or any
other material line of business is sold, leased, licensed or otherwise transferred for value to a
non-Affiliate, Employee’s duties will be materially reduced and Employee shall have “Good Reason”
to resign employment pursuant to this clause (1); (2) the assignment of duties or positions that
would necessitate a material change in the location of Employee’s home (presently in North Dallas,
Texas); or (3) the Company’s failure to maintain directors and officers liability coverage for
Employee in an amount equal to at least $10,000,000.
Notwithstanding the preceding provisions, Employee shall not be permitted to resign
employment for “Good Reason” until (a) Employee has provided to the Company notice of the existence
of the good reason condition within 90 days of its initial existence and (b) the Company has not
remedied the good reason condition within a period of 30 days from the Company’s receipt of such
notice. Following the satisfaction of (a) and (b), Employee must exercise his right to resign for
Good Reason within 30 days (i.e., such Good Reason resignation must occur within 150 days of the
occurrence of the good reason event), with the day immediately following the existence of the good
reason condition being day “1.”
2. Termination Without Cause Payment. If the Company terminates Employee’s employment
other than for Cause, the Company shall pay to Employee an amount equal to 12 months of
Employee’s base salary, using Employee’s highest monthly base salary during the
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term of Employee’s employment (the “Termination Without Cause Payment”) pursuant to Section 6. The
Company specifically acknowledges that Employee will incur a termination of employment for a reason
other than Cause if (i) a material portion of the Company’s e-Prescribing line of business,
the Company’s Email Encryption line of business, or any other material line of business is sold,
leased, licensed or otherwise transferred for value (the “Transfer”) to a non-Affiliate
(“Non-Affiliate Transferee”) and (ii) in connection with such Transfer the Company involuntarily
terminates Employee’s employment with the Company and its Affiliates (regardless of whether
Employee accepts employment with the Non-Affiliate Transferee or one of its Affiliates).
As an additional component of the Termination Without Cause Payment, the Company shall pay the
applicable premiums for COBRA continuation benefits under the applicable Company benefit plans, on
a monthly basis beginning with the effective date of Employee’s loss of coverage by reason of
Employee’s separation from employment and continuing until the earlier of (a) 12 months following
the loss of coverage by reason of Employee’s separation from employment or (b) the date Employee
obtains medical coverage under a new employer’s group health plan.
Employee shall not be entitled to more than one Termination Without Cause Payment pursuant to
this Agreement.
3. Change In Control Payment. If Employee resigns from employment (subject to the notice
and cure provisions noted below) with the Company and its Affiliates following a Change in Control
for a “Change in Control Good Reason,” as such term is defined below, the Company shall pay to
Employee an amount equal to 12 months of Employee’s base salary, using Employee’s highest monthly
base salary during the term of Employee’s employment (the “Change In Control Payment”) pursuant to
Section 6.
A “Change in Control Good Reason” shall mean (i) a material diminution in the Employee’s
authority, duties or responsibilities, (ii) a material diminution in the Employee’s base salary,
(iii) a material change in the geographic location at which the Employee must perform services,
(iv) a material diminution in the authority, duties, or responsibilities of the supervisor to whom
the Employee is required to report, including a requirement that the Employee report to a corporate
officer or employee instead of the board of directors (or similar governing body), (v) a material
diminution in the budget over which the Employee retains authority, or (vi) any other event that
constitutes a material breach by the Company of the agreement under which the Employee provides
services.
Notwithstanding the preceding provisions, Employee shall not be permitted to resign
employment for a “Change in Control Good Reason” until (a) Employee has provided to the Company
notice of the existence of the good reason condition within 90 days of its initial existence and
(b) the Company has not remedied the good reason condition within a period of 30 days from the
Company’s receipt of such notice. Following the satisfaction of (a) and (b), Employee must
exercise his right to resign for a Change in Control Good Reason within 60 days (i.e., such Change
in Control Good Reason resignation must occur within 180 days of the
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occurrence of the good reason event), with the day immediately following the existence of the
good reason condition being day “1.”
As an additional component of the Change In Control Payment, the Company shall pay the
applicable premiums for COBRA continuation benefits under the applicable Company benefit plans, on
a monthly basis beginning with the effective date of Employee’s loss of coverage by reason of
Employee’s separation from employment and continuing until the earlier of (a) 12 months following
the loss of coverage by reason of Employee’s separation from employment or (b) the date Employee
obtains medical coverage under a new employer’s group health plan.
