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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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):
January 15, 2008
MarketAxess Holdings Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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0-50670
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52-2230784
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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140 Broadway, 42
nd
Floor
New York, New York 10005
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
(212) 813-6000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 5.02 Departure of Directors or Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
(1) Approval of Form of Performance Share Agreements
On January 15, 2008, the Compensation Committee of the Board of Directors (the
Compensation Committee
) of MarketAxess Holdings, Inc. (the
Company
), pursuant
to the Companys 2004 Stock Incentive Plan (Amended and Restated Effective April 28, 2006) (the
2004 Plan
), approved two forms of Performance Share Award Agreements for use under the
2004 Plan. The first form of Performance Share Award Agreement, a copy of which is attached hereto
as Exhibit 10.1 and incorporated by reference herein, is for use in connection with grants of
performance share awards to Richard M. McVey, the Companys Chief Executive Officer, and T. Kelley
Millet, the Companys President. The second form of Performance Share Award Agreement, a copy of
which is attached hereto as Exhibit 10.2 and incorporated by reference herein, is for use in
connection with grants of performance share awards to all other individuals entitled to receive
performance shares under the 2004 Plan.
Each Performance Share Award Agreement provides for the grant of a target number of
performance shares. The performance shares will vest or be forfeited based on the Companys
achievement, during the applicable performance period, of a level of pre-tax operating income per
share of the Companys common stock (
Common Stock
) before payment of cash bonuses to the
Companys employees during the performance period and expenses incurred in connection with the
grant of all performance share awards for the performance period (the
Performance Goal
).
Subject to a participant remaining employed by the Company during the performance period and
through the date that the Compensation Committee certifies the level of achievement of the
Performance Goal for the performance period (each such date, a
Settlement Date
), the
participant may earn a specified percentage of the target number of performance shares awarded to
the participant based upon the level of achievement of the Performance Goal for the performance
period. For each performance share earned, a participant will be awarded an equal number of
restricted shares of the Common Stock (as described below).
In the event of a participants termination of employment due to death or Disability (as such
term is defined in the 2004 Plan) prior to a Settlement Date, on the Settlement Date the
participant will receive the shares of restricted stock the participant would have received had the
participant been employed on the Settlement Date, based on the actual achievement of the
Performance Goal. Fifty percent, or 100% in the case of Messrs. Millet and McVey, of these shares
of restricted stock will immediately vest. Any remaining performance shares or unvested shares of
restricted stock will be forfeited.
In addition, Messrs. McVeys and Millets Performance Share Award Agreements provide that if
their employment is terminated without Cause or for Good Reason (as such terms are defined in the
2004 Plan) prior to the Settlement Date, then on the Settlement Date they will receive the shares
of restricted stock they would have received had they been employees on such Settlement Date, based
on actual achievement of the Performance Goal and 50% of the total number of unvested shares of
restricted stock will immediately vest. Any remaining performance shares or unvested shares of
restricted stock will be forfeited.
2
In the event of a Change in Control (as such term is defined in the 2004 Plan) prior to the
Settlement Date, the Compensation Committee will determine the treatment of the performance shares
in a manner provided in the Performance Share Award Agreements.
Subject to continued service with the Company from the Settlement Date through each vesting
date, other than as set forth below, any restricted stock awarded to the participant shall vest and
cease to be restricted stock in equal 50% installments on each of the second and third
anniversaries of the grant of the applicable performance share award.
In the event of a participants termination of employment due to death or Disability after the
Settlement Date, 50%, or 100% in the case of Messrs. Millet and McVey, of the total number of
unvested shares of restricted stock will immediately vest. Any remaining unvested shares of
restricted stock will be forfeited.
In addition, Messrs. McVeys and Millets Performance Share Award Agreements provide that if
employment is terminated without Cause or for Good Reason after the Settlement Date, 50% of the
total number of unvested shares of restricted stock will immediately vest. Any remaining unvested
shares of restricted stock will be forfeited.
In the event of a Change in Control after a Settlement Date, all restricted stock will
immediately vest if a participant is terminated without Cause within 24 months following the Change
in Control. For Messrs. McVey and Millet only, all restricted will also immediately vest if such
Change in Control occurs within three months following a termination of employment for Good Reason.
In addition, if immediately prior to the Change in Control the Compensation Committee determines
that the restricted stock award will not be continued, assumed or have new rights substituted
therefor, then immediately prior to the Change in Control all unvested shares of restricted stocks
will immediately vest.
(2) Approval of Performance Share Awards for Fiscal Year 2008 Performance Period
On January 15, 2008, the Compensation Committee approved and awarded grants of performance
shares under the 2004 Plan to eleven key officers and employees of the Company, including the named
executive officers set forth in the chart below. The performance period for the awards will be the
Companys fiscal year ending on December 31, 2008 (the
2008 Performance Period
). Subject
to remaining employed with the Company during the 2008 Performance Period and through the
Settlement Date, each participant may earn between 50% and 150% of the target number of performance
shares awarded to such participant based upon the level of achievement of the Performance Goal
established by the Compensation Committee for the 2008 Performance Period. Participants will not
earn any shares of restricted stock if the Company does not achieve at least 80% of the Performance Goal.
3
Set forth below is the target number of performance shares granted to the following named
executive officers of the Company (i.e., the number of performance shares that would be earned
based upon achievement of 100% of the performance goal):
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Target Number of
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Name of Executive Officer
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Title
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Performance Shares
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Richard M. McVey
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Chief Executive Officer
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68,600
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T. Kelley Millet
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President
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27,400
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James N. B. Rucker
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Chief Financial Officer
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8,920
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Nicholas Themelis
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Chief Information Officer
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17,200
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The grants to Messrs. McVey and Millet were made subject to the terms of the form of
Performance Share Award Agreement attached hereto as Exhibit 10.1. The grants to the other named
executive officers were made subject to the terms of the form of Performance Share Award Agreement
attached hereto as Exhibit 10.2.
(3) Approval of New Form of Restricted Stock Agreement
On January 15, 2008, the Compensation Committee approved a form of Restricted Stock Agreement
for use in connection with grants of shares of restricted stock made as of and following such date
under the 2004 Plan to all individuals eligible to receive grants of restricted stock under the
2004 Plan other than Messrs. McVey and Millet. A copy of the form of Restricted Stock Agreement is
attached hereto as Exhibit 10.3 and incorporated by reference herein.
(4) Approval of Restricted Stock Grants
On January 15, 2008, the Compensation Committee approved grants of restricted stock under the
2004 Plan to the following named executive officers of the Company, which grants were made on
January 15, 2008:
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Number of Shares of
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Name of Executive Officer
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Restricted Common Stock
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James N. B. Rucker
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7,000
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Nicholas Themelis
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13,500
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These grants were made subject to the terms of the form of Restricted Stock Agreement attached
hereto as Exhibit 10.3.
(5) Approval of New Form of Incentive Stock Option Agreement
On January 15, 2008, the Compensation Committee approved a new form of Incentive Stock Option
Agreement (the
New ISO Agreement
) for use in connection with grants of incentive stock
options made as of and following such date under the 2004 Plan to all employees of the Company
other than Messrs. McVey and Millet. A copy of the form of the New ISO Agreement is attached
hereto as Exhibit 10.4 and incorporated by reference herein.
The New ISO Agreement is substantially identical to the form of incentive stock option
agreement attached as Appendix B to the Companys Proxy Statement for its 2006 Annual Meeting of
Stockholders, except the New ISO Agreement provides for the following additional terms:
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upon the participants death or Disability, 50% of any unvested portion of the stock
option at the time of the participants termination of employment will become fully
vested and
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exercisable until the earlier of one year from the employment termination date or the
expiration of the stated term of the stock option; and
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in the event of a Change in Control, the stock option will be treated in accordance
with the 2004 Plan, except that (i) immediately prior to the Change in Control, the
Compensation Committee may determine that the stock option will not be continued,
assumed or have new rights substituted therefor in accordance with the 2004 Plan, and
immediately prior to the Change in Control, the stock option will become fully vested
and exercisable, and (ii) if the participant incurs a termination of employment by the
Company without Cause within 24 months after such Change in Control, the stock option
will become fully vested and exercisable until the earlier of 90 days from the date of
such termination or the expiration of the stated term of the stock option.
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(6) Approval of Stock Option Grants
On January 15, 2008, the Compensation Committee approved grants of stock options under the
2004 Plan to the following named executive officers of the Company, which grants were made on
January 15, 2008.
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Name of Executive Officer
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Number of Stock Options
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Richard M. McVey
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287,000
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T. Kelley Millet
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115,000
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James N. B. Rucker
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18,650
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Nicholas Themelis
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35,850
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The grant to Mr. McVey was made subject to the terms of the form of Stock Option Agreement by
and between the Company and Mr. McVey, attached hereto as Exhibit 10.5 and incorporated by
reference herein. The grant to Mr. Millet was made subject to the terms of the form of Stock
Option Agreement by and between the Company and Mr. Millet, attached hereto as Exhibit 10.6 and
incorporated by reference herein. The grants to Messrs. Rucker and Themelis were made subject to
the New ISO Agreement.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
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10.1
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Form of Performance Share Award Agreement Pursuant to the
MarketAxess Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) for Messrs. McVey and Millet (used beginning January
15, 2008).
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10.2
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Form of Performance Share Award Agreement Pursuant to the
MarketAxess Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) for individuals eligible to receive grants of
performance shares under the 2004 Plan other than Messrs. McVey and Millet (used
beginning January 15, 2008).
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10.3
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Form of Restricted Stock Agreement Pursuant to the MarketAxess
Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated effective April
28, 2006) for individuals eligible to receive grants of performance shares under
the 2004 Plan other than Messrs. McVey and Millet (used beginning January 15,
2008).
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10.4
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Form of Incentive Stock Option Agreement Pursuant to the
MarketAxess Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) for individuals eligible to receive grants of
performance shares under the 2004 Plan other than Messrs. McVey and Millet (used
beginning January 15, 2008).
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10.5
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Form of Stock Option Agreement Pursuant to the MarketAxess
Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated effective April
28, 2006) dated effective as of January 15, 2008 by and between the Company and
Mr. McVey.
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10.6
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Form of Stock Option Agreement Pursuant to the MarketAxess
Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated effective April
28, 2006) dated effective as of January 15, 2008 by and between the Company and
Mr. Millet.
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6
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.
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MARKETAXESS HOLDINGS INC.
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Date: January 18, 2008
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By:
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/s/
Richard M. McVey
Name: Richard M. McVey
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Title: Chief Executive Officer
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7
EXHIBIT INDEX
Exhibit
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10.1
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Form of Performance Share Award Agreement Pursuant to the
MarketAxess Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) for Messrs. McVey and Millet (used beginning January
15, 2008).
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10.2
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Form of Performance Share Award Agreement Pursuant to the
MarketAxess Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) for individuals eligible to receive grants of
performance shares under the 2004 Plan other than Messrs. McVey and Millet (used
beginning January 15, 2008).
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10.3
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Form of Restricted Stock Agreement Pursuant to the MarketAxess
Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated effective April
28, 2006) for individuals eligible to receive grants of performance shares under
the 2004 Plan other than Messrs. McVey and Millet (used beginning January 15,
2008).
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10.4
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Form of Incentive Stock Option Agreement Pursuant to the
MarketAxess Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) for individuals eligible to receive grants of
performance shares under the 2004 Plan other than Messrs. McVey and Millet (used
beginning January 15, 2008).
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10.5
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Form of Stock Option Agreement Pursuant to the MarketAxess
Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated effective April
28, 2006) by and between the Company and
Mr. McVey.
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10.6
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Form of Stock Option Agreement Pursuant to the MarketAxess
Holdings, Inc. 2004 Stock Incentive Plan (Amended and Restated effective April
28, 2006) by and between the Company and
Mr. Millet.
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8
Exhibit
10.1
FORM OF PERFORMANCE
SHARE AWARD AGREEMENT
FOR MESSRS. McVEY AND MILLET
PERFORMANCE SHARE AWARD AGREEMENT
PURSUANT TO THE
MARKETAXESS HOLDINGS INC.
2004 STOCK INCENTIVE PLAN
THIS
PERFORMANCE SHARE AWARD AGREEMENT
(this
Agreement
), made effective as
of
, by and
between MarketAxess Holdings Inc. (the
Company
)
and
(the
Participant
).
