EXHIBIT 10.6
MARKETAXESS HOLDINGS INC.
2000 STOCK INCENTIVE PLAN
.
.
.
TABLE OF CONTENTS
Page
----
ARTICLE I PURPOSE.................................................. -1-
ARTICLE II DEFINITIONS.............................................. -1-
ARTICLE III ADMINISTRATION........................................... -7-
ARTICLE IV SHARE AND OTHER LIMITATIONS.............................. -10-
ARTICLE V ELIGIBILITY.............................................. -13-
ARTICLE VI STOCK OPTIONS............................................ -13-
ARTICLE VII RESTRICTED STOCK......................................... -16-
ARTICLE VIII NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY/DIRECTORSHIP...................... -19-
ARTICLE IX CHANGE IN CONTROL PROVISIONS............................. -21-
ARTICLE X TERMINATION OR AMENDMENT OF PLAN......................... -22-
ARTICLE XI COMPANY CALL RIGHTS; RIGHTS OF FIRST REFUSAL............. -23-
ARTICLE XII UNFUNDED PLAN............................................ -27-
ARTICLE XIII GENERAL PROVISIONS....................................... -27-
ARTICLE XIV EFFECTIVE DATE OF PLAN................................... -31-
ARTICLE XV TERM OF PLAN............................................. -31-
MARKETAXESS HOLDINGS INC.
--------------------------
2000 STOCK INCENTIVE PLAN
--------------------------
ARTICLE I
PURPOSE
The purpose of this MarketAxess Holdings Inc. 2000 Stock Incentive Plan
is to enhance the profitability and value of the Company for the benefit of its
stockholders by enabling the Company to offer employees of, Consultants (as
defined below) to and Non-Employee Directors (as defined below) of the Company
and its Affiliates (as defined below) stock-based incentives in the Company,
thereby creating a means to raise the level of equity ownership by such
individuals in order to attract, retain and reward such individuals and
strengthen the mutuality of interests between such individuals and the Company's
stockholders.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Acquisition Events" has the meaning set forth in Section
4.2(d).
2.2 "Affiliate" means each of the following: (a) any Subsidiary; (b)
any Parent; (c) any corporation, trade or business (including, without
limitation, a partnership or limited liability company) which is directly
or indirectly controlled fifty percent (50%) or more (whether by ownership
of stock, assets or an equivalent ownership interest or voting interest)
by the Company or one of its Affiliates; and (d) any other entity in which
the Company or any of its Affiliates has a material equity interest and
which is designated as an "Affiliate" by resolution of the Committee.
2.3 "Award" means any award under this Plan of a Stock Option and/or
Restricted Stock.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means, with respect to a Participant's Termination of
Employment or Termination of Consultancy, the following: (a) in the case
where there is no employment agreement, consulting agreement, change in
control agreement or similar agreement in effect
between the Company or an Affiliate and the Participant at the time of the
grant of the Award (or where there is such an agreement but it does not
define "cause" (or words of like import)), termination due to a
Participant's insubordination, dishonesty, fraud, incompetence, moral
turpitude, willful misconduct, refusal to perform his or her duties or
responsibilities for any reason other than illness or incapacity or
materially unsatisfactory performance of his or her duties for the Company
or an Affiliate, as determined by the Committee in its sole discretion; or
(b) in the case where there is an employment agreement, consulting
agreement, change in control agreement or similar agreement in effect
between the Company or an Affiliate and the Participant at the time of the
grant of the Award that defines "cause" (or words of like import), "cause"
as defined under such agreement; provided, however, that with regard to
any agreement under which the definition of "cause" only applies on
occurrence of a change in control, such definition of "cause" shall not
apply until a change in control actually takes place and then only with
regard to a termination thereafter. With respect to a Participant's
Termination of Directorship, "cause" means an act or failure to act that
constitutes cause for removal of a director under applicable Delaware law.
2.6 "Change in Control" has the meaning set forth in Article IX.