Employee shall not be entitled to more than one Change In Control Payment pursuant to this
Agreement.
4. Resignation For Good Reason Payment. If Employee resigns employment for Good
Reason, the Company shall pay to Employee an amount equal to 12 months of Employee’s base salary,
using Employee’s highest monthly base salary during the term of Employee’s employment (the
“Resignation For Good Reason Payment”) pursuant to Section 6.
As an additional component of the Resignation For Good Reason or Disability Payment, the
Company shall pay the applicable premiums for COBRA continuation benefits under the applicable
Company benefit plans, on a monthly basis beginning with the effective date of Employee’s loss of
coverage by reason of Employee’s separation from employment and continuing until the earlier of (a)
12 months following the loss of coverage by reason of Employee’s separation from employment or (b)
the date Employee obtains medical coverage under a new employer’s group health plan.
Employee shall not be entitled to more than one Resignation For Good Payment pursuant to this
Agreement.
5. Disability Payment. If Employee incurs a Disability, the Company shall pay to Employee
an amount equal to 8 months of Employee’s base salary using Employee’s highest monthly base salary
during the term of Employee’s employment (the “Disability Payment”) pursuant to Section 6.
As an additional component of the Disability Payment, the Company shall pay the applicable
premiums for COBRA continuation benefits under the applicable Company benefit plans, on a monthly
basis beginning with the effective date of Employee’s loss of coverage by reason of Employee’s
Disability and continuing until 12 months following the date of Employee’s Disability.
6. Mode of Payment; Acceptance: No Overlapping Payments. The first 8 months of Employee’s
base salary payable as a Termination Without Cause Payment (Section 2), Change In Control Payment
(Section 3), or Resignation For Good Reason Payment (Section 4), and the Disability Payment
(Section 5), as applicable, shall be paid to Employee on a monthly basis until the earlier
of (a) 8 months after the occurrence of the event giving rise to the payment or (b) the
later of two and one-half (2.5) months after the end of Employee’s tax year in which the
event
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giving rise to the payment occurs or two and one-half (2.5) months after the end of the Company’s
tax year in which the event giving rise to the payment occurs, with payments commencing as soon as
practicable following the occurrence of the event giving rise to such payment but no later than 60
days following such event. The remaining 4 months of the Termination Without Cause Payment
(Section 2), Change In Control Payment (Section 3), or Resignation For Good Reason Payment (Section
4), shall be paid to Employee on a monthly basis commencing with the 9th month following Employee’s
separation from service. The payment of the Termination Without Cause Payment (Section 2), Change
In Control Payment (Section 3), Resignation For Good Reason Payment (Section 4), and the Disability
Payment (Section 5) shall be subject to the Company’s receipt of a release, within 60 days of the
date of the event giving rise to the payment, in a form reasonably satisfactory to the Company
relating to employment matters. The Company will provide the form release to Employee within 5
days of the date of the event giving rise to the payment. In the event that Employee does not
execute a release within the 60 day period specified above, Employee shall forfeit the Termination
Without Cause Payment (Section 2), Change In Control Payment (Section 3), Resignation For Good
Reason Payment (Section 4) or Disability Payment (Section 5), as applicable. Employee shall be
responsible for all applicable withholdings for taxes and other withholdings required by applicable
law and any amounts owed by Employee to Company, and Employee shall pay the same to the Company
promptly upon demand if not otherwise withheld. The Company’s obligation to make the payments
provided for in Sections 2, 3, 4, and 5 is absolute, and such payments shall not be mitigated or
offset by virtue of Employee obtaining new employment or failing to seek new employment.
Acceptance by Employee of the Termination Without Cause Payment (Section 2), Change In Control
Payment (Section 3), Resignation For Good Reason Payment (Section 4), or Disability Payment
(Section 5), as applicable, shall constitute a release by Employee of the Company and its
Affiliates, shareholders, officers, employees, directors and other agents from all claims arising
out of, relating to, or in connection with, Employee’s employment with, or separation from
employment with, the Company and its Affiliates.
Employee shall be entitled to receive pursuant to this Agreement only one of the following
payments (a) the Termination Without Cause Payment (Section 2), (b) the Change In Control Payment
(Section 3), (c) the Resignation For Good Reason Payment (Section 4) or (d) the Disability Payment
(Section 5) (i.e., not more than one of any such payments is payable pursuant to this Agreement).