WHEREAS
, the Board of Directors of the Company (the
Board
) adopted, and the
stockholders of the Company, approved the MarketAxess Holdings Inc. 2004 Stock Incentive Plan
(Amended and Restated Effective April 28, 2006) (the
Plan
);
WHEREAS
, the Company, through the Committee under the Plan, wishes to grant to the Participant
a Performance Share Award under the Plan that, upon the achievement of the performance metric set
forth on
Appendix A
attached hereto and subject to the Participants continuing service
with the Company or an Affiliate through the achievement of such performance metric, may provide
for the issuance of shares of the Companys common stock, par value $.003 per share (Common
Stock) in accordance with the terms of this Agreement;
WHEREAS
, the performance metric set forth on
Appendix A
attached hereto is intended to
constitute a performance goal, as set forth under the Plan; and
WHEREAS
, such shares of Common Stock, when issued to the Participant, shall be subject to the
terms of this Agreement (including without limitation, the restrictions set forth in Sections 4 and
5 herein).
NOW, THEREFORE
, the Company and the Participant agree as follows:
1.
Grant of Performance Share Award
.
Subject to the restrictions, terms and
conditions of the Plan and this Agreement, the Company hereby awards and grants to the Participant
Performance Shares entitling the Participant to receive, for each Performance
Share earned in accordance with
Section 2
below, one share of Common Stock, subject to the
provisions of
Appendix A
attached hereto (the
Performance Share Award
).
Fractional shares shall be aggregated until, and eliminated at, the time earned by rounding-down
for fractions less than one-half and rounding-up for fractions equal to or greater than one-half.
No cash settlements shall be made with respect to fractional shares eliminated by rounding.
2.
Payment
. Subject to the Participants not incurring a Termination of Employment
prior to the Settlement Date (as defined below) (except as otherwise specifically set forth in this
Agreement), upon the Committee determining and certifying the level of achievement of the
performance metric set forth on
Appendix A
attached hereto with respect to the Companys
fiscal year beginning on
and ending on
(the
Performance Period
), the Company shall award to the Participant a number of
shares of Common Stock following the Performance Period reflecting the
level of attainment of the performance metric in accordance with
Appendix A
attached
hereto (
Awarded Shares
) during the Performance Period. The Committee shall certify the
level of achievement of the performance metric during the Companys first fiscal quarter in
, but in any event no later than
, and on the date of such
certification (the
Settlement Date
) the Committee shall grant to the Participant the
applicable number of Awarded Shares in accordance with
Appendix A
attached hereto.
Pursuant to Sections 4 and 5 hereof, any Awarded Shares granted hereunder shall be subject to
certain restrictions, which restrictions relate to the passage of time as an employee of, or
consultant to, the Company or its Affiliates, as described in Section 4.1 hereof. While such
restrictions are in effect, the Awarded Shares granted subject to such restrictions shall be
referred to herein as
Restricted Stock
. The Performance Shares and, if any, the number
of Awarded Shares and the number of shares of Restricted Stock are subject to adjustment under
Section 4.2(b) of the Plan. Prior to the Settlement Date, the provisions in Section 9.1 of the
Plan regarding Detrimental Activity shall apply to the Performance Share Award.
3.
Termination of Employment/ Change in Control Prior to Settlement Date
.
3.1.
Termination of Employment
.
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(a)
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In the event of the Participants Termination of Employment by reason of
death or Disability, each prior to the Settlement Date, then on the Settlement Date,
the Participant shall receive the Restricted Stock that the Participant would have
received if the Participant had been employed by the Company on the Settlement Date,
based on the actual level of achievement of the performance metric, and all of the
unvested shares of such Restricted Stock shall become immediately vested.
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(b)
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In the event of the Participants Termination of Employment by the Company
without Cause or by the Participant for Good Reason, each prior to the Settlement
Date, then on the Settlement Date, the Participant shall receive the Restricted Stock
that the Participant would have received if the Participant had been employed by the
Company on the Settlement Date, based on the actual level of achievement of the
performance metric, and 50% of the total number of unvested shares of such Restricted
Stock shall immediately vest. Any remaining unvested shares of Restricted Stock shall
be forfeited.
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3.2.
Change in Control
.
In the event of a Change in Control before the Settlement
Date, the Committee, in its sole discretion, may treat the Performance Share Award in accordance
with any one of the following methods as determined by the Committee:
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(a)
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The Committee may determine that performance metric set forth on
Appendix
A
would likely have been achieved at or above the 80%
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Performance Target level on the Settlement Date and treat the Performance Share Award
in accordance with any one of the following methods, as determined by the Committee:
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(i)
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The Committee may determine that the performance metric is deemed
achieved at the Performance Target, and on the date of the Change in Control,
the Participant shall be granted Restricted Stock at the Performance Target
level, subject to the conditions of Section 4, and all unvested Restricted Stock
shall become immediately vested if (i) such Change in Control occurs within
three months following a Termination of Employment by the Participant for Good
Reason or (ii) the Participant incurs a Termination of Employment by the Company
without Cause within 24 months following such Change in Control;
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(ii)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will not be continued, assumed or
have new rights substituted therefor in accordance with Section 12.1(a) of the
Plan and the Participant will be granted Restricted Stock which shall become
immediately vested on the Change in Control; or
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(iii)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be continued, assumed or have
new rights substituted therefor in accordance with Section 12.1(a) of the Plan.
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(b)
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The Committee may determine that performance metric set forth on
Appendix
A
would likely have been achieved below the 80% Performance Target level on the
Settlement Date and treat the Performance Share Award in accordance with any one of
the following methods as determined by the Committee:
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(i)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be canceled in its entirety;
or
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(ii)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be continued, assumed or have
new rights substituted therefor in accordance with Section 12.1(a) of the
Plan.
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(c)
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The Committee may elect not to make a determination of the likely achievement
of the performance metric set forth on
Appendix A
and treat the Performance
Share Award in accordance with Section 12.1 of the Plan.
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(d)
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Notwithstanding any other provision herein, the Committee may otherwise
determine the treatment of the Performance Share Award, which shall not be
inconsistent with any of the terms of the Plan.
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4.
Restricted Stock
.
4.1.
Vesting
.
The Restricted Stock shall become vested and cease to be Restricted
Stock (but shall remain subject to the other terms of this Agreement and the Plan) as follows if
the Participant has been continuously employed by the Company or an Affiliate from the Settlement
Date until the applicable vesting date:
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Vesting Date
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Percentage Vested
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Except as otherwise provided herein,
there shall be no proportionate or partial vesting in the
periods prior to the applicable vesting dates and all vesting shall occur only on the appropriate
vesting date. When any shares of Restricted Stock become vested, the Company shall promptly
deliver to the Participant any related RS Property (as defined below), subject to applicable
withholding.
4.2.
Detrimental Activity
. The provisions in Section 8.1 of the Plan regarding
Detrimental Activity shall apply to the Restricted Stock.
4.3.
Termination of Employment/ Change in Control
.
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(a)
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Termination of Employment.
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(i)
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In the event of the Participants Termination of Employment by
reason of death or Disability, each on or after the Settlement Date, then all
unvested Restricted Stock shall become immediately vested.
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(ii)
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In the event of the Participants Termination of Employment by
the Company without Cause or by the Participant for Good Reason, each on or
after the Settlement Date, 50% of the total number of unvested shares of
Restricted Stock granted pursuant to this Agreement shall vest. Any remaining
unvested shares of Restricted Stock shall be forfeited.
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(i)
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If on or after the Settlement Date there is a Change in Control
and (i) such Change in Control occurs within three months following a
Termination of Employment by the Participant for Good Reason or
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(ii) the Participant incurs a Termination of Employment by the Company
without Cause within 24 months following such Change in Control, then all
unvested Restricted Stock shall become immediately vested.
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(ii)
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If there is a Change in Control after the Settlement Date and
immediately prior to the Change in Control it is determined that the Award will
not be continued, assumed or have new rights substituted therefor in accordance
with Section 12.1(a) of the Plan, then immediately prior to the Change in
Control, all unvested Restricted Stock shall become immediately vested.
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4.4.
Rights as a Holder of Restricted Stock
.
From and after the Settlement Date, the
Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a
holder of shares of Common Stock, including, without limitation, the right to vote such shares, to
receive and retain all regular cash dividends payable to holders of Common Stock of record on and
after the Settlement Date (although such dividends will be treated, to the extent required by
applicable law, as additional compensation for tax purposes), and to exercise all other rights,
powers and privileges of a holder of Common Stock with respect to the Restricted Stock, with the
exceptions that (i) the Participant shall not be entitled to delivery of the stock certificate or
certificates representing the Restricted Stock until such shares are no longer Restricted Stock;
(ii) the Company (or its designated agent) will retain custody of the stock certificate or
certificates representing the Restricted Stock and any other property (
RS Property
)
issued in respect of the Restricted Stock, including stock dividends at all times such shares are
Restricted Stock; (iii) no RS Property will bear interest or be segregated in separate accounts;
and (iv) the Participant shall not, directly or indirectly, Transfer the Restricted Stock in any
manner whatsoever. Prior to the Settlement Date, the Participant shall have no rights as a
stockholder with respect to any shares of Common Stock covered by any Restricted Stock to be
granted for the Performance Period (if any) unless and until the Participant has become the holder
of record of such Common Stock, and no adjustments shall be made for dividends in cash or other
property, distributions or other rights in respect of any such shares, except as otherwise
specifically provided for in the Plan (including, without limitation, Section 4.2(b) of the Plan).
4.5.
Taxes;
Section 83(b)
Election
.
The Participant acknowledges, subject to the last
sentence of this paragraph, that (i) no later than the date on which any Restricted Stock shall
have become vested, the Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding payment of, any Federal, state or local taxes of any kind required by law to
be withheld with respect to any Restricted Stock which shall have become so vested, including by
electing to reduce the number of shares of Common Stock otherwise deliverable to the Participant or
by delivering shares of Common Stock already owned; (ii) the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind otherwise due to the Participant any
Federal, state or local taxes of any kind required by law to be withheld with respect to any
Restricted Stock which shall have become so vested, including that the Company
-5-
may, but shall not be required to, sell a number of shares of Common Stock sufficient to cover
applicable withholding taxes; and (iii) in the event that the Participant does not satisfy (i)
above on a timely basis, the Company may to the extent permitted by law, but shall not be required
to, pay such required withholding and treat such amount as a demand loan to the Participant at the
maximum rate permitted by law, with such loan, at the Companys sole discretion and provided the
Company so notifies the Participant within thirty (30) days of the making of the loan, secured by
the Common Stock and any failure by the Participant to pay the loan upon demand shall entitle the
Company to all of the rights at law of a creditor secured by the Common Stock. The Company may
hold as security any certificates representing any Common Stock and, upon demand of the Company,
the Participant shall deliver to the Company any certificates in his or her possession representing
the Common Stock together with a stock power duly endorsed in blank. The Participant also
acknowledges that it is his or her sole responsibility, and not the Companys, to file timely and
properly any election under Section 83(b) of the Code, and any corresponding provisions of state
tax laws, if the Participant wishes to utilize such election.
4.6.
Legend
.
In the event that a certificate evidencing Restricted Stock is issued,
the certificate representing the Common Stock shall have endorsed thereon the following legends:
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(a)
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THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT,
PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE MARKETAXESS HOLDINGS INC. (THE
COMPANY) 2004 STOCK INCENTIVE PLAN (AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
(THE PLAN) AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE
COMPANY DATED AS OF
. COPIES OF SUCH PLAN AND
AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
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(b)
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Any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated to
issue a certificate representing the Restricted Stock prior to vesting as set forth in
Section 4.1 hereof.
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5.
Restrictions on Transfer
.
The Participant shall not sell, negotiate, transfer,
pledge, hypothecate, assign, encumber or otherwise dispose of the Performance Share Award or,
if any, the shares of Restricted Stock or grant any proxy with respect thereto, except as
specifically permitted by the Plan and this Agreement. Any attempted Transfer in violation of
this Agreement and the Plan shall be void and of no effect and the Company shall have the right
to disregard the same on its books and records and to issue stop transfer instructions to its
transfer agent. Notwithstanding the foregoing, nothing herein or in the Plan shall prohibit
the
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Participant from pledging the Common Stock the Participant is granted hereunder to the
Company pursuant to a stock pledge agreement entered into between the parties hereto.
6.
Issuance Restrictions
.
The Company is not obligated to issue any securities
if, in the opinion of counsel for the Company, the issuance of such Common Stock shall
constitute a violation by the Participant or the Company of any provisions of any law or of any
regulations of any governmental authority or any national securities exchange.
7.
Securities Representations
.
