EX:4.1





Exhibit 4.1


MARKETAXESS HOLDINGS INC.




and




AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC




as Rights Agent




 






STOCKHOLDERS

RIGHTS AGREEMENT




Dated as of

June 2, 2008




 







 









 









TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Section	 	 	 	Page
	Section 1.

	 	Certain Definitions
	 	 	1	 
	Section 2.

	 	Appointment of Rights Agent
	 	 	9	 
	Section 3.

	 	Issue of Rights Certificates
	 	 	9	 
	Section 4.

	 	Form of Rights Certificate
	 	 	12	 
	Section 5.

	 	Countersignature and Registration
	 	 	12	 
	Section 6.

	 	Transfer, Split Up, Combination, and Exchange of Rights Certificates; Mutilated, Destroyed, Lost, or Stolen
Rights Certificates
	 	 	13	 
	Section 7.

	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	14	 
	Section 8.

	 	Cancellation and Destruction of Rights Certificates
	 	 	16	 
	Section 9.

	 	Reservation and Availability of Capital Stock
	 	 	16	 
	Section 10.

	 	Series A Preferred Stock Record Date
	 	 	18	 
	Section 11.

	 	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights
	 	 	19	 
	Section 12.

	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	26	 
	Section 13.

	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	26	 
	Section 14.

	 	Fractional Rights; Fractional Shares; Waiver
	 	 	30	 
	Section 15.

	 	Rights of Action
	 	 	31	 
	Section 16.

	 	Agreement of Rights Holders
	 	 	31	 
	Section 17.

	 	Rights Certificate Holder Not Deemed a Stockholder
	 	 	32	 
	Section 18.

	 	Concerning the Rights Agent
	 	 	32	 
	Section 19.

	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	32	 
	Section 20.

	 	Duties of Rights Agent
	 	 	33	 
	Section 21.

	 	Change of Rights Agent
	 	 	35	 
	Section 22.

	 	Issuance of New Rights Certificates
	 	 	36	 






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	Section	 	 	 	Page
	Section 23.

	 	Redemption and Termination
	 	 	36	 
	Section 24.

	 	Exchange
	 	 	38	 
	Section 25.

	 	Notice of Certain Events
	 	 	39	 
	Section 26.

	 	Notices
	 	 	40	 
	Section 27.

	 	Supplements and Amendments
	 	 	40	 
	Section 28.

	 	Successors
	 	 	41	 
	Section 29.

	 	Determinations and Actions by the Board of Directors
	 	 	41	 
	Section 30.

	 	Benefits of this Agreement
	 	 	41	 
	Section 31.

	 	Severability
	 	 	42	 
	Section 32.

	 	Governing Law
	 	 	42	 
	Section 33.

	 	Counterparts
	 	 	42	 
	Section 34.

	 	Descriptive Headings
	 	 	42	 






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     This STOCKHOLDERS RIGHTS AGREEMENT, dated as of June 2, 2008 (the “Effective Date”) by
and between MarketAxess Holdings Inc., a Delaware corporation (the “Company”), and American
Stock Transfer & Trust Company, LLC a New York limited liability trust company (the “Rights
Agent”).



     WHEREAS, effective June 2, 2008 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company authorized and declared a distribution of one right for each share of
common stock, par value $0.003 per share, of the Company (the
“Common Stock”) and each share of nonvoting common
stock, par value $0.003 per share, of the Company (the
“Nonvoting Common Stock”)  outstanding
at the Close of Business (as such term is defined herein) on June 20, 2008 (the “Record
Date”), and has authorized the issuance of one such right (as such number may hereafter be
adjusted pursuant hereto) for each  Common Share that shall become outstanding (whether
originally issued or delivered from the Company’s treasury) between the Record Date and, except as
otherwise provided in Section 22 herein, the Distribution Date, each such right initially
representing the right to purchase, upon the terms and subject to the conditions hereinafter set
forth, one Unit of Series A Preferred Stock (each a “Right” and together with all other
such rights distributed or issued pursuant hereto, the “Rights”).



     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereby agree as follows:



     Section 1. Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:



     (a) “Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of shares of Voting Stock
representing 20% or more of the total Voting Power of the aggregate of all shares of Voting Stock
then outstanding, but shall not include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any trustee or fiduciary holding
Voting Stock for, or pursuant to the terms of, any such plan, acting in such capacity.
Notwithstanding the foregoing:




     (i) No Person shall become an “Acquiring Person” as the result of an acquisition of
Voting Stock by the Company, which, by reducing the number of shares of Voting Stock
outstanding, increases the proportionate percentage of the total Voting Power represented by
all shares of Voting Stock Beneficially Owned by such Person, together with all Affiliates
and Associates of such Person, to 20% or more of the total Voting Power of the aggregate of
all shares of Voting Stock then outstanding; provided, however, that if a
Person, together with all Affiliates and Associates of such Person, shall become the
Beneficial Owner of shares of Voting Stock representing 20% or more of total Voting Power of
the aggregate of all shares of Voting Stock then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Company, become the Beneficial
Owner of any additional shares of Voting Stock (other than shares issued by the Company as a
dividend or distribution made pro rata to all holders of Common Shares), then, subject to
Section 1(a)(ii), such Person shall be deemed to be an “Acquiring Person;”



 









 







     (ii) If the Board of Directors determines in good faith that a Person who would
otherwise be an “Acquiring Person,” as defined pursuant to this Section 1(a), has become
such inadvertently, and such Person divests as promptly as practicable a sufficient number
of shares of Voting Stock so that such Person would no longer be an “Acquiring Person,” as
defined pursuant to this Section 1(a), then such Person shall not be deemed to be an
“Acquiring Person” for any purposes of this Agreement; and



     (iii) If a Person would otherwise be deemed an “Acquiring Person” upon the adoption of
this Agreement, such Person (herein referred to as a “Grandfathered Stockholder”)
will not be deemed an “Acquiring Person” for purposes of this Agreement unless and until,
subject to Section 1(a)(ii), such Grandfathered Stockholder, or any Affiliate or Associate
of such Grandfathered Stockholder, acquires Beneficial Ownership of additional shares of
Voting Stock after adoption of this Agreement in excess of one percent (1%) of the number of
shares of Common Stock outstanding as of the Rights Dividend Declaration Date, in which
case, such Person shall no longer be deemed a Grandfathered
Stockholder and shall be deemed an “Acquiring Person”; and



     (iv) TCV shall not be an “Acquiring Person” pursuant to this Section 1(a) for so long as TCV shall be the Beneficial Owner of shares of Voting Stock and Nonvoting  Common Stock  representing, in
 the aggregate, less than 19.9% of the   sum of (x)
the total  Voting  Power of the   aggregate of  all  shares of Voting  Stock  then
outstanding   plus (y) the  total Voting Power of the aggregate of all shares of
Voting  Stock into  which all  outstanding shares  of Nonvoting Common
Stock are then  convertible, plus (z) the total Voting Power of the
aggregate of all shares of Voting Stock issuable upon exercise of
warrants to purchase Common Stock issued by the Company to TCV.



     (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the Exchange Act Regulations, as in effect on the date of this
Agreement; provided, however, that no director or officer of the Company shall be
deemed an Affiliate or Associate of any other director or officer of the Company solely as a result
of his or her being a director or officer of the Company.



     (c) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“Beneficially Own” and to have “Beneficial Ownership” of any securities:




     (i) that such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly (as determined pursuant to Rule 13d-3 of the Exchange Act
Regulations as in effect on the date of this Agreement); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of, any security if the agreement, arrangement, or understanding to
vote such security that would otherwise render such Person the Beneficial Owner of such
security (1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the Exchange Act and the Exchange Act Regulations, and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report);




     (ii) that such Person or any of such Person’s Affiliates or Associates has (A) the
right to acquire (whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding, whether or not in writing
(other than customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than these Rights), warrants, or options,
or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own or to have Beneficial Ownership of securities
tendered pursuant to a tender or exchange offer made in accordance with the



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Exchange Act Regulations by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement, or understanding
(except to the extent contemplated by the proviso to subparagraph (i) of this paragraph
(c)); or




     (iii) that are Beneficially Owned, directly or indirectly, by any other Person (or any
Affiliate or Associate of such Person) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement, or understanding, whether or not
in writing (other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to subparagraph
(i) of this paragraph (c)), or disposing of any such securities.



     Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding that such
Person would be deemed to Beneficially Own hereunder.



     (d) “Board of Directors” shall mean the Board of Directors of the Company or any duly
authorized committee thereof.



     (e) “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which
banking institutions in New York City, New York are authorized or obligated by law or executive
order to close.



     (f) “Certificate of Incorporation” shall mean the Amended and Restated Certificate of
Incorporation of the Company, as amended, as filed with the Office of the Secretary of State of the
State of Delaware, together with the Certificate of Designation of the Series A Preferred Stock of
the Company adopted contemporaneously with the approval of this Agreement, as the same may
hereafter be amended or restated.



     (g) “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on
such date; provided, however, that if such date is not a Business Day, it shall
mean 5:00 P.M., New York City time, on the next succeeding Business Day.


     (h) “Common
Shares” shall mean, collectively, shares of Common Stock and
Nonvoting Common Stock.


     (i) “Common Stock” shall have the meaning set forth in the Preamble to this Agreement.



     (j) “Common Equity Interest” when used with reference to any Person other than the
Company shall mean the class or series of capital stock (or equity interest) with the greatest
voting power (in relation to any other classes or series of capital stock (or equity interest)) of
such other Person.



     (k) “Definitive Acquisition Agreement” shall mean any agreement entered into by the
Company that is conditioned on the approval by the holders of not less than a majority of the



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outstanding shares of Common Stock at a meeting of stockholders with respect to (i) a merger,
consolidation, recapitalization, reorganization, share exchange, business combination or similar
transaction involving the Company or (ii) the acquisition in any manner, directly or indirectly, of
more than 50% of the consolidated total assets (including, without limitation, equity securities of
its subsidiaries) of the Company.



     (l) “Distribution Date” shall have the meaning set forth in Section 3(a).



     (m) “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b).



     (n) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



     (o) “Exchange Act Regulations” shall mean the General Rules and Regulations under the
Exchange Act.



     (p) “Expiration Date” has the meaning set forth in Section 7(a).



     (q) “Final Expiration Date” has the meaning set forth in Section 7(a).



     (r) “Grandfathered Stockholder” has the meaning set forth in Section 1(a)(iii).


     (s) “Nonvoting  Common Stock” shall have the meaning set forth in the Preamble to this Agreement.


     (t) “Outside Meeting Date” has the meaning set forth in Section 23(b).



     (u) “Person” shall mean any individual, partnership (general or limited), limited
liability company, firm, corporation, association, trust, unincorporated organization, or other
entity, as well as any syndicate or group deemed to be a Person under Section 14(d)(2) of the
Exchange Act.



     (v) “Principal Party” shall have the meaning set forth in Section 13(b).



     (w) “Purchase Price” shall have the meaning set forth in Section 7(b).



     (x) “Qualified Offer” shall mean an offer determined by a majority of the Independent
Directors to have each of the following characteristics:




     (i) a fully-financed, all-cash tender offer, or an exchange offer offering shares of
common stock of the offeror, or a combination thereof, in each such case for all of the
outstanding shares of Common Stock at the same per-share consideration;




     (ii) an offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange
Act;




     (iii) an offer whose per-share offer price is greater than the highest reported market
price for the Common Stock in the immediately preceding 24 months, with, in the case of an
offer that includes shares of common stock of the offeror, such per-share offer price being
determined using the lowest reported market price for common stock of the offeror during the
five trading days immediately preceding and the five trading days



4









 







immediately following the commencement of such offer within the meaning of Rule
14d-2(a) under the Exchange Act;




     (iv) an offer that, within twenty Business Days after the commencement date of the
offer (or within ten Business Days after any increase in the offer consideration), does not
result in a nationally recognized investment banking firm retained by the Board of Directors
of the Company rendering an opinion to the Board of Directors of the Company that the
consideration being offered to the stockholders of the Company is either unfair or
inadequate;




     (v) if the offer includes shares of common stock of the offeror, an offer pursuant to
which (A) the offeror shall permit representatives of the Company (including a
nationally-recognized investment banking firm retained by the Board of Directors of the
Company and legal counsel and an accounting firm designated by the Company) to have access
to such offeror’s books, records, management, accountants and other appropriate outside
advisors for the purposes of permitting such representatives to conduct a due diligence
review of the offeror in order to permit the Board of Directors of the Company to evaluate
the offer and make an informed decision and, if requested by the Board of Directors of the
Company, to permit such investment banking firm (relying as appropriate on the advice of
such legal counsel) to be able to render an opinion to the Board of Directors of the Company
with respect to whether the consideration being offered to the stockholders of the Company
is fair from a financial point of view and (B) within ten Business Days after such
representatives of the Company (including a nationally-recognized investment banking firm
retained by the Board of Directors of the Company and legal counsel and an accounting firm
designated by the Company) shall have notified the Company and the offeror that it had
completed such due diligence review to its satisfaction (or, following completion of such
due diligence review, within ten Business Days after any increase in the consideration being
offered), such investment banking firm does not render an opinion to the Board of Directors
of the Company that the consideration being offered to the stockholders of the Company is
either unfair or inadequate and such investment banking firm does not, after the expiration
of such ten Business Day period, render an opinion to the Board of Directors of the Company
that the consideration being offered to the stockholders of the Company has become either
unfair or inadequate based on a subsequent disclosure or discovery of a development or
developments that have had or are reasonably likely to have a material adverse effect on the
value of the common stock of the offeror;




     (vi) an offer that is subject to only the minimum tender condition described below in
Section 1(v)(ix) and other customary terms and conditions, which conditions shall not
include any financing, funding or similar conditions or any requirements with respect to the
offeror or its agents being permitted any due diligence with respect to the books, records,
management, accountants or other outside advisors of the Company;




     (vii) an offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that the offer will remain open for at least 120 Business Days
and, if a Special Meeting is duly requested in accordance with Section 23(b), for at least
fifteen Business Days after the date of the Special Meeting or,



5









 







if
no Special Meeting is held within ninety Business Days following receipt of the Special
Meeting Notice in accordance with Section 23(b), for at least fifteen Business Days
following such ninety Business Day period;




     (viii) an offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that, in addition to the minimum time periods specified above in
Section 1(v)(vii), the offer, if it is otherwise to expire prior thereto, will be extended
for at least twenty Business Days after any increase in the consideration being offered or
after any bona fide alternative offer is commenced within the meaning of Rule 14d-2(a) under
the Exchange Act; provided, however, that such offer need not remain open,
as a result of Section 1(v)(vii) and this Section 1(v)(viii), beyond (A) the time that any
other offer satisfying the criteria for a Qualified Offer is then required to be kept open
under such Section 1(v)(vii) and this Section 1(v)(viii) or (B) the expiration date, as such
date may be extended by public announcement (with prompt written notice to the Rights Agent)
in compliance with Rule 14e-1 under the Exchange Act, of any other tender offer for the
Common Stock with respect to which the Board of Directors of the Company has agreed to
redeem the Rights immediately prior to acceptance for payment of Common Stock thereunder
(unless such other offer is terminated prior to its expiration without any Common Stock
having been purchased thereunder) or (C) one Business Day after the stockholder vote with
respect to approval of any Definitive Acquisition Agreement has been officially determined
and certified by the inspectors of elections;