7. Deemed Resignation from Board. Employee agrees that if Employee separates from
employment with the Company and Employee is a member of the Company’s Board of Directors at the
time of the employment separation, then Employee shall be deemed to have tendered Employee’s
resignation from the Board. The resignation shall be deemed to have been tendered, regardless of
whether the separation from employment is because of resignation, termination with or without
cause, or otherwise. The resignation shall be effective upon acceptance of the same by the Board
unless the Employee shall have specified an earlier effective date of the resignation. If the
Board determines not to accept the resignation, then the Employee shall (with Employee’s
concurrence) continue as a member of the Board until the next annual meeting of shareholders and
until the Employee’s (director) successor is duly elected and qualified, unless earlier removed in
accordance with the Company’s Restated Bylaws.
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8. Conflict of Interest. Employee agrees that during the term of his employment, Employee
shall not:
A. Engage, either directly or indirectly, in any activity which may involve a conflict
of interest with the Company or its Affiliates (a “Conflict of Interest”), including
ownership in any supplier, contractor, subcontractor; customer or other entity with which
the Company does business (other than as a shareholder of less than one percent (1%) of a
publicly-traded or private class of equity ownership); and
B. Employee shall not accept any material payment, service, loan, gift, trip,
entertainment or other favor from a supplier, contractor, subcontractor, customer or other
entity with which the Company does business, and Employee shall promptly inform the Board as
to each offer received by Employee to engage in any such activity.
Employee agrees to disclose to the Company any other facts of which Employee becomes aware
that might involve or give rise to a Conflict of Interest or potential Conflict of Interest.
9. Non-competition. Beginning the date that Employee separates from employment with the
Company and through the one year anniversary of such separation from employment date, Employee
agrees and covenants that Employee shall not:
A. Directly or indirectly, compete with the Company’s Email Encryption business or
e-Prescribing business or any other material line of business being conducted by the Company
(“Other Material Business’), in each case, as the Email Encryption line of business,
e-Prescribing line of business, or Other Material Business line of business is comprised as
of the date of the Employee’s separation from employment. For purposes of this Agreement,
“Competition” shall include, without limitation, engaging, directly or indirectly, in any
business, whether as proprietor, partner, joint venturer, employee, agent, officer,
director, consultant, advisor, or holder of more than one percent (1%) of any publicly
traded or private class of equity ownership of a business enterprise, that is competitive
with the Company’s Email Encryption business or e-Prescribing business or Other Material
Business;
B. Directly or indirectly, solicit to do, or do, competing business with (i) any person
that is a customer of the Company’s Email Encryption business or e-Prescribing business or
Other Material Business as of the date of the Employee’s separation from employment, or (ii)
any person that has been a customer of the Company’s Email Encryption business or
e-Prescribing business or Other Material Business within the six months preceding such date;
or
C. Directly or indirectly, solicit to hire, or hire, any person that is an employee of
the Company (including its affiliated companies) as of the date of the Employee’s separation
from employment, or was an employee within the 3 month period preceding such date, except by
way of bona-fide general advertising.
Although the Company and Employee have, in good faith, used their best efforts to make the
covenants of this Section 9 reasonable in all pertinent respects, and it is not anticipated, nor is
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it intended, by either party to this Agreement that any arbitrator or court will find it
necessary to reform any of such covenants to make it reasonable in all pertinent respects, the
Company and Employee understand and agree that if an arbitrator or court determines it necessary to
reform any of such covenants to make it reasonable in all pertinent respects, damages, if any, for
a breach of the non-competition covenant, as so reformed, shall be deemed to accrue to the Company
as and from the date of such a breach only and so far as the damages for such breach related to an
action that accrued within the scope of the covenant as so reformed.