The shares of Common Stock will be issued to the
Participant and this Agreement is being made by the Company in reliance upon the following
express representations and warranties of the Participant. The Participant acknowledges,
represents and warrants that:
7.1. The Participant has been advised that the Participant may be an affiliate
within the meaning of Rule 144 under the Securities Act and in this connection the Company
is relying in part on the Participants representations set forth in this section;
7.2. The Common Stock must be held indefinitely by the Participant unless (i) an
exemption from the registration requirements of the Securities Act is available for the
resale of such Common Stock or (ii) the Company files an additional registration statement
(or a re-offer prospectus) with regard to the resale of such Common Stock and the
Company is under no obligation to continue in effect a Form S-8 Registration Statement or
to otherwise register the resale of the Common Stock (or to file a re-offer prospectus);
7.3. The exemption from registration under Rule 144 will not be available under
current law unless (i) a public trading market then exists for the Common Stock, (ii)
adequate information concerning the Company is then available to the public, and (iii)
other terms and conditions of Rule 144 or any exemption therefrom are complied with and
that any sale of the Common Stock may be made only in limited amounts in accordance with
such terms and conditions.
8.
Not an Employment Agreement
.
Neither the execution of this Agreement nor the
issuance of the Performance Share Award or the Common Stock hereunder constitute an agreement by
the Company to employ or to continue to employ the Participant during the entire, or any portion
of, the term of this Agreement, including but not limited to any period during which any shares of
Common Stock are outstanding.
9.
Power of Attorney
.
The Company, its successors and assigns, is hereby appointed
the attorney-in-fact, with full power of substitution, of the Participant for the purpose of
carrying out the provisions of this Agreement and taking any action and
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executing any instruments which such attorney-in-fact may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest. The Company, as attorney-in-fact for the Participant, may in the name and stead
of the Participant, make and execute all conveyances, assignments and transfers of the Restricted
Stock, other RS Property, Common Stock and property provided for herein, and the Participant hereby
ratifies and confirms that which the Company, as said attorney-in-fact, shall do by virtue hereof.
Nevertheless, the Participant shall, if so requested by the Company, execute and deliver to the
Company all such instruments as may, in the judgment of the Company, be advisable for this purpose.
10.
Miscellaneous
.
10.1. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, personal legal representatives, successors, trustees, administrators,
distributees, devisees and legatees. The Company may assign to, and require, any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or any affiliate by which the
Participant is employed to expressly assume and agree in writing to perform this Agreement.
Notwithstanding the foregoing, the Participant may not assign this Agreement other than with
respect to shares of Common Stock Transferred in compliance with the terms hereof.
10.2. This award of the Performance Share Award, and upon the settlement thereof the issuance
of Restricted Stock (if any), shall not affect in any way the right or power of the Board or
stockholders of the Company to make or authorize an adjustment, recapitalization or other change in
the capital structure or the business of the Company, any merger or consolidation of the Company or
subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, the dissolution or liquidation of the Company, any sale or transfer of
all or part of its assets or business or any other corporate act or proceeding.
10.3. The Participant agrees that the award of the Performance Share Award hereunder, and upon
the settlement thereof the issuance of Restricted Stock (if any), is special incentive compensation
and that the Performance Share Award and Restricted Stock (if applicable), any dividends paid
thereon (even if treated as compensation for tax purposes) and any other RS Property will not be
taken into account as salary or compensation or bonus in determining the amount of any
payment under any pension, retirement or profit-sharing plan of the Company or any life insurance,
disability or other benefit plan of the Company.
10.4. No modification or waiver of any of the provisions of this Agreement shall be effective
unless in writing and signed by the party against whom it is sought to be enforced.
10.5. This Agreement may be executed in one or more counterparts (including via facsimile or
PDF), all of which taken together shall constitute one contract.
-8-
10.6. The failure of any party hereto at any time to require performance by another party of
any provision of this Agreement shall not affect the right of such party to require performance of
that provision, and any waiver by any party of any breach of any provision of this Agreement shall
not be construed as 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.
10.7. The headings of the sections of this Agreement have been inserted for convenience of
reference only and shall in no way restrict or modify any of the terms or provisions hereof.
10.8. All notices, consents, requests, approvals, instructions and other communications
provided for herein shall be in writing and validly given or made when delivered, or on the second
succeeding business day after being mailed by registered or certified mail, whichever is earlier,
to the persons entitled or required to receive the same, at the addresses set forth at the heading
of this Agreement or to such other address as either party may designate by like notice. Notices
to the Company shall be addressed to the Compensation Committee of the Board with a copy to the
Companys Head of Human Resources.
10.9. This Agreement shall be construed, interpreted and governed and the legal relationships
of the parties determined in accordance with the internal laws of the State of Delaware without
reference to rules relating to conflicts of law.
10.10. By executing this Agreement the Participant hereby accepts the terms and conditions of
this Agreement and, effective as of the Settlement Date, shall be deemed to have accepted the award
of Restricted Stock within the time period required under Section 8.2(b) of the Plan.
11.
Provisions of Plan Control
.
This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted
by the Committee and as may be in effect from time to time. The Plan is incorporated herein by
reference. A copy of the Plan has been delivered to the Participant. If and to the extent that
this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan,
the Plan shall control, and this Agreement shall be deemed to be modified accordingly. Unless
otherwise indicated, any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof (other than any other documents expressly contemplated
herein or in the Plan) and supersedes any prior agreements between the Company and the Participant.
-9-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
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MARKETAXESS HOLDINGS INC.
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By:
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Richard M. McVey
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Date:
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[Participant]
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Date:
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[Remainder of page intentionally left blank]
-10-
APPENDIX A
Performance Metric and Number of Shares
A.
Performance Metric
.
The Performance metric set forth herein is established for purposes of the grant of the
Performance Shares for the Performance Period and is intended to be performance-based under
Section 162(m) of the Code.
The performance metric for the Performance Period ending
shall be the
Companys attainment of pre-tax operating income of $
per share of Common Stock before the
Companys payment of any cash bonuses to its employees for performance during the Performance
Period and any expenses incurred in connection with all Performance Share Awards for the
Performance Period granted by the Company to Eligible Employees and Consultants, as set forth in
the Companys financial statements and as calculated in accordance with GAAP (the
Performance
Target
). The number of shares of Common Stock awarded will be based on the level of the
Performance Target achieved, as specified below (i.e., Awarded Shares). The terms and conditions
governing the Performance Share Award will be construed and interpreted in a manner consistent with
Section 162(m) of the Code and, without limiting the generality of the foregoing, the Committee
will certify the attainment of the Level of Target Performance Achieved to the extent and in the
manner required by Section 162(m) of the Code.
Subject to the terms and conditions of this Agreement, a number of shares of Common Stock
shall be awarded to the Participant on the Settlement Date, as follows:
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Percentage of Shares of Common Stock
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Represented by Performance Shares to
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Level of Target Performance Achieved
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be Awarded
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120% and above
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150%
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100%
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100%
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80%
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50%
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less than 80%
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0%
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B.
Interpolation; Fractional Shares
. In awarding a percentage of the Common Stock to the
Participant, the Committee shall interpolate the percentage of Common Stock awarded for the
achievement of the performance metric between each applicable target level, which percentage shall
be calculated to the nearest one-hundredth percent. Fractional shares shall be aggregated until,
and eliminated at, the time earned by rounding-down for fractions less than one-half and
rounding-up for fractions equal to or greater than one-half. No cash settlements shall be made
with respect to fractional shares eliminated by rounding.
A-1
C.
Miscellaneous
.
Notwithstanding anything to the contrary, the Committee shall calculate pre-tax operating
income in a manner that excludes the following:
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(i)
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all items of gain, loss or expense for the applicable fiscal year under
consideration that are related to the disposal of a business or discontinued
operations; and
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(ii)
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all items of gain, loss or expense for the applicable fiscal year that are
related to changes in accounting principles or to changes in applicable law or
regulations.
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In addition, the Committee may, in its sole discretion, elect to exclude from the calculation
of operating income all items of gain loss or expense for the applicable fiscal year that are
related to extraordinary, special, unusual or non-recurring items, events or circumstances
affecting the Company or the financial statements of the Company.
With respect to the Performance Period, to the extent any provision contained herein creates
impermissible discretion under Section 162(m) of the Code, such provision will be of no force or
effect.
A-2
Exhibit
10.2
FORM OF PERFORMANCE
SHARE
AWARD AGREEMENT FOR EMPLOYEES
OTHER THAN MESSRS. McVEY AND MILLET
PERFORMANCE SHARE AWARD AGREEMENT
PURSUANT TO THE
MARKETAXESS HOLDINGS INC.
2004 STOCK INCENTIVE PLAN
THIS PERFORMANCE SHARE AWARD AGREEMENT
(this
Agreement
), made effective as of
, by and between MarketAxess Holdings Inc. (the
Company
) and
(the
Participant
).
WHEREAS
, the Board of Directors of the Company (the
Board
) adopted, and the
stockholders of the Company, approved the MarketAxess Holdings Inc. 2004 Stock Incentive Plan
(Amended and Restated Effective April 28, 2006) (the
Plan
);
WHEREAS
, the Company, through the Committee under the Plan, wishes to grant to the Participant
a Performance Share Award under the Plan that, upon the achievement of the performance metric set
forth on
Appendix A
attached hereto and subject to the Participants continuing service
with the Company or an Affiliate through the achievement of such performance metric, may provide
for the issuance of shares of the Companys common stock, par value $.003 per share (Common
Stock) in accordance with the terms of this Agreement;
WHEREAS
, the performance metric set forth on
Appendix A
attached hereto is intended to
constitute a performance goal, as set forth under the Plan; and
WHEREAS
, such shares of Common Stock, when issued to the Participant, shall be subject to the
terms of this Agreement (including without limitation, the restrictions set forth in Sections 4 and
5 herein).
NOW, THEREFORE
, the Company and the Participant agree as follows:
1.
Grant of Performance Share Award
.
Subject to the restrictions, terms and
conditions of the Plan and this Agreement, the Company hereby awards and grants to the Participant
Performance Shares entitling the Participant to receive, for each Performance Share
earned in accordance with
Section 2
below, one share of Common Stock, subject to the
provisions of
Appendix A
attached hereto (the
Performance Share Award
).
Fractional shares shall be aggregated until, and eliminated at, the time earned by rounding-down
for fractions less than one-half and rounding-up for fractions equal to or greater than one-half.
No cash settlements shall be made with respect to fractional shares eliminated by rounding.
2.
Payment
. Subject to the Participants not incurring a Termination of Employment
prior to the Settlement Date (as defined below) (except as otherwise specifically set forth in this
Agreement), upon the Committee determining and certifying the level of achievement of the
performance metric set forth on
Appendix A
attached hereto with respect to the Companys
fiscal year beginning on
and ending on
(the
Performance Period
), the Company shall award to the Participant a number of
shares of Common Stock following the Performance Period
reflecting the level of attainment of the performance metric in accordance with
Appendix
A
attached hereto (
Awarded Shares
) during the Performance Period. The Committee
shall certify the level of achievement of the performance metric during the Companys first fiscal
quarter in
, but in any event no later than
, and
on the date of such certification (the
Settlement Date
) the Committee shall grant to the
Participant the applicable number of Awarded Shares in accordance with
Appendix A
attached
hereto. Pursuant to Sections 4 and 5 hereof, any Awarded Shares granted hereunder shall be subject
to certain restrictions, which restrictions relate to the passage of time as an employee of, or
consultant to, the Company or its Affiliates, as described in Section 4.1 hereof. While such
restrictions are in effect, the Awarded Shares granted subject to such restrictions shall be
referred to herein as
Restricted Stock
. The Performance Shares and, if any, the number
of Awarded Shares and the number of shares of Restricted Stock are subject to adjustment under
Section 4.2(b) of the Plan. Prior to the Settlement Date, the provisions in Section 9.1 of the
Plan regarding Detrimental Activity shall apply to the Performance Share Award.
3.
Termination of Employment/ Change in Control Prior to Settlement Date
.
3.1.
Termination of Employment
.
In the event of the Participants Termination of
Employment by reason of death or Disability, each prior to the Settlement Date, then on the
Settlement Date, the Participant shall receive the Restricted Stock that the Participant would have
received if the Participant had been employed by the Company on the Settlement Date, based on the
actual level of achievement of the performance metric, and 50% of the total number of unvested
shares of such Restricted Stock shall immediately vest. Any remaining unvested shares of
Restricted Stock shall be forfeited.
3.2.
Change in Control
.
In the event of a Change in Control before the Settlement
Date, the Committee, in its sole discretion, may treat the Performance Share Award in accordance
with any one of the following methods as determined by the Committee:
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(a)
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The Committee may determine that performance metric set forth on
Appendix
A
would likely have been achieved at or above the 80% Performance Target level on
the Settlement Date and treat the Performance Share Award in accordance with any one
of the following methods, as determined by the Committee:
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(i)
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The Committee may determine that the performance metric is deemed
achieved at the Performance Target, and on the date of the Change in Control,
the Participant shall be granted Restricted Stock at the Performance Target
level, subject to the conditions of Section 4, and all unvested Restricted Stock
shall become immediately vested upon a Participants Termination of Employment
by the Company without Cause within 24 months after such Change in Control;
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(ii)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will not be continued, assumed or
have new rights substituted therefor in accordance with Section 12.1(a) of the
Plan and the Participant will be granted Restricted Stock which shall become
immediately vested on the Change in Control; or
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(iii)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be continued, assumed or have
new rights substituted therefor in accordance with Section 12.1(a) of the Plan.