     (ix) an offer that is conditioned on a minimum of at least two-thirds of the
outstanding shares of the Common Stock not held by the Person making such offer (and such
Person’s Affiliates and Associates) being tendered and not withdrawn as of the offer’s
expiration date, which condition shall not be waivable;




     (x) an offer pursuant to which the Company has received an irrevocable written
commitment of the offeror to consummate, as promptly as practicable upon successful
completion of the offer, a second step transaction whereby all shares of the Common Stock
not tendered into the offer will be acquired at the same consideration per share actually
paid pursuant to the offer, subject to stockholders’ statutory appraisal rights, if any;




     (xi) an offer pursuant to which the Company and its stockholders have received an
irrevocable written commitment of the offeror that no amendments will be made to the offer
to reduce the consideration being offered or to otherwise change the terms of the offer in a
way that is adverse to a tendering stockholder;




     (xii) an offer (other than an offer consisting solely of cash consideration) pursuant
to which the Company has received the written representation and certification of the
offeror and, in their individual capacities, the written representations and certifications
of the offeror’s Chief Executive Officer and Chief Financial Officer, that (A) all facts
about the offeror that would be material to making an investor’s decision to accept the
offer have been fully and accurately disclosed as of the date of the commencement of the
offer within the meaning of Rule 14d-2(a) under the Exchange



6









 







Act, (B) all such new facts
will be fully and accurately disclosed on a prompt basis during the entire period during which the offer remains open, and (C) all required
Exchange Act reports will be filed by the offeror in a timely manner during such period; and




     (xiii) if the offer includes non-cash consideration, (A) the non-cash portion of the
consideration offered must consist solely of common stock of a Person that is a
publicly-owned United States corporation, (B) such common stock must be freely tradable and
listed or admitted to trading on either the New York Stock Exchange or NASDAQ, (C) no
stockholder approval of the issuer of such common stock is required to issue such common
stock, or, if such approval required, such approval has already been obtained, (D) no Person
(including such Person’s Affiliates and Associates) beneficially owns more than 15% of the
voting stock of the issuer of such common stock at the time of commencement of the offer or
at any time during the term of the offer, (E) no other class of voting stock of the issuer
of such common stock is outstanding and (F) the issuer of such common stock meets the
registrant eligibility requirements for use of Form S-3 for registering securities under the
Securities Act, including the filing of all required Exchange Act reports in a timely manner
during the twelve calendar months prior to the date of commencement of such offer.


For the purposes of this definition of “Qualified Offer,” “fully financed” shall
mean that the offeror has sufficient funds for the offer and related expenses which shall be
evidenced by (1) firm, unqualified, written commitments from responsible financial institutions
having the necessary financial capacity, accepted by the offeror, to provide funds for such offer
subject only to customary terms and conditions, (2) cash or cash equivalents then available to the
offeror, set apart and maintained solely for the purpose of funding the offer with an irrevocable
written commitment being provided by the offeror to the Board of Directors of the Company to
maintain such availability until the offer is consummated or withdrawn or (3) a combination of the
foregoing; which evidence has been provided to the Company prior to, or upon, commencement of the
offer. If an offer becomes a Qualified Offer in accordance with this definition, but subsequently
ceases to be a Qualified Offer as a result of the failure at a later date to continue to satisfy
any of the requirements of this definition, such offer shall cease to be a Qualified Offer and the
provisions of Section 23(b) shall no longer be applicable to such offer, provided that the actual
redemption of the Rights pursuant to Section 23(b) shall not have already occurred.




     (y) “Record Date” shall have the meaning set forth in the Preamble to this Agreement.



     (z) “Redemption Price” shall have the meaning set forth in Section 23(a).



     (aa) “Redemption Resolution” shall have the meaning set forth in Section 23(b).



     (bb) “Right” and “Rights” shall have the meaning set forth in the Preamble to
this Agreement.



     (cc) “Rights Certificates” shall have the meaning set forth in Section 3(a).




7











 





     (dd) “Rights Dividend Declaration Date” shall have the meaning set forth in the
Preamble to this Agreement.



     (ee) “Section 11(a)(ii) Event” shall mean the event described in Section 11(a)(ii)
hereof that triggers the adjustment provided in Section 11(a)(ii).



     (ff) “Section 13 Event” shall mean any event described in clause (x), (y), or (z) of
Section 13(a) hereof.



     (gg “Securities Act” shall mean the Securities Act of 1933, as amended.



     (hh) “Series A Preferred Stock” shall mean the Series A Preferred Stock of the
Company, par value $0.001 per share, having the voting rights, powers, designations, preferences,
and relative, participating, optional, or other special rights and qualifications, limitations, and
restrictions set forth in Exhibit C hereof.



     (ii) “Special Meeting” has the meaning set forth in Section 23(b).



     (jj) “Special Meeting Notice” has the meaning set forth in Section 23(b).



     (kk) “Special Meeting Period” has the meaning set forth in Section 23(b).



     (ll) “Stock Acquisition Date” shall mean the first date of public announcement
(including, without limitation, the filing of any report pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become such.



     (mm) “Subsidiary” shall mean, with reference to any Person, any other Person of which
(1) a majority of the Voting Power of the voting securities or equity interests is Beneficially
Owned, directly or indirectly, by such first-mentioned Person or otherwise controlled by such
first-mentioned Person, or (2) an amount of voting securities or equity interests sufficient to
elect at least a majority of the directors or equivalent governing body of such other Person is
Beneficially Owned, directly or indirectly, by such first-mentioned Person, or otherwise controlled
by such first-mentioned Person.



     (nn)  “TCV” shall mean
(i) TCV VI, L.P., a Delaware limited partnership; (ii) TCV Member Fund, L.P., a Delaware limited
partnership; (iii) any Person who is directly or indirectly responsible for the formation,
management, operations, oversight or administration of the Persons referred to in the preceding
clauses (i) and (ii) (including, without limitation, any principals, partners or employees of any
such Person); and (iv) any investment fund directly or indirectly formed, managed or controlled by
 any one or more Persons referred to in the preceding clause (iii).



     (oo) “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13
Event.



     (pp) “Unit” has the meaning set forth in Section 7(b).



     (qq) “Voting Power” when used with reference to the Voting Securities of any Person
shall mean the number of votes (whether cast in person, by proxy, or by written consent) entitled
(1) to be cast generally in the election of directors or members of the governing body of such
Person (if such person is a corporation or is managed by or under the direction of a governing body
performing functions and having obligations similar to those of a corporate board of directors) or
(2) to participate in the management and control of such Person (if such Person is not a
corporation and is not managed by or under the direction of a governing body performing functions
and having obligations similar to those of a corporate board of directors).



8









 





     (rr) “Voting Securities” when used in reference to any Person, shall mean the
outstanding capital stock, equity interest, or other voting securities of such Person, in each case
entitling the holder thereof (1) to cast votes, in person or by proxy, or to act by written
consent, in the election of directors or members of the governing body of such Person (if such
person is a corporation or is managed by or under the direction of a governing body performing
functions and having obligations similar to those of a corporate board of directors) or (2) to
participate in the management and control of such Person (if such Person is not a corporation and
is not managed by or under the direction of a governing body performing functions and having
obligations similar to those of a corporate board of directors).



     (ss) “Voting Stock” shall mean the Common Stock, the Series A Preferred Stock, and any
other class or series of securities of the Company entitled to vote generally, together with the
Common Stock, in the election of directors of the Company.



     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company and the holders of the Rights (who, in accordance with Section 4
hereof, shall prior to the Distribution Date also be holders of Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. With the
consent of the Rights Agent, the Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable. The Rights Agent shall have no duty to supervise, and in no event
shall it be liable for, the acts or omissions of any such co-Rights Agent.



     Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the Close of
Business on the tenth Business Day after the Stock Acquisition Date and (ii) the Close of Business
on the tenth Business Day (or such later date as may be determined by action of a majority of the
Board of Directors prior to such time as any Person becomes an Acquiring Person and of which later
date the Company will give the Rights Agent prompt written notice) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
holding Voting Stock for, or pursuant to the terms of, any such plan, acting in such capacity) is
first published or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act
Regulations or any successor rule, if upon consummation thereof such Person would be the Beneficial
Owner of shares of Voting Stock representing 20% or more of the total Voting Power of the aggregate
of all shares of Voting Stock then outstanding (including any such date that is after the date of
this Agreement and prior to the issuance of the Rights) (the earlier of (i) and (ii) above being
the “Distribution Date”):




	 	(x)	 	the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for shares of Common Stock or Nonvoting Common Stock, as applicable, registered in the names
of the holders of shares of Common Stock or Nonvoting Common Stock, as applicable, as of and subsequent
to the Record Date (which certificates for shares of Common
Stock shall be deemed also to be certificates for Rights) and
not by separate rights certificates; and




9









 












	 	(y)	 	the Rights will be transferable only in
connection with the transfer of the underlying shares of Common
Stock or Nonvoting Common Stock, as applicable (including a transfer to the Company).




As soon as practicable after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent,
if so requested, will send) by first-class, insured, postage prepaid mail, to each record holder of
 Common Shares  as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights certificates, in substantially the
form of Exhibit A (the “Rights Certificates”), evidencing one Right for each  Common Share so held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per  Common Share  has been made pursuant to Section 11(i) or
Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company may make
the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.




     (b) As promptly as practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Series A Preferred Stock in substantially the form attached hereto as
Exhibit B and which may be appended to certificates that represent  Common Shares
(hereinafter referred to as the “Summary of Rights”), by first-class, postage prepaid mail,
to each record holder of Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders thereof together with a copy
of the Summary of Rights attached thereto. Until the earlier of the Distribution Date or the
Expiration Date, the surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares represented thereby.



     (c) Rights shall, without any further action, be issued in respect of all  Common
Shares that become outstanding (whether originally issued or delivered from the Company’s treasury)
after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date;
provided, that with respect to any shares of Common Stock issued upon conversion of shares of Nonvoting Common Stock, no additional Rights shall be issued, but the Rights attached to such shares of Nonvoting Common Stock shall be attached to such shares of Common Stock after such conversion.
Certificates, representing such Common Shares, issued after the Record Date shall bear the
following legend:




“This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Stockholders Rights Agreement
between MarketAxess Holdings Inc. (the “Company”) and
American Stock Transfer & Trust Company, LLC (the “Rights
Agent”) dated as of June 2, 2008 (the “Rights
Agreement”), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal office of
the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer



10









 







be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge after receipt of a
written request therefor. Under certain circumstances, as set forth
in the Rights Agreement, Rights that are Beneficially Owned by any
Person who is, was, or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such capitalized terms are defined in the
Rights Agreement), or specified transferees of such Acquiring Person
(or Affiliate or Associate thereof) may become null and void.”


After the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, if new certificate(s) representing Common Shares are issued in connection with the transfer, split up, combination, or exchange of certificate(s) representing Common Shares or if new certificate(s) representing Common Shares are issued to replace any certificate(s) that have been
mutilated, destroyed, lost, or stolen, then such new certificate(s) shall bear the foregoing legend.  With respect to all certificates containing the foregoing legend, until the earlier of the Distribution Date or the Expiration Date, the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates alone and registered holders of the Common Shares shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Shares represented by such certificates.  In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares that are no longer outstanding.




     Section 4. Form of Rights Certificate. (a)  The Rights Certificates (and the forms of
election to purchase and of assignment and the certificate to be printed on the reverse thereof)
shall be substantially in the form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries, or endorsements printed thereon as the
Company may deem appropriate (but which do not affect the rights, duties, or responsibilities of
the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or any rule or regulation thereunder or with any rule or
regulation of any stock exchange upon which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 7, 11, 13, 22, 23, 24, and 27 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Distribution Date and on their
face shall entitle the holders thereof to purchase such number of Units of Series A Preferred Stock
as shall be set forth therein at the price set forth therein, but the amount and type of
securities, cash, or other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.



     (b) Any Rights Certificate issued pursuant hereto that represents Rights Beneficially Owned
by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person



11









 




(or of any such Associate or Affiliate) that becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and that receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or such Associate or Affiliate)
or to any Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing written or oral agreement, arrangement, or understanding regarding either the
transferred Rights,  Common Shares, or the Company, or (B) a transfer that the Board of
Directors has determined in good faith to be part of a plan, agreement, arrangement, or
understanding that has as a primary purpose or effect the avoidance of Section 7(e) hereof shall,
upon the written direction of the Board of Directors, contain (to the extent feasible), the
following legend:





“The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such
capitalized terms are defined in the Stockholders Rights Agreement,
dated as of June 2, 2008 (the “Rights Agreement”), by and between
MarketAxess Holdings Inc. and American Stock Transfer & Trust
Company, LLC, as Rights Agent). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement.”



     Section 5. Countersignature and Registration. (a)  Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Vice Chairman of the Board, or its Treasurer, shall have affixed thereto the
Company’s corporate seal (or a facsimile thereof), and shall be attested by the Company’s Secretary
or one of its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or by facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to hold such offices
prior to the countersigning of such Rights Certificates by the Rights Agent or did not hold such
offices at the date of such Rights Certificates. No Rights Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual or facsimile signature
of an authorized officer, and such countersignature upon any Rights Certificate shall be conclusive
evidence, and the only evidence, that such Rights Certificate has been duly countersigned as
required hereunder.



     (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its
office designated for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such books shall show the
name and address of each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate, and the date of each Rights Certificate.



     Section 6. Transfer, Split Up, Combination, and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost, or Stolen Rights Certificates. (a)  Subject to the provisions of
Sections 4(b), 7(e), and 14 hereof, at any time after the Close of Business on the Distribution



12









 




Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate
or Certificates (other than Rights Certificates representing Rights that have become null and void
pursuant to Section 7(e) hereof, that have been redeemed pursuant to Section 23 hereof, or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined, or
exchanged for another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of Units of Series A Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine, or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined, or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and executed the certificate set forth in the form of
assignment on the reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request; whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination, or exchange of Rights Certificates.




     (b) If a Rights Certificate shall be mutilated, lost, stolen, or destroyed, upon request by
the registered holder of the Rights represented thereby and upon payment to the Company and the
Rights Agent of all reasonable expenses incident thereto, there shall be issued, in exchange for
and upon cancellation of the mutilated Rights Certificate, or in substitution for the lost, stolen,
or destroyed Rights Certificate, a new Rights Certificate, in substantially the form of the prior
Rights Certificate, of like tenor and representing the equivalent number of Rights, but, in the
case of loss, theft, or destruction, only upon receipt of evidence satisfactory to the Company and
the Rights Agent of such loss, theft or destruction of such Rights Certificate and, if requested by
the Company or the Rights Agent, indemnity also satisfactory to it.



