FORM OF SEPARATION PAY AGREEMENT
Exhibit 10.35
FORM OF SEPARATION PAY AGREEMENT
THIS SEPARATION PAY AGREEMENT (this “Agreement”), entered into as of February 29, 2008, is
made and entered into between Zix Corporation, a Texas corporation (the “Company”), and
(“Employee”).
WHEREAS, Employee is currently employed by the Company or a company controlled by,
controlling, or under common control with, the Company (“Company Affiliate”);
WHEREAS, Employee is willing to continue working for the Company or Company 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. Termination Without Cause Payment/COBRA. If the Employee’s employment with the Company
or the employing Company Affiliate, as applicable, is terminated by the Company or the employing
Company Affiliate other than “for cause” (as defined below), then, subject to receiving a release
reasonably satisfactory to the Company relating to employment matters, the Company shall pay to
Employee an amount equal to six (6) months of base salary, using Employee’s highest monthly base
salary during the term of Employee’s employment (the “Termination Without Cause Payment”).
Notwithstanding the preceding sentence, however, the parties acknowledge and agree that 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-Affiliated Transferee”) and (ii) in
connection with such Transfer (a) the Employee separates from employment with the Company,
regardless of whether or not the Employee’s separation from employment actually results from a
termination of employment or resignation from employment, and (b) the Employee accepts employment
with the Non-Affiliated Transferee or one of its affiliates, then the Employee shall be entitled to
receive the Termination Without Cause Payment only if the Company agrees in writing that the
Employee is entitled to receive such payment. The Termination Without Cause Payment shall be paid
as provided in Section 2 below.
Furthermore, as an additional component of the Termination Without Cause Payment, if Employee
elects to continue health and/or dental insurance coverage pursuant to the “COBRA” rules and
regulations, then, subject to receiving a release reasonably satisfactory to the Company relating
to employment matters, the Company shall pay the insurance premiums for a period of six months.
For purposes of this Agreement, “for cause” shall mean any of the following shall have
occurred: (a) 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; (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 employing Company Affiliate, as applicable, that specifically identifies the
manner in which the Company or the employing Company Affiliate, as applicable, believes Employee
has not substantially performed Employee’s duties and that is not cured within five business days
after the notice thereof to Employee; (c) the intentional engaging by Employee in misconduct that
is materially injurious to the Company or the employing Company Affiliate, as applicable; (d) the
commission of acts by Employee of moral turpitude that are injurious to the Company or employing
Company Affiliate,
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as applicable; (e) a breach by Employee of the “confidentiality and invention” agreement
between the Employee and the Company or employing Company Affiliate, as applicable; (f) a breach by
Employee of the provisions (typically paragraph 10) of the option agreement(s) between the Company
and Employee (relating to non-solicitation and non-competition); or (g) a breach by Employee of the
Company’s “Code of Conduct,” including the “Code of Ethics for Senior Officers,” as currently in
effect or as amended from time-to-time. To terminate Employee’s employment other than “for cause,”
the Company or the employing Company 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.
2. Mode of Payment; Acceptance. The Termination Without Cause Payment consisting of the
Employee’s base salary shall be paid in cash and in six monthly increments (less applicable
withholdings for taxes and other withholdings required by applicable law and any amounts owed by
Employee to Company or the employing Company Affiliate, as applicable). Alternatively, the Company
may, in the Company’s sole discretion, make the payment by depositing in the Employee’s stock
brokerage account publicly registered shares of the Company’s common stock valued at 104% of the
Termination Without Cause Payment, using the closing price of the Company’s common stock on the
business day of deposit. The Company’s obligation to pay the Termination Without Cause Payment
shall not be mitigated or offset by virtue of Employee obtaining new employment or failing to seek
new employment, although the Company may offset against the Termination Without Cause Payment if
Employee violates any post-employment covenants or legal obligations binding on the Employee.
Acceptance by Employee of the Termination Without Cause Payment shall constitute a release by
Employee of the Company and all Company Affiliates and their respective 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 or the employing
Company Affiliate.
3. Miscellaneous.
3.1 Dispute Resolution. Employee and the Company acknowledge that Employee has, or
may have, previously executed a Mutual Alternate Dispute Resolution Agreement with the Company or a
Company Affiliate. The provisions of such Mutual 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 Employee 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.
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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.
| ZIX CORPORATION |
||||
| By: | ||||
| Xxxxxxx X. Xxxxx | ||||
| Chairman and Chief Executive Officer | ||||
| EMPLOYEE | ||||
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