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(b)
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The Committee may determine that performance metric set forth on
Appendix
A
would likely have been achieved below the 80% Performance Target level on the
Settlement Date and treat the Performance Share Award in accordance with any one of
the following methods as determined by the Committee:
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(i)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be canceled in its entirety;
or
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(ii)
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Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be continued, assumed or have
new rights substituted therefor in accordance with Section 12.1(a) of the
Plan.
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(c)
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The Committee may elect not to make a determination of the likely achievement
of the performance metric set forth on
Appendix A
and treat the Performance
Share Award in accordance with Section 12.1 of the Plan.
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(d)
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Notwithstanding any other provision herein, the Committee may otherwise
determine the treatment of the Performance Share Award, which shall not be
inconsistent with any of the terms of the Plan.
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4.1.
Vesting
.
The Restricted Stock shall become vested and cease to be Restricted
Stock (but shall remain subject to the other terms of this Agreement and the Plan) as follows if
the Participant has been continuously employed by the Company or an Affiliate from the Settlement
Date until the applicable vesting date:
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Vesting Date
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Percentage Vested
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-3-
Except as otherwise provided herein,
there shall be no proportionate or partial vesting in the
periods prior to the applicable vesting dates and all vesting shall occur only on the appropriate
vesting date. When any shares of Restricted Stock become vested, the Company shall promptly
deliver to the Participant any related RS Property (as defined below), subject to applicable
withholding.
4.2.
Detrimental Activity
.
The provisions in Section 8.1 of the Plan regarding
Detrimental Activity shall apply to the Restricted Stock.
4.3.
Termination of Employment/ Change in Control
.
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(a)
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Termination of Employment
.
In the event of the Participants
Termination of Employment by reason of death or Disability, each on or after the
Settlement Date, 50% of the total number of unvested shares of Restricted Stock
granted pursuant to this Agreement shall vest. Any remaining unvested shares of
Restricted Stock shall be forfeited.
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(i)
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If on or after the Settlement Date there is a Change in
Control and the Participant incurs a Termination of Employment by the Company
without Cause within 24 months after such Change in Control, then all unvested
Restricted Stock shall become immediately vested.
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(ii)
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If there is a Change in Control after the Settlement Date and
immediately prior to the Change in Control it is determined that the Award
will not be continued, assumed or have new rights substituted therefor in
accordance with Section 12.1(a) of the Plan, then immediately prior to the
Change in Control, all unvested Restricted Stock shall become immediately
vested.
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4.4.
Rights as a Holder of Restricted Stock
.
From and after the Settlement Date, the
Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a
holder of shares of Common Stock, including, without limitation, the right to vote such shares, to
receive and retain all regular cash dividends payable to holders of Common Stock of record on and
after the Settlement Date (although such dividends will be treated, to the extent required by
applicable law, as additional compensation for tax purposes), and to exercise all other rights,
powers and privileges of a holder of Common Stock with respect to the Restricted Stock, with the
exceptions that (i) the Participant shall not be entitled to delivery of the stock certificate or
certificates representing the Restricted Stock until such shares are no longer Restricted Stock;
(ii) the Company (or its designated agent) will retain custody of the stock certificate or
certificates representing the Restricted Stock and any other property (
RS Property
)
issued in respect of the Restricted Stock, including stock dividends at all times such shares are
Restricted Stock; (iii) no RS Property will bear interest or be segregated in separate accounts;
and (iv) the Participant shall not, directly or indirectly, Transfer the
-4-
Restricted Stock in any manner whatsoever. Prior to the Settlement Date, the Participant
shall have no rights as a stockholder with respect to any shares of Common Stock covered by any
Restricted Stock to be granted for the Performance Period (if any) unless and until the Participant
has become the holder of record of such Common Stock, and no adjustments shall be made for
dividends in cash or other property, distributions or other rights in respect of any such shares,
except as otherwise specifically provided for in the Plan (including, without limitation, Section
4.2(b) of the Plan).
4.5.
Taxes; Section 83(b) Election
.
The Participant acknowledges, subject to the last
sentence of this paragraph, that (i) no later than the date on which any Restricted Stock shall
have become vested, the Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding payment of, any Federal, state or local taxes of any kind required by law to
be withheld with respect to any Restricted Stock which shall have become so vested, including by
electing to reduce the number of shares of Common Stock otherwise deliverable to the Participant or
by delivering shares of Common Stock already owned; (ii) the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind otherwise due to the Participant any
Federal, state or local taxes of any kind required by law to be withheld with respect to any
Restricted Stock which shall have become so vested, including that the Company may, but shall not
be required to, sell a number of shares of Common Stock sufficient to cover applicable withholding
taxes; and (iii) in the event that the Participant does not satisfy (i) above on a timely basis,
the Company may to the extent permitted by law, but shall not be required to, pay such required
withholding and treat such amount as a demand loan to the Participant at the maximum rate permitted
by law, with such loan, at the Companys sole discretion and provided the Company so notifies the
Participant within thirty (30) days of the making of the loan, secured by the Common Stock and any
failure by the Participant to pay the loan upon demand shall entitle the Company to all of the
rights at law of a creditor secured by the Common Stock. The Company may hold as security any
certificates representing any Common Stock and, upon demand of the Company, the Participant shall
deliver to the Company any certificates in his or her possession representing the Common Stock
together with a stock power duly endorsed in blank. The Participant also acknowledges that it is
his or her sole responsibility, and not the Companys, to file timely and properly any election
under Section 83(b) of the Code, and any corresponding provisions of state tax laws, if the
Participant wishes to utilize such election.
4.6.
Legend
.
In the event that a certificate evidencing Restricted Stock is issued,
the certificate representing the Common Stock shall have endorsed thereon the following legends:
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(a)
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THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT,
PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE MARKETAXESS HOLDINGS INC. (THE
COMPANY) 2004 STOCK INCENTIVE PLAN (AMENDED AND RESTATED EFFECTIVE
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APRIL 28, 2006) (THE PLAN) AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED
OWNER AND THE COMPANY DATED AS OF
. COPIES OF SUCH
PLAN AND AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
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(b)
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Any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated to
issue a certificate representing the Restricted Stock prior to vesting as set forth in
Section 4.1 hereof.
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5.
Restrictions on Transfer
.
The Participant shall not sell, negotiate, transfer,
pledge, hypothecate, assign, encumber or otherwise dispose of the Performance Share Award or,
if any, the shares of Restricted Stock or grant any proxy with respect thereto, except as
specifically permitted by the Plan and this Agreement. Any attempted Transfer in violation of
this Agreement and the Plan shall be void and of no effect and the Company shall have the right
to disregard the same on its books and records and to issue stop transfer instructions to its
transfer agent. Notwithstanding the foregoing, nothing herein or in the Plan shall prohibit
the Participant from pledging the Common Stock the Participant is granted hereunder to the
Company pursuant to a stock pledge agreement entered into between the parties hereto.
6.
Issuance Restrictions
.
The Company is not obligated to issue any securities
if, in the opinion of counsel for the Company, the issuance of such Common Stock shall
constitute a violation by the Participant or the Company of any provisions of any law or of any
regulations of any governmental authority or any national securities exchange.
7.
Securities Representations
.
The shares of Common Stock will be issued to the
Participant and this Agreement is being made by the Company in reliance upon the following
express representations and warranties of the Participant. The Participant acknowledges,
represents and warrants that:
7.1. The Participant has been advised that the Participant may be an affiliate
within the meaning of Rule 144 under the Securities Act and in this connection the Company
is relying in part on the Participants representations set forth in this section;
7.2. The Common Stock must be held indefinitely by the Participant unless (i) an
exemption from the registration requirements of the Securities Act is available for the
resale of such Common Stock or (ii) the Company files an additional registration statement
(or a re-offer prospectus) with regard to the resale of such Common Stock and the
Company is under no obligation to continue in effect a Form S-8 Registration Statement or
to otherwise register the resale of the Common Stock (or to file a re-offer prospectus);
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7.3. The exemption from registration under Rule 144 will not be available under
current law unless (i) a public trading market then exists for the Common Stock, (ii)
adequate information concerning the Company is then available to the public, and (iii)
other terms and conditions of Rule 144 or any exemption therefrom are complied with and
that any sale of the Common Stock may be made only in limited amounts in accordance with
such terms and conditions.
8.
Not an Employment Agreement
.
Neither the execution of this Agreement nor the
issuance of the Performance Share Award or the Common Stock hereunder constitute an agreement by
the Company to employ or to continue to employ the Participant during the entire, or any portion
of, the term of this Agreement, including but not limited to any period during which any shares of
Common Stock are outstanding.
9.
Power of Attorney
.
The Company, its successors and assigns, is hereby appointed
the attorney-in-fact, with full power of substitution, of the Participant for the purpose of
carrying out the provisions of this Agreement and taking any action and executing any instruments
which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Participant, may in the name and stead of the Participant, make and
execute all conveyances, assignments and transfers of the Restricted Stock, other RS Property,
Common Stock and property provided for herein, and the Participant hereby ratifies and confirms
that which the Company, as said attorney-in-fact, shall do by virtue hereof. Nevertheless, the
Participant shall, if so requested by the Company, execute and deliver to the Company all such
instruments as may, in the judgment of the Company, be advisable for this purpose.
10.
Miscellaneous
.
10.1. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, personal legal representatives, successors, trustees, administrators,
distributees, devisees and legatees. The Company may assign to, and require, any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or any affiliate by which the
Participant is employed to expressly assume and agree in writing to perform this Agreement.
Notwithstanding the foregoing, the Participant may not assign this Agreement other than with
respect to shares of Common Stock Transferred in compliance with the terms hereof.
10.2. This award of the Performance Share Award, and upon the settlement thereof the issuance
of Restricted Stock (if any), shall not affect in any way the right or power of the Board or
stockholders of the Company to make or authorize an adjustment, recapitalization or other change in
the capital structure or the business of the Company, any merger or consolidation of the Company or
subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, the dissolution or liquidation of the Company, any sale or transfer of
all or part of its assets or business or any other corporate act or proceeding.
-7-
10.3. The Participant agrees that the award of the Performance Share Award hereunder, and upon
the settlement thereof the issuance of Restricted Stock (if any), is special incentive compensation
and that the Performance Share Award and Restricted Stock (if applicable), any dividends paid
thereon (even if treated as compensation for tax purposes) and any other RS Property will not be
taken into account as salary or compensation or bonus in determining the amount of any
payment under any pension, retirement or profit-sharing plan of the Company or any life insurance,
disability or other benefit plan of the Company.
10.4. No modification or waiver of any of the provisions of this Agreement shall be effective
unless in writing and signed by the party against whom it is sought to be enforced.
10.5. This Agreement may be executed in one or more counterparts (including via facsimile or
PDF), all of which taken together shall constitute one contract.
10.6. The failure of any party hereto at any time to require performance by another party of
any provision of this Agreement shall not affect the right of such party to require performance of
that provision, and any waiver by any party of any breach of any provision of this Agreement shall
not be construed as 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.
10.7. The headings of the sections of this Agreement have been inserted for convenience of
reference only and shall in no way restrict or modify any of the terms or provisions hereof.
10.8. All notices, consents, requests, approvals, instructions and other communications
provided for herein shall be in writing and validly given or made when delivered, or on the second
succeeding business day after being mailed by registered or certified mail, whichever is earlier,
to the persons entitled or required to receive the same, at the addresses set forth at the heading
of this Agreement or to such other address as either party may designate by like notice. Notices
to the Company shall be addressed to the Compensation Committee of the Board with a copy to the
Companys Head of Human Resources.
10.9. This Agreement shall be construed, interpreted and governed and the legal relationships
of the parties determined in accordance with the internal laws of the State of Delaware without
reference to rules relating to conflicts of law.
10.10. By executing this Agreement the Participant hereby accepts the terms and conditions of
this Agreement and, effective as of the Settlement Date, shall be deemed to have accepted the award
of Restricted Stock within the time period required under Section 8.2(b) of the Plan.
11.
Provisions of Plan Control
.
This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the amendment
-8-
provisions thereof, and to such rules, regulations and interpretations relating to the Plan as
may be adopted by the Committee and as may be in effect from time to time. The Plan is
incorporated herein by reference. A copy of the Plan has been delivered to the Participant. If
and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. Unless otherwise indicated, any capitalized term used but not defined herein shall
have the meaning ascribed to such term in the Plan. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof (other than any other
documents expressly contemplated herein or in the Plan) and supersedes any prior agreements between
the Company and the Participant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
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MARKETAXESS HOLDINGS INC.