     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a)  Prior
to the earlier of (i) the Close of Business on June 2, 2011 (the “Final Expiration Date”),
or (ii) the time at which the Rights are redeemed as provided in Section 23 hereof or (iii) the
time at which the Rights are exchanged as provided in Section 24 hereof (the earlier of (i), (ii),
and (iii) being the “Expiration Date”), the registered holder of any Rights Certificate
may, subject to the provisions of Sections 7(e), 9(c), and 9(f) hereof, exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price
(as hereinafter defined) for the number of Units of Series A Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) for which such
surrendered Rights are then exercisable.



13









 





     (b) The purchase price for each one one-thousandth of a share of Series A Preferred Stock
purchasable upon exercise of a Right shall be $40.00 (as adjusted from time to time as provided in
Sections 11 and 13(a) hereof) (the “Purchase Price”). The Purchase Price shall be subject
to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)(2) below. Each one
one-thousandth of a share of Series A Preferred Stock shall be referred to herein as a
“Unit” of Series A Preferred Stock.



     (c) (i) Subject to Section 14(b) hereof, following the Distribution Date, the Company may (at
the direction of the Board of Directors) deposit with a corporation in good standing organized
under the laws of the United States or any State of the United States, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority (the “Depositary Agent”) certificates
representing the shares of Series A Preferred Stock that may be acquired upon exercise of the
Rights and may cause such Depositary Agent to enter into an agreement pursuant to which the
Depositary Agent shall issue receipts representing interests in the shares of Series A Preferred
Stock so deposited.




     (ii) Upon receipt of a Rights Certificate representing exercisable Rights, with the
form of election to purchase and the certificate duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price for the Units of Series A
Preferred Stock (or, following a Triggering Event, other securities, cash, or other assets,
as the case may be) to be purchased thereby as set forth below and an amount equal to any
applicable tax or charge required to be paid by the holder of such Rights Certificate in
accordance with Section 9 hereof, or evidence satisfactory to the Company of payment of such
tax or charge, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i)(A) requisition from any transfer agent of the Series A Preferred Stock certificates
representing such number of shares of Series A Preferred Stock (or fractions of shares that
are integral multiples of one one-thousandth of a share of Series A Preferred Stock) as are
to be purchased and the Company will direct its transfer agent to comply with all such
requests, and/or (B) requisition from the Depositary Agent depositary receipts representing
such number of Units of Series A Preferred Stock as are to be purchased and the Company will
direct the Depositary Agent to comply with all such requests, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or such depositary
receipts, cause the same to be delivered to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate. In the event that the Company is
obligated to issue Common Shares or other securities of the Company, pay cash, and/or
distribute other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such Common Shares, other securities, cash, and/or other
property is available for distribution by the Rights Agent, if and when necessary to comply
with this Agreement. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified or bank check or
money order payable to the order of the Company.



14









 





     (d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or names as may be designated by such holder,
subject to the provisions of Sections 6 and 14 hereof.



     (e) Notwithstanding anything in this Agreement to the contrary, from and after the time that
any Person becomes an Acquiring Person, any Rights Beneficially Owned by (i) an Acquiring Person or
an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and who receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in such Acquiring Person
(or any such Associate or Affiliate) or to any Person with whom the Acquiring Person (or such
Associate or Affiliate) has any continuing written or oral agreement, arrangement, or understanding
regarding the transferred Rights, Common Shares, or the Company or (B) a transfer that the
Board of Directors has determined in good faith to be part of a plan, agreement, arrangement, or
understanding that has as a primary purpose or effect the avoidance of this Section 7(e), shall be
null and void without any further action, and any holder of such Rights thereafter shall have no
rights or preferences whatsoever with respect to such Rights, whether under any provision of this
Agreement, the Rights Certificates, or otherwise (including, without limitation, rights and
preferences pursuant to Sections 7, 11, 13, 23, and 24 hereof). The Company shall use reasonable
efforts to ensure compliance with the provisions of this Section 7(e) and Section 4(b), but neither
the Company nor the Rights Agent shall have any liability to any holder of Rights or any other
Person as a result of the Company’s failure to make any determination under this Section 7(e) or
such Section 4(b) with respect to an Acquiring Person or its Affiliates, Associates, or
transferees.



     (f) Notwithstanding anything in this Agreement or any Rights Certificate to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to
a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 by
such registered holder unless such registered holder shall have (i) completed and executed the
certificate following the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such
Rights Certificate or Affiliates or Associates thereof as the Company shall reasonably request.



     Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any Rights Certificates acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights



15









 




Certificates to the Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof
to the Company.




     Section 9. Reservation and Availability of Capital Stock. (a)  The Company shall at
all times prior to the Expiration Date cause to be reserved and kept available out of its
authorized but unissued shares of Series A Preferred Stock and/or out of any shares of Series A
Preferred Stock held in its treasury (and following the occurrence of a Triggering Event, out of
the authorized but unissued shares of such other equity securities of the Company as may be
issuable upon exercise of the Rights and/or out of any shares of such securities held in its
treasury), the number of shares of Series A Preferred Stock (and following the occurrence of a
Triggering Event, the number of shares of such other equity securities of the Company) that, as
provided in this Agreement, will be sufficient to permit the full exercise of all outstanding
Rights. Upon the occurrence of any events resulting in an increase in the aggregate number of
shares of Series A Preferred Stock (or other equity securities of the Company) issuable upon
exercise of all outstanding Rights above the number then reserved, the Company shall make
appropriate increases in the number of shares so reserved.



     (b) So long as the shares of Series A Preferred Stock (and following the occurrence of a
Triggering Event, any other equity securities of the Company) to be issued and delivered upon the
exercise of the Rights may be listed on any stock exchange, the Company shall during the period
from the Distribution Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice of issuance upon such
exercise.



     (c) The Company shall use its reasonable best efforts (i) either (A) as soon as practicable
following the first occurrence of a Section 11(a)(ii) Event and a determination by the Company in
accordance with Section 11(a)(iii) hereof, if applicable, of the consideration to be delivered by
the Company upon exercise of the Rights, or (B) if so required by law, as soon as required
following the Distribution Date (the earliest of (A) and (B) being the “Registration
Date”), to file a registration statement on an appropriate form under the Securities Act, with
respect to the securities that may be acquired upon exercise of the Rights (the “Registration
Statement”); (ii) to cause the Registration Statement to become effective as soon as
practicable after such filing; (iii) to cause the Registration Statement to remain effective (and
to include a prospectus at all times complying with the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement and (B) the Expiration Date; and (iv) to take as soon as
practicable following the Registration Date such action as may be required to ensure that any
acquisition of securities upon exercise of the Rights complies with any applicable state securities
or “Blue Sky” laws. The Company may temporarily suspend, for a period of time not to exceed 90
days after the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration statement and permit it
to become effective. Upon any such suspension, the Company shall notify the Rights Agent thereof
in writing and shall issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement (with written notice thereof to the
Rights Agent) at such time as the suspension is no longer in effect, stating that the suspension on
the exercisability of the Rights is no longer in effect. Notwithstanding any provision of this



16









 




Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction (x) if the
requisite qualification in such jurisdiction shall not have been obtained and until a registration
statement has been declared effective or (y) if the exercise thereof shall not be permitted under
applicable law.




     (d) The Company shall take such action as may be necessary to ensure that all shares of Series
A Preferred Stock (and, following the occurrence of a Triggering Event, any other securities that
may be delivered upon exercise of Rights) shall be, at the time of delivery of the certificates or
depositary receipts for such securities (subject to payment of the Purchase Price), duly and
validly authorized and issued, fully paid and non-assessable.



     (e) The Company shall pay when due and payable any and all documentary, stamp, or transfer
tax, or other tax or charge, that is payable in respect of the issuance and delivery of the Rights
Certificates or the issuance and delivery of any certificates or depository receipts for Series A
Preferred Stock (or other equity securities of the Company that may be delivered upon exercise of
the Rights) upon the exercise of Rights; provided, however, that the Company shall
not be required to pay any such tax or charge that may be payable in connection with the issuance
or delivery of Units of Series A Preferred Stock, or any certificates or depositary receipts for
such Units of Series A Preferred Stock (or, following the occurrence of a Triggering Event, any
other securities, cash or other assets, as the case may be) to any Person other than the registered
holder of the Rights Certificates evidencing the Rights surrendered for exercise. The Company
shall not be required to issue or deliver any certificates or depositary receipts for Units of
Series A Preferred Stock (or, following the occurrence of a Triggering Event, any other securities,
cash or other assets, as the case may be) to, or in a name other than that of, the registered
holder upon the exercise of any Rights until any such tax or charge shall have been paid (any such
tax or charge being payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company’s satisfaction that no such tax or charge is due.



     (f) The Company shall use its reasonable best efforts, on or prior to the date that is either
(A) as soon as practicable following the first occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) hereof, if applicable, of the
consideration to be delivered by the Company upon exercise of the Rights, or (B) if so required by
law, as soon as required following the Distribution Date, to obtain any and all regulatory
approvals that may be required with respect to the securities purchasable upon exercise of the
Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days after the
date set forth in the first sentence of this Section 9(f), the exercise of the Rights in order to
permit the Company to obtain the necessary regulatory approvals. Upon any such suspension, the
Company shall notify the Rights Agent thereof in writing and issue a public announcement stating
that the exercise of the Rights has been temporarily suspended, as well as a public announcement
(with written notice thereof to the Rights Agent) at such time as the suspension is no longer in
effect stating that the suspension on the exercise of the Rights is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable unless and until all required regulatory approvals have been obtained with respect to
the securities purchasable upon exercise of the Rights.




17












 





     Section 10. Series A Preferred Stock Record Date. Each Person in whose name any
certificate for Units of Series A Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Units of Series A Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Series A Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) transfer books of the Company are closed, such Person shall be deemed to have become
the record holder of such securities on, and such certificate shall be dated, the next succeeding
Business Day on which the Series A Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are open and, provided
further, that if delivery of Units of Series A Preferred Stock is delayed pursuant to
Section 9(c) hereof, such Persons shall be deemed to have become the record holders of such Units
of Series A Preferred Stock only when such Units first become deliverable. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any
rights of a shareholder of the Company with respect to securities for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.



     Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. The Purchase Price, the number and kind of securities covered by each Right, and the
number of Rights outstanding are subject to adjustment from time to time as provided in this
Section 11.



     (a) (i) In the event the Company shall at any time after the Rights Dividend Declaration Date
(A) declare a dividend on the Series A Preferred Stock payable in shares of Series A Preferred
Stock, (B) subdivide the outstanding Series A Preferred Stock, (C) combine the outstanding Series A
Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Series A Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares (or fractions thereof) of Series A Preferred
Stock or capital stock, as the case may be, issuable on such date upon exercise of the Rights,
shall be proportionately adjusted so that the holder of any Right exercised after such time shall
be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares (or fractions thereof) of Series A Preferred Stock or capital stock, as the case may
be, which, if such Right had been exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the aggregate par value of the
shares (or fractions thereof) of capital stock of the Company issuable upon exercise of one Right.
If an event occurs that would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided



18









 







for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.




     (ii) In the event any Person becomes an Acquiring Person, provision shall be made so
that each holder of a Right (except as provided below in Section 11(a)(iii) and in Sections
7(e), 13, and 24 hereof) shall thereafter have the right to receive, upon exercise thereof,
at a price equal to the then current Purchase Price multiplied by the number of Units of
Series A Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (such product thereafter being, for all purposes of
this Agreement other than Section 13 hereof, the “Purchase Price”), in accordance
with the terms of this Agreement, in lieu of the number of Units of Series A Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, such number of shares of Common Stock as shall equal the result obtained by
dividing (x) the Purchase Price (as the same has been adjusted pursuant to the foregoing
provisions of this Section 11(a)(ii)), by (y) 50% of the then current market price
(determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such shares of Common Stock being the “Adjustment Shares”).




     (iii) In the event that the number of shares of Common Stock that are authorized by the
Company’s Certificate of Incorporation but are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is insufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a),
the Company shall take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights. In the event that the Company shall,
after good faith effort, be unable to take all such actions as may be necessary to authorize
such additional shares of Common Stock, then the Company shall issue Common Stock to the
extent shares thereof are available in connection with exercise of the Rights and to the
extent sufficient shares of Common Stock are not available therefor shall substitute, for
each share of Common Stock that would otherwise be issuable upon exercise of a Right, a
number of Units of Series A Preferred Shares such that the current per share market price of
one Unit of Series A Preferred Stock multiplied by such number of Units is equal (as nearly
as possible) to the current per share market price of one share of Common Stock as of the
date of issuance of such Units of Series A Preferred Stock. In the event that the number of
shares of Common Stock, together with the number of Units of Series A Preferred Stock, that
are authorized by the Company’s Certificate of Incorporation but are not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is insufficient to
permit the exercise in full of the Rights in accordance with the foregoing provisions of
this subparagraph (iii) and subparagraph (ii) of this Section 11(a), then the Company shall
take all such action as may be necessary to authorize additional shares of Series A
Preferred Stock for issuance upon exercise of the Rights. In the event that the Company
shall, after good faith effort, be unable to take all such actions as may be necessary to
authorize such additional shares of Common Stock and/or Units of Series A Preferred Stock,
then the Company, by the vote of a majority of the Board of Directors, shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the exercise of each such
Right (the “Current Value”) over (2) the Purchase Price (such excess being



19









 







the “Spread”), and (B) with respect to each such Right, make adequate provision
to substitute for such Adjustment Shares, upon exercise of such Rights and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock, Units of Series A Preferred Stock, and/or other equity securities of the Company,
each to the extent permitted by the Company’s Certificate of Incorporation (including,
without limitation, shares, or units of shares, of preferred stock that the Board of
Directors has deemed to have the same value as shares of Common Stock (the “Preferred
Stock Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by a majority of the Board of Directors, after
receiving advice from a nationally recognized investment banking firm; provided,
however, that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty days following the first occurrence of a Section
11(a)(ii) Event (for purposes hereof, the “Section 11(a)(iii) Trigger Date”), then
the Company shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, Units of Series A Preferred Stock (to the extent
available) and then, if necessary, cash, which shares of Common Stock, Units of Series A
Preferred Stock and/or cash shall have an aggregate value equal to the Spread. To the
extent that the Company determines that some action need be taken pursuant to this Section
11(a)(iii), the Company shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights. For purposes of this Section 11(a)(iii),
the value of a share of Common Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock on the Section 11(a)(iii)
Trigger Date, the value of a Unit of Series A Preferred Stock shall be the current market
price (as determined pursuant to Section 11(d) hereof) per Unit of Series A Preferred Stock
on the Section 11(a)(iii) Trigger Date, and the value of a unit or share, as applicable, of
any Preferred Stock Equivalent shall be deemed to have the same value as the Common Stock on
such date.



