EX-10.1



 





Exhibit
10.1


FORM OF PERFORMANCE

SHARE AWARD AGREEMENT
FOR MESSRS. McVEY AND MILLET




PERFORMANCE SHARE AWARD AGREEMENT

PURSUANT TO THE

MARKETAXESS HOLDINGS INC.

2004 STOCK INCENTIVE PLAN




     THIS
PERFORMANCE SHARE AWARD AGREEMENT (this “Agreement”), made effective as
of            , by and
between MarketAxess Holdings Inc. (the “Company”)
and               (the “Participant”).



     WHEREAS, the Board of Directors of the Company (the “Board”) adopted, and the
stockholders of the Company, approved the MarketAxess Holdings Inc. 2004 Stock Incentive Plan
(Amended and Restated Effective April 28, 2006) (the “Plan”);



     WHEREAS, the Company, through the Committee under the Plan, wishes to grant to the Participant
a Performance Share Award under the Plan that, upon the achievement of the performance metric set
forth on Appendix A attached hereto and subject to the Participant’s continuing service
with the Company or an Affiliate through the achievement of such performance metric, may provide
for the issuance of shares of the Company’s common stock, par value $.003 per share (“Common
Stock”) in accordance with the terms of this Agreement;



     WHEREAS, the performance metric set forth on Appendix A attached hereto is intended to
constitute a “performance goal”, as set forth under the Plan; and



     WHEREAS, such shares of Common Stock, when issued to the Participant, shall be subject to the
terms of this Agreement (including without limitation, the restrictions set forth in Sections 4 and
5 herein).



     NOW, THEREFORE, the Company and the Participant agree as follows:



     1. Grant of Performance Share Award. Subject to the restrictions, terms and
conditions of the Plan and this Agreement, the Company hereby awards and grants to the Participant
                     Performance Shares entitling the Participant to receive, for each Performance
Share earned in accordance with Section 2 below, one share of Common Stock, subject to the
provisions of Appendix A attached hereto (the “Performance Share Award”).
Fractional shares shall be aggregated until, and eliminated at, the time earned by rounding-down
for fractions less than one-half and rounding-up for fractions equal to or greater than one-half.
No cash settlements shall be made with respect to fractional shares eliminated by rounding.



     2. Payment. Subject to the Participant’s not incurring a Termination of Employment
prior to the Settlement Date (as defined below) (except as otherwise specifically set forth in this
Agreement), upon the Committee determining and certifying the level of achievement of the
performance metric set forth on Appendix A attached hereto with respect to the Company’s
fiscal year beginning on                      and ending on                      (the “Performance Period”), the Company shall award to the Participant a number of
shares of Common Stock following the Performance Period reflecting the













 





level of attainment of the performance metric in accordance with Appendix A attached
hereto (“Awarded Shares”) during the Performance Period. The Committee shall certify the
level of achievement of the performance metric during the Company’s first fiscal quarter in             , but in any event no later than                     , and on the date of such
certification (the “Settlement Date”) the Committee shall grant to the Participant the
applicable number of Awarded Shares in accordance with Appendix A attached hereto.
Pursuant to Sections 4 and 5 hereof, any Awarded Shares granted hereunder shall be subject to
certain restrictions, which restrictions relate to the passage of time as an employee of, or
consultant to, the Company or its Affiliates, as described in Section 4.1 hereof. While such
restrictions are in effect, the Awarded Shares granted subject to such restrictions shall be
referred to herein as “Restricted Stock.” The Performance Shares and, if any, the number
of Awarded Shares and the number of shares of Restricted Stock are subject to adjustment under
Section 4.2(b) of the Plan. Prior to the Settlement Date, the provisions in Section 9.1 of the
Plan regarding Detrimental Activity shall apply to the Performance Share Award.



     3. Termination of Employment/ Change in Control Prior to Settlement Date.



          3.1. Termination of Employment.





	 	(a)	 	In the event of the Participant’s Termination of Employment by reason of
death or Disability, each prior to the Settlement Date, then on the Settlement Date,
the Participant shall receive the Restricted Stock that the Participant would have
received if the Participant had been employed by the Company on the Settlement Date,
based on the actual level of achievement of the performance metric, and all of the
unvested shares of such Restricted Stock shall become immediately vested.
	 
