EX-10.1.B






Exhibit 10.1(b)




	 	 	 
	

	 	140 Broadway

42nd Floor

New York, NY 10005

Tel (212) 813-6000

Fax (212 813-6340

www.marketaxess.com






December 19, 2008




Mr. Richard M. McVey, Chief Executive Officer

c/o MarketAxess Holdings, Inc.

140 Broadway, 42nd Floor

New York, New York 10005




Re: Amendment to Employment Agreement



Dear Rick:




          Reference is hereby made to the letter agreement between you and MarketAxess Holdings Inc.
(the “Company”), dated as of May 3, 2004 (the “Employment Agreement”). Unless
otherwise indicated, any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Employment Agreement. The purpose of this letter is to modify the
Employment Agreement as agreed between you and the Company, including amendments that the parties
agree will be interpreted to comply with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended. Accordingly, the Employment Agreement is hereby amended effective as of
January 1, 2005 as follows:




          1. The second sentence of the first paragraph of Section 2 of the Employment Agreement is
hereby amended in its entirety to provide as follows:





“You will be eligible to receive an annual bonus subject to, and in accordance with, the
Company’s annual performance incentive plan as in effect from time to time.”



          2. Section 4(a) of the Employment Agreement is hereby amended in its entirety to provide as
follows:





     “(a) In the event your employment with the Company pursuant to this Letter Agreement is
terminated outside the Change in Control Protection Period (as defined in Section 4(b)) other
than: (x) by you voluntarily (other than as a result of your resignation for Good Reason); or
(y) by the Company as a result of: (A) your willful misconduct or gross negligence in the
performance of your duties under this Letter Agreement that is not cured by you within thirty
(30) days after your receipt of written notice given to you by the Company; (B) your
conviction of, or plea of guilty or nolo contendere to, a crime relating to the Company or any
affiliate or any felony; or (C) a material breach by you of this Letter Agreement or any other
material written agreement entered into between you and the Company that is not cured by you
within thirty (30) days after your receipt of written notice given to you by the Company (a
“Cause Event”), subject to your executing and
delivering to the Company within 60 days following the date of such termination a fully



 









 





Mr. Richard M. McVey

December 19, 2008

Page 2





effective waiver and general release in substantially in the form which has been provided to
other senior management employed by the Company (the “Release”), which the Company will
provide to you within seven (7) days following the date of termination, the Company will: (i)
continue to pay you (or, in the event of your death, your estate) in accordance with this
Section 4(a) your base salary for a period of twelve (12) months commencing on the date set
forth below in accordance with the usual payroll practices of the Company, but off the
employee payroll; (ii) pay you an amount equal to the average of the annual cash bonuses you
received from the Company for the three (3) completed calendar years prior to termination,
payable in accordance with this Section 4(a) in twelve (12) approximately equal monthly
installments commencing on the date set forth below; (iii) pay you any accrued and earned but
unpaid annual bonus for the prior calendar year that would have been paid but for such
termination, payable when such annual bonus would have otherwise been paid in accordance with
the applicable annual performance incentive plan; and (iv) if you (or in the event of your
death, your spouse or dependents) timely elect to continue health coverage under the Company’s
plan in accordance with COBRA, pay your, your spouse’s and your dependent’s continuation
coverage premiums to the extent and for so long as you (or, in the event of your death, your
spouse or dependents) remain eligible for such continuation coverage under the applicable plan
and pursuant to applicable law, but in no event for more than twelve (12) months from the date
of termination. Notwithstanding anything herein to the contrary, payment of the amounts
described in subsections (i), (ii) and (iii) above shall be subject to the delay provided
under Section 8(a), and in the event that such delay does not apply to the amounts described
in subsection (i) and (ii), then the first payments of such amounts will made on the sixtieth
(60th) day after the date of termination, which first payment will include payment
of any amounts that would otherwise be due prior thereto.”



          3. Section 4(b) of the Employment Agreement is hereby amended in its entirety to provide as
follows:





“ (b) In the event your employment with the Company pursuant to this Letter Agreement is
terminated by you for Good Reason (as defined below) or other than: (x) by you voluntarily
(other than as a result of your resignation for Good Reason); (y) as a result of your death;
or (z) by the Company as a result of a Cause Event, in any case, on or within eighteen (18)
months after a Change in Control (as defined in the MarketAxess Holdings Inc. 2004 Stock
Incentive Plan) or within three (3) months prior to a Change in Control that constitutes a
Change in Control Event within the meaning of Section 409A of Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations and guidance promulgated thereunder
(collectively “Code Section 409A”) (the “Change in Control Protection Period”), in
lieu of the payments and benefits described in Section 4(a), and subject to your executing and
delivering to the Company within 60 days following the date of such termination a fully
effective copy of the Release, which the Company will provide to you within seven (7) days
following the date of termination, the Company will: (i) continue to pay you (or, in the event
of your death, your estate) in accordance with this Section 4(b) your base salary for a period
of twenty-four (24) months commencing on the



 









 





Mr. Richard M. McVey

December 19, 2008

Page 3





date set forth below in accordance with the usual
payroll practices of the Company, but off the employee payroll; (ii) pay you an amount equal
to two (2) times the average of the annual cash bonus you received from the Company for the
three (3) completed calendar years prior to such termination, which shall be payable in
accordance with this Section 4(b) in twenty-four (24) approximately equal monthly installments
commencing on the date set forth below; (iii) pay you any accrued and earned but unpaid annual
bonus for the prior calendar year that would have been paid but for such termination, payable
when such annual bonus would have otherwise been paid in accordance with the applicable annual
performance incentive plan; and (iv) provide you with the benefits described in Section
4(a)(iv) (provided in the manner described therein) for up to eighteen (18) months from the
date of termination. Notwithstanding anything herein to the contrary, payment of the amounts
described in subsections (i), (ii) and (iii) above shall be subject to the delay provided
under Section 8(a), and in the event that such delay does not apply to the amounts described
in subsection (i) and (ii), then the first payments of such amounts will made on the sixtieth
(60th) day after the date of termination, which first payment will include payment
of any amounts that would otherwise be due prior thereto.”