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By:
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Richard M. McVey
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Date:
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Participant
Date:
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[Remainder of page intentionally left blank]
-9-
APPENDIX A
Performance Metric and Number of Shares
A.
Performance Metric
.
The
Performance metric set forth herein is established for purposes of the grant of the
Performance Shares for the Performance Period and is intended to
be performance-based under
Section 162(m) of the Code.
The performance metric for the Performance Period ending
shall
be the Companys attainment of pre-tax operating income of $
per share of Common Stock before the
Companys payment of any cash bonuses to its employees for performance during the Performance
Period and any expenses incurred in connection with all Performance Share Awards for the
Performance Period granted by the Company to Eligible Employees and Consultants, as set forth in
the Companys financial statements and as calculated in accordance with GAAP (the
Performance
Target
). The number of shares of Common Stock awarded will be based on the level of the
Performance Target achieved, as specified below (i.e., Awarded Shares). The terms and conditions
governing the Performance Share Award will be construed and interpreted in a manner consistent with
Section 162(m) of the Code and, without limiting the generality of the foregoing, the Committee
will certify the attainment of the Level of Target Performance Achieved to the extent and in the
manner required by Section 162(m) of the Code.
Subject to the terms and conditions of this Agreement, a number of shares of Common Stock
shall be awarded to the Participant on the Settlement Date, as follows:
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Percentage of Shares of Common Stock
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Represented by Performance Shares to
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Level of Target Performance Achieved
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be Awarded
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120% and above
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150%
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100%
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100%
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80%
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50%
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less than 80%
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0%
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B.
Interpolation; Fractional Shares
. In awarding a percentage of the Common Stock to the
Participant, the Committee shall interpolate the percentage of Common Stock awarded for the
achievement of the performance metric between each applicable target level, which percentage shall
be calculated to the nearest one-hundredth percent. Fractional shares shall be aggregated until,
and eliminated at, the time earned by rounding-down for fractions less than one-half and
rounding-up for fractions equal to or greater than one-half. No cash settlements shall be made
with respect to fractional shares eliminated by rounding.
A-1
C.
Miscellaneous
.
Notwithstanding anything to the contrary, the Committee shall calculate pre-tax operating
income in a manner that excludes the following:
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(i)
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all items of gain, loss or expense for the applicable fiscal year under
consideration that are related to the disposal of a business or discontinued
operations; and
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(ii)
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all items of gain, loss or expense for the applicable fiscal year that are
related to changes in accounting principles or to changes in applicable law or
regulations.
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In addition, the Committee may, in its sole discretion, elect to exclude from the calculation
of operating income all items of gain loss or expense for the applicable fiscal year that are
related to extraordinary, special, unusual or non-recurring items, events or circumstances
affecting the Company or the financial statements of the Company.
With respect to the Performance Period, to the extent any provision contained herein creates
impermissible discretion under Section 162(m) of the Code, such provision will be of no force or
effect.
A-2
Exhibit
10.3
FORM OF RESTRICTED
STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
MARKETAXESS HOLDINGS INC. 2004 STOCK INCENTIVE PLAN
(AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
THIS AGREEMENT, made as of the
___ day of ____________, ______, by and between
MarketAxess Holdings Inc., a Delaware corporation with its principal office at 140 Broadway,
42
nd
Floor, New York, New York 10005 (the Company), and _______________, residing
at _________________________________ (the Participant).
WHEREAS, the Board of Directors of the Company (the Board) adopted, and the stockholders of
the Company, approved the MarketAxess Holdings Inc. 2004 Stock Incentive Plan (Amended and Restated
effective April 28, 2006) (the Plan);
WHEREAS, the Company, through the Committee under the Plan, wishes to grant to the Participant
shares of its common stock, par value $.003 per share (Common Stock or the Shares) in the
amount set forth below; and
WHEREAS, such Shares are subject to certain restrictions.
NOW, THEREFORE, the Company and the Participant agree as follows:
1.
Sale of Shares
.
Subject to the terms, conditions and restrictions of the Plan and
this Agreement, the Company awards to the Participant, ____________ shares of the Companys Common
Stock on _______________ (the Grant Date). To the extent required by law, the
Participant shall pay the Company the par value ($.003) (the Purchase Price) for each Share
awarded to the Participant simultaneously with the execution of this Agreement in cash or cash
equivalents payable to the order of the Company. Pursuant to the Plan and Section 2 of this
Agreement, the Shares are subject to certain restrictions, which restrictions shall expire in
accordance with the provisions of the Plan and Section 2 hereof. While such restrictions are in
effect, the Shares subject to such restrictions shall be referred to herein as Restricted Stock.
2.
Vesting
.
(a) Except as set forth in subsections (b) and (c) below, the Restricted
Stock shall become vested and cease to be Restricted Stock (but shall remain subject to the other
terms of this Agreement and the Plan) as follows if the Participant has been continuously employed
by the Company until such date:
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Vesting Date
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Percentage Vested
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There shall be no proportionate or partial vesting in the periods prior to the applicable
vesting dates and all vesting shall occur only on the appropriate vesting date.
(b) Upon the death or Disability of the Participant, 50% of any shares of Restricted Stock
that are unvested at the time of such Termination shall become vested and cease to be Restricted
Stock (but shall remain subject to the other terms of this Agreement and the Plan). Any remaining
unvested shares of Restricted Stock shall be forfeited.
(c) In the event of a Change in Control, the Restricted Stock shall be treated in accordance
with Section 12.1 of the Plan; provided that, (i) immediately prior to the Change in Control, the
Committee may determine that the Restricted Stock will not be continued, assumed or have new rights
substituted therefor in accordance with Section 12.1(a) of the Plan, and immediately prior to the
Change in Control, the Restricted Stock shall become fully vested and cease to be Restricted Stock
(but shall remain subject to the other terms of this Agreement and the Plan) and (ii) if the
Participant incurs a Termination by the Company without Cause within 24 months after such Change in
Control, the Restricted Stock shall become fully vested and cease to be Restricted Stock (but shall
remain subject to the other terms of this Agreement and the Plan).
3.
Restrictions on Transfer
.
The Participant shall not sell, negotiate, transfer,
pledge, hypothecate, assign, encumber or otherwise dispose of the Shares or grant any proxy with
respect thereto, except as specifically permitted by the Plan and this Agreement. Any attempted
Transfer in violation of this Agreement and the Plan shall be void and of no effect and the Company
shall have the right to disregard the same on its books and records and to issue stop transfer
instructions to its transfer agent. Notwithstanding the foregoing, nothing herein or in the Plan
shall prohibit the Participant from pledging the Shares the Participant is granted hereunder to the
Company pursuant to a stock pledge agreement entered into between the parties hereto.
4.
Forfeiture
.
(a) The provisions in Section 8.l of the Plan regarding Detrimental
Activity shall apply to the Restricted Stock.
(b) If a Participant incurs a Termination for any reason, the Company shall repurchase from
the Participant for the Purchase Price paid for such shares of Restricted Stock, any and all
Restricted Stock.
5.
Rights as a Holder of Restricted Stock
.
From and after the issue date, the
Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a
holder of shares of Common Stock, including, without limitation, the right to vote the Shares, to
receive and retain all regular cash dividends payable to holders of Shares of record on and after
the issue date (although such dividends will be treated, to the extent required by applicable law,
as additional compensation for tax purposes), and to exercise all other rights, powers and
privileges of a holder of Shares with respect to the Restricted Stock, with the exceptions that (i)
the Participant shall not be entitled to delivery of the stock certificate or certificates
representing the Restricted Stock until such shares are no longer Restricted Stock; (ii) the
Company (or its designated agent) will retain custody of the stock certificate or certificates
representing the Restricted Stock and any other property (RS Property) issued in respect of the
Restricted Stock, including stock dividends at all times such Shares are Restricted Stock; (iii) no
RS Property will bear interest or be segregated in separate accounts; and (iv) the Participant
shall not, directly or indirectly, Transfer the Restricted Stock in any manner whatsoever.
6.
Taxes;
Section 83(b)
Election
.
The Participant acknowledges, subject to the last
sentence of this paragraph, that (i) no later than the date on which any Restricted Stock shall
have become vested, the Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding payment of, any Federal, state or local taxes of any kind required by law to
be withheld with respect to any Restricted Stock which shall have become so vested; (ii) the
Company shall, to the extent permitted by law, have the right to deduct from any payment of any
kind otherwise due to the Participant any Federal, state or local taxes of any kind required by law
to be withheld with respect to any Restricted Stock which shall have become so vested, including
that the Company may, but shall not be required to, sell a number of Shares sufficient to cover
applicable withholding taxes; and (iii) in the event that the Participant does not satisfy (i)
above on a timely basis, the Company may, but shall not be required to, pay such required
withholding and treat such amount as a demand loan to you at the maximum rate permitted by law,
with such loan, at the Companys sole discretion and provided the Company so notifies the
Participant within thirty (30) days of the making of the loan, secured by the Shares and any
failure by you to pay the loan upon demand shall entitle the Company to all of the rights at law of
a creditor secured by the Shares. The Company may hold as security any certificates representing
any Shares and, upon demand of the Company, the Participant shall deliver to the Company any
certificates in his or her possession representing Shares together with a stock power duly endorsed
in blank. The Participant also acknowledges that it is his or her sole responsibility, and not the
Companys, to file timely and properly any election under Section 83(b) of the Code, and any
corresponding provisions of state tax laws, if the Participant wishes to utilize such election.
7.
Legend
.
In the event that a certificate evidencing Restricted Stock is issued, the
certificate representing the Shares shall have endorsed thereon the following legends:
(a) THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE
OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
(INCLUDING FORFEITURE) OF THE MARKETAXESS HOLDINGS INC. (THE COMPANY) 2004 STOCK INCENTIVE PLAN
(THE PLAN) AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE COMPANY DATED AS OF
THE ___ DAY
OF _________. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY.
(b) Any legend required to be placed thereon by applicable blue sky laws of any state.
Notwithstanding the foregoing, in no event shall the Company be obligated to issue a certificate
representing the Restricted Stock prior to vesting as set forth in Section 2 hereof.
8.
Securities Representations
.
The Shares are being issued to the Participant and
this Agreement is being made by the Company in reliance upon the following express representations
and warranties of the Participant. The Participant acknowledges, represents and warrants that:
(a) The Participant has been advised that the Participant may be an affiliate within the
meaning of Rule 144 under the Securities Act and in this connection the Company is relying in part
on the Participants representations set forth in this section;
(b) The Shares must be held indefinitely by the Participant unless (i) an exemption from the
registration requirements of the Securities Act is available for the resale of such Shares or (ii)
the Company files an additional registration statement (or a re-offer prospectus) with regard to
the resale of such Shares and the Company is under no obligation to continue in effect a Form S-8
Registration Statement or to otherwise register the resale of the Shares (or to file a re-offer
prospectus);
(c) The exemption from registration under Rule 144 will not be available under current law
unless (i) a public trading market then exists for the Common Stock of the Company, (ii) adequate
information concerning the Company is then available to the public, and (iii) other terms and
conditions of Rule 144 or any exemption therefrom are complied with and that any sale of the Shares
may be made only in limited amounts in accordance with such terms and conditions.
9.
Not an Employment Agreement
.
Neither the execution of this Agreement nor the
issuance of the Shares hereunder constitute an agreement by the Company to employ or to continue to
employ the Participant during the entire, or any portion of, the term of this Agreement, including
but not limited to any period during which any Shares are outstanding.
10.
Power of Attorney
.
The Company, its successors and assigns, is hereby appointed
the attorney-in-fact, with full power of substitution, of the Participant for the purpose of
carrying out the provisions of this Agreement and taking any action and executing any instruments
which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and coupled with an interest. The Company, as
attorney-in-fact for the Participant, may in the name and stead of the Participant, make and
execute all conveyances, assignments and transfers of the Restricted Stock, other RS Property,
Shares and property provided for herein, and the Participant hereby ratifies and confirms that
which the Company, as said attorney-in-fact, shall do by virtue hereof. Nevertheless, the
Participant shall, if so requested by the Company, execute and deliver to the Company all such
instruments as may, in the judgment of the Company, be advisable for this purpose.
11.
Miscellaneous
.
(a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, personal legal representatives, successors, trustees, administrators,
distributees, devisees and legatees. The Company may assign to, and require,
any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company or any affiliate by which the
Participant is employed to expressly assume and agree in writing to perform this Agreement.
Notwithstanding the foregoing, the Participant may not assign this Agreement other than with
respect to Shares Transferred in compliance with the terms hereof.