	 	(b)	 	In the event of the Participant’s Termination of Employment by the Company
without Cause or by the Participant for Good Reason, each prior to the Settlement
Date, then on the Settlement Date, the Participant shall receive the Restricted Stock
that the Participant would have received if the Participant had been employed by the
Company on the Settlement Date, based on the actual level of achievement of the
performance metric, and 50% of the total number of unvested shares of such Restricted
Stock shall immediately vest. Any remaining unvested shares of Restricted Stock shall
be forfeited.





          3.2. Change in Control. In the event of a Change in Control before the Settlement
Date, the Committee, in its sole discretion, may treat the Performance Share Award in accordance
with any one of the following methods as determined by the Committee:





	 	(a)	 	The Committee may determine that performance metric set forth on Appendix
A would likely have been achieved at or above the 80%




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	 	 	 	Performance Target level on the Settlement Date and treat the Performance Share Award
in accordance with any one of the following methods, as determined by the Committee:






	 	(i)	 	The Committee may determine that the performance metric is deemed
achieved at the Performance Target, and on the date of the Change in Control,
the Participant shall be granted Restricted Stock at the Performance Target
level, subject to the conditions of Section 4, and all unvested Restricted Stock
shall become immediately vested if (i) such Change in Control occurs within
three months following a Termination of Employment by the Participant for Good
Reason or (ii) the Participant incurs a Termination of Employment by the Company
without Cause within 24 months following such Change in Control;
	 
	 	(ii)	 	Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will not be continued, assumed or
have new rights substituted therefor in accordance with Section 12.1(a) of the
Plan and the Participant will be granted Restricted Stock which shall become
immediately vested on the Change in Control; or
	 
	 	(iii)	 	Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be continued, assumed or have
new rights substituted therefor in accordance with Section 12.1(a) of the Plan.






	 	(b)	 	The Committee may determine that performance metric set forth on Appendix
A would likely have been achieved below the 80% Performance Target level on the
Settlement Date and treat the Performance Share Award in accordance with any one of
the following methods as determined by the Committee:






	 	(i)	 	Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be canceled in its entirety;
or
	 
	 	(ii)	 	Immediately prior to the Change in Control, the Committee may
determine that the Performance Share Award will be continued, assumed or have
new rights substituted therefor in accordance with Section 12.1(a) of the
Plan.






	 	(c)	 	The Committee may elect not to make a determination of the likely achievement
of the performance metric set forth on Appendix A and treat the Performance
Share Award in accordance with Section 12.1 of the Plan.




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	 	(d)	 	Notwithstanding any other provision herein, the Committee may otherwise
determine the treatment of the Performance Share Award, which shall not be
inconsistent with any of the terms of the Plan.





     4. Restricted Stock.



          4.1. Vesting. The Restricted Stock shall become vested and cease to be Restricted
Stock (but shall remain subject to the other terms of this Agreement and the Plan) as follows if
the Participant has been continuously employed by the Company or an Affiliate from the Settlement
Date until the applicable vesting date:




	 	 	 
	Vesting Date	 	Percentage Vested
	                    
	 	                    
	 	 	 
	                    
	 	                    





Except as otherwise provided herein, there shall be no proportionate or partial vesting in the
periods prior to the applicable vesting dates and all vesting shall occur only on the appropriate
vesting date. When any shares of Restricted Stock become vested, the Company shall promptly
deliver to the Participant any related RS Property (as defined below), subject to applicable
withholding.




          4.2. Detrimental Activity. The provisions in Section 8.1 of the Plan regarding
Detrimental Activity shall apply to the Restricted Stock.




          4.3. Termination of Employment/ Change in Control.





	 	(a)	 	Termination of Employment.






	 	(i)	 	In the event of the Participant’s Termination of Employment by
reason of death or Disability, each on or after the Settlement Date, then all
unvested Restricted Stock shall become immediately vested.
	 
	 	(ii)	 	In the event of the Participant’s Termination of Employment by
the Company without Cause or by the Participant for Good Reason, each on or
after the Settlement Date, 50% of the total number of unvested shares of
Restricted Stock granted pursuant to this Agreement shall vest. Any remaining
unvested shares of Restricted Stock shall be forfeited.






	 	(b)	 	Change in Control.






	 	(i)	 	If on or after the Settlement Date there is a Change in Control
and (i) such Change in Control occurs within three months following a
Termination of Employment by the Participant for Good Reason or




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	 	 	 	(ii) the Participant incurs a Termination of Employment by the Company
without Cause within 24 months following such Change in Control, then all
unvested Restricted Stock shall become immediately vested.





