SEVERANCE AGREEMENT
EXHIBIT 10.31
THIS SEVERANCE AGREEMENT (this “Agreement”), entered into as of November 10, 2006, is made and
entered into between Zix Corporation, a Texas corporation (the “Company”), and Xxxxx X. Xxxxxx
(“Employee”).
WHEREAS, Employee is currently employed by the Company;
WHEREAS, Employee is willing to continue working for the Company or a Company affiliate
(“Affiliate”), as applicable, 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. Severance Payment. If the Employee’s employment with the Company or an Affiliate, as
applicable, is terminated by the Company or the employing Affiliate prior to the second anniversary
of the date of this Agreement other than “for cause” (as defined below), then, subject to
receiving a release reasonably satisfactory to the Company relating to employment matters, the
Company will pay to Employee an amount equal to six months of base salary, using Employee’s highest
monthly base salary during the term of Employee’s employment (the “Severance Payment”). The
Severance Payment will be paid as provided in Section 2. To terminate Employee’s employment other
than “for cause,” the Company or the employing Affiliate, as applicable, shall give Employee a
written notice of termination setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee’s employment. Such notice shall be
effective upon receipt. For purposes of this Severance Agreement, “for cause” shall mean any of
the following shall have occurred: (a) the conviction of Employee of any felony; (b) 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 or an Affiliate, as applicable, that specifically identifies the manner in
which the Company or the Affiliate, as applicable, 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; (c) the intentional wrongdoing by Employee that is materially injurious to
the Company or employing Affiliate, as applicable; (d) acts by Employee of moral turpitude that are
injurious to the Company or employing Affiliate, as applicable; or (e) breach of the
“confidentiality and invention” agreement between the Company or an Affiliate, as applicable, and
Employee.
2. Mode of Payment; Acceptance. The Severance Payment shall be paid in six equal monthly
cash payments (less applicable withholdings for taxes and other withholdings required by applicable
law and any amounts owed by Employee to Company or an Affiliate, as applicable) within 30 days of
the occurrence of the applicable event. Alternatively, the Company may, in the Company’s
discretion, pay the Severance Payment by depositing in the Employee’s stock brokerage account
registered shares of ZixCorp common stock valued at 104% of the Severance Payment, using the
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closing price of the ZixCorp common stock on the business day of deposit. The Company’s obligation
to pay the Severance Payment 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 Severance Payment 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 the Company.
3. Miscellaneous.
3.1 Dispute Resolution. Employee and the Company acknowledge that Employee has, or
may have, previously executed an alternate dispute resolution agreement with the Company or an
Affiliate. The provisions of such alternate dispute resolution agreement shall govern any disputes
arising under this Agreement.
3.2 Successors; Binding Agreement. This Agreement will be binding upon and inure to
the benefit of the parties hereto and any successors in interest to the Company. This Agreement
and all rights of Employees hereunder shall inure to the benefit of and be enforceable by
Employee’s personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.
3.3. Entire Agreement; Modifications. This Agreement represents the entire agreement
of the parties relating to the subject matter hereof. Only an instrument in writing executed by
both parties may amend this Agreement. No waiver by either party hereto of, or compliance with,
any condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
3.4 Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
3.5 Enforcement Fees. In the event of a dispute arising under this Agreement, unless
otherwise agreed by the parties in writing, each party shall pay its own costs and expenses in
resolving the dispute.
3.6 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas (excluding its conflict of laws rules).
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.
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| ZIX CORPORATION | ||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | ||||
| Chairman and Chief Executive Officer | ||||
| EMPLOYEE | ||||
| /s/ Xxxxx X. Xxxxxx | ||||
| Xxxxx | X. Xxxxxx | |||
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