STOCK OPTION AGREEMENT PURSUANT TO THE MARKETAXESS HOLDINGS INC. 2004 STOCK INCENTIVE PLAN (AS AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
Exhibit 10.6
(AS AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
AGREEMENT (“Agreement”),
dated January 19, 2011 by and between MarketAxess Holdings Inc.
(the “Company”) and Xxxxxxx X. XxXxx (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 January 19, 2011 (the “Grant Date”) to purchase the number of shares of
the Company’s 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
Executive’s 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 219,969 shares of Common Stock, at a price per share
of $21.56 (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 Executive has not incurred a
Termination of Employment prior to the vesting date:
| Incremental Percentage of | ||||
| Vesting Date | Options Vested | |||
January 15, 2012 |
12.5 | % | ||
January 15, 2013 |
25.0 | % | ||
January 15, 2014 |
25.0 | % | ||
January 15, 2015 |
25.0 | % | ||
January 15, 2016 |
12.5 | % | ||
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 the death or Disability of the Executive, fifty percent (50%) of the then unvested
portion the Option shall become fully vested and exercisable on the date of the Executive’s death
or Disability.
(c) Upon the Executive’s Termination (i) by the Company without Cause, or (ii) by the
Executive for Good Reason, any portion of the Option that
would have otherwise become vested in (x) the twelve (12) month period
following the date of such Termination if such Termination occurs outside of a
Change in Control Period or (y) the twenty-four (24) month period following the
date of such Termination if such Termination occurs during a Change in Control
Period, shall become immediately vested and exercisable on the date of such
Termination.
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“Change in Control Period” means the three (3) month period prior to, and the eighteen month period
following, a Change in Control that constitutes a Change in Control Event within the meaning of
Section 409A of the Code.
(d) Notwithstanding anything herein to the contrary, in the event of the Executive’s
Termination as a result of the Company’s non-extension of the letter agreement between the Company
and the Executive, dated January 19, 2011, in accordance with the terms thereof (a
“”Non-Extension”), the then unvested portion of the Options shall continue to become vested and
exercisable in accordance with Section 3(a), as if a Termination shall not have occurred.
(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 the Executive’s Termination, 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 Executive’s Termination as specified in Section
5 below.
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5. Termination. Subject to the terms of the Plan and this Agreement, the Option, to
the extent vested at the time of the Executive’s Termination, shall remain exercisable as follows:
(a) In the event of the Executive’s Termination by reason of death or Disability, the vested
portion of 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 Executive’s involuntary Termination without Cause, or the Executive’s
voluntary Termination for Good Reason, 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 Executive’s voluntary Termination without Good Reason (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) 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 Executive’s Termination as a result of a Non-Extension (i) the portion
of the Option that is vested on the date of such Termination shall remain exercisable for one (1)
year from the date of such Termination and (ii) any portion of the Option that becomes vested and
exercisable in accordance with Section 3(d) shall remain exercisable for one (1) year from the date
such portion of the Option becomes vested.
(e) In the event of the Executive’s Termination for Cause or in the event of the Executive’s
voluntary Termination without Good Reason within ninety (90) days after an event that would be
grounds for a Termination for Cause, the Executive’s entire Option (whether or not vested) shall
terminate and expire upon such Termination.
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
Executive, may be exercised only by the Executive or the Executive’s 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 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.
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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.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Compensation Committee
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
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 Employer’s right to terminate or modify
the Executive’s 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.
| MARKETAXESS HOLDINGS INC. |
||||
| By: | /s/ X. Xxxxxx Xxxxxx | |||
| X. Xxxxxx Millet | ||||
| President | ||||
| Dated: | January 19, 2011 | |||
EXECUTIVE:
| /s/ Xxxxxxx X. XxXxx | ||||
| Xxxxxxx X. XxXxx | ||||
Dated: |
January 19, 2011 | |||
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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 Company’s or its affiliate’s 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 Executive’s
Termination; (b) activity while employed or performing services that results, or if known could
result, in the Executive’s Termination 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 Company’s 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.
“Competition” means the Executive’s 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 Executive’s
employment. Competition does not include: (i) the Executive’s ownership of not more than 1% of the
total outstanding stock of a publicly held company; or (ii) the Executive’s performance of services
for any enterprise to the 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
Company’s 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.
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“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 Executive’s 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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