     (b) In case the Company shall fix a record date for the issuance of rights, options, or
warrants to all holders of any Series A Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within forty-five calendar days after such record date) shares of Series A
Preferred Stock (or shares having substantially the same rights, privileges, and preferences as
shares of Series A Preferred Stock (“Equivalent Preferred Stock”)) or securities
convertible into Series A Preferred Stock or Equivalent Preferred Stock at a price per share of
Series A Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Series A Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section 11(d) hereof) per share of
Series A Preferred Stock on such record date, then the Purchase Price with respect to the Series A
Preferred Stock to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the sum of the number of shares of Series A Preferred Stock outstanding on such
record date plus the number of shares of Series A Preferred Stock that the aggregate offering price
of the total number of shares of Series A Preferred Stock and/or Equivalent Preferred Stock so to
be offered (and/or the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of which shall be



20









 







the number of shares of Series A Preferred Stock outstanding on such record date plus the
number of additional shares of Series A Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery of consideration
all or part of which may be in a form other than cash, the value of such consideration shall be as
determined by the Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Series A Preferred Stock owned by or held for the account of the Company or any
Subsidiary shall not be deemed outstanding for the purpose of such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the event that such rights
or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price that
would then be in effect if such record date had not been fixed.



     (c) In case the Company shall fix a record date for a distribution to all holders of shares of
Series A Preferred Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation), evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Series A Preferred Stock, but
including any dividend payable in stock other than Series A Preferred Stock), or subscription
rights, options, or warrants (excluding those referred to in Section 11(b) hereof), then, in each
case, the Purchase Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share
of Series A Preferred Stock on such record date minus the fair market value (as determined in good
faith by a majority of the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding and conclusive for all purposes on the
Rights Agent and the holder of the Rights) of the cash, assets, or evidences of indebtedness so to
be distributed or of such subscription rights or warrants distributable in respect of a share of
Series A Preferred Stock and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Series A Preferred Stock on such record
date. Such adjustments shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price that would have been in effect if such record date had not been fixed.



     (d) (i) For the purpose of any computation hereunder, the “current market price” per share of
any security, including the Common Stock or any Common Equity Interest, on any date shall be deemed
to be the average of the daily closing prices per share of such security for the ten consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, if prior to the expiration of such requisite ten Trading Day
period, the issuer announces either (A) a dividend or distribution on such security payable in
shares of such security or securities convertible into such shares (other than the Rights), or (B)
any subdivision, combination, or reclassification of such shares, then, following the ex-dividend
date for such dividend or the record date for such subdivision, as the case may be, the “current
market price” for such security shall be properly adjusted to take into account such event. The
closing price for each day shall be, if the shares of such security are listed and admitted to
trading on a national securities exchange, as reported in the principal consolidated transaction
reporting system with



21









 







respect to securities listed on the principal national securities exchange on which such
shares of such security are listed or admitted to trading or, if such shares are not listed or
admitted to trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated Quotation System
(“NASDAQ”) or such other system then in use, or, if on any such date such shares are not
quoted by any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected by a majority of the Board of
Directors. If on any such date no market maker is making a market in such shares, the fair value
of such shares on such date as determined in good faith by a majority of the Board of Directors
shall be used. If such shares are not publicly held or not so listed or traded, “current market
price” per share shall mean the fair value per share as determined in good faith by a majority of
the Board of Directors, whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term “Trading Day” shall mean, if such
shares of such security are listed or admitted to trading on any national securities exchange, a
day on which the principal national securities exchange on which such shares are listed or admitted
to trading is open for the transaction of business or, if such shares are not so listed or
admitted, a Business Day.




     (ii) For the purpose of any computation hereunder, the “current market price” per share
of Series A Preferred Stock shall be determined in the same manner as set forth above for
Common Stock in clause (i) of this Section 11(d) (other than the fourth sentence thereof).
If the current market price per share of Series A Preferred Stock cannot be determined in
the manner provided above or if the Series A Preferred Stock is not publicly held or listed
or traded in a manner described in clause (i) of this Section 11(d), the “current market
price” per share of Series A Preferred Stock shall be conclusively deemed to be the “current
market price” per share of the Common Stock multiplied by 1,000 (as such amount may be
appropriately adjusted to reflect any stock split, reverse stock split, stock dividend, or
any similar transaction with respect to Common Stock occurring after the date of this
Agreement. If neither the Common Stock nor the Series A Preferred Stock is publicly held or
so listed or traded, “current market price” per share of Series A Preferred Stock shall mean
the fair value per share as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. For all purposes of this
Agreement, the “current market price” of a Unit of Series A Preferred Stock shall be equal
to the “current market price” of one share of Series A Preferred Stock divided by 1,000.



     (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least one percent in
the Purchase Price; provided, however, that any adjustments that by reason of this
Section 11(e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or
to the nearest ten-thousandth of a Common Share  or Common Equity Interest or other share
or one-millionth of a share of Series A Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction that mandates such
adjustment or (ii) the Expiration Date.



22









 





     (f) If, as a result of an adjustment made pursuant to Sections 11(a)(ii) or 13(a) hereof, the
holder of any Right thereafter exercised shall become entitled to receive any shares of capital
stock other than Series A Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect
to the Series A Preferred Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i),
(j), (k), (1), and (m), and the provisions of Sections 7, 9, 10, 13, and 14 hereof with respect to
the Series A Preferred Stock shall apply on like terms to any such other shares.



     (g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of Units of Series A Preferred Stock (or other securities or amount of cash or combination
thereof) that may be acquired from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.



     (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of Units of Series A
Preferred Stock (calculated to the nearest one ten-thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Series A Preferred Stock covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.



     (i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of any adjustment in the number of Units of Series A Preferred
Stock that may be acquired upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of Units of Series A
Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth of a Right) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a public announcement,
and notify the Rights Agent in writing, of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least ten days later than
the date of such public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such



23









 







adjustment. Rights Certificates to be so distributed shall be issued, executed, and
countersigned in the manner provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.



     (j) Irrespective of any adjustment or change in the Purchase Price or the number of Units of
Series A Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per Unit and the
number of Units of Series A Preferred Stock that was expressed in the initial Rights Certificates
issued hereunder.



     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value of the number of Units of Series A Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such fully paid and
non-assessable number of Units of Series A Preferred Stock at such adjusted Purchase Price.



     (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
(and shall notify the Rights Agent in writing of any such election) until the occurrence of such
event the issuance to the holder of any Right exercised after such record date of that number of
Units of Series A Preferred Stock and shares of other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of Units of Series A Preferred Stock
and shares of other capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such adjustment.



     (m) Anything in this Section 11 to the contrary notwithstanding, prior to the Distribution
Date, the Company shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent that the Board of
Directors shall determine that any (i) consolidation or subdivision of the Series A Preferred
Stock, (ii) issuance wholly for cash of any shares of Series A Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of Series A Preferred Stock or
securities that by their terms are convertible into or exchangeable for shares of Series A
Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options, or warrants referred to
in this Section 11, hereafter made by the Company to holders of its Series A Preferred Stock, shall
not be taxable to such holders or shall reduce the taxes payable by such holders.



     (n) The Company shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a direct or indirect, wholly-owned Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a direct or indirect, wholly-owned Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole)



24









 







to any other Person or Persons (other than the Company and/or any of its direct or indirect,
wholly-owned Subsidiaries in one or more transactions, each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger, or sale there are
any rights, warrants, or other instruments or securities outstanding or agreements in effect that
would substantially diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with, or immediately after such consolidation, merger, or
sale, the Person that constitutes, or would constitute, the “Principal Party” for purposes of
Section 13(a) hereof shall have distributed or otherwise transferred to its shareholders or other
persons holding an equity interest in such Person Rights previously owned by such Person or any of
its Affiliates and Associates; provided, however, that this Section 11(n) shall not
affect the ability of any Subsidiary of the Company to consolidate with, merge with or into, or
sell or transfer assets or earning power to, any other Subsidiary of the Company.



     (o) After the Distribution Date and so long as any Rights shall then be outstanding (other
than Rights that have become null and void pursuant to Section 7(e) hereof), the Company shall not,
except as permitted by Sections 23, 24, and 27 hereof, take (or permit any Subsidiary of the
Company to take) any action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.



     (p) Anything in this Agreement to the contrary notwithstanding, in the event
that the Company shall at any time after the Effective Date and prior to the Distribution Date (i) declare a dividend on the outstanding Common Shares payable in Common
 Shares, (ii) subdivide any outstanding Common Shares, (iii) combine any of the outstanding Common Shares into a smaller number of shares, or (iv) issue any shares of its
capital stock in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), the number of Rights associated with each Common Share then outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter associated with each Common Share following any such event shall equal the result obtained by
 multiplying the number of Rights associated with each Common Share immediately prior to such event by a fraction the numerator of which shall be the total number of Common
 Shares outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of Common Shares outstanding immediately following
 the occurrence of such event. The adjustments provided for in this Section 11(p) shall be made successively whenever such a dividend is declared or paid or such a subdivision,
 combination, or reclassification is effected.  If an event occurs that would require an adjustment under Section 11(a)(ii) and this Section 11(p), the adjustments provided for
 in this Section 11(p) shall be in addition and prior to any adjustment required pursuant to Section 11(a)(ii).



     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the facts and
computations accounting for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Series A Preferred Stock and the Common
Shares, a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior



25









 







to the Distribution Date, to each holder of a certificate representing  Common Shares)
in accordance with Section 26 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment or statement therein contained and shall have no duty or
liability with respect to, and shall not be deemed to have knowledge of, any adjustment or any such
event unless and until it shall have received such a certificate.



     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.



     (a) At any time after a Person has become an Acquiring Person, in the event that, directly or
indirectly, either (x) the Company shall consolidate with, or merge with and into, any other Person
(other than a direct or indirect, wholly-owned Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving
entity of such consolidation or merger, (y) any Person (other than a direct or indirect,
wholly-owned Subsidiary of the Company in a transaction that complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing
or surviving entity of such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding  Common Shares shall be converted into or exchanged
for stock or other securities of any other Person (or the Company) or cash or any other property or
(z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) to any Person or Persons (other than the Company or any of its direct or
indirect, wholly-owned Subsidiaries in one or more transactions, each of which complies with
Section 11(o) hereof), in one or more transactions, assets or earning power aggregating 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a whole) (any such
event described in (x), (y), or (z) being herein referred to as a “Section 13 Event”);
then, and in each such case, proper provision shall be made so that:




     (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current Purchase Price
multiplied by the number of Units of Series A Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of Units of Series A
Preferred Stock, such number of validly authorized and issued, fully paid, and
non-assessable shares of Common Equity Interest of the Principal Party (which shares shall
not be subject to any liens, encumbrances, rights of first refusal, transfer restrictions,
or other adverse claims) as shall be equal to the result obtained by (1) multiplying such
then current Purchase Price by the number of Units of Series A Preferred Stock for which
such Right is exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such Units of Series A Preferred Stock for which a Right
would be exercisable hereunder but for the occurrence of such Section 11(a)(ii) Event by the
Purchase Price that would be in effect hereunder but for such first occurrence) and (2)
dividing that product (which, following the first occurrence of a Section 13 Event, shall be
the “Purchase Price” for all purposes of this Agreement) by 50% of the then current
market price (determined pursuant to Section 11(d) hereof) per share of the Common Equity
Interest of such Principal Party on the date of consummation of such Section 13 Event;



26









 






     (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant to this
Agreement;




     (iii) the term “Company” shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13 Event;




     (iv) such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Equity Interest) in connection
with the consummation of any such transaction as may be necessary to ensure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may be possible,
to its shares of Common Equity Interest thereafter deliverable upon the exercise of the
Rights; and




     (v) the provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event, and the Rights that have not theretofore been
exercised shall thereafter become exercisable in the manner described in this Section 13.



     (b) “Principal Party” shall mean:




     (i) in the case of any transaction described in clause (x) or (y) of the first sentence
of Section 13(a), (A) the Person (including the Company as successor thereto or as the
surviving entity) that is the issuer of any securities or other equity interests into which
shares of Common Stock are converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer of Common Equity Interest that has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof) and (B) if no securities
or other equity interests are so issued, the Person (including the Company as successor
thereto or as the surviving entity) that is the other constituent party to such merger or
consolidation, or, if there is more than one such Person, the Person that is a constituent
party to such merger or consolidation, the Common Equity Interest of which has the highest
aggregate current market price (determined pursuant to Section 11(d) hereof); and




     (ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the largest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if each Person
that is a party to such transaction or transactions receives the same portion of the assets
or earning power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be determined, whichever
Person that has received assets or earning power pursuant to such transaction or
transactions, the Common Equity Interest of which has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof);


provided, however, that in any such case, (1) if the Common Equity Interest of such
Person is not at such time and has not been continuously over the preceding twelve-month period
registered


27









 






under Section 12 of the Exchange Act (“Registered Common Equity Interest”), and such Person
is a direct or indirect Subsidiary of another Person that has Registered Common Equity Interest
outstanding, “Principal Party” shall refer to such other Person; (2) if the Common Equity Interest
of such Person is not Registered Common Equity Interest, and such Person is a direct or indirect
Subsidiary of another Person (other than an individual), but is not a direct or indirect Subsidiary
of another Person that has Registered Common Equity Interest outstanding, “Principal Party” shall
refer to the ultimate parent entity of such first-mentioned Person; (3) if the Common Equity
Interest of such Person is not Registered Common Equity Interest, and such Person is directly or
indirectly controlled by more than one Person, and one or more of such other Persons has Registered
Common Equity Interest outstanding, “Principal Party” shall refer to whichever of such other
Persons is the issuer of the Registered Common Equity Interest having the highest aggregate current
market price (determined pursuant to Section 11(d) hereof); and (4) if the Common Equity Interest
of such Person is not Registered Common Equity Interest, and such Person is directly or indirectly
controlled by more than one Person (one or more of which is a Person other than an individual), and
none of such other Persons has Registered Common Equity Interest outstanding, “Principal Party”
shall refer to whichever ultimate parent entity is the corporation having the greatest
stockholders’ equity or, if no such ultimate parent entity is a corporation, shall refer to
whichever ultimate parent entity is the entity having the greatest net assets.




     (c) The Company shall not consummate any Section 13 Event unless the Principal Party shall
have a sufficient number of authorized shares of its Common Equity Interest that have not been
issued (or reserved for issuance) or that are held in its treasury to permit the exercise in full
of the Rights in accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that the Principal Party shall use its best efforts to:




     (i) (A) prepare and file on an appropriate form, as soon as practicable following the
execution of such agreement, a registration statement under the Securities Act with respect
to the shares of Common Equity Interest that may be acquired upon exercise of the Rights,
(B) cause such registration statement to remain effective (and to include a prospectus at
all times complying with the requirements of the Securities Act) until the Expiration Date,
and (C) take such action as may be required to ensure that any acquisition of such shares of
Common Equity Interest upon the exercise of the Rights complies with any applicable state
security or “Blue Sky” laws as soon as practicable following the execution of such
agreement;




     (ii) as soon as practicable after the execution of such agreement, deliver to holders
of the Rights historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act; and




     (iii) obtain any and all regulatory approvals as may be required with respect to the shares of Common Equity Interest securities that may be acquired upon exercise of the
Rights.




28












 





     (d) In case the Principal Party that is to be a party to a transaction referred to in this
Section 13 has at the time of such transaction, or immediately following such transaction will
have, a provision in any of its authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its affairs, or any other agreements or arrangements, which
provision would have the effect of (i) causing such Principal Party to issue, in connection with,
or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of
Common Equity Interest of such Principal Party at less than the then current market price per share
(determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into,
Common Equity Interest of such Principal Party at less than such then current market price (other
than to holders of Rights pursuant to this Section 13); (ii) providing for any special payment,
tax, or similar provisions in connection with the issuance of the Common Equity Interest of such
Principal Party pursuant to the provisions of Section 13; or (iii) otherwise eliminating or
substantially diminishing the benefits intended to be afforded by the Rights in connection with, or
as a consequence of, the consummation of a transaction referred to in this Section 13; then, in
such event, the Company shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party shall have been
cancelled, waived, or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.