(b) This award of Restricted Stock shall not affect in any way the right or power of the Board
or stockholders of the Company to make or authorize an adjustment, recapitalization or other change
in the capital structure or the business of the Company, any merger or consolidation of the Company
or subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, the dissolution or liquidation of the Company, any sale or transfer of
all or part of its assets or business or any other corporate act or proceeding.
(c) The Participant agrees that the award of the Restricted Stock hereunder is special
incentive compensation and that it, any dividends paid thereon (even if treated as compensation for
tax purposes) and any other RS Property will not be taken into account as salary or
compensation or bonus in determining the amount of any payment under any pension, retirement or
profit-sharing plan of the Company or any life insurance, disability or other benefit plan of the
Company.
(d) No modification or waiver of any of the provisions of this Agreement shall be effective
unless in writing and signed by the party against whom it is sought to be enforced.
(e) This Agreement may be executed in one or more counterparts, all of which taken together
shall constitute one contract.
(f) The failure of any party hereto at any time to require performance by another party of any
provision of this Agreement shall not affect the right of such party to require performance of that
provision, and any waiver by any party of any breach of any provision of this Agreement shall not
be construed as 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.
(g) The headings of the sections of this Agreement have been inserted for convenience of
reference only and shall in no way restrict or modify any of the terms or provisions hereof.
(h) All notices, consents, requests, approvals, instructions and other communications provided
for herein shall be in writing and validly given or made when delivered, or on the second
succeeding business day after being mailed by registered or certified mail, whichever is earlier,
to the persons entitled or required to receive the same, at the addresses set forth at the heading
of this Agreement or to such other address as either party may designate by like notice. Notices
to the Company shall be addressed to the Compensation Committee of the Board with a copy to General
Counsel, MarketAxess Holdings Inc., 140 Broadway, 42
nd
Floor, New York, NY 10005.
(i) This Agreement shall be construed, interpreted and governed and the legal relationships of
the parties determined in accordance with the internal laws of the State of Delaware without
reference to rules relating to conflicts of law.
(j) By executing this Agreement within 60 days after the day and year first written above, the
award of Restricted Stock shall be accepted by the Participant within the time period required
under Section 8.2(b) of the Plan.
12.
Provisions of Plan Control
.
This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted
by the Committee and as may be in effect from time to time. The Plan is incorporated herein by
reference. A copy of the Plan has been delivered to the Participant. If and to the extent that
this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan,
the Plan shall control, and this Agreement shall be deemed to be modified accordingly. Unless
otherwise indicated, any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof (other than any other documents expressly contemplated
herein or in the Plan) and supersedes any prior agreements between the Company and the Participant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
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MARKETAXESS HOLDINGS INC.
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Richard M. McVey, Chief Executive Officer
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Dated:
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Exhibit
10.4
FORM OF INCENTIVE STOCK
OPTION AGREEMENT
STOCK OPTION AGREEMENT
PURSUANT TO THE
MARKETAXESS HOLDINGS INC.
2004 STOCK INCENTIVE PLAN
(
AS AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
AGREEMENT (Agreement), dated as of
by and between MarketAxess Holdings Inc.
(the Company) and
(the Participant).
Preliminary Statement
The Board of Directors of the Company (the Board) or a committee appointed by the Board (the
Committee) to administer the MarketAxess Holdings Inc. 2004 Stock Incentive Plan (Amended and
Restated effective April 28, 2006) (the Plan), has authorized this grant of an incentive stock
option (the Option) on ______ (the Grant Date) to purchase the number of shares of the Companys
common stock, par value $.003 per share (the Common Stock) set forth below to the Participant, as
an Eligible Employee of the Company or an Affiliate (collectively, the Company and all Subsidiaries
and Parents of the Company shall be referred to as the Employer). Unless otherwise indicated,
any capitalized term used but not defined herein shall have the meaning ascribed to such term in
the Plan. A copy of the Plan has been delivered to the Participant. By signing and returning this
Agreement, the Participant acknowledges having received and read a copy of the Plan and agrees to
comply with it, this Agreement and all applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1.
Tax Matters
. The Option granted hereby is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
Notwithstanding the foregoing, the Option will not qualify as an incentive stock option, among
other events, (i) if the Participant disposes of the Common Stock acquired pursuant to the Option
at any time during the two (2) year period following the date of this Agreement or the one (1) year
period following the date on which the Option is exercised; (ii) except in the event of the
Participants death or disability, as defined in Section 22(e)(3) of the Code, if the Participant
is not employed by the Company, any Subsidiary or any Parent at all times during the period
beginning on the date of this Agreement and ending on the day three (3) months before the date of
exercise of the Option; or (iii) to the extent the aggregate fair market value (determined as of
the time the Option is granted) of the Common Stock subject to incentive stock options which
become exercisable for the first time in any calendar year exceeds $100,000. To the extent that
the Option does not qualify as an
FORM OF INCENTIVE STOCK
OPTION AGREEMENT
incentive stock option, it shall not effect the validity of the Option and shall constitute
a separate non-qualified stock option.
2.
Grant of Option
. Subject in all respects to the Plan and the terms and conditions
set forth herein and therein, the Participant is hereby granted an Option to purchase from the
Company
shares of Common Stock, at a price per
share of $
(the Option
Price).
3.
Exercise
. (a) Except as set forth in subsections (b) through (e) below, the Option
shall vest and become exercisable as follows, provided that the Participant has not incurred a
Termination of Employment prior to the vesting date:
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Vesting Date
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Percentage Vested
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To the extent that the Option has become vested and exercisable with respect to a number of
shares of Common Stock as provided above, the Option may thereafter be exercised by the
Participant, in whole or in part, at any time or from time to time prior to the expiration of the
Option as provided herein and in accordance with Section 6.4(d) of the Plan, including, without
limitation, by the filing of any written form of exercise notice as may be required by the
Committee and payment in full of the Option Price multiplied by the number of shares of Common
Stock underlying the portion of the Option exercised. Upon expiration of the Option, the Option
shall be canceled and no longer exercisable.
There shall be no proportionate or partial vesting in the periods prior to each vesting date
and all vesting shall occur only on the appropriate vesting date.
(b) The Committee may, in its sole discretion, provide for accelerated vesting of the Option
at any time.
(c) The provisions in Section 6.4(c) of the Plan regarding Detrimental Activity shall apply to
the Option.
(d) Upon the death or Disability of the Participant, 50% of any unvested portion of the Option
at the time of such Termination shall become fully vested and exercisable in accordance with
Section 5(a) below. Any remaining unvested Options shall terminate and be cancelled immediately
upon such Termination.
(e) In the event of a Change in Control, the Option shall be treated in accordance with
Section 12.1 of the Plan; provided that, (i) immediately prior to the
2
FORM OF INCENTIVE STOCK
OPTION AGREEMENT
Change in Control, the Committee may determine that the Option will not be continued, assumed or
have new rights substituted therefor in accordance with Section 12.1(a) of the Plan, and
immediately prior to the Change in Control, the Option shall become fully vested and exercisable
and (ii) if the Participant incurs a Termination by the Company without Cause within 24 months
after such Change in Control, the Option shall become fully vested and exercisable in accordance
with Section 5(b) below.
4.
Option Term
. The term of each Option shall be ten (10) years after the Grant Date,
subject to earlier termination in the event of the Participants Termination as specified in
Section 5 below.
5.
Termination
.
Subject to the terms of the Plan and this Agreement, the Option, to the extent vested at the
time of the Participants Termination, shall remain exercisable as follows:
(a) In the event of the Participants Termination by reason of death, Disability, or
Retirement, the vested portion of the Option shall remain exercisable until the earlier of (i) one
(1) year from the date of such Termination or (ii) the expiration of the stated term of the Option
pursuant to Section 4 hereof; provided, however, that in the case of Retirement, if the Participant
dies within such one (1) year exercise period, any unexercised Option held by the Participant shall
thereafter be exercisable by the legal representative of the Participants estate, to the extent to
which it was exercisable at the time of death, for a period of one (1) year from the date of death,
but in no event beyond the expiration of the stated term of the Option pursuant to Section 4
hereof.
(b) In the event of the Participants involuntary Termination without Cause, the vested
portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the
date of such Termination or (ii) the expiration of the stated term of the Option pursuant to
Section 4 hereof.
(c) In the event of the Participants voluntary Termination (other than a voluntary
termination described in Section 5(d) below), the vested portion of the Option shall remain
exercisable until the earlier of (i) thirty (30) days from the date of such Termination or (ii) the
expiration of the stated term of the Option pursuant to Section 4 hereof.
(d) In the event of the Participants Termination for Cause or in the event of the
Participants voluntary Termination within ninety (90) days after an event that would be grounds
for a Termination for Cause, the Participants entire Option (whether or not vested) shall
terminate and expire upon such Termination.
Any portion of the Option that is not vested as of the date of the Participants Termination for
any reason shall terminate and expire as of the date of such Termination.
3
FORM OF INCENTIVE STOCK
OPTION AGREEMENT
6.
Restriction on Transfer of Option
. No part of the Option shall be Transferred
other than by will or by the laws of descent and distribution and during the lifetime of the
Participant, may be exercised only by the Participant or the Participants guardian or legal
representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated
in any way (except as provided by law or herein), and the Option shall not be subject to execution,
attachment or similar process. Upon any attempt to Transfer the Option or in the event of any levy
upon the Option by reason of any execution, attachment or similar process contrary to the
provisions hereof, such transfer shall be void and of no effect and the Company shall have the
right to disregard the same on its books and records and to issue stop transfer instructions to
its transfer agent.
7.
Rights as a Stockholder
. The Participant shall have no rights as a stockholder
with respect to any shares covered by the Option unless and until the Participant has become the
holder of record of the shares, and no adjustments shall be made for dividends in cash or other
property, distributions or other rights in respect of any such shares, except as otherwise
specifically provided for in the Plan.
8.
Provisions of Plan Control
. This Agreement is subject to all the terms, conditions
and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to
such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee
and as may be in effect from time to time. The Plan is incorporated herein by reference. If and
to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement contains the entire understanding of the parties with respect to the
subject matter hereof (other than any exercise notice or other documents expressly contemplated
herein or in the Plan) and supersedes any prior agreements between the Company and the Participant
with respect to the subject matter hereof.
9.
Notices
. Any notice or communication given hereunder shall be in writing and shall
be deemed to have been duly given: (i) when delivered in person; (ii) two (2) days after being sent
by United States mail; or (iii) on the first business day following the date of deposit if
delivered by a nationally recognized overnight delivery service, to the appropriate party at the
address set forth below (or such other address as the party shall from time to time specify):
If to the Company, to:
MarketAxess Holdings Inc.
140 Broadway, 42
nd
Floor
New York, New York 10005
Attention: Compensation Committee
If to the Participant, to the address on file with the Company.
4
FORM OF INCENTIVE STOCK
OPTION AGREEMENT
10.
No Obligation to Continue Employment
. This Agreement is not an agreement of
employment. This Agreement does not guarantee that the Employer will employ the Participant for
any specific time period, nor does it modify in any respect the Employers right to terminate or
modify the Participants employment or compensation.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above
written.
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MARKETAXESS HOLDINGS INC.
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By:
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Richard M. McVey
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Dated: _______________________________
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[Participants Name]
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Date:
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5
Exhibit 10.5
FORM OF INCENTIVE STOCK OPTION
AGREEMENT FOR MR. MCVEY
STOCK OPTION AGREEMENT
PURSUANT TO THE
MARKETAXESS HOLDINGS INC.
2004 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
AGREEMENT (Agreement), dated as of
by and between MarketAxess
Holdings Inc. (the Company and Richard M. McVey (the Executive).
Preliminary Statement
The Board of Directors of the Company (the Board) or a committee appointed by the Board (the
Committee) to administer the MarketAxess Holdings Inc. 2004 Stock Incentive Plan (Amended and
Restated effective April 28, 2006) (the Plan), has authorized this grant of an incentive stock
option (the Option) on
(the Grant Date) to purchase the number of shares of
the Companys common stock, par value $.003 per share (the Common Stock) set forth below to the
Executive, as an Eligible Employee of the Company or an Affiliate (collectively, the Company and
all Subsidiaries and Parents of the Company shall be referred to as the Employer). Unless
otherwise indicated, any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan. A copy of the Plan has been delivered to the Executive. By
signing and returning this Agreement, the Executive acknowledges having received and read a copy of
the Plan and agrees to comply with it, this Agreement and all applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1.