10. Miscellaneous.
A. Pending Litigation Indemnification. With respect to any lawsuits currently
pending or hereafter asserted against the Company that pertain to (i) matters reasonably
within the purview of Employee’s job responsibilities while employed with the Company or
(ii) matters for which the Employee has particular knowledge, Employee agrees to cooperate
reasonably in the defense of the litigation thereof, including signing affidavits and making
himself available for interviews, deposition preparation, deposition, and trial. If Employee
is requested to assist with litigation activities following Employee’s separation from
employment other than those litigation activities in which Employee would be required to
participate as a named party, the Company agrees to pay all reasonable documented
out-of-pocket costs up to a maximum of $2,500 per day incurred in connection with such
activities and lost income incurred during the period Employee assists with such litigation
activities (not to exceed the lesser of the amount of lost income or $10,000 in any one tax
year). Such out-of-pocket reimbursement payments shall be made as soon as practicable after
Employee provides documentation of such out-of-pocket costs but no later than the end of the
tax year following the tax year in which such expenses were incurred. The amount of
expenses reimbursed to the Employee pursuant to this Section 10.A. during the Employee’s tax
year shall not impact the amount of such expenses eligible for reimbursement during any
other tax year of the Employee. Employee’s right to reimbursement of such expenses shall
not be subject to liquidation or exchange for another benefit. The lost income
reimbursement will be paid in a lump sum within 60 days after Employee provides
documentation of the same and such payment will be subject to the six month delay applicable
to specified employees under section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”). Without the Company’s prior consent, Employee agrees not to comment publicly
on any such litigation or any of the issues in the litigation. Without the Company’s prior
consent, Employee also agrees not to discuss any such litigation, or cooperate, with the
plaintiffs, their attorneys, or their representatives. The Company acknowledges that the
Employee has certain rights to indemnification as an officer and/or director of the Company
as set forth in the Company’s Restated Bylaws.
B. Waiver. No waiver of any provision of this Agreement shall be deemed, or
shall constitute, a waiver of any other provision, whether or not similar, nor shall any
waiver constitute a waiver of any continuing or succeeding breach of such provision, a
waiver of the provision itself, or a waiver of any right under this Agreement. No waiver
shall be binding unless executed in writing by the party making the waiver.
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C. Limitation of Rights. Nothing in this Agreement, except as specifically
stated in this Agreement, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their respective permitted
successors and assigns and other legal representatives.
D. Remedies. Employee hereby agrees that a violation of the provisions of
Section 8 and Section 9 would cause irreparable injury to the Company for which it would
have no adequate remedy at law. Accordingly, in the event of any such violation, the Company
shall be entitled to preliminary and other injunctive relief. Any such injunctive relief
shall be in addition to any other remedies to which the Company may be entitled at law or in
equity, or otherwise.
E. Notice. Any consent, notice, demand, or other communication regarding any
payment required or permitted hereby must be in writing to be effective and shall be deemed
to have been received on the date delivered, if personally delivered, or the date received,
if delivered otherwise, addressed to the applicable party at the address for such party set
forth below or at such other address as such party may designate by like notice:
The Company:
Zix Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000, XX 36
Xxxxxx, Xxxxx 00000-0000, Attn: General Counsel
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000, XX 36
Xxxxxx, Xxxxx 00000-0000, Attn: General Counsel
If to Employee, to the address on file in the Company’s records.
F. Entirety and Amendments. This Agreement embodies the entire agreement
between the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings relating to the subject matter hereof, including that certain
Employment Agreement dated as of January 20, 2004 between the parties.
G. Successors and Assigns. This Agreement will be binding upon and inure to
the benefit of the parties to this Agreement and any successors-in-interest to the Company,
but otherwise, neither this Agreement nor any rights or obligations under this Agreement may
be assigned by Employee.
H. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas (excluding its conflict of laws
rules) and applicable federal law.
I. Cumulative Remedies. No remedy in this Agreement conferred upon any party
is intended to be exclusive of any other benefit or remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other benefit or remedy given under
this Agreement or now or hereafter existing at law or in equity or by statute or otherwise.
No single or partial exercise by any party of any right, power, or remedy under this
Agreement shall preclude any other or further exercise thereof.
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J. Multiple Counterparts. This Agreement may be executed in a number of
identical counterparts, each of which constitute collectively, one agreement; but making
proof of this Agreement, it shall not be necessary to produce or account for more than one
counterpart.
K. Descriptive Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not be deemed to limit, amplify, or modify the
terms of this Agreement, nor affect the meaning hereof.