     (e) The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the Rights that have not theretofore
been exercised shall thereafter become exercisable in the manner described in Section 13(a).



     Section 14. Fractional Rights; Fractional Shares; Waiver. (a)  The Company shall not
be required to issue fractions of Rights or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the Persons to which
such fractional Rights would otherwise be issuable, an amount in cash equal to such fraction of the
market value of a whole Right. For purposes of this Section 14(a), the market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately prior to the date
that such fractional Rights would have been otherwise issuable. The closing price of the Rights
for any day shall be, if the Rights are listed or admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in good faith by the
Board of Directors shall be used and such determination shall be described in a statement filed
with the Rights Agent and delivered to the holders of the Rights, which shall be conclusive for all
purposes.



29









 





     (b) The Company shall not be required to issue fractions of shares of Series A Preferred Stock
(other than fractions that are integral multiples of one one-thousandth of a share of Series A
Preferred Stock) upon exercise of the Rights or to distribute certificates that evidence such
fractional shares of Series A Preferred Stock (other than fractions that are integral multiples of
one one-thousandth of a share of Series A Preferred Stock). Subject to Section 7(c)(1) hereof,
fractions of shares of Series A Preferred Stock in integral multiples of one one-thousandth of a
share of Series A Preferred Stock may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a Depositary Agent selected
by it; provided, however, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges, and preferences to which they are
entitled as Beneficial Owners of the shares of Series A Preferred Stock represented by such
depositary receipts. In lieu of such fractional shares of Series A Preferred Stock that are not
integral multiples of one one-thousandth of a share, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the then current market price of a share of Series A Preferred Stock
on the day of exercise, determined in accordance with Section 11(d) hereof.



     (c) The holder of a Right, by the acceptance of the Right, expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a Right, except as
permitted by this Section 14.



     Section 15. Rights of Action. All rights of action in respect of this Agreement,
other than rights of action vested in the Rights Agent pursuant to Section 18 hereof, are vested in
the respective registered holders of the Rights Certificates (and, prior to the Distribution Date,
the registered holders of certificates representing Common Shares); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a certificate representing
Common Shares), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of a certificate representing
Common Shares), may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company or any other Person to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any Person subject to this
Agreement.



     Section 16. Agreement of Rights Holders. Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every other holder of a
Right that:



     (a) prior to the Distribution Date, the Rights will be transferable only in connection with
the transfer of Common Shares;



     (b) after the Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office of the Rights Agent designated for



30









 







such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates duly executed;



     (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem
and treat the Person in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates
or the associated Common Share certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 7(e) hereof, shall be affected by any notice to the contrary; and



     (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or any other Person as a result of
its inability to perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree, judgment, or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory, or administrative agency or commission, or any
statute, rule, regulation, or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree, judgment, or
ruling lifted or otherwise overturned as promptly as practicable.



     Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such,
of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of the number of shares of Series A Preferred Stock or any other securities of the
Company that may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or, except as provided in Section
25 hereof, to receive notice of meetings or other actions affecting shareholders, or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.



     Section 18. Concerning the Rights Agent. (a)  The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses, including reasonable fees and disbursements of
counsel and other reasonable disbursements, incurred in the preparation, delivery, amendment,
administration, or execution of this Agreement and the acceptance, administration, exercise and
performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim,
demand, settlement, cost, or expense (including, without limitation, the reasonable fees and
disbursements of counsel), incurred without negligence, bad faith, or willful misconduct on the
part of the Rights Agent, for any action taken, suffered, or omitted by the Rights Agent in
connection with the acceptance, administration, exercise, and performance of its duties under this
Agreement, including the costs and expenses of defending against any claim of liability hereunder.



31









 





     (b) The Rights Agent shall be authorized and protected and shall incur no liability for, or in
respect of any action taken, suffered, or omitted by it in connection with, its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Rights Certificate or certificate for shares of Series A Preferred Stock or for
other capital stock or securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to have been signed, executed and, where
necessary, verified or acknowledged by the proper Person or Persons.



     (c) The provisions of this Section 18 and Section 20 below shall survive the termination of
this Agreement, the exercise or expiration of the Rights, and the resignation, replacement, or
removal of the Rights Agent.



     Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a)  Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may
be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any Person succeeding to the corporate trust or
shareholder services businesses of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties hereto; provided, however,
that such Person would be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.



     (b) In case at any time the name of the Rights Agent shall be changed and at such time any of
the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.



     Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform only the
duties and obligations imposed by this Agreement, upon the following terms and conditions, by all
of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:



     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company
or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to, and the Rights



32









 







Agent shall incur no liability for or in respect of, any action taken, suffered, or omitted by
the Rights Agent in good faith and in accordance with such advice or opinion.



     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including, without limitation, the identity of
an Acquiring Person and the determination of “current market price”) be proved or established by
the Company prior to the Rights Agent taking, suffering, or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by any one of the Chairman of the
Board, the Chief Executive Officer, the President, the Vice-Chairman of the Board, the Treasurer,
any Assistant Treasurer, the Secretary, or any Assistant Secretary of the Company and delivered to
the Rights Agent, and such certificate shall be full and complete authorization and protection to
the Rights Agent, and the Rights Agent shall incur no liability, for or in respect of any action
taken, suffered, or omitted in good faith by it under the provisions of this Agreement in reliance
upon such certificate.



     (c) The Rights Agent shall be liable hereunder to the Company or any other Person only for its
own negligence, bad faith, or willful misconduct. Anything herein to the contrary notwithstanding,
in no event shall the Rights Agent be liable for special, punitive, indirect, consequential, or
incidental loss or damage of any kind whatsoever (including but not limited to lost profits).



     (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.



     (e) The Rights Agent shall not have any responsibility for the validity of this Agreement or
the execution and delivery hereof (except the due execution and delivery hereof by the Rights
Agent) or for the validity or execution of any Rights Certificate (except its countersignature
thereon); nor shall it be responsible for any breach by the Company of any covenant or failure by
the Company to satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the Rights (including Rights
becoming void pursuant to Section 7(e) hereof) or any adjustment in the terms of the Rights
required under the provisions of Sections 11, 13, 23, or 24 hereof or for the manner, method, or
amount of any such change or adjustment or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of the certificate describing any such
adjustment contemplated by Section 12); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares of Series A
Preferred Stock or any other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Series A Preferred Stock or any other securities will,
when so issued, be validly authorized and issued, fully paid and non-assessable.



     (f) The Company shall perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further acts, instruments, and



33









 







assurances as may reasonably be required by the Rights Agent for the performance by the Rights
Agent of its duties under this Agreement.



     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Vice-Chairman of the Board, the Secretary, any Assistant
Secretary, the Treasurer, or any Assistant Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Rights Agent, and the Rights Agent shall not be liable for or
in respect of any action taken, suffered, or omitted by it in good faith in accordance with
instructions of any such officer.



     (h) The Rights Agent and any shareholder, affiliate, director, officer, or employee of the
Rights Agent may buy, sell, or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though the
Rights Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such stockholder, affiliate, director, officer, or employee from acting in any other
capacity for the Company or for any other Person.



     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself (through its directors, officers, and employees) or by
or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect, or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect, or misconduct, absent
gross negligence, bad faith, or willful misconduct of the Rights Agent in the selection and
continued employment thereof.



     (j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights hereunder if the Rights Agent shall have reasonable grounds for
believing that repayment of such funds or adequate indemnification against such risk or liability
is not reasonably assured to it.



     (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has not been completed, has not been signed, or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company. If such certificate
has been completed and signed and shows a negative response to clauses 1 and 2 of such certificate,
unless previously instructed otherwise in writing by the Company (which instructions may impose on
the Rights Agent additional ministerial responsibilities, but no discretionary responsibilities),
the Rights Agent may assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) hereof and shall not be charged with any knowledge
to the contrary.



34









 





     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon thirty days’ prior notice in
writing mailed to the Company, and to each transfer agent of the Series A Preferred Stock and the
Common Shares, by registered or certified mail, in which case the Company shall give or cause to be
given written notice to the registered holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty days’ prior notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Series A Preferred Stock and the Common Shares, by registered or certified
mail, and to the registered holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within
a period of thirty days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a Person organized and
doing business under the laws of the United States or any state of the United States, in good
standing, shall be authorized under such laws to exercise corporate trust, stock transfer, or
shareholder services powers, shall be subject to supervision or examination by federal or state
authorities, and shall have at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an Affiliate of a Person described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Series A Preferred Stock and the Common Shares, and mail a
notice thereof in writing to the registered holders of the Rights Certificates by first-class mail.
Failure to give any notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent.



     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or the Rights Certificates to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be approved by a
majority of the Board of Directors to reflect any adjustment or change made in accordance with the
provisions of this Agreement in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired under the Rights Certificates. In addition, in
connection with the issuance or sale of  Common Shares following the Distribution Date and
prior to the Expiration Date, the Company (a) shall, with respect to  Common Shares so
issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board of Directors, issue
Rights Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued



35









 







if, and to the extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or the person to whom
such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.



     Section 23. Redemption and Termination. (a)  The Board of Directors may, within its
sole discretion, at any time prior to the earlier of (i) such time as any Person becomes an
Acquiring Person and (ii) the Final Expiration Date, redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $0.0001 per Right, rounded up to the nearest whole
cent, appropriately adjusted to reflect any stock split, reverse stock split, stock dividend, or
similar transaction occurring after the date hereof (such redemption price, as adjusted, being
hereinafter referred to as the “Redemption Price”). The redemption of the Rights by the
Board of Directors pursuant to this paragraph (a) may be made effective at such time, on such
basis, and with such conditions as the Board of Directors in its sole discretion may establish.
The Company may, at its option, pay the Redemption Price in cash, Common Shares (based on
the current market price (determined pursuant to Section 11(d) hereof) of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate by the Board of
Directors.



     (b) If the Company receives a Qualified Offer and the Board of Directors of the Company has
not redeemed the outstanding Rights or exempted such offer from the terms of this Agreement or
called a special meeting of stockholders for the purpose of voting on whether or not to exempt such
Qualified Offer from the terms of this Agreement, in each case by the end of the 90 days following
the commencement of such Qualified Offer, and if the Company receives, not earlier than 90 days nor
later than 120 days following the commencement of such Qualified Offer, a written notice complying
with the terms of this Section 23(b) (the “Special Meeting Notice”), properly executed by
the holders of record (or their duly authorized proxy) of ten percent (10%) or more of the shares
of Common Stock then outstanding (excluding shares of Common Stock beneficially owned by the Person
making the Qualified Offer and such Person’s Affiliates and Associates), directing the Board of
Directors of the Company to submit to a vote of stockholders at a special meeting of the
stockholders of the Company (a “Special Meeting”) a resolution authorizing the redemption
of all, but not less than all, of the then outstanding Rights at the Redemption Price (the
“Redemption Resolution”), then the Board of Directors of the Company shall take such
actions as are necessary or desirable to cause the Redemption Resolution to be submitted to a vote
of stockholders within ninety days following receipt by the Company of the Special Meeting Notice
(the “Special Meeting Period”), by including a proposal relating to adoption of the
Redemption Resolution in the proxy materials of the Company for the Special Meeting;
provided, however, that if the Company, at any time during the Special Meeting
Period and prior to a vote on the Redemption Resolution, enters into a Definitive Acquisition
Agreement, the Special Meeting Period may be extended (and any Special Meeting called in connection
therewith may be cancelled) if the Redemption Resolution will be separately submitted to a vote at
the same meeting as the Definitive Acquisition Agreement. For purposes of a Special Meeting Notice,
the record date for determining eligible holders of record of the Common Stock shall be the
ninetieth day following the commencement of a Qualified Offer. Any Special Meeting Notice must be
delivered to the Secretary of the Company at the principal executive offices of the Company and
must set forth, as to the stockholders of record executing



36









 







such Special Meeting Notice, (i) the name and address of such stockholders, as they appear on
the Company’s books and records, (ii) the number of shares of Common Stock that are owned of record
by each of such stockholders and (iii) in the case of Common Stock that is owned beneficially by
another Person, an executed certification by the holder of record that such holder has executed
such Special Meeting Notice only after obtaining instructions to do so from such beneficial owner.
Subject to the requirements of applicable law, the Board of Directors of the Company may take a
position in favor of or opposed to the adoption of the Redemption Resolution, or no position with
respect to the Redemption Resolution, as it determines to be appropriate in the exercise of its
fiduciary duties. In the event that (A) no Person has become an Acquiring Person prior to the
effective date of redemption referred to below in this sentence, (B) the Qualified Offer continues
to be a Qualified Offer prior to the last day of the Special Meeting Period (the “Outside
Meeting Date”) and (C) either (1) the Special Meeting is not held on or prior to the ninetieth
day following receipt of the Special Meeting Notice or (2) at the Special Meeting at which a quorum
is present, the holders of a majority of the shares of Common Stock outstanding as of the record
date for the Special Meeting selected by the Board of Directors of the Company (excluding shares of
Common Stock beneficially owned by the Person making the Qualified Offer and such Person’s
Affiliates and Associates), shall vote in favor of the Redemption Resolution, then all of the
Rights shall be deemed redeemed at the Redemption Price by such failure to hold the Special Meeting
or as a result of the adoption of the Redemption Resolution by the stockholders of the Company (or
the Board of Directors of the Company shall take such other action as may be necessary to prevent
the existence of the Rights from interfering with the consummation of the Qualified Offer), such
redemption to be effective, as the case may be, (x) as of the close of business on the Outside
Meeting Date if a Special Meeting is not held on or prior to such date or (y) if a Special Meeting
is held on or prior to the Outside Meeting Date, as of the date on which the results of the vote
adopting the Redemption Resolution at the Special Meeting are certified as official by the
appointed inspectors of election for the Special Meeting.



     (c) Immediately upon the action of the Board of Directors ordering the redemption of Rights
pursuant to paragraph (a) or (b) of this Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right held. The Company shall
promptly give (i) written notice to the Rights Agent of any such redemption and (ii) public notice
of any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Within 10 days after such
action of the Board of Directors ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire, or purchase
for value any Rights at any time in any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, or other than in connection with the purchase of
Common Shares or the conversion or redemption of  Common Shares in accordance with the
applicable provisions of the Certificate of Incorporation prior to the Distribution Date.



37









 





     Section 24. Exchange. (a)  The Board of Directors may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and void pursuant to the
provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as
the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Acquiring Person, together with all
Affiliates and Associates of such Acquiring Person, becomes the Beneficial Owner of shares of
Voting Stock representing 50% or more of the total Voting Power of the aggregate of all shares of
Voting Stock then outstanding.



     (b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly give (i) written
notice to the Rights Agent of any such exchange and (ii) public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights that will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other than Rights that
have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.