Tax Matters
. The Option granted hereby is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
Notwithstanding the foregoing, the Option will not qualify as an incentive stock option, among
other events, (i) if the Executive disposes of the Common Stock acquired pursuant to the Option at
any time during the two (2) year period following the date of this Agreement or the one (1) year
period following the date on which the Option is exercised; (ii) except in the event of the
Executives death or disability, as defined in Section 22(e)(3) of the Code, if the Executive is
not employed by the Company, any Subsidiary or any Parent at all times during the period beginning
on the date of this Agreement and ending on the day three (3) months before the date of exercise of
the Option; or (iii) to the extent the aggregate fair market value (determined as of the time the
Option is granted) of the Common Stock subject to incentive stock options which become
exercisable for the first time in any calendar year exceeds $100,000. To the extent that the
Option does not qualify as an incentive stock option, it shall not effect the validity of the
Option and shall constitute a separate non-qualified stock option.
2.
Grant of Option
. Subject in all respects to the Plan and the terms and conditions
set forth herein and therein, the Executive is hereby granted an Option to purchase from the
Company
shares of Common Stock, at a price per share of $
(the Option Price).
3.
Exercise
. (a) Except as set forth in subsections (b) through (f) below, the Option
shall vest and become exercisable as follows, provided that the Executive has not incurred a
Termination of Employment prior to the vesting date:
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Vesting Date
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Percentage Vested
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To the extent that the Option has become vested and exercisable with respect to a number of
shares of Common Stock as provided above, the Option may thereafter be exercised by the Executive,
in whole or in part, at any time or from time to time prior to the expiration of the Option as
provided herein and in accordance with Section 6.4(d) of the Plan, including, without limitation,
by the filing of any written form of exercise notice as may be required by the Committee and
payment in full of the Option Price multiplied by the number of shares of Common Stock underlying
the portion of the Option exercised. Upon expiration of the Option, the Option shall be canceled
and no longer exercisable.
There shall be no proportionate or partial vesting in the periods prior to each vesting date
and all vesting shall occur only on the appropriate vesting date. The Committee may, in its sole
discretion, provide for accelerated vesting of the Option at any time.
(b) Upon death or Disability of the Executive, the Option shall become fully vested and
exercisable.
(c) In
the event the Executives Service is terminated by the Company without Cause,
shares shall immediately vest and become exercisable.
(d) In the event of a change of Control in which the holders of the Companys outstanding
capital stock receive only cash in exchange for such capital stock, the Option shall become fully
vested and exercisable immediately prior to such Change in Control. In the event of any other
Change in Control, the unvested portion of the Option shall immediately become fully vested and
exercisable upon any termination of the Executives Service by the Company (or any successor
thereto) without Cause occurring after such Change in Control.
2
(e) In the event that the Executive engages in Detrimental Activity (as defined in
Exhibit A
hereto) prior to any exercise of the Option, the Option shall thereupon terminate
and expire. As a condition of the exercise of the Option, the Executive shall certify (or shall be
deemed to have certified) at the time of exercise in a manner acceptable to the Company that the
Executive is in compliance with the terms and conditions of the Plan and that the Executive has not
engaged in, and does not intend to engage in, any Detrimental Activity. In the event the Executive
engages in Detrimental Activity during the one (1) year period commencing on the date any portion
of the Option is exercised or becomes vested, the Company shall be entitled to recover from the
Executive at any time within one (1) year after such exercise or vesting, and the Executive shall
pay over to the Company, an amount equal to any gain realized as a result of the exercise (whether
at the time of exercise or thereafter). The foregoing provisions of this Section 3(e) shall cease
to apply upon a Change in Control.
(f) Notwithstanding any other provision to the contrary in this Agreement, any unvested
portion of the Option shall, upon such termination of the Executives Service, be non-exercisable
and shall be canceled.
4.
Option Term
. The term of each Option shall be ten (10) years after the Grant Date,
subject to earlier termination in the event of the Executives Termination as specified in Section
5 below.
5.
Termination
. Subject to the terms of the Plan and this Agreement, the Option, to
the extent vested at the time of the Executives Termination, shall remain exercisable as follows:
(a) In the event of the Executives Termination by reason of death or Disability, the Option
shall become fully vested and exercisable. The Option shall remain exercisable until the earlier
of (i) two (2) years from the date of such Termination or (ii) the expiration of the stated term of
the Option pursuant to Section 4 hereof.
(b) In the event of the Executives involuntary Termination without Cause, the vested portion
of the Option shall remain exercisable until the earlier of (i) one (1) year from the date of such
Termination or (ii) the expiration of the stated term of the Option pursuant to Section 4 hereof.
(c) In the event of the Executives voluntary Termination (other than a voluntary termination
described in Section 5(e) below), the vested portion of the Option shall remain exercisable until
the earlier of (i) ninety (90) days from the date of such Termination or (ii) the expiration of the
stated term of the Option pursuant to Section 4 hereof.
(d) In the event of the Executives Termination for Cause or in the event of the Executives
voluntary Termination within ninety (90) days after an event that would be grounds for a
Termination for Cause, the Executives entire Option (whether or not vested) shall terminate and
expire upon such Termination.
3
6.
Restriction on Transfer of Option
.
(a) No part of the Option shall be Transferred other than by will or by the laws of descent
and distribution and during the lifetime of the Executive, may be exercised only by the Executive
or the Executives guardian or legal representative. In addition, the Option shall not be
assigned, negotiated, pledged or hypothecated in any way (except as provided by law or herein), and
the Option shall not be subject to execution, attachment or similar process. Upon any attempt to
Transfer the Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, such transfer shall be void and of
no effect and the Company shall have the right to disregard the same on its books and records and
to issue stop transfer instructions to its transfer agent.
(b) Notwithstanding anything to the contrary contained in Section 6(a) above, the Option shall
be Transferable, in whole or in part, to a Family Member (as defined below) of the Executive. Any
portion of the Option that is Transferred to a Family Member pursuant to the preceding sentence (i)
may not be subsequently Transferred otherwise than by will or by the laws of descent and
distribution and (ii) remains subject to the terms of this Agreement. Any shares of Common Stock
acquired upon exercise of the Option by a permissible transferee of the Option or a permissible
transferee pursuant to a Transfer after the exercise of the Option shall be subject to the terms of
this Agreement.
(c) For purposes hereof, a Family Member shall mean, solely to the extent provided for in
Rule 701 under the Securities Act, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Executives household (other than a tenant or employee), a
trust in which these persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the employee) control the management of assets, and any other
entity in which these persons (or the employee) own more than fifty percent (50%) of the voting
interests or as otherwise defined in Rule 701 under the Securities Act.
7.
Rights as a Stockholder
. The Executive shall have no rights as a stockholder with
respect to any shares covered by the Option unless and until the Executive has become the holder of
record of the shares, and no adjustments shall be made for dividends in cash or other property,
distributions or other rights in respect of any such shares, except as otherwise specifically
provided for in the Plan.
8.
Provisions of Plan Control
. This Agreement is subject to all the terms, conditions
and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to
such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee
and as may be in effect from time to time. The Plan is incorporated herein by reference. If and
to the extent that
4
this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof (other than any exercise notice or other documents
expressly contemplated herein or in the Plan) and supersedes any prior agreements between the
Company and the Executive with respect to the subject matter hereof.
9.
Notices
. Any notice or communication given hereunder shall be in writing and shall
be deemed to have been duly given: (i) when delivered in person; (ii) two (2) days after being sent
by United States mail; or (iii) on the first business day following the date of deposit if
delivered by a nationally recognized overnight delivery service, to the appropriate party at the
address set forth below (or such other address as the party shall from time to time specify):
If to the Company, to:
MarketAxess Holdings Inc.
140 Broadway, 42
nd
Floor
New York, New York 10005
Attention: Compensation Committee
If to the Executive, to the address on file with the Company.
10.
No Obligation to Continue Employment
. This Agreement is not an agreement of
employment. This Agreement does not guarantee that the Employer will employ the Executive for any
specific time period, nor does it modify in any respect the Employers right to terminate or modify
the Executives employment or compensation.
[
End of text. Signature page follows.
]
5
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above
written.
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MARKETAXESS HOLDINGS INC.
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By:
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Richard M. McVey
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Chief Executive Officer
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Dated:
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By:
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James N.B. Rucker
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Chief Financial Officer
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Dated:
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EXECUTIVE:
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[Executive]
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Dated:
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6
EXHIBIT A
DEFINITION OF DETRIMENTAL ACTIVITY
For purposes of this Agreement,
Detrimental Activity
shall mean: (a) the disclosure to
anyone outside the Company or its affiliates, or the use in any manner other than in the
furtherance of the Companys or its affiliates business, without written authorization from the
Company, of any confidential information or proprietary information, relating to the business of
the Company or its affiliates that is acquired by an Executive prior to the termination of the
Executives Service; (b) activity while employed or performing services that results, or if known
could result, in the termination of the Executives Service that is classified by the Company as a
termination for Cause; (c) engaging in Solicitation (as defined below) without, in all cases,
written authorization from the Company; (d) the making of disparaging comments or statements by the
Executive, or the inducement of others by the Executive to make any disparaging comments or
statements, to the press, the Companys or its affiliates employees, consultants or any individual
or entity with whom the Company or its affiliates has a business relationship which could
reasonably be expected to adversely affect in any manner: (i) the conduct of the business of the
Company or its affiliates (including, without limitation, any products or business plans or
prospects); or (ii) the business reputation of the Company or its affiliates, or any of their
products, or their past or present officers, directors or employees; (e) without written
authorization from the Company, engaging in Competition (as defined below). For purposes of
sub-sections (a), (c), and (e) above, the Board of Directors of the Company shall each have
authority to provide the Executive with written authorization to engage in the activities
contemplated thereby and no other person shall have authority to provide the Executive with such
authorization. Except as specifically provided in any other agreement between the Executive and the
Company, Detrimental Activity shall not be deemed to occur after the end of the one (1) year period
following the date of termination of the Executives Service.
Competition
means the Executives participation, directly or indirectly, as an individual
proprietor, partner, stockholder, officer, employee, director, joint venturer, investor, lender,
consultant or in any capacity whatsoever (within the United States or in any foreign country where
the Company or its affiliates does business) in a business (whether a division, unit, subsidiary or
affiliate), other than the Company and its affiliates: (i) that is engaged in the design,
development, operation or promotion of a multi-dealer electronic platform or electronic commerce
network (ECN) for fixed income securities (or other fixed income instruments) information research,
distribution, trading and/or other transactions; (ii) whose principal business is electronic
distribution, research and/or trading of fixed income securities (or other fixed income
instruments); or (iii) that is not included in subsections (i) or (ii) and as to which the Company
or its affiliates have taken demonstrable steps at the time of termination of the Executives
employment. Competition does not include: (i) the Executives ownership of not more than 1% of the
total outstanding stock of a publicly held company; or (ii) the Executives performance of services
for any enterprise to the
7
extent such services are not performed, directly or indirectly, for a business in the aforesaid
Competition (including, without limitation, his performance of services for any entity which has a
division or business unit engaging in competition with the Companys or its affiliates business,
if such performance does not in any capacity, directly or indirectly, involve work with or
assistance to such division or business unit). The meaning of as to which the Company has taken
demonstrable steps shall be determined by the Board of Directors of the Company in good faith
based on written memoranda or similar writings or communications and such determination shall be
conclusive and binding for all purposes hereunder.
Solicitation
means (i) recruiting, soliciting or inducing any nonclerical employee or
consultant of the Company or its affiliates to terminate his or her employment with, or otherwise
cease or reduce his or her relationship with, the Company or such affiliate; (ii) hiring or
assisting another person or entity to hire any nonclerical employee or consultant of the Company or
its affiliates or any person who, to the Executives knowledge, within six months before was such a
person; or (iii) soliciting or inducing any person or entity to terminate, or otherwise to cease,
reduce, or diminish in any way its relationship with or prospective relationship with the Company
or its affiliates. You may however, if requested by any entity with which you are not affiliated,
serve as a reference for any person who at the time of the request is not an employee of, or
consultant to, the Company or its affiliates.
8
Exhibit 10.6
FORM OF INCENTIVE STOCK OPTION
AGREEMENT FOR MR. MILLET
STOCK OPTION AGREEMENT
PURSUANT TO THE
MARKETAXESS HOLDINGS INC.
2004 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
AGREEMENT (Agreement), dated as of
by and between MarketAxess
Holdings Inc. (the Company) and
T. Kelley Millet (the Executive).
Preliminary Statement
The Board of Directors of the Company (the Board) or a committee appointed by the Board (the
Committee) to administer the MarketAxess Holdings Inc. 2004 Stock Incentive Plan (Amended and
Restated effective April 28, 2006) (the Plan), has authorized this grant of an incentive stock
option (the Option) on
(the Grant Date) to purchase the number of shares of
the Companys common stock, par value $.003 per share (the Common Stock) set forth below to the
Executive, as an Eligible Employee of the Company or an Affiliate (collectively, the Company and
all Subsidiaries and Parents of the Company shall be referred to as the Employer). Unless
otherwise indicated, any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan. A copy of the Plan has been delivered to the Executive. By
signing and returning this Agreement, the Executive acknowledges having received and read a copy of
the Plan and agrees to comply with it, this Agreement and all applicable laws and regulations.