2.7 "Change in Control Price" has the meaning set forth in Section
9.1(b).
2.8 "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any
successor provision and any Treasury Regulation promulgated thereunder.
2.9 "Committee" means: (a) with respect to the application of this
Plan to Eligible Employees and Consultants, a committee or subcommittee of
the Board appointed from time to time by the Board, except that on or
after the Registration Date, the Committee shall be a committee or
subcommittee of the Board appointed from time to time which shall consist
solely of two (2) or more non-employee directors, each of whom is intended
to be, to the extent required by Rule 16b-3, a "non-employee director" as
defined in Rule 16b-3; and (b) with respect to the application of this
Plan to Non-Employee Directors, the Board. If for any reason the appointed
Committee does not meet the requirements of Rule 16b-3 such noncompliance
shall not affect the validity of grants, interpretations or other actions
of the Committee. Notwithstanding the foregoing, if, and to the extent
that no Committee exists which has the authority to administer this Plan,
the functions of the Committee shall be exercised by the Board and all
references herein to the Committee shall be deemed to be references to the
Board.
2.10 "Common Stock" means the common stock, $0.001 par value per
share, of the Company.
2.11 "Company" means MarketAxess Holdings Inc., a Delaware
corporation, and its successors by operation of law.
2.12 "Consultant" means any Person who is an advisor or consultant
to the Company or its Affiliates.
-2-
2.13 "Detrimental Activity" means: (a) the disclosure to anyone
outside the Company or its Affiliates, or the use in any manner other than
in the furtherance of the Company's or its Affiliate's business, without
written authorization from the Company, of any confidential information or
proprietary information, relating to the business of the Company or its
Affiliates that is acquired by a Participant prior to the Participant's
Termination; (b) activity while employed or performing services that
results, or if known could result, in the Participant's Termination that
is classified by the Company as a termination for Cause; (c) any attempt,
directly or indirectly, to solicit, induce or hire (or the identification
for solicitation, inducement or hiring of) any non-clerical employee of
the Company or its Affiliates to be employed by, or to perform services
for, the Participant or any Person with which the Participant is
associated (including, but not limited to, due to the Participant's
employment by, consultancy for, equity interest in, or creditor
relationship with such Person) or any Person from which the Participant
receives direct or indirect compensation or fees as a result of such
solicitation, inducement or hire (or the identification for solicitation,
inducement or hire) without, in all cases, written authorization from the
Company; (d) any attempt, directly or indirectly, to solicit in a
competitive manner any current or prospective customer of the Company or
its Affiliates without, in all cases, written authorization from the
Company; (e) the Participant's Disparagement, or inducement of others to
do so, of the Company or its Affiliates or their past and present
officers, directors, employees or products; (f) without written
authorization from the Company, the rendering of services for any
organization, or engaging, directly or indirectly, in any business, which
is competitive with the Company or its Affiliates, or the rendering of
services to such organization or business if such organization or business
is otherwise prejudicial to or in conflict with the interests of the
Company or its Affiliates provided, however, that competitive activities
shall only be those competitive with any business unit or Affiliate of the
Company with regard to which the Participant performed services at any
time within the two (2) years prior to the Participant's Termination; or
(g) breach of any agreement between the Participant and the Company or an
Affiliate (including, without limitation, any employment agreement or
noncompetition or nonsolicitation agreement). Unless otherwise determined
by the Committee at grant, Detrimental Activity shall not be deemed to
occur after the end of the one year period following the Participant's
Termination. For purposes of sub-sections (a), (c), (d) and (f) above, the
Chief Executive Officer of the Company shall each have authority to
provide the Participant with written authorization to engage in the
activities contemplated thereby and no other person shall have authority
to provide the Participant with such authorization.
2.14 "Disability" means, with respect to a Participant's
Termination, a permanent and total disability as defined in Section
22(e)(3) of the Code. A Disability shall only be deemed to occur at the
time of the determination by the Committee of the Disability.