     (c) In the event that there are not sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the Rights. In the event
the Company, after good faith effort, is unable to take all such action as may be necessary to
authorize such additional shares of Common Stock, the Company shall substitute Units of Series A
Preferred Stock (or Equivalent Preferred Stock) for Common Stock exchangeable for Rights, at the
initial rate of one Unit of Series A Preferred Stock (or Equivalent Preferred Stock) for each share
of Common Stock, as appropriately adjusted to reflect stock splits, stock dividends, and other
similar transactions after the date hereof.



     Section 25. Notice of Certain Events. (a)   In case the Company shall propose, at any
time after the Distribution Date, (i) to pay any dividend payable in stock of any class or series
to the holders of Series A Preferred Stock or to make any other distribution to the holders of
Series A Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company); (ii) to offer to the holders of Series A Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Series A Preferred Stock or
shares of stock of any class or any other securities, rights or options; (iii) to effect any



38









 







reclassification of Series A Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Series A Preferred Stock); (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof); or (v) to effect the
liquidation, dissolution or winding up of the Company; then, in each such case, the Company shall
give to each registered holder of a Rights Certificate, to the extent feasible, and to the Rights
Agent in accordance with Section 26 hereof, a written notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of participation therein by
the holders of the shares of Series A Preferred Stock if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii) above at least ten
(10) days prior to the record date for determining holders of the shares of Series A Preferred
Stock for purposes of such action, and in the case of any such other action, at least ten (10) days
prior to the date of the taking of such proposed action or the date of participation therein by the
holders of the shares of Series A Preferred Stock whichever shall be the earlier; provided,
however, that no such action shall be taken pursuant to this Section 25(a) that will or
would conflict with any provision of the Certificate of Incorporation; provided
further, that no such notice shall be required pursuant to this Section 25, if any
Subsidiary of the Company effects a consolidation or merger with or into, or effects a sale or
other transfer of assets or earnings power to, any other Subsidiary of the Company.



     (b) In case any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any
such case, (i) the Company shall, as soon as practicable thereafter, give to each holder of a
Rights Certificate, to the extent feasible, and to the Rights Agent in accordance with Section 26
hereof, a written notice of the occurrence of such event, which notice shall describe such event
and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding Section 25(a) to Series A Preferred Stock shall be deemed to refer, if
appropriate, to any other securities that may be acquired upon exercise of a Right.



     (c) In case any Section 13 Event shall occur, then the Company shall, as soon as practicable
thereafter, give to each registered holder of a Rights Certificate, to the extent feasible, and to
the Rights Agent in accordance with Section 26 hereof, a written notice of the occurrence of such
event, which notice shall describe such event and the consequences of such event to holders of
Rights under Section 13(a) hereof.



     Section 26. Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by facsimile, telegram or cable)
and mailed or sent or delivered, if to the Company, at its address at:


MarketAxess Holdings Inc.

140 Broadway, 42nd Floor

New York, New York 10005





39









 







Attention: General Counsel




And if to the Rights Agent, at its address at:



American Stock Transfer & Trust Company, LLC

59 Maiden Lane

New York, NY 10038



Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing  Common Shares) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company or the Rights Agent, as the case may be.




     Section 27. Supplements and Amendments. Subject to the penultimate sentence of this
Section 27, the Company, by action of the Board of Directors, may from time to time supplement or
amend this Agreement without the approval of any holders of Rights in order to cure any ambiguity,
to correct or supplement any provision contained herein that may be defective or inconsistent with
any other provisions herein, to shorten or lengthen any time period hereunder, or to make any other
provisions with respect to the Rights that the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner that would adversely affect the interests
of the holders of Rights (other than Rights that have become null and void pursuant to Section 7(e)
hereof). Without limiting the foregoing, the Company, by action of the Board of Directors, may at
any time prior to such time as any Person becomes an Acquiring Person amend this Agreement (A) to
make the provisions of this Agreement inapplicable to a particular transaction by which a Person
would otherwise become an Acquiring Person or to otherwise alter the terms and conditions of this
Agreement as they may apply with respect to any such transaction; and (B) to lower the thresholds
set forth in Sections 1(a) and 3(a) to not less than the greater of (i) the sum of 0.001% and the
largest percentage of Voting Power represented by the then outstanding shares of Voting Stock then
known by the Company to be Beneficially Owned by any Person (other than a Grandfathered
Stockholder, the Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company, or any trustee or fiduciary holding shares of Voting Stock for,
or pursuant to the terms of, any such plan, acting in such capacity), and (ii) 10%. Upon delivery
of a certificate from an appropriate officer of the Company that states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment; provided, however, that no supplement or
amendment may be made to Sections 18, 19, 20, or 21 hereof without the consent of the Rights Agent.
Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Shares.



     Section 28. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.



40









 





     Section 29. Determinations and Actions by the Board of Directors. For all purposes of
this Agreement, any calculation of the number of shares of any class or series of Voting Stock
outstanding at any particular time, including for purposes of determining the particular percentage
of outstanding shares of Voting Stock of which any Person is the Beneficial Owner (or the
particular percentage of total Voting Power of such outstanding shares of Voting Stock represented
by shares of Voting Stock of which any Person is the Beneficial Owner), shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the
date hereof. Except as otherwise specifically provided herein, the Board of Directors shall have
the exclusive power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or to the Company hereunder, or as may be
necessary or advisable in the administration of this Agreement, including, without limitation, the
right and power (i) to interpret the provisions of this Agreement, and (ii) to make all
determinations deemed necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by the Board of
Directors shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders
of the Rights and all other parties, and (y) not subject the Board of Directors or any member
thereof to any liability to the holders of the Rights.



     Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered holders of  Common
Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, registered holders of
Common Shares).



     Section 31. Severability. If any term, provision, covenant, or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.



     Section 32. Governing Law. This Agreement, each Right, and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.



     Section 33. Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one and the same
instrument.



     Section 34. Descriptive Headings. The headings contained in this Agreement are for
descriptive purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.



41









 





[Signature Page To Follow On Next Page]




42









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as
of the date first above written.



	 	 	 	 	 
	 	MARKETAXESS HOLDINGS INC.

 	 
	 	By:  	/s/ Richard M. McVey	 
	 	 	Name:  	Richard M. McVey	 
	 	 	Title:  	Chief Executive Officer	 
	 



	 	 	 	 	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 	 
	 	By:  	/s/ Herbert J. Lemmer	 
	 	 	Name:  	Herbert J. Lemmer	 
	 	 	Title:  	Vice President	 
	 
















 





EXHIBIT A




			
	 	 	 
	Certificate No.                     
	 	         Rights





NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW).
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN RIGHTS AGREEMENT), RIGHTS THAT ARE OR
WERE BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR BY THEIR
AFFILIATES OR ASSOCIATES (AS DEFINED IN THE RIGHTS AGREEMENT) OR, IN CERTAIN CIRCUMSTANCES, BY
TRANSFERREES OF SUCH ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES MAY BECOME NULL AND VOID.




RIGHTS CERTIFICATE 




MARKETAXESS HOLDINGS INC.




     This certifies that                     , or registered assigns, is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder thereof, subject to
the terms and conditions of the Rights Agreement dated as of June 2, 2008 (the “Rights
Agreement”) between MarketAxess Holdings Inc., a Delaware corporation (the “Company”),
and American Stock Transfer & Trust Company, LLC a New York limited liability trust company, as
Rights Agent (which term shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Distribution Date and prior to the Expiration Date
at the office of the Rights Agent, one one-thousandth of a fully paid and non-assessable share of
Series A Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred
Stock”), at the Purchase Price initially of $40.00 per one one-thousandth share (each such one
one-thousandth of a share being a “Unit”) of Series A Preferred Stock, upon presentation
and surrender of this Rights Certificate with the Election to Purchase and related certificate duly
executed. The number of Rights evidenced by this Rights Certificate as set forth above, the number
of Units that may be purchased upon exercise thereof as set forth above, and the Purchase Price per
Unit as set forth above shall be subject to adjustment in certain events as provided in the Rights
Agreement. Terms defined in the Rights Agreement are used herein with the same meaning unless
otherwise defined herein.



 









 





     Upon the occurrence of a Section 11(a)(ii) Event or Section 13 Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person or, under certain circumstances described in the Rights
Agreement, a transferee of any such Acquiring Person, Associate or Affiliate, such Rights shall
become null and void and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event or Section 13 Event.



     In certain circumstances described in the Rights Agreement, the Rights evidenced hereby may
entitle the registered holder thereof to purchase capital stock of an entity other than the Company
or receive common stock, cash or other assets of an entity other than the Company, all as provided
in the Rights Agreement.



     This Rights Certificate is subject to all of the terms and conditions of the Rights Agreement
applicable to a Right, which terms and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the Company upon written
request.



     This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.



     Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company under certain circumstances at its option at a redemption price of
$0.0001 per Right, rounded up to the nearest whole cent, payable at the Company’s option in cash or
other securities or property of the Company, subject to adjustment for certain events as provided
in the Rights Agreement.



     No fractional shares of Series A Preferred Stock will be issued upon the exercise of any Right
or Rights evidenced hereby (other than fractions that are integral multiples of one one-thousandth
of a share of Series A Preferred Stock), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.



     No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of Series A Preferred Stock or of any other



2









 







securities that
may at any time be issuable upon the exercise hereof; nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.



     This Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.



     WITNESS the signature of the proper officers of the Company and its corporate seal.



Dated as of                     .




	 	 	 	 	 
	 	MARKETAXESS HOLDINGS INC.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




Countersigned:



	 	 	 	 	 
	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC


      as Rights Agent

 	 
	By  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 




3









 








[Reverse Side of Rights Certificate]




FORM OF ASSIGNMENT




(To be executed by the registered

holder if such holder desires

to transfer the Rights Certificate.)



FOR VALUE RECEIVED                                                                  



hereby sells, assigns and transfers unto                                        



 

(Please print name and address of transferee)



 

this Rights Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                      Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of substitution.




Dated:                                        




	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 



Signature Guaranteed:





 









 








CERTIFICATE





     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) this Rights Certificate [    ] is [    ] is not being sold, assigned and transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement); and



     (2) after due inquiry and to the best knowledge of the undersigned, it [    ] did [    ] did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.



	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature	 	 






Signature Guaranteed:




 






NOTICE




     The signature to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.



     Signatures must be guaranteed by an approved eligible financial institution acceptable to the
Rights Agent in its sole discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Program.



     In the event the certification set forth above is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.




 











 







FORM OF ELECTION TO PURCHASE




(To be executed if the registered

holder desires to exercise

Rights represented by the Rights Certificate)




     To: MARKETAXESS HOLDINGS INC.



     The undersigned hereby irrevocably elects to exercise                      Rights represented by
this Rights Certificate to purchase the Units of Series A Preferred Stock issuable upon the
exercise of the Rights (or such other securities of the Company or of any other person or such
other property as may be issuable upon the exercise of the Rights) and requests that certificates
for such Units of Series A Preferred Stock (or such other securities of the Company or of any other
person or such other property as may be issuable upon the exercise of the Rights) be issued in the
name of and delivered to:



      

(Please print name and address


 


Please insert social security

or other identifying number:                                        




     If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in the name of and
delivered to:


 

(Please print name and address)




 




Please insert social security

or other identifying number:                                        




Dated:                                        




                                                            

Signature



Signature Guaranteed:


 









 



 


   CERTIFICATE



     The undersigned hereby certifies by checking the appropriate boxes that:



     (1) the Rights evidenced by this Rights Certificate [   ] are [   ] are not beneficially owned
by an Acquiring Person or an Affiliate or an Associate thereof (as defined in the Rights
Agreement); and



     (2) after due inquiry and to the best knowledge of the undersigned, the undersigned [   ] did
[   ] did not acquire the Rights evidenced by this Rights Certificate from any person who is, was
or subsequently became an Acquiring Person or an Affiliate or Associate thereof.



	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature	 	 





Signature Guaranteed:




 






NOTICE




     The signature in the foregoing Election to Purchase and Certificate must conform to the name
as written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.



     Signatures must be guaranteed by an approved eligible financial institution acceptable to the
Rights Agent in its sole discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Program.



     In the event the certification set forth above is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.




 











 





EXHIBIT B




SUMMARY OF RIGHTS TO PURCHASE

SERIES A PREFERRED STOCK




     On June 2, 2008, the Board of Directors (the “Board of Directors”) of MarketAxess Holdings
Inc. (the “Company”) implemented a stockholders rights agreement and declared a distribution of one
right (a “Right”) for each outstanding share of common stock, par value $0.003 per share (the
“Common Stock”), and nonvoting common stock, par value $0.003 per share, of the Company (the “Nonvoting Common Stock” and, together with the Common Stock, the “Common Shares”) to stockholders of record at the close of business on June 20, 2008 (the “Record
Date”) and for each  Common Share issued (including Common Shares issued from the
Company’s treasury) by the Company thereafter and prior to the Distribution Date (as defined
below). Each Right entitles the registered holder, subject to the terms of the Stockholders Rights
Agreement (as defined below), to purchase from the Company one one-thousandth of a share (a “Unit”)
of Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), at a
price of $40.00 per Unit, subject to adjustment (the “Purchase Price”).



     The description and terms of the Rights are set forth in a Stockholders Rights Agreement,
dated as of June 2, 2008 (the “Stockholders Rights Agreement”), by and between the Company and
American Stock Transfer & Trust Company, LLC (the “Rights Agent”). Copies of the Stockholders
Rights Agreement and the Certificate of Designation for the Series A Preferred Stock have been
filed with the Securities and Exchange Commission as exhibits to a Registration Statement on Form
8-A dated June 2, 2008 (the “Form 8-A”). Copies of the Stockholders Rights Agreement and
the Certificate of Designation are available free of charge from the Company. This summary
description of the Rights and Series A Preferred Stock does not purport to be complete and is
qualified in its entirety by reference to all the provisions of the Stockholders Rights Agreement
and the Certificate of Designation, including the definitions therein of certain terms, which
Stockholders Rights Agreement and Certificate of Designation are incorporated herein by reference.
Capitalized terms herein and defined in the Stockholders Rights Agreement and not otherwise defined
herein shall have the meaning set forth in the Stockholders Rights Agreement.



     The Stockholders Rights Agreement



     Initially, the Rights will attach to all certificates representing Common Shares then
outstanding, and no separate Rights Certificates will be distributed. The Rights will separate
from the Common Shares and the “Distribution Date” will occur upon the earlier of (i) ten
business days following a public announcement that a person or group of affiliated or associated
persons has become an “Acquiring Person” or (ii) ten business days (or such later date as may be
determined by the Board of Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of a tender or exchange offer that would result in a person or group of
affiliated and associated persons beneficially owning an aggregate of 20% or more of the total
voting power represented by all the then



 









 





outstanding shares of Common Stock and other voting
securities of the Company (the “Voting
Securities”) if, upon consummation thereof, such person would be the beneficial owner of Voting
Securities representing 20% or more of the total Voting Securities then outstanding. Until the
Distribution Date, (i) the Rights will be evidenced by certificates for Common Shares and
will be transferred with and only with such share certificates, (ii) new certificates for
Common Shares issued after the Record Date (including Common Shares distributed from the
Company’s treasury) will contain a notation incorporating the Stockholders Rights Agreement by
reference and (iii) the surrender for transfer of any certificates representing outstanding
Common Shares will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificates.