          4. Section 4(e) of the Employment Agreement is hereby amended in its entirety to provide as
follows:





“ (e) Upon termination of your employment for any reason, the Company will have no obligations
under this Letter Agreement other than as provided above and to pay you: (i) any base salary
you have earned and accrued but remains unpaid as of the date of your termination of
employment, paid in accordance with the usual payroll practices of the Company; (ii) any
unreimbursed business expenses otherwise reimbursable in accordance with the Company’s
policies as in effect from time to time, paid in accordance with such policies and Section
8(d) below; and (iii) benefits paid and or provided in accordance with the terms of the
applicable plans and programs of the Company.”



          5. The following sentence is hereby added to the end of Section 5 of the Employment Agreement
to provide as follows:





“If such reduction is to be effective, the Company Payments shall be reduced in the following
order: (a) any cash severance based on salary or bonus, (b) any other cash amounts payable to
you, (c) any benefits valued as “parachute payments” within the meaning of Code Section
280G(b)(2); (d) acceleration of vesting of any stock option or similar awards for which the
exercise price exceeds the then fair market value, and (e) acceleration of vesting of any
equity not covered by clause (d) above.”



          6. A new Section 8 is hereby added to the Employment Agreement to provide as follows:





“8 Code Section 409A.



 









 





Mr. Richard M. McVey

December 19, 2008

Page 4





     (a) Notwithstanding any provision to the contrary in this Letter Agreement, a termination
of your employment will not be deemed to have occurred for purposes of any provision of this
Letter Agreement providing for the payment of any amounts or benefits upon or following a
termination of employment unless such termination is also a “separation from service” (within
the meaning of Code Section 409A) and, for purposes of any such provision of this Letter
Agreement, references to a “termination” or “termination of employment” will mean separation
from service. If you are deemed on the date of termination of your employment to be a
“specified employee”, within the meaning of that term under Section 409A(a)(2)(B) of the Code
and using the identification methodology selected by the Company from time to time, or if
none, the default methodology set forth in Code Section 409A, then with regard to any payment
or the providing of any benefit that constitutes “non-qualified deferred compensation”
pursuant to Code Section 409A, such payment or benefit will not be made or provided prior to
the earlier of (i) the expiration of the six-month period measured from the date of your
separation from service or (ii) the date of your death. On the first day of the seventh month
following the date of your separation from service or, if earlier, on the date of your death,
all payments delayed pursuant to this Section (whether they would have otherwise been payable
in a single sum or in installments in the absence of such delay) will be paid or reimbursed to
you in a lump sum, and any remaining payments and benefits due under this Letter Agreement
will be paid or provided in accordance with the normal payment dates specified for them
herein.




     (b) If you (or your representative) inform the Company that any provision of this Letter
Agreement would cause you to incur any additional tax or interest under Code Section 409A, the
Company will consider in good faith reforming such provision, after consulting with and
receiving your approval (which will not be unreasonably withheld); provided that the Company
agrees to maintain, to the maximum extent practicable, the original intent and economic
benefit to you of the applicable provision without violating the provisions of Code Section
409A.




     (c) The parties agree that this Letter Agreement shall be interpreted to comply with Code
Section 409A and all provisions of this Letter Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under Code Section 409A. In
no event will the Company be liable for any additional tax, interest or penalties that may be
imposed on you by Code Section 409A or any damages for failing to comply with Code Section
409A or the provisions of this Section 8.




     (d) Any reimbursement of costs and expenses provided for under this Letter Agreement
shall be made no later than December 31 of the calendar year next following the calendar year
in which the expenses to be reimbursed are incurred.




     (e) With regard to any provision herein that provides for reimbursement of expenses or
in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits,



 









 





Mr. Richard M. McVey

December 19, 2008

Page 5





provided during any
taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to
be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be
violated with regard to expenses reimbursed under any arrangement covered by Code Section
105(b) solely because such expenses are subject to a limit related to the period the
arrangement is in effect.




     (f) With regard to any installment payments provided for herein, each installment thereof
shall be deemed a separate payment for purposes of Code Section 409A.




     (g) Whenever a payment under this Letter Agreement specifies a payment period with
reference to a number of days, the actual date of payment within the specified period shall be
within the sole discretion of the Company.




     (h) To the extent that this Letter Agreement provides for your indemnification by the
Company and/or the payment or advancement of costs and expenses associated with
indemnification, any such amounts shall be paid or advanced to you only in a manner and to the
extent that such amounts are exempt from the application of Code Section 409A in accordance
with the provisions of Treasury Regulation 1.409A-1(b)(10).”



          This letter shall serve as an amendment to the Employment Agreement. Accordingly, by signing
this letter, you agree to the amendments to your Employment Agreement set forth herein. All other
terms of the Employment Agreement shall remain unchanged and, as amended, the Employment Agreement
shall remain in full force and effect. If the terms set forth above accurately reflect the
understanding between you and the Company, please execute a copy of this letter and return it to
acknowledge your agreement to the foregoing.




	 	 	 	 	 
	 	Very truly yours,





MARKETAXESS HOLDINGS INC.

 	 
	 	By:  	/s/ James N.B. Rucker
 	 
	 	 	James N. B. Rucker 	 
	 	 	Chief Financial Officer 	 
	 



	 	 	 
	Accepted and Agreed:
	 	 
	 
	 	 
	/s/ Richard M. McVey
 

Richard M. McVey