2.15 "Disparagement" means making comments or statements to the
press, the Company's or its Affiliates' employees, consultants or any
individual or entity with whom the Company or its Affiliates has a
business relationship which could reasonably be expected to adversely
affect in any manner: (a) the conduct of the business of the Company or
its Affiliates (including, without limitation, any products or business
plans or prospects); or (b)
-3-
the business reputation of the Company or its Affiliates, or any of their
products, or their past or present officers, directors or employees.
2.16 "Effective Date" means the effective date of this Plan as
defined in Article XIV.
2.17 "Eligible Employee" means each employee of the Company or an
Affiliate.
2.18 "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Any references to any section of the Exchange Act shall also be a
reference to any successor provision.
2.19 "Fair Market Value" means, for purposes of this Plan, unless
otherwise required by any applicable provision of the Code or any
regulations issued thereunder, as of any date and except as provided
below, the last sales price reported for the Common Stock on the
applicable date: (a) as reported on the principal national securities
exchange in the United States on which it is then traded or The Nasdaq
Stock Market; or (b) if not traded on any such national securities
exchange or The Nasdaq Stock Market, as quoted on an automated quotation
system sponsored by the National Association of Securities Dealers, Inc.
or if the Common Stock shall not have been reported or quoted on such
date, on the first day prior thereto on which the Common Stock was
reported or quoted; provided, that the Committee may modify the definition
of Fair Market Value to reflect any changes in the trading practices of
any exchange on which the Common Stock is listed or traded. If the Common
Stock is not readily tradable on a national securities exchange, The
Nasdaq Stock Market or any automated quotation system sponsored by the
National Association of Securities Dealers, Inc., its Fair Market Value
shall be set in good faith by the Committee. Notwithstanding anything
herein to the contrary, for purposes of granting Incentive Stock Options,
"Fair Market Value" means the price for Common Stock set by the Committee
in good faith based on reasonable methods set forth under Section 422 of
the Code including, without limitation, a method utilizing the average of
prices of the Common Stock reported on the principal national securities
exchange on which it is then traded during a reasonable period designated
by the Committee. For purposes of the grant of any Stock Option, the
applicable date shall be the date on which the Stock Option is granted.
2.20 "Family Member" means, solely to the extent provided for in
Rule 701 under the Securities Act or, following the filing of a Securities
Act Form S-8 with respect to the Plan, solely to the extent provided for
in Securities Act Form S-8, any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in- law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any
person sharing the employee's household (other than a tenant or employee),
a trust in which these persons have more than fifty percent (50%) of the
beneficial interest, a foundation in which these persons (or the employee)
control the management of assets, and any other entity in which these
persons (or the employee) own more than fifty percent (50%) of the voting
interests or as otherwise defined in Rule 701 under the Securities Act or
Securities Act Form S-8, as applicable.
-4-
2.21 "Good Reason" means, with respect to a Participant's
Termination: (a) in the case where there is no employment agreement,
consulting agreement, change in control agreement or similar agreement in
effect between the Company or an Affiliate and the Participant at the time
of the grant of the Award (or where there is such an agreement but it does
not define "good reason" (or words or a concept of like import)), a
voluntary termination due to good reason, as the Committee, in its sole
discretion, decides to treat as a Good Reason termination; or (b) in the
case where there is an employment agreement, consulting agreement, change
in control agreement or similar agreement in effect between the Company or
an Affiliate and the Participant at the time of the grant of the Award
that defines "good reason" (or words or a concept of like import), a
termination due to good reason (or words or a concept of like import), as
defined in such agreement at the time of the grant of the Award, and for
purposes of the Plan, as determined by the Committee in its sole
discretion; provided that any definition that is effective under an
employment agreement, consulting agreement, change in control agreement or
similar agreement after a change in control shall only be effective for
purposes of this Plan after a change in control.
2.22 "Incentive Stock Option" means any Stock Option awarded to an
Eligible Employee under this Plan intended to be and designated as an
"Incentive Stock Option" within the meaning of Section 422 of the Code.