     An “Acquiring Person” is a person or group of affiliated or associated persons that has
acquired, obtained the right to acquire, or otherwise obtained beneficial ownership of an aggregate
of 20% or more of the total voting power represented by all the then outstanding shares of Voting
Securities. The following, however, are not considered Acquiring Persons: (1) the Company, its
subsidiaries, any employee benefit plan of the Company or any of its subsidiaries, or any entity
holding shares of Voting Securities pursuant to the terms of any such plan; (2) any person or group
that becomes the Beneficial Owner of 20% or more of the total voting power represented by all the
then outstanding Voting Securities solely as a result of the acquisition of Voting Securities by
the Company, unless such person or group thereafter acquires beneficial ownership of additional
Voting Securities; (3) subject to certain conditions set forth in the Stockholders Rights
Agreement, a person or group that otherwise would have become an Acquiring Person as a result of an
inadvertent acquisition of 20% or more of the total voting power represented by all the then
outstanding Voting Securities; and (4) subject to certain conditions set forth in the Stockholders
Rights Agreement, any person or group that would otherwise be deemed an Acquiring Person upon
adoption of the Stockholders Rights Agreement (a “Grandfathered Stockholder”). Except as provided
in the Stockholders Rights Agreement, a person or group that is a Grandfathered Stockholder will
cease to be a Grandfathered Stockholder and will become an Acquiring Person if after adoption of
the Stockholders Rights Agreement such Grandfathered Stockholder acquires beneficial ownership of
additional Voting Securities in excess of one percent of the number of shares of Common Stock
outstanding as of June 2, 2008.



     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on the third anniversary of the Stockholders Rights Agreement unless earlier redeemed or
exchanged by the Company as described below.



     As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of Common Shares as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will represent the Rights.



     If a person or group of affiliated or associated persons becomes an Acquiring Person, then
each holder of a Right will thereafter have the right to receive, upon exercise, shares of



 









 




Common
Stock (or, in certain circumstances, Units of Series A Preferred Stock, other securities, cash,
property or a combination thereof) having a value equal to two times the
exercise price of the Right. The exercise price is the Purchase Price multiplied by the number of
Units of Series A Preferred Stock issuable upon exercise of a Right prior to the events described
in this paragraph.




     Notwithstanding any of the foregoing, following the time any person or group becomes an
Acquiring Person, all Rights that are, or under certain circumstances specified in the Stockholders
Rights Agreement were, beneficially owned by any Acquiring Person or its Affiliates or Associates
will be null and void.



     In the event that, at any time after a person or group becomes an “Acquiring Person,” (i) the
Company is acquired in a merger or other business combination with another company and the Company
is not the surviving corporation, (ii) another company consolidates or merges with the Company and
all or part of the shares of Common Stock are converted or exchanged for other securities, cash or
property or (iii) 50% or more of the consolidated assets or earning power of the Company and its
subsidiaries is sold or transferred to another company, then each holder of a Right (except Rights
that previously have been voided as described above) shall thereafter have the right to receive,
upon exercise, common stock or other equity interest of the ultimate parent of such other company
having a value equal to two times the exercise price of the Right.



     The Purchase Price payable, and the number of Units of Series A Preferred Stock (or other
securities, as applicable) issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Series A Preferred Stock, (ii) if holders of the Series A
Preferred Stock are granted certain rights or warrants to subscribe for Series A Preferred Stock or
convertible securities at less than the current market price of the Series A Preferred Stock or
(iii) upon the distribution to the holders of the Series A Preferred Stock of evidences of
indebtedness, cash or assets (excluding regular quarterly cash dividends or dividends payable in
the Series A Preferred Stock) or of subscription rights or warrants (other than those referred to
above).



     With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least one percent of the Purchase Price. The Company is not required to
issue fractional shares of Series A Preferred Stock (other than fractional shares that are integral
multiples of one one-thousandth of a share). In lieu thereof, an adjustment in cash may be made
based on the market price of the Series A Preferred Stock prior to the date of exercise.



     At any time prior to such time as any person or group or affiliated or associated persons
becomes an Acquiring Person, the Board of Directors may redeem the Rights in whole, but not in
part, at a price of $0.0001 per Right, rounded up to the nearest whole cent (subject to adjustment
in certain events) (the “Redemption Price”). Immediately upon the action of the



 









 




Board of Directors
ordering the redemption of the Rights, the Rights will terminate and the only right of the holders
of such Rights will be to receive the Redemption Price for each Right held.




     Between 90 and 120 days after the commencement of a Qualified Offer (as such term is defined
below), the holders of 10% or more of the Common Stock then outstanding (excluding Common Stock
beneficially owned by the Person making the Qualified Offer and such Person’s Affiliates and
Associates) may, by notice (a “Special Meeting Notice”), require the Company to call a special
meeting of the stockholders to vote on a resolution authorizing the redemption of all, but not less
than all, of the then outstanding Rights at the Redemption Price (the “Redemption Resolution”).
The Board of Directors must cause the Rights to be redeemed or otherwise prevent the Rights from
interfering with the consummation of the Qualified Offer if the special meeting of the stockholders
is not held within 90 days of the Special Meeting Notice (which period may be extended to permit
the stockholders to vote on a definitive acquisition agreement) or if such meeting is held and the
holders of a majority of the outstanding Common Stock (excluding Common Stock beneficially owned by
the Person making the Qualified Offer and such Person’s Affiliates and Associates) vote in favor of
the Redemption Resolution, in each case as long as at such time no Person has become an Acquiring
Person and as long as the Qualified Offer continues to be a Qualified Offer prior to the last day
of the period in which the special meeting of the stockholders must be held.



     A “Qualified Offer” is an offer determined by a majority of the independent directors of the
Company to have each of the following characteristics:



     (i) a fully-financed, all-cash tender offer, or an exchange offer offering shares of common
stock of the offeror, or a combination thereof, in each such case for all of the outstanding shares
of Common Stock at the same per-share consideration;



     (ii) an offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange Act;



     (iii) an offer whose per-share offer price is greater than the highest reported market price
for the Common Stock in the immediately preceding twenty-four months, with, in the case of an offer
that includes shares of common stock of the offeror, such per-share offer price being determined
using the lowest reported market price for common stock of the offeror during the five trading days
immediately preceding and immediately following the commencement of such offer within the meaning
of Rule 14d-2(a) under the Exchange Act;



     (iv) an offer that does not result in a nationally recognized investment banking firm retained
by the Board of Directors rendering an opinion to the Board of Directors that the consideration
being offered to the stockholders of the Company is either unfair or inadequate;



     (v) if the offer includes shares of common stock of the offeror, (A) the offeror must allow
the Company’s investment bank, legal counsel and accountants to perform appropriate due diligence
on the offeror and (B) such investment bank must not render an opinion to the Board of Directors
that the consideration being offered to the stockholders of the Company is either unfair or
inadequate and must not later render an opinion to the



 









 




Board of Directors that the consideration
being offered to the stockholders of the Company has become either unfair or inadequate based on a
subsequent disclosure or discovery of a development or developments
that have had or are reasonably likely to have a material adverse effect on the value of the
common stock of the offeror;




     (vi) an offer that is subject to only the minimum tender condition described in Section
1(v)(ix) of the Stockholders Rights Agreement and other customary terms and conditions, which
conditions shall not include any financing, funding or similar conditions or any requirements with
respect to the offeror or its agents being permitted any due diligence with respect to the books,
records, management, accountants or other outside advisors of the Company;



     (vii) an offer pursuant to which the Company has received an irrevocable written commitment of
the offeror that the offer will remain open for at least 120 Business Days and, if a Special
Meeting is duly requested, for at least fifteen Business Days after the date of the Special Meeting
or, if no Special Meeting is held within ninety Business Days following receipt of the Special
Meeting Notice, for at least fifteen Business Days following such ninety Business Day period;



     (viii) an offer pursuant to which the Company has received an irrevocable written commitment
of the offeror that, in addition to the minimum time periods specified, the offer, if it would
otherwise expire, will be extended for at least twenty Business Days after any increase in the
consideration being offered or after any bona fide alternative offer is commenced within the
meaning of Rule 14d-2(a) under the Exchange Act; provided, however, that such offer
need not remain open beyond (A) the time that any other offer satisfying the criteria for a
Qualified Offer is then required to be kept open, (B) the expiration date of any other tender offer
for the Common Stock with respect to which the Board of Directors has agreed to redeem the Rights
immediately prior to acceptance for payment of the Common Stock thereunder or (C) one Business Day
after the stockholder vote with respect to approval of any definitive acquisition agreement has
been officially determined and certified by the inspectors of elections;



     (ix) an offer that is conditioned on a minimum of at least two-thirds of the outstanding
shares of the Common Stock not held by the Person making such offer (and such Person’s Affiliates
and Associates) being tendered and not withdrawn as of the offer’s expiration date, which condition
shall not be waivable;



     (x) an offer pursuant to which the Company has received an irrevocable written commitment of
the offeror to consummate, as promptly as practicable upon successful completion of the offer, a
second step transaction whereby all shares of the Common Stock not tendered into the offer will be
acquired at the same consideration per share actually paid pursuant to the offer, subject to
stockholders’ statutory appraisal rights;



 









 





     (xi) an offer pursuant to which the Company and its stockholders have received an irrevocable
written commitment of the offeror that no amendments will be made to the offer to reduce the
consideration being offered or to otherwise change the terms of the offer in a way that is adverse
to a tendering stockholder;



     (xii) an offer (other than an offer consisting solely of cash consideration) pursuant to which
the Company has received the written representation and certification of the offeror and, in their
individual capacities, the written representations and certifications of the offeror’s Chief
Executive Officer and Chief Financial Officer, that (A) all facts about the offeror that would be
material to making an investor’s decision to accept the offer have been fully and accurately
disclosed as of the date of the commencement of the offer, (B) all such new facts will be fully and
accurately disclosed during the entire period which the offer remains open, and (C) all required
Exchange Act reports will be filed by the offeror in a timely manner during such period; and



     (xiii) if the offer includes non-cash consideration, (A) the non-cash portion of the
consideration offered must consist solely of common stock of a Person that is a publicly-owned
United States corporation, (B) such common stock must be freely tradable and listed or admitted to
trading on either the New York Stock Exchange or NASDAQ, (C) no stockholder approval of the issuer
of such common stock is required to issue such common stock, or, if required, such approval has
already been obtained, (D) no Person (including such Person’s Affiliates and Associates)
beneficially owns more than 15% of the voting stock of the issuer of such common stock at the time
of commencement or at any time during the term of the offer, (E) no other class of voting stock of
the issuer of such common stock is outstanding and (F) the issuer of such common stock meets the
registrant eligibility requirements for use of Form S-3 for registering securities under the
Securities Act.


For the purposes of the definition of “Qualified Offer,” “fully financed” shall mean that the
offeror has sufficient funds for the offer and related expenses which shall be evidenced by (1)
firm, unqualified, written commitments from responsible financial institutions having the necessary
financial capacity, accepted by the offeror, to provide funds for such offer subject only to
customary terms and conditions, (2) cash or cash equivalents then available to the offeror, set
apart and maintained solely for the purpose of funding the offer with an irrevocable written
commitment being provided by the offeror to the Board of Directors to maintain such availability
until the offer is consummated or withdrawn or (3) a combination of the foregoing; which evidence
has been provided to the Company prior to, or upon, commencement of the offer. If an offer becomes
a Qualified Offer in accordance with this definition, but subsequently ceases to be a Qualified
Offer as a result of the failure at a later date to continue to satisfy any of the requirements of
this definition, such offer shall cease to be a Qualified Offer and the applicable provisions of
the Stockholders Rights Agreement shall no longer be applicable to such offer, provided that the
actual redemption of the Rights shall not have already occurred.




     At any time after any person or group of affiliated or associated persons becomes an Acquiring
Person and before any such Acquiring Person becomes the beneficial owner of 50%



 









 




or more of the
total voting power of the aggregate of all shares of Voting Securities then outstanding, the Board
of Directors, at its option, may exchange each Right (other than Rights that previously have become
void as described above) in whole or in part, at an exchange ratio of one Common Share (or
under certain circumstances one Unit of Series A Preferred Stock or equivalent preferred stock) per
Right (subject to adjustment in certain events).




     Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Series A Preferred Stock (or other consideration).



     Any of the provisions of the Stockholders Rights Agreement may be amended without the approval
of the holders of Rights in order to cure any ambiguity, defect, or inconsistency or to make any
other changes that the Board of Directors may deem necessary or desirable. After any person or
group of affiliated or associated persons becomes an Acquiring Person, the provisions of the
Stockholders Rights Agreement may not be amended in any manner that would adversely affect the
interests of the holders of Rights (excluding the interests of any Acquiring Person).



     Description of Series A Preferred Stock



     On June 2, 2008, the Company also filed a Certificate of Designation for the Series A
Preferred Stock (the “Series A Certificate of Designation”) with Secretary of State of the State of
Delaware. The Series A Certificate of Designation authorizes the Company to issue 110,000 of its
5,000,000 authorized shares of preferred stock as shares of Series A Preferred Stock.



     The Units of Series A Preferred Stock that may be acquired upon exercise of the Rights will
not be redeemable and will rank junior to any other shares of preferred stock that may be issued by
the Company with respect to the payment of dividends and as to distribution of assets in
liquidation.



     Each share of Series A Preferred Stock will have a minimum preferential quarterly dividend of
the greater of $1.00 per share or 1,000 times the aggregate per share amount of any cash dividend
declared on the shares of Common Stock since the immediately preceding quarterly dividend, subject
to certain adjustments.



     In the event of liquidation, the holder of Series A Preferred Stock will be entitled to
receive a cash preferred liquidation payment per share equal to the greater of $1.00 (plus accrued
and unpaid dividends thereon) or 1,000 times the amount paid in respect of a share of Common Stock,
subject to certain adjustments.



 









 





     Generally, each share of Series A Preferred Stock will vote together with the shares of Common
Stock and any other class or series of capital stock entitled to vote on such matter, and will be
entitled to 1,000 votes per share, subject to certain adjustments. The holders of the Series A
Preferred Stock, voting as a separate class, shall be entitled to elect two directors if dividends
on the Series A Preferred Stock are in arrears in an amount equal to six quarterly dividends
thereon.



     In the event of any merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Series A Preferred Stock will be entitled to receive 1,000 times the
aggregate per share amount of stock, securities, cash or other property paid in respect of each
share of Common Stock, subject to certain adjustments.



     The rights of holders of the Series A Preferred Stock to dividend, liquidation and voting
rights are protected by customary anti-dilution provisions.



     Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting
rights, the economic value of one Unit of Series A Preferred Stock is expected to approximate the
economic value of one share of Common Stock.



     Amendment of Rights



     The terms of the Rights generally may be amended by the Board of Directors without the
approval of the holders of the Rights, except that from and after such time as the Rights are
distributed, no such amendment may adversely affect the interests of the holders of Rights
(excluding any interests of any Acquiring Person).