	 	(ii)	 	If there is a Change in Control after the Settlement Date and
immediately prior to the Change in Control it is determined that the Award will
not be continued, assumed or have new rights substituted therefor in accordance
with Section 12.1(a) of the Plan, then immediately prior to the Change in
Control, all unvested Restricted Stock shall become immediately vested.





          4.4. Rights as a Holder of Restricted Stock. From and after the Settlement Date, the
Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a
holder of shares of Common Stock, including, without limitation, the right to vote such shares, to
receive and retain all regular cash dividends payable to holders of Common Stock of record on and
after the Settlement Date (although such dividends will be treated, to the extent required by
applicable law, as additional compensation for tax purposes), and to exercise all other rights,
powers and privileges of a holder of Common Stock with respect to the Restricted Stock, with the
exceptions that (i) the Participant shall not be entitled to delivery of the stock certificate or
certificates representing the Restricted Stock until such shares are no longer Restricted Stock;
(ii) the Company (or its designated agent) will retain custody of the stock certificate or
certificates representing the Restricted Stock and any other property (“RS Property”)
issued in respect of the Restricted Stock, including stock dividends at all times such shares are
Restricted Stock; (iii) no RS Property will bear interest or be segregated in separate accounts;
and (iv) the Participant shall not, directly or indirectly, Transfer the Restricted Stock in any
manner whatsoever. Prior to the Settlement Date, the Participant shall have no rights as a
stockholder with respect to any shares of Common Stock covered by any Restricted Stock to be
granted for the Performance Period (if any) unless and until the Participant has become the holder
of record of such Common Stock, and no adjustments shall be made for dividends in cash or other
property, distributions or other rights in respect of any such shares, except as otherwise
specifically provided for in the Plan (including, without limitation, Section 4.2(b) of the Plan).



          4.5. Taxes; Section 83(b) Election. The Participant acknowledges, subject to the last
sentence of this paragraph, that (i) no later than the date on which any Restricted Stock shall
have become vested, the Participant shall pay to the Company, or make arrangements satisfactory to
the Company regarding payment of, any Federal, state or local taxes of any kind required by law to
be withheld with respect to any Restricted Stock which shall have become so vested, including by
electing to reduce the number of shares of Common Stock otherwise deliverable to the Participant or
by delivering shares of Common Stock already owned; (ii) the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind otherwise due to the Participant any
Federal, state or local taxes of any kind required by law to be withheld with respect to any
Restricted Stock which shall have become so vested, including that the Company



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may, but shall not be required to, sell a number of shares of Common Stock sufficient to cover
applicable withholding taxes; and (iii) in the event that the Participant does not satisfy (i)
above on a timely basis, the Company may to the extent permitted by law, but shall not be required
to, pay such required withholding and treat such amount as a demand loan to the Participant at the
maximum rate permitted by law, with such loan, at the Company’s sole discretion and provided the
Company so notifies the Participant within thirty (30) days of the making of the loan, secured by
the Common Stock and any failure by the Participant to pay the loan upon demand shall entitle the
Company to all of the rights at law of a creditor secured by the Common Stock. The Company may
hold as security any certificates representing any Common Stock and, upon demand of the Company,
the Participant shall deliver to the Company any certificates in his or her possession representing
the Common Stock together with a stock power duly endorsed in blank. The Participant also
acknowledges that it is his or her sole responsibility, and not the Company’s, to file timely and
properly any election under Section 83(b) of the Code, and any corresponding provisions of state
tax laws, if the Participant wishes to utilize such election.



          4.6. Legend. In the event that a certificate evidencing Restricted Stock is issued,
the certificate representing the Common Stock shall have endorsed thereon the following legends:




	 	(a)	 	“THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT,
PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE MARKETAXESS HOLDINGS INC. (THE
“COMPANY”) 2004 STOCK INCENTIVE PLAN (AMENDED AND RESTATED EFFECTIVE APRIL 28, 2006)
(THE “PLAN”) AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE
COMPANY DATED AS OF                     . COPIES OF SUCH PLAN AND
AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.”
	 
	 	(b)	 	Any legend required to be placed thereon by applicable blue sky laws of any
state. Notwithstanding the foregoing, in no event shall the Company be obligated to
issue a certificate representing the Restricted Stock prior to vesting as set forth in
Section 4.1 hereof.