2.23 "Non-Employee Director" means a director of the Company who is
not an active employee of the Company or an Affiliate.
2.24 "Non-Qualified Stock Option" means any Stock Option awarded
under this Plan that is not an Incentive Stock Option.
2.25 "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.26 "Participant" means any Eligible Employee, Non-Employee
Director or Consultant to whom an Award has been granted under this Plan.
2.27 "Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint-stock
company, trust, incorporated organization, governmental or regulatory or
other entity.
2.28 "Plan" means this MarketAxess Holdings Inc. 2000 Stock
Incentive Plan, as amended from time to time.
2.29 "Registration Date" means the first date (a) on which the
Company sells its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement under the Securities Act
or (b) any class of common equity securities of the Company are required
to be registered under Section 12 of the Exchange Act.
2.30 "Restricted Stock" means an Award of shares of Common Stock
under this Plan that is subject to the restrictions under Article VII.
-5-
2.31 "Restriction Period" has the meaning set forth in Section 7.3
with respect to Restricted Stock.
2.32 "Retirement" means a Termination of a Participant's employment
or consultancy without Cause at or after age sixty-five (65) or such
earlier date after age fifty (50) as may be approved by the Committee with
regard to such Participant. With respect to a Participant's Termination of
Directorship, Retirement means the failure to stand for reelection or the
failure to be reelected on or after a Participant has attained age
sixty-five (65) or, with the consent of the Board, before age sixty-five
(65) but after age fifty (50).
2.33 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act as then in effect or any successor provision.
2.34 "Securities Act" means the Securities Act of 1933, as amended
and all rules and regulations promulgated thereunder. Any reference to any
section of the Securities Act shall also be a reference to any successor
provision.
2.35 "Stock Option" or "Option" means any option to purchase shares
of Common Stock granted to Eligible Employees, Non-Employee Directors or
Consultants under Article VI.
2.36 "Subsidiary" means any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
2.37 "Ten Percent Stockholder" means a person owning stock
possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company, its Subsidiaries or its Parent.
2.38 "Termination" means a Termination of Consultancy, Termination
of Directorship or Termination of Employment, as applicable.
2.39 "Termination of Consultancy" means: (a) that the Consultant is
no longer acting as a consultant to the Company or an Affiliate; or (b)
when an entity which is retaining a Participant as a Consultant ceases to
be an Affiliate unless the Participant otherwise is, or thereupon becomes,
a Consultant to the Company or another Affiliate at the time the entity
ceases to be an Affiliate. In the event that a Consultant becomes an
Eligible Employee or a Non-Employee Director upon the termination of his
or her consultancy, unless otherwise determined by the Committee, in its
sole discretion, no Termination of Consultancy shall be deemed to occur
until such time as such Consultant is no longer a Consultant, an Eligible
Employee or a Non-Employee Director. Notwithstanding the foregoing, the
Committee may otherwise define Termination of Consultancy in the Award
agreement or, if no rights of a Participant are reduced, may otherwise
define Termination of Consultancy thereafter.
2.40 "Termination of Directorship" means that the Non-Employee
Director has ceased to be a director of the Company; except that if a
Non-Employee Director becomes an Eligible Employee or a Consultant upon
the termination of his or her directorship, his or her
-6-
ceasing to be a director of the Company shall not be treated as a
Termination of Directorship unless and until the Participant has a
Termination of Employment or Termination of Consultancy, as the case may
be.
