UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
MARCH 4, 2003 (MARCH 3, 2003)
ZIX CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 0-17995 75-2216818
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(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
2711 NORTH HASKELL AVENUE
SUITE 2300, LB 36
DALLAS, TEXAS 75204-2960
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(214) 370-2000
ZIXIT CORPORATION
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 5. OTHER EVENTS.
On March 3, 2003, Zix Corporation (the "Registrant") entered into a
binding agreement with the holders of certain warrants (the "Existing Warrants")
to purchase 386,473 shares of the Registrant's common stock, par value $0.01 per
share (the "Common Stock"), providing, subject to the terms and conditions of
the agreement, for the exercise of the Existing Warrants and the issuance by the
Registrant of replacement warrants to such holders (the "Replacement Warrants")
to purchase shares of Common Stock (collectively, the "Exchange").
Following is a summary of the material terms of the Exchange, which
terms are qualified in their entirety by reference to the full text of the
underlying documents governing the Exchange filed as exhibits to this report and
incorporated herein by reference.
The Registrant entered into an Agreement Regarding Exercise and
Issuance of Warrants (the "Exchange Agreement") with the investors named therein
(the "Investors"). The Investors are the holders of the Existing Warrants, which
are exercisable, as of the date hereof, for an aggregate of 386,473 shares of
Common Stock at an exercise price of $4.14 per share of Common Stock.
Pursuant to the Exchange Agreement, the Investors will be obligated,
subject to certain conditions, to exercise all or any portion of the Existing
Warrants held by them on each business day following a trading day on which the
weighted average market price of the Common Stock is at least $4.50 per share (a
"Trigger Day"). The extent to which an Investor must exercise an Existing
Warrant on any such business day is based on the daily trading volume in the
Common Stock on the corresponding Trigger Day. Required exercises under the
Exchange Agreement will occur only during a ninety day period beginning on the
date that the first exercise of Existing Warrants takes place (the "Exercise
Period"). The Investors are also permitted to exercise all or any portion of the
Existing Warrants held by them at any time, or from time-to-time, regardless of
the market price or trading volume of the Common Stock.
Once the Exchange Warrants have been fully exercised or the Exercise
Period has expired, the Company will be obligated to issue Replacement Warrants
to the Investors. The intention of the parties is that the Replacement Warrants
will have substantially the same economic value to the holders as the Existing
Warrants that have been exercised, based on the application of a Black-Scholes
formula. The number of shares of Common Stock covered by the Replacement
Warrants will be calculated based on the Black-Scholes formula applied at the
time of each exercise of Existing Warrants, and the Replacement Warrants will
have an exercise price of $5.00 per share of Common Stock, subject to adjustment
in certain events. The Company may also be required to issue Replacement
Warrants prior to the end of the Exercise Period if certain events requiring an
adjustment to the exercise price of the Existing Warrants occur.
The Registrant and the Investors entered into a Registration Rights
Agreement with respect to the Replacement Warrants, pursuant to which the
Registrant has agreed to prepare and file, within fifteen days of the date of
issuance of the Replacement Warrants, a registration statement covering the
resale of 110% of the shares of Common Stock issuable upon the exercise
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of the Replacement Warrants (the "New Registration Statement"). The Registrant
is required to have the New Registration Statement declared effective within
ninety days of the date of issuance of the Replacement Warrants. The holders of
the Replacement Warrants are entitled to receive from the Registrant substantial
cash damages in the event the Registrant fails to file the New Registration
Statement, or have the New Registration Statement declared effective, within the
time limits set forth above.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZIX CORPORATION
Date: March 4, 2003 By: /s/ Steve M. York
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Steve M. York
Senior Vice President,
Chief Financial Officer
and Treasurer
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INDEX TO EXHIBITS
Exhibit
Number Description
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*4.1 Agreement Regarding Exercise and Issuance of Warrants, dated March 3,
2003, by and between Zix Corporation and the Investors named therein
(including schedules but excluding exhibits).
*4.2 Form of Warrant to purchase shares of common stock of Zix Corporation,
issued by Zix Corporation.
*4.3 Registration Rights Agreement, dated March 3, 2003, by and among Zix
Corporation and the Investors named therein.
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* Filed electronically herewith
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