Accordingly, the parties hereto agree as follows:
1.
Tax Matters
. The Option granted hereby is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the Code).
Notwithstanding the foregoing, the Option will not qualify as an incentive stock option, among
other events, (i) if the Executive disposes of the Common Stock acquired pursuant to the Option at
any time during the two (2) year period following the date of this Agreement or the one (1) year
period following the date on which the Option is exercised; (ii) except in the event of the
Executives death or disability, as defined in Section 22(e)(3) of the Code, if the Executive is
not employed by the Company, any Subsidiary or any Parent at all times during the period beginning
on the date of this Agreement and ending on the day three (3) months before the date of exercise of
the Option; or (iii) to the extent the aggregate fair market value (determined as of the time the
Option is granted) of the Common Stock subject to incentive stock options which become
exercisable for the first time in any calendar year exceeds $100,000. To the extent that the
Option does not qualify as an
incentive stock option, it shall not effect the validity of the Option and shall constitute
a separate non-qualified stock option.
2.
Grant of Option
. Subject in all respects to the Plan and the terms and conditions
set forth herein and therein, the Executive is hereby granted an Option to purchase from the
Company
shares of Common Stock, at a price per share of $
(the Option Price).
3.
Exercise
. (a) Except as set forth in subsections (b) through (f) below, the Option
shall vest and become exercisable as follows, provided that the Executive has not incurred a
Termination of Employment prior to the vesting date:
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Vesting Date
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Percentage Vested
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To the extent that the Option has become vested and exercisable with respect to a number of
shares of Common Stock as provided above, the Option may thereafter be exercised by the Executive,
in whole or in part, at any time or from time to time prior to the expiration of the Option as
provided herein and in accordance with Section 6.4(d) of the Plan, including, without limitation,
by the filing of any written form of exercise notice as may be required by the Committee and
payment in full of the Option Price multiplied by the number of shares of Common Stock underlying
the portion of the Option exercised. Upon expiration of the Option, the Option shall be canceled
and no longer exercisable.
There shall be no proportionate or partial vesting in the periods prior to each vesting date
and all vesting shall occur only on the appropriate vesting date. The Committee may, in its sole
discretion, provide for accelerated vesting of the Option at any time.
(b) Upon death or Disability of the Executive, the Option shall become fully vested and
exercisable.
(c) In the event the Executives Service is terminated by the Company without Cause,
shares shall immediately vest and become exercisable.
(d) In the event of a change of Control in which the holders of the Companys outstanding
capital stock receive only cash in exchange for such capital stock, the Option shall become fully
vested and exercisable immediately prior to such Change in Control. In the event of any other
Change in Control, the unvested portion
2
of the Option shall immediately become fully vested and
exercisable upon (i) such
Change in Control if such Change in Control occurs within three (3) months following any
resignation by the Executive for Good Reason (as defined in the Letter Agreement) or a
termination of the Participants service by the Company (or the successor thereto) without Cause,
or (ii) any resignation by the Executive for Good Reason or termination of the Executives service
by the Company (or the successor thereto) without Cause occurring twenty-four (24) months after
such Change in Control and shall be exercisable in accordance with Section 5(b) below. .
(e) In the event that the Executive engages in Detrimental Activity (as defined in
Exhibit A
hereto) prior to any exercise of the Option, the Option shall thereupon terminate
and expire. As a condition of the exercise of the Option, the Executive shall certify (or shall be
deemed to have certified) at the time of exercise in a manner acceptable to the Company that the
Executive is in compliance with the terms and conditions of the Plan and that the Executive has not
engaged in, and does not intend to engage in, any Detrimental Activity. In the event the Executive
engages in Detrimental Activity during the one (1) year period commencing on the date any portion
of the Option is exercised or becomes vested, the Company shall be entitled to recover from the
Executive at any time within one (1) year after such exercise or vesting, and the Executive shall
pay over to the Company, an amount equal to any gain realized as a result of the exercise (whether
at the time of exercise or thereafter). The foregoing provisions of this Section 3(e) shall cease
to apply upon a Change in Control.
(f) Notwithstanding any other provision to the contrary in this Agreement, any unvested
portion of the Option shall, upon such termination of the Executives Service, be non-exercisable
and shall be canceled.
4.
Option Term
. The term of each Option shall be ten (10) years after the Grant Date,
subject to earlier termination in the event of the Executives Termination as specified in Section
5 below.
5.
Termination
. Subject to the terms of the Plan and this Agreement, the Option, to
the extent vested at the time of the Executives Termination, shall remain exercisable as follows:
(a) In the event of the Executives Termination by reason of death or Disability, the Option
shall become fully vested and exercisable. The Option shall remain exercisable until the earlier
of (i) two (2) years from the date of such Termination or (ii) the expiration of the stated term of
the Option pursuant to Section 4 hereof.
(b) In the event of the Executives involuntary Termination without Cause, the vested portion
of the Option shall remain exercisable until the earlier of (i) one (1) year from the date of such
Termination or (ii) the expiration of the stated term of the Option pursuant to Section 4 hereof.
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(c) In the event of the Executives voluntary Termination (other than a voluntary termination
described in Section 5(e) below), the vested portion of the Option
shall remain exercisable until the earlier of (i) ninety (90) days from the date of such
Termination or (ii) the expiration of the stated term of the Option pursuant to Section 4 hereof.
(d) In the event of the Executives Termination for Cause or in the event of the Executives
voluntary Termination within ninety (90) days after an event that would be grounds for a
Termination for Cause, the Executives entire Option (whether or not vested) shall terminate and
expire upon such Termination.
6.
Restriction on Transfer of Option
.
(a) No part of the Option shall be Transferred other than by will or by the laws of descent
and distribution and during the lifetime of the Executive, may be exercised only by the Executive
or the Executives guardian or legal representative. In addition, the Option shall not be
assigned, negotiated, pledged or hypothecated in any way (except as provided by law or herein), and
the Option shall not be subject to execution, attachment or similar process. Upon any attempt to
Transfer the Option or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, such transfer shall be void and of
no effect and the Company shall have the right to disregard the same on its books and records and
to issue stop transfer instructions to its transfer agent.
(b) Notwithstanding anything to the contrary contained in Section 6(a) above, the Option shall
be Transferable, in whole or in part, to a Family Member (as defined below) of the Executive. Any
portion of the Option that is Transferred to a Family Member pursuant to the preceding sentence (i)
may not be subsequently Transferred otherwise than by will or by the laws of descent and
distribution and (ii) remains subject to the terms of this Agreement. Any shares of Common Stock
acquired upon exercise of the Option by a permissible transferee of the Option or a permissible
transferee pursuant to a Transfer after the exercise of the Option shall be subject to the terms of
this Agreement.
(c) For purposes hereof, a Family Member shall mean, solely to the extent provided for in
Rule 701 under the Securities Act, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Executives household (other than a tenant or employee), a
trust in which these persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the employee) control the management of assets, and any other
entity in which these persons (or the employee) own more than fifty percent (50%) of the voting
interests or as otherwise defined in Rule 701 under the Securities Act.
7.
Rights as a Stockholder
. The Executive shall have no rights as a stockholder with
respect to any shares covered by the Option unless and until the Executive has become the holder of
record of the shares, and no adjustments shall be
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made for dividends in cash or other property,
distributions or other rights in respect of any such shares, except as otherwise specifically
provided for in the Plan.
8.
Provisions of Plan Control
. This Agreement is subject to all the terms, conditions
and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to
such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee
and as may be in effect from time to time. The Plan is incorporated herein by reference. If and
to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement contains the entire understanding of the parties with respect to the
subject matter hereof (other than any exercise notice or other documents expressly contemplated
herein or in the Plan) and supersedes any prior agreements between the Company and the Executive
with respect to the subject matter hereof.
9.
Notices
. Any notice or communication given hereunder shall be in writing and shall
be deemed to have been duly given: (i) when delivered in person; (ii) two (2) days after being sent
by United States mail; or (iii) on the first business day following the date of deposit if
delivered by a nationally recognized overnight delivery service, to the appropriate party at the
address set forth below (or such other address as the party shall from time to time specify):
If to the Company, to:
MarketAxess Holdings Inc.
140 Broadway, 42
nd
Floor
New York, New York 10005
Attention: Compensation Committee
If to the Executive, to the address on file with the Company.
10.
No Obligation to Continue Employment
. This Agreement is not an agreement of
employment. This Agreement does not guarantee that the Employer will employ the Executive for any
specific time period, nor does it modify in any respect the Employers right to terminate or modify
the Executives employment or compensation.
[
End of text. Signature page follows.
]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above
written.
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MARKETAXESS HOLDINGS INC.
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By:
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Richard M. McVey
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Chief Executive Officer
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Dated:
EXECUTIVE:
Dated:
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EXHIBIT A
DEFINITION OF DETRIMENTAL ACTIVITY
For purposes of this Agreement,
Detrimental Activity
shall mean: (a) the disclosure to
anyone outside the Company or its affiliates, or the use in any manner other than in the
furtherance of the Companys or its affiliates business, without written authorization from the
Company, of any confidential information or proprietary information, relating to the business of
the Company or its affiliates that is acquired by an Executive prior to the termination of the
Executives Service; (b) activity while employed or performing services that results, or if known
could result, in the termination of the Executives Service that is classified by the Company as a
termination for Cause; (c) engaging in Solicitation (as defined below) without, in all cases,
written authorization from the Company; (d) the making of disparaging comments or statements by the
Executive, or the inducement of others by the Executive to make any disparaging comments or
statements, to the press, the Companys or its affiliates employees, consultants or any individual
or entity with whom the Company or its affiliates has a business relationship which could
reasonably be expected to adversely affect in any manner: (i) the conduct of the business of the
Company or its affiliates (including, without limitation, any products or business plans or
prospects); or (ii) the business reputation of the Company or its affiliates, or any of their
products, or their past or present officers, directors or employees; (e) without written
authorization from the Company, engaging in Competition (as defined below). For purposes of
sub-sections (a), (c), and (e) above, the Board of Directors of the Company shall each have
authority to provide the Executive with written authorization to engage in the activities
contemplated thereby and no other person shall have authority to provide the Executive with such
authorization. Except as specifically provided in any other agreement between the Executive and the
Company, Detrimental Activity shall not be deemed to occur after the end of the one (1) year period
following the date of termination of the Executives Service.
Competition
means the Executives participation, directly or indirectly, as an individual
proprietor, partner, stockholder, officer, employee, director, joint venturer, investor, lender,
consultant or in any capacity whatsoever (within the United States or in any foreign country where
the Company or its affiliates does business) in a business (whether a division, unit, subsidiary or
affiliate), other than the Company and its affiliates: (i) that is engaged in the design,
development, operation or promotion of a multi-dealer electronic platform or electronic commerce
network (ECN) for fixed income securities (or other fixed income instruments) information research,
distribution, trading and/or other transactions; (ii) whose principal business is electronic
distribution, research and/or trading of fixed income securities (or other fixed income
instruments); or (iii) that is not included in subsections (i) or (ii) and as to which the Company
or its affiliates have taken demonstrable steps at the time of termination of the Executives
employment. Competition does not include: (i) the Executives ownership of not more than 1% of the
total outstanding stock of a publicly held company; or (ii) the Executives performance of services
for any enterprise to the
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extent such services are not performed, directly or indirectly, for a business in the aforesaid
Competition (including, without limitation, his performance of services for any entity which has a
division or business unit engaging in competition with the Companys or its affiliates business,
if such performance does not in any capacity, directly or indirectly, involve work with or
assistance to such division or business unit). The meaning of as to which the Company has taken
demonstrable steps shall be determined by the Board of Directors of the Company in good faith
based on written memoranda or similar writings or communications and such determination shall be
conclusive and binding for all purposes hereunder.
Solicitation
means (i) recruiting, soliciting or inducing any nonclerical employee or
consultant of the Company or its affiliates to terminate his or her employment with, or otherwise
cease or reduce his or her relationship with, the Company or such affiliate; (ii) hiring or
assisting another person or entity to hire any nonclerical employee or consultant of the Company or
its affiliates or any person who, to the Executives knowledge, within six months before was such a
person; or (iii) soliciting or inducing any person or entity to terminate, or otherwise to cease,
reduce, or diminish in any way its relationship with or prospective relationship with the Company
or its affiliates. You may however, if requested by any entity with which you are not affiliated,
serve as a reference for any person who at the time of the request is not an employee of, or
consultant to, the Company or its affiliates.
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