2.41 "Termination of Employment" means: (a) a termination of
employment (for reasons other than a military or personal leave of absence
granted by the Company) of a Participant from the Company and its
Affiliates; or (b) when an entity which is employing a Participant ceases
to be an Affiliate, unless the Participant otherwise is, or thereupon
becomes, employed by the Company or another Affiliate at the time the
entity ceases to be an Affiliate. In the event that an Eligible Employee
becomes a Consultant or a Non-Employee Director upon the termination of
his or her employment, unless otherwise determined by the Committee, in
its sole discretion, no Termination of Employment shall be deemed to occur
until such time as such Eligible Employee is no longer an Eligible
Employee, a Consultant or a Non-Employee Director. Notwithstanding the
foregoing, the Committee may otherwise define Termination of Employment in
the Award agreement or, if no rights of a Participant are reduced, may
otherwise define Termination of Employment thereafter.
2.42 "Transfer" means (a) when used as a noun, any direct or
indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or
other disposition (including the issuance of equity in a Person), whether
for value or no value and whether voluntary or involuntary (including by
operation of law), and (b) when used as a verb, to directly or indirectly
transfer, sell, assign, pledge, encumber, charge, hypothecate or otherwise
dispose of (including the issuance of equity in a Person) whether for
value or for no value and whether voluntarily or involuntarily (including
by operation of law). "Transferred" and "Transferrable" shall have a
correlative meaning.
ARTICLE III
ADMINISTRATION
3.1 The Committee. The Plan shall be administered and interpreted by
the Committee.
3.2 Grants of Awards. The Committee shall have full authority to
grant Awards to Eligible Employees, Consultants and Non-Employee Directors
pursuant to the terms of this Plan. All Awards shall be granted by,
confirmed by, and subject to the terms of, a written agreement executed by
the Company and the Participant. In particular, the Committee shall have
the authority:
(a) to select the Eligible Employees, Consultants and
Non-Employee Directors to whom Awards may from time to time be
granted hereunder;
(b) to determine whether and to what extent Awards are to be
granted hereunder to one or more Eligible Employees, Consultants and
Non-Employee Directors;
-7-
(c) to determine, in accordance with the terms of this Plan,
the number of shares of Common Stock to be covered by each Award
granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of this Plan, of any Award granted hereunder
(including, but not limited to, the exercise or purchase price (if
any), any restriction or limitation, any vesting schedule or
acceleration thereof and any forfeiture restrictions or waiver
thereof, regarding any Award and the shares of Common Stock relating
thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Stock and/or Restricted Stock
under Section 6.3(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans (which may be on a recourse basis and
shall bear interest at the rate the Committee shall provide) to
Participants in order to exercise Stock Options or to purchase
Awards under this Plan (including shares of Common Stock);
(g) to determine whether a Stock Option is an Incentive Stock
Option or Non- Qualified Stock Option;
(h) to determine whether to require an Eligible Employee,
Consultant or Non- Employee Director, as a condition of the granting
of any Stock Option, not to sell or otherwise dispose of shares of
Common Stock acquired pursuant to the exercise of an Option or
vesting of an Award for a period of time as determined by the
Committee, in its sole discretion, following the date of the
acquisition of such Award;
(i) to modify, extend or renew an Award, subject to Article X
herein, provided, however, that if an Award is modified, extended or
renewed and thereby deemed to be the issuance of a new Award under
the Code or the applicable accounting rules, the exercise price of a
Stock Option may continue to be the original exercise price even if
less than the Fair Market Value of the Common Stock at the time of
such modification, extension or renewal; and
(j) to offer to buy out an Option previously granted, based on
such terms and conditions as the Committee shall establish and
communicate to the Participant at the time such offer is made.
3.3 Guidelines. Subject to Article X hereof, the Committee shall
have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing this Plan and perform all acts,
including the delegation of its administrative responsibilities, as it
shall, from time to time, deem advisable; to construe and interpret the
terms and provisions of this Plan and any Award issued under this Plan
(and any agreements relating thereto); and to otherwise supervise the
administration of this Plan. The Committee may correct any defect, supply
any omission or reconcile any inconsistency in this Plan or in any
agreement
-8-
relating thereto in the manner and to the extent it shall deem necessary
to effectuate the purpose and intent of this Plan. The Committee may adopt
special guidelines and provisions for persons who are residing in or
employed in, or subject to, the taxes of, any domestic or foreign
jurisdictions to comply with applicable tax and securities laws and may
impose any limitations and restrictions that it deems necessary to comply
with the applicable tax and securities laws of such domestic or foreign
jurisdictions.