 











 





EXHIBIT C




CERTIFICATE OF DESIGNATION

OF

SERIES A PREFERRED STOCK

OF

MARKETAXESS HOLDINGS INC.




 






Pursuant to Section 151 of the

General Corporation Law of

the State of Delaware




 






     MarketAxess Holdings Inc., a corporation duly organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY:



     That, pursuant to authority conferred by the Corporation’s Amended and Restated Certificate of
Incorporation, as amended (the “Certificate”) and by the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the board of directors of the Corporation (the
“Board of Directors”), at a duly called meeting, at which a quorum was present and acted
throughout, adopted the following resolutions, which resolutions remain in full force and effect on
the date hereof creating a series of 110,000 shares of Preferred Stock having a par value of $0.001
per share, designated as Series A Preferred Stock:



     RESOLVED, that in accordance with the provisions of the Certificate, the Board of Directors
does hereby create, authorize and provide for the issuance of a series of Preferred Stock, par
value $0.001 per share, of the Corporation, designated as “Series A Preferred Stock,” having the
voting rights, powers, preferences and relative, participating, optional and other special rights,
preferences, and qualifications, limitations and restrictions thereof that are set forth as
follows:



     Section 1. Designation and Amount. The shares of such class shall be designated as
“Series A Preferred Stock” (the “Series A Preferred Stock”) and the number of shares
constituting such class shall be 110,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors, provided that no such decrease shall reduce the
number of shares of the Series A Preferred Stock to a number less than the number of shares then
outstanding, plus the number reserved for issuance upon the exercise of options, rights or
warrants, or upon conversion of any outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.



     Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights
of the holders of any shares of any other class or series of Preferred Stock of the Corporation
ranking prior and superior to the shares of Series A Preferred Stock with respect to



 









 







dividends, each holder of a share (a “Share”) of Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds legally available for
that purpose, (i) quarterly dividends payable in cash on the last day of March, June, September,
and December in each year (each such date being a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance of such Share of
Series A Preferred Stock, in an amount per Share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, one thousand
(1,000) times an amount equal to (x) the aggregate per share amount of all cash dividends declared
on shares of the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Share of
Series A Preferred Stock, minus (y) the amount in cash actually paid per share of Common Stock
pursuant to Section 2(B) below since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Share of
Series A Preferred Stock, and (ii) subject to the provision for adjustment hereinafter set forth,
quarterly distributions (payable in kind) on each Quarterly Dividend Payment Date in an amount per
Share equal to one thousand (1,000) times the aggregate per share amount of all non-cash dividends
or other distributions (other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock, by reclassification or otherwise) declared on shares of
Common Stock since the immediately preceding Quarterly Dividend Payment Date, or with respect to
the first Quarterly Dividend Payment Date, since the first issuance of a Share of Series A
Preferred Stock. In the event that the Corporation shall at any time after June 2, 2008 (the
“Rights Declaration Date”) (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii)
combine outstanding shares of Common Stock into a smaller number of shares, then in each such case
the amount to which the holder of a Share of Series A Preferred Stock was entitled immediately
prior to such event pursuant to the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be the number of shares
of Common Stock that were outstanding immediately prior to such event.



     (B) The Corporation shall declare a dividend or distribution on Shares of Series A Preferred
Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution
on the shares of Common Stock (other than a dividend or distribution payable in shares of Common
Stock); provided, however, that in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Date, a dividend of $1.00 per Share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.



     (C) Dividends shall begin to accrue and shall be cumulative on each outstanding Share of
Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of
issuance of such Share of Series A Preferred Stock, unless the date of issuance of such Share is
prior to the record date for the first Quarterly Dividend Payment Date, in which case, dividends on
such Share shall begin to accrue from the date of issuance of



2









 







such Share, or unless the date of issuance is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of Shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on Shares of Series A
Preferred Stock in an amount less than the aggregate amount of all such dividends at the time
accrued and payable on such Shares shall be allocated pro rata on a share-by-share basis among all
Shares of Series A Preferred Stock at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of Shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.



     Section 3. Voting Rights. The holders of Shares of Series A Preferred Stock shall
have the following voting rights:



     (A) Subject to the provision for adjustment hereinafter set forth, each Share of Series A
Preferred Stock shall entitle the holder thereof to one thousand (1,000) votes on all matters
submitted to a vote of the holders of Common Stock of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock or (iii) combine the outstanding shares of Common Stock into a small number
of shares, then in each such case the number of votes per Share to which holders of Shares of
Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately after such event and the denominator of which shall be the
number of shares of Common Stock that were outstanding immediately prior to such event.



     (B) Except as otherwise provided herein or in any other Certificate of Designation creating a
series of preferred stock, or any similar stock, or by law, the holders of Shares of Series A
Preferred Stock, the holders of shares of Common Stock, and the holders of any other class or
series of capital stock of the Corporation entitled to vote generally, together with the Common
Stock, shall vote together as one class on all matters submitted to a vote of the holders of such
stock.



     (C) (i) If at any time dividends on any Shares of Series A Preferred Stock shall be in arrears
in an amount equal to six quarterly dividends thereon, then during the period (a “default
period”) from the occurrence of such event until such time as all accrued and unpaid dividends
for all previous quarterly dividend periods and for the current quarterly dividend period on all
Shares of Series A Preferred Stock then outstanding shall have been declared and paid or set apart
for payment, the holders of the outstanding Shares of Series A Preferred Stock, together with the
holders of outstanding shares of any one or more other classes or series of stock of the
Corporation upon which like voting rights have been conferred and are exercisable (voting together
as a class), shall have the right to elect two Directors to the Board of Directors of the
Corporation at the Corporation’s next annual meeting of



3









 







stockholders, and so long as such default period continues, shall have the right to elect a
successor to each of the two Directors so elected upon the expiration of their respective terms,
such right to be exercised at the subsequent annual meeting or meetings at which the respective
terms of such Directors expire. Any Director who shall have been so elected pursuant to this
paragraph may be removed only for cause. If the office of any Director elected by the holders of
Shares of Series A Preferred Stock pursuant to this paragraph becomes vacant for any reason, the
remaining Director elected pursuant to this paragraph may choose a successor who shall hold office
for the unexpired term in respect of which such vacancy occurred, and if the offices of both such
Directors elected by the holders of Shares of Series A Preferred Stock pursuant to this paragraph
become vacant for any reason, such vacancies may be filled for the unexpired term in respect of
which such vacancy occurred only by the affirmative vote of the holders of the outstanding Shares
of Series A Preferred Stock, together with the holders of the outstanding shares of any other class
or series of stock upon which like voting rights have been conferred and are exercisable (voting
together as a class).



          (ii) The voting rights vested pursuant to paragraph (C)(i) hereof in the holders of the
outstanding Shares of Series A Preferred Stock, together with the holders of outstanding shares of
any one or more other classes or series of stock of the Corporation upon which like voting rights
have been conferred and are exercisable (voting together as a class), may not be exercised at any
annual meeting unless one-third of the outstanding shares of stock of the corporation upon which
such voting rights have been conferred shall be present at such meeting in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of
Shares of Series A Preferred Stock of such rights. In connection with the election of Directors
pursuant to paragraph (C)(i) hereof, each holder of Shares of Series A Preferred Stock shall be
entitled to one vote for each one one-thousandth of a Share held (the holders of shares of any
other class or series of preferred stock having like voting rights being entitled to such number of
votes, if any, for each share of such stock held as may be granted to them).




          (iii) During any default period, the holders of shares of Common Stock, and Shares of Series
A Preferred Stock, and other classes or series of stock of the Corporation, if applicable, shall
continue to be entitled to elect (voting together as a class) all the Directors other than the two
Directors to be elected pursuant to paragraph (C)(i) hereof by the holders of the outstanding
shares of Series A Preferred Stock, together with the holders of outstanding shares of any one or
more other classes or series of stock of the Corporation upon which like voting rights have been
conferred and are exercisable (voting together as a class).




          (iv) Immediately upon the expiration of a default period, (x) the right of the holders of
Shares of Series A Preferred Stock to elect Directors pursuant to paragraph (C)(i) hereof shall
cease (subject to re-vesting in the event of each and every subsequent default of the character
mentioned in paragraph (C)(i) above), and (y) the term of any Directors elected by the holders of
Shares of Series A Preferred Stock pursuant to paragraph (C)(i) hereof shall terminate.






     (D)  Notwithstanding anything to the contrary contained herein, each Share of Series A
 Preferred Stock issued upon exercise of a Right which was originally received by the holder
thereof in respect of a share of Nonvoting Common Stock of the Company shall have no voting rights
 other than such rights as the shares of Nonvoting Common Stock have under the Certificate, unless
 and until such share of Nonvoting Common Stock of the Company is converted into Common Stock in
accordance with the Certificate (in which event it shall have the voting rights it would have had
if it had originally been issued in respect of such Common Stock).



     (E) Except as set forth herein, holders of Shares of Series A Preferred Stock shall have no
special voting rights and their consents shall not be required (except to the extent



4









 







they are entitled to vote with holders of share of Common Stock as set forth herein) for taking any
corporate action.



     Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other
dividends or distributions payable on Shares of Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or
not declared, on outstanding Shares of Series A Preferred Stock shall have been paid in full, the
Corporation shall not




     (i) declare or pay dividends on, or make any other distributions on, any shares
of Junior Stock;




     (ii) declare or pay dividends on or make any other distributions on any shares
of Parity Stock, except dividends paid ratably on Shares of Series A Preferred Stock
and shares of all such Parity Stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of such Shares and all such
shares are then entitled;




     (iii) redeem or purchase or otherwise acquire for consideration shares of any
Junior Stock, provided, however, that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such Junior Stock in
exchange for shares of any Junior Stock; provided further, that the
Corporation may repurchase shares of Common Stock owned by terminated employees of,
or consultants to, the Corporation or its subsidiaries;




     (iv) redeem or purchase or otherwise acquire for consideration any Shares of
Series A Preferred Stock, or any Parity Stock except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates, and other relative rights and
preferences of the respective series and classes, shall determine in good faith,
will result in fair an equitable treatment among the respective series or classes.



     (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.



     Section 5. Reacquired Shares. Any Shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock, par value $0.001 per share, and may be reissued
as part of a new series of Preferred Stock, subject to the conditions and restrictions on issuance
set forth herein, in the Certificate, or in any other Certificate of



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Designation creating a series of Preferred Stock, par value $0.001 per share, or any similar stock,
or as otherwise restricted by law.



     Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation no distribution shall be made
(i) to the holders of shares of Junior Stock unless the holders of Shares of Series A Preferred
Stock shall have first received, subject to adjustment as hereinafter provided in paragraph (B), an
amount in cash equal to the greater of either (a) $1.00 per Share plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of
such payment, or (b) the amount equal to one thousand (1,000) times the aggregate per share amount
to be distributed to holders of shares of Common Stock, or (ii) to the holders of shares of Parity
Stock, unless simultaneously therewith distributions are made ratably on Shares of Series A
Preferred Stock and all other shares of such Parity Stock in proportion to the total amounts to
which the holders of Shares of Series A Preferred Stock are entitled under clause (i)(a) of this
sentence and to which the holders of shares of such Parity Stock are entitled, in each case upon
such liquidation, dissolution or winding up.



     (B) In the event the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding shares of Common Stock
into a smaller number of shares, then in each such case the aggregate amount to which holders of
Shares of Series A Preferred Stock were entitled immediately prior to such event pursuant to clause
(i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.



     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination, or other transaction in which the shares of Common Stock are
exchanged for or converted into other stock, securities, cash, and/or any other property, then in
any such case Shares of Series A Preferred Stock shall at the same time be similarly exchanged for
or converted into an amount per Share (subject to the provision for adjustment hereinafter set
forth) equal to one thousand (1,000) times the aggregate amount of stock, securities, cash, and/or
other property (payable in kind), as the case may be, into which or for which each share of Common
Stock is converted or exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine outstanding
Common Stock into a smaller number of shares, then in each such case the amount set forth in the
immediately preceding sentence with respect to the exchange or conversion of Shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which
shall be the number of shares of Common Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.



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     Section 8. Conversion; Redemption. The Shares of Series A Preferred Stock shall not
be convertible into any other class or series of capital stock of the Corporation, or redeemable.



     Section 9. Ranking. Except as provided below, the Series A Preferred Stock shall
rank junior to all other series of Preferred Stock, par value $0.001 per share, and to any other
class of preferred stock that hereafter may be issued by the Corporation as to the payment of
dividends and the distribution of assets, unless the terms of any such series or class shall
provide otherwise. The Series A Preferred Stock shall rank prior, as to dividends and upon
liquidation, dissolution, or winding up, to the Common Stock.



     Section 10. Amendment. Except as set forth in Section 1 hereof, at any time that any
Shares of Series A Preferred Stock are outstanding, the Certificate, including, without limitation,
this Certificate of Designation shall not be amended, either directly or indirectly, or through
merger or consolidation with another corporation or otherwise, in any manner that would alter or
change the powers, preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least two-thirds of the
outstanding Shares of Series A Preferred Stock, voting separately as a class.



     Section 11. Fractional Shares. The Series A Preferred Stock may be issued in
fractions of one one-thousandth of a Share or other fractions of a share, which fractions shall
entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions, and to have the benefit of all other rights of
holders of Series A Preferred Stock.


     Section 12. Definitions. All capitalized terms used herein have the meanings
ascribed to them in the Certificate, unless otherwise defined herein. In addition, for purposes
hereof, the following terms shall have the meanings set forth below:



     (A) The term “Common Stock” shall mean the class of stock designated as the Common
Stock, par value $0.003 per share, of the Corporation at the date hereof or any other class of
stock resulting from successive changes or reclassification of such Common Stock.



     (B) The term “Junior Stock” (i) as used in Section 4, shall mean the Common Stock and
any other class or series of capital stock of the Corporation hereafter authorized or issued over
which the Series A Preferred Stock has preference or priority as to the payment of dividends and
(ii) as used in Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Corporation over which the Series A Preferred Stock has preference or priority in the
distribution of assets on any liquidation, dissolution or winding up of the Corporation.


     (C)  The
term “Nonvoting Common Stock” shall mean the class of stock designated as the Common Stock, par
 value $0.003 per share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of such Common Stock.



     (D) The term “Parity Stock” (i) as used in Section 4, shall mean any class or series
of stock of the Corporation hereafter authorized or issued ranking pari passu with
the Series A Preferred Stock as to the payment of dividends and (ii) as used in Section 6, shall
mean any class or series of stock of the Corporation hereinafter authorized or issued and



     (E)  The term “
Right” shall have the meaning given to it in the Stockholders Rights Agreement
of the Company, dated as of June 2, 2008.


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ranking pari passu with the Series A Preferred Stock as to the distribution of
assets on any liquidation, dissolution, or winding up of the Corporation.



[End of text. Signature page follows.]




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     IN WITNESS WHEREOF, MarketAxess Holdings Inc. has caused this Certificate of Designation to be
signed by its authorized officer this       day of      , 2008.



	 	 	 	 	 
	 	MARKETAXESS HOLDINGS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




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