     5. Restrictions on Transfer. The Participant shall not sell, negotiate, transfer,
pledge, hypothecate, assign, encumber or otherwise dispose of the Performance Share Award or,
if any, the shares of Restricted Stock or grant any proxy with respect thereto, except as
specifically permitted by the Plan and this Agreement. Any attempted Transfer in violation of
this Agreement and the Plan shall be void and of no effect and the Company shall have the right
to disregard the same on its books and records and to issue “stop transfer” instructions to its
transfer agent. Notwithstanding the foregoing, nothing herein or in the Plan shall prohibit
the



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Participant from pledging the Common Stock the Participant is granted hereunder to the
Company pursuant to a stock pledge agreement entered into between the parties hereto.



     6. Issuance Restrictions. The Company is not obligated to issue any securities
if, in the opinion of counsel for the Company, the issuance of such Common Stock shall
constitute a violation by the Participant or the Company of any provisions of any law or of any
regulations of any governmental authority or any national securities exchange.



     7. Securities Representations. The shares of Common Stock will be issued to the
Participant and this Agreement is being made by the Company in reliance upon the following
express representations and warranties of the Participant. The Participant acknowledges,
represents and warrants that:




          7.1. The Participant has been advised that the Participant may be an “affiliate”
within the meaning of Rule 144 under the Securities Act and in this connection the Company
is relying in part on the Participant’s representations set forth in this section;




          7.2. The Common Stock must be held indefinitely by the Participant unless (i) an
exemption from the registration requirements of the Securities Act is available for the
resale of such Common Stock or (ii) the Company files an additional registration statement
(or a “re-offer prospectus”) with regard to the resale of such Common Stock and the
Company is under no obligation to continue in effect a Form S-8 Registration Statement or
to otherwise register the resale of the Common Stock (or to file a “re-offer prospectus”);




          7.3. The exemption from registration under Rule 144 will not be available under
current law unless (i) a public trading market then exists for the Common Stock, (ii)
adequate information concerning the Company is then available to the public, and (iii)
other terms and conditions of Rule 144 or any exemption therefrom are complied with and
that any sale of the Common Stock may be made only in limited amounts in accordance with
such terms and conditions.



     8. Not an Employment Agreement. Neither the execution of this Agreement nor the
issuance of the Performance Share Award or the Common Stock hereunder constitute an agreement by
the Company to employ or to continue to employ the Participant during the entire, or any portion
of, the term of this Agreement, including but not limited to any period during which any shares of
Common Stock are outstanding.



     9. Power of Attorney. The Company, its successors and assigns, is hereby appointed
the attorney-in-fact, with full power of substitution, of the Participant for the purpose of
carrying out the provisions of this Agreement and taking any action and



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executing any instruments which such attorney-in-fact may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest. The Company, as attorney-in-fact for the Participant, may in the name and stead
of the Participant, make and execute all conveyances, assignments and transfers of the Restricted
Stock, other RS Property, Common Stock and property provided for herein, and the Participant hereby
ratifies and confirms that which the Company, as said attorney-in-fact, shall do by virtue hereof.
Nevertheless, the Participant shall, if so requested by the Company, execute and deliver to the
Company all such instruments as may, in the judgment of the Company, be advisable for this purpose.



     10. Miscellaneous.



          10.1. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, personal legal representatives, successors, trustees, administrators,
distributees, devisees and legatees. The Company may assign to, and require, any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or any affiliate by which the
Participant is employed to expressly assume and agree in writing to perform this Agreement.
Notwithstanding the foregoing, the Participant may not assign this Agreement other than with
respect to shares of Common Stock Transferred in compliance with the terms hereof.



          10.2. This award of the Performance Share Award, and upon the settlement thereof the issuance
of Restricted Stock (if any), shall not affect in any way the right or power of the Board or
stockholders of the Company to make or authorize an adjustment, recapitalization or other change in
the capital structure or the business of the Company, any merger or consolidation of the Company or
subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, the dissolution or liquidation of the Company, any sale or transfer of
all or part of its assets or business or any other corporate act or proceeding.



          10.3. The Participant agrees that the award of the Performance Share Award hereunder, and upon
the settlement thereof the issuance of Restricted Stock (if any), is special incentive compensation
and that the Performance Share Award and Restricted Stock (if applicable), any dividends paid
thereon (even if treated as compensation for tax purposes) and any other RS Property will not be
taken into account as “salary” or “compensation” or “bonus” in determining the amount of any
payment under any pension, retirement or profit-sharing plan of the Company or any life insurance,
disability or other benefit plan of the Company.



          10.4. No modification or waiver of any of the provisions of this Agreement shall be effective
unless in writing and signed by the party against whom it is sought to be enforced.



          10.5. This Agreement may be executed in one or more counterparts (including via facsimile or
PDF), all of which taken together shall constitute one contract.