3.4 Decisions Final. Any decision, interpretation or other action
made or taken in good faith by or at the direction of the Company, the
Board or the Committee (or any of its members) arising out of or in
connection with this Plan shall be within the absolute discretion of all
and each of them, as the case may be, and shall be final, binding and
conclusive on the Company and all employees and Participants and their
respective heirs, executors, administrators, successors and assigns.
3.5 Procedures. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the
Committee shall hold meetings, subject to the By-Laws of the Company, at
such times and places as it shall deem advisable, including, without
limitation, by telephone conference or by written consent to the extent
permitted by applicable law. A majority of the Committee members shall
constitute a quorum. All determinations of the Committee shall be made by
a majority of its members. Any decision or determination reduced to
writing and signed by all the Committee members in accordance with the
By-Laws of the Company, shall be fully as effective as if it had been made
by a vote at a meeting duly called and held. The Committee shall keep
minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
3.6 Designation of Consultants/Liability.
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration
of this Plan and may grant authority to officers to execute
agreements or other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of this
Plan and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or
agent. Expenses incurred by the Committee or the Board in the
engagement of any such counsel, consultant or agent shall be paid by
the Company. The Committee, its members and any person designated
pursuant to sub-section (a) above shall not be liable for any action
or determination made in good faith with respect to this Plan. To
the maximum extent permitted by applicable law, no officer of the
Company or member or former member of the Committee or of the Board
shall be liable for any action or determination made in good faith
with respect to this Plan or any Award granted under it.
-9-
3.7 Indemnification. To the maximum extent permitted by applicable
law and the Certificate of Incorporation and By-Laws of the Company and to
the extent not covered by insurance directly insuring such person, each
officer and member or former member of the Committee or the Board shall be
indemnified and held harmless by the Company against any cost or expense
(including reasonable fees of counsel reasonably acceptable to the
Committee) or liability (including any sum paid in settlement of a claim
with the approval of the Committee), and advanced amounts necessary to pay
the foregoing at the earliest time and to the fullest extent permitted,
arising out of any act or omission to act in connection with the
administration of this Plan, except to the extent arising out of such
officer's, member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
employees, officers, directors or members or former officers, directors or
members may have under applicable law or under the Certificate of
Incorporation or By-Laws of the Company or any Affiliate. Notwithstanding
anything else herein, this indemnification will not apply to the actions
or determinations made by an individual with regard to Awards granted to
him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 Shares. The aggregate number of shares of Common Stock which may
be issued or used for reference purposes under this Plan or with respect
to which Awards may be granted under this Plan shall not exceed 3,530,600
shares of Common Stock (subject to any increase or decrease pursuant to
Section 4.2), which may be either authorized and unissued Common Stock or
Common Stock held in or acquired for the treasury of the Company or both.
If any Stock Option granted under this Plan expires, terminates or is
canceled for any reason without having been exercised in full or the
Company repurchases any Stock Option, the number of shares of Common Stock
underlying such unexercised or repurchased Stock Option shall again be
available for the purposes of Stock Options under this Plan. If any shares
of Restricted Stock awarded under this Plan to an Eligible Employee,
Consultant or Non-Employee Director are forfeited, repurchased, terminated
or canceled by the Company for any reason, the number of forfeited,
repurchased, terminated or canceled shares of Restricted Stock shall again
be available for the purposes of the Awards under this Plan. In addition,
in determining the number of shares of Common Stock available for Awards
other than Incentive Stock Options, if Common Stock has been delivered or
exchanged by a Participant as full or partial payment to the Company for
payment of the exercise price, or for payment of withholding taxes, or if
the number shares of Common Stock otherwise deliverable has been reduced
for payment of the exercise price or for payment of withholding taxes, the
number of shares of Common Stock exchanged as payment in connection with
the exercise or for withholding or reduced shall again be available for
purposes of Awards other than Incentive Stock Options under this Plan.
