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 Participant’s continuing service with the Company or an
Affiliate through the achievement of such performance metric, may provide for
the issuance of shares of the Company’s 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 Participant’s 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 Company’s 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

 

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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 Company’s 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 Participant’s
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:

  (a)   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:

  (i)   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 Participant’s Termination of Employment
by the Company without Cause within 24 months after such Change in Control;

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  (ii)   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     (iii)   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.

  (b)   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:

  (i)   Immediately prior to the Change in Control, the Committee may determine
that the Performance Share Award will be canceled in its entirety; or     (ii)  
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.

  (c)   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.     (d)  
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.

  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:

      Vesting Date   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.

  (a)   Termination of Employment. In the event of the Participant’s 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.

  (b)   Change in Control.

  (i)   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.     (ii)   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.

          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

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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
Company’s 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 Company’s, 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:

  (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 (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.”

  (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 4.1 hereof.

     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 Participant’s
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.

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          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 Company’s 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

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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.

            MARKETAXESS HOLDINGS INC.
      By:           Richard M. McVey                Date:
                                        
             
 
Participant

Date:                                         
   

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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 Company’s attainment of pre-tax operating
income of $               per share of Common Stock before the Company’s 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 Company’s 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:

          Percentage of Shares of Common Stock     Represented by Performance
Shares to Level of Target Performance Achieved   be Awarded 120% and above  
150% 100%   100% 80%   50% less than 80%   0%

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.

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C. Miscellaneous.
     Notwithstanding anything to the contrary, the Committee shall calculate
pre-tax operating income in a manner that excludes the following:

  (i)   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

  (ii)   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.

     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.

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