L. Arbitration. The Company and the Employee agree to the resolution by
binding arbitration of all claims, demands, causes of action, disputes, controversies, or
other matters in question (“Claims”), whether sounding in contract, tort, or otherwise and
whether provided by statute or common law, that (a) are asserted by the Employee, and (b)
arise out of this Agreement, or the Employee’s employment (or its termination), or are any
other type of claim that Employee may assert or have, and (c) are against the Company or any
and its affiliated companies, or any benefit plans of the Company or any of its affiliated
companies, or any fiduciaries, administrators, and affiliates of any of such benefit plans,
or their respective officers, directors, employees, or agents in their capacity as such.
This agreement to arbitrate shall not limit a party’s right to seek equitable relief,
including, but not limited to, injunctive relief and specific performance in a court of
competent jurisdiction. Claims covered by this agreement to arbitrate include, but are not
limited to, claims by the Employee for breach of this Agreement, wrongful termination,
discrimination (based on age, race, sex, disability, national origin, or other factor), and
retaliation, or any other claim that Employee may have or assert. The only Claims otherwise
within the definition of Claims that are not covered by this Subsection L are: (1) any
administrative actions that the Employee is permitted to pursue under applicable law that
are not precluded by virtue of the Employee having entered into this Section L; (2) any
Claim by the Employee for workers’ compensation benefits or unemployment compensation
benefits; or (3) any Claim by the Employee for benefits under a Company or affiliated
company pension or benefit plan that provides its own non-judicial dispute resolution
procedure.
Claims shall be submitted to arbitration and finally settled under the applicable rules
of the American Arbitration Association (“AAA”) in effect at the time the written notice of
the Claim is received. An arbitrator shall be selected in the manner provided for in the
applicable rules of the AAA, except that the parties agree that the arbitrator shall be an
attorney licensed in the state where the arbitration is being conducted. If any party
refuses to honor its obligations under this agreement to arbitrate, the other party may
compel arbitration in either federal or state court. The arbitrator will have exclusive
authority to resolve any dispute relating to the interpretation, applicability,
enforceability, or formation of this agreement to arbitrate, including, but not limited to,
any claim that all or part of this Agreement is void or voidable and any claim that an issue
is not subject to arbitration. The arbitration will be held in Dallas County, Texas. The
arbitrator shall issue a written decision that identifies the factual findings and
principles of law upon which any award is based. The award and findings of such arbitrator
shall be conclusive and binding upon the parties. Any and all of the arbitrator’s orders,
decisions, and awards may be enforceable in, and judgment upon any award rendered by the
arbitrator may be
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confirmed and entered by, any federal or state court having jurisdiction. The Company
shall pay all costs and expenses of its advisors and expert witnesses, and Employee shall
pay all costs and expenses of his advisors and expert witnesses. The costs and expenses of
the arbitration proceedings will be paid by the non-prevailing party or as the arbitrator
otherwise determines. Discovery will be permitted to the extent directed by the arbitrator.
Employee understands that by agreeing to submit Claims to arbitration, Employee gives up the
right to seek a trial by court or jury and the right to appeal a court or jury decision and
forgoes any and all related rights Employee may otherwise have under federal and state laws.
M. 409A Compliance. This Agreement, as amended, is intended to be exempt from
and/or comply with the requirements (and not otherwise be subject to the interest and
penalty taxes of) section 409A of the Code and the regulations and other guidance issued
thereunder, and shall be interpreted in a manner consistent with that intent.
Notwithstanding the foregoing, in the event there is a failure under this Agreement to
comply with section 409A of the Code, the Company shall have the discretion to accelerate
any payment hereunder of “nonqualified deferred compensation” (within the meaning of section
409A of the Code), but only to the extent of the amount required to be included in income as
a result of such failure.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.
| EMPLOYEE | ZIX CORPORATION | |||||||||
| /s/ Xxxxxxx X. Xxxxx | By: | /s/ Xxxxx X. Xxxxxx | ||||||||
| Xxxxxxx X. Xxxxx | Xxxxx X. Xxxxxx | |||||||||
| Chief Financial Officer | ||||||||||
Date:
|
12-22-08 | Date: | 12-24-08 | |||||||
| APPROVED: | APPROVED: | |||||||||
| /s/ Xxxx X. Xxxxxxxxxx | /s/ Xxxxxx X. Xxxxxxxx | |||||||||
| Xxxx X. Xxxxxxxxxx | Xxxxxx X. Xxxxxxxx | |||||||||
| Member of Compensation Committee | Sr. Vice President & General Counsel | |||||||||
Date:
|
12/30/08 | Date: | 12-23-08 | |||||||
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