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          10.6. The failure of any party hereto at any time to require performance by another party of
any provision of this Agreement shall not affect the right of such party to require performance of
that provision, and any waiver by any party of any breach of any provision of this Agreement shall
not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of
the provision itself, or a waiver of any right under this Agreement.



          10.7. The headings of the sections of this Agreement have been inserted for convenience of
reference only and shall in no way restrict or modify any of the terms or provisions hereof.



          10.8. All notices, consents, requests, approvals, instructions and other communications
provided for herein shall be in writing and validly given or made when delivered, or on the second
succeeding business day after being mailed by registered or certified mail, whichever is earlier,
to the persons entitled or required to receive the same, at the addresses set forth at the heading
of this Agreement or to such other address as either party may designate by like notice. Notices
to the Company shall be addressed to the Compensation Committee of the Board with a copy to the
Company’s Head of Human Resources.



          10.9. This Agreement shall be construed, interpreted and governed and the legal relationships
of the parties determined in accordance with the internal laws of the State of Delaware without
reference to rules relating to conflicts of law.



          10.10. By executing this Agreement the Participant hereby accepts the terms and conditions of
this Agreement and, effective as of the Settlement Date, shall be deemed to have accepted the award
of Restricted Stock within the time period required under Section 8.2(b) of the Plan.



     11. Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted
by the Committee and as may be in effect from time to time. The Plan is incorporated herein by
reference. A copy of the Plan has been delivered to the Participant. If and to the extent that
this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan,
the Plan shall control, and this Agreement shall be deemed to be modified accordingly. Unless
otherwise indicated, any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof (other than any other documents expressly contemplated
herein or in the Plan) and supersedes any prior agreements between the Company and the Participant.



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



	 	 	 	 	 	 	 	 	 
	 	 	MARKETAXESS HOLDINGS INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	Richard M. McVey	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	[Participant]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 	 
	 	 	 	 	 	 	 





[Remainder of page intentionally left blank]





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APPENDIX A




Performance Metric and Number of Shares



A. Performance Metric.




     The Performance metric set forth herein is established for purposes of the grant of the
Performance Shares for the Performance Period and is intended to be “performance-based” under
Section 162(m) of the Code.



     The performance metric for the Performance Period ending                      shall be the
Company’s attainment of pre-tax operating income of $                     per share of Common Stock before the
Company’s payment of any cash bonuses to its employees for performance during the Performance
Period and any expenses incurred in connection with all Performance Share Awards for the
Performance Period granted by the Company to Eligible Employees and Consultants, as set forth in
the Company’s financial statements and as calculated in accordance with GAAP (the “Performance
Target”). The number of shares of Common Stock awarded will be based on the level of the
Performance Target achieved, as specified below (i.e., Awarded Shares). The terms and conditions
governing the Performance Share Award will be construed and interpreted in a manner consistent with
Section 162(m) of the Code and, without limiting the generality of the foregoing, the Committee
will certify the attainment of the Level of Target Performance Achieved to the extent and in the
manner required by Section 162(m) of the Code.



     Subject to the terms and conditions of this Agreement, a number of shares of Common Stock
shall be awarded to the Participant on the Settlement Date, as follows:



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





B. Interpolation; Fractional Shares. In awarding a percentage of the Common Stock to the
Participant, the Committee shall interpolate the percentage of Common Stock awarded for the
achievement of the performance metric between each applicable target level, which percentage shall
be calculated to the nearest one-hundredth percent. Fractional shares shall be aggregated until,
and eliminated at, the time earned by rounding-down for fractions less than one-half and
rounding-up for fractions equal to or greater than one-half. No cash settlements shall be made
with respect to fractional shares eliminated by rounding.




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C. Miscellaneous.




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




	 	(i)	 	all items of gain, loss or expense for the applicable fiscal year under
consideration that are related to the disposal of a business or discontinued
operations; and
	 
	 	(ii)	 	all items of gain, loss or expense for the applicable fiscal year that are
related to changes in accounting principles or to changes in applicable law or
regulations.





     In addition, the Committee may, in its sole discretion, elect to exclude from the calculation
of operating income all items of gain loss or expense for the applicable fiscal year that are
related to extraordinary, special, unusual or non-recurring items, events or circumstances
affecting the Company or the financial statements of the Company.



     With respect to the Performance Period, to the extent any provision contained herein creates
impermissible discretion under Section 162(m) of the Code, such provision will be of no force or
effect.




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