-10-
4.2 Changes.
(a) The existence of this Plan and the Awards granted
hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize (i)
any adjustment, recapitalization, reorganization or other change in
the Company's capital structure or its business, (ii) any merger or
consolidation of the Company or any Affiliate, (iii) any issuance of
bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, (iv) the dissolution or liquidation of
the Company or any Affiliate, (v) any sale or transfer of all or
part of the assets or business of the Company or any Affiliate or
(vi) any other corporate act or proceeding.
(b) Subject to the provisions of Section 4.2(d), in the event
of any such change in the capital structure or business of the
Company by reason of any stock split, reverse stock split, stock
dividend, combination or reclassification of shares,
recapitalization, merger, consolidation, spin-off, reorganization,
partial or complete liquidation, issuance of rights or warrants to
purchase any Common Stock or securities convertible into Common
Stock, any sale or transfer of all or part of the Company's assets
or business, or any other corporate transaction or event having an
effect similar to any of the foregoing and effected without receipt
of consideration by the Company and the Committee determines in good
faith that an adjustment is necessary or appropriate under the Plan
to prevent substantial dilution or enlargement of the rights granted
to, or available for, Participants under the Plan, then the
aggregate number and kind of shares which thereafter may be issued
under this Plan, the number and kind of shares or other property
(including cash) to be issued upon exercise of an outstanding Stock
Option or under other Awards granted under this Plan and the
purchase price thereof shall be appropriately adjusted consistent
with such change in such manner as the Committee may deem equitable
to prevent substantial dilution or enlargement of the rights granted
to, or available for, Participants under this Plan, and any such
adjustment determined by the Committee in good faith shall be final,
binding and conclusive on the Company and all Participants and
employees and their respective heirs, executors, administrators,
successors and assigns. In connection with any event described in
this paragraph, the Committee may provide, in its sole discretion,
for the cancellation of any outstanding Awards and payment in cash
or other property in exchange therefor. Except as provided in this
Section 4.2, a Participant shall have no rights by reason of any
issuance by the Company of any class or securities convertible into
stock of any class, any subdivision or consolidation of shares of
stock of any class, the payment of any stock dividend, any other
increase or decrease in the number of shares of stock of any class,
any sale or transfer of all or part of the Company's assets or
business or any other change affecting the Company's capital
structure or business.
(c) Fractional shares of Common Stock resulting from any
adjustment in Awards pursuant to Section 4.2(a) or (b) shall be
aggregated until, and eliminated at, the time of exercise by
rounding-down for fractions less than one-half and
-11-
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. Notice of any adjustment shall be given by
the Committee to each Participant whose Award has been adjusted and
such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of this Plan.
(d) In the event of a merger or consolidation in which the
Company is not the surviving entity or in the event of any
transaction that results in the acquisition of substantially all of
the Company's outstanding Common Stock by a single person or entity
or by a group of persons and/or entities acting in concert, or in
the event of the sale or transfer of all or substantially all of the
Company's assets (all of the foregoing being referred to as
"Acquisition Events"), then the Committee may, in its sole
discretion, terminate all outstanding Stock Options, effective as of
the date of the Acquisition Event, by delivering notice of
termination to each Participant at least twenty (20) days prior to
the date of consummation of the Acquisition Event, in which case
during the period from the date on which such notice of termination
is delivered to the consummation of the Acquisition Event, each such
Participant shall have the right to exercise in full all of his or
her Stock Options that are then outstanding (without regard to any
limitations on exercisability otherwise contained in the Stock
Option agreements), but any such exercise shall be contingent upon
and subject to the occurrence of the Acquisition Event, and,
provided that, if the Acquisition Event does not take place within a
specified period after giving such notice for any reason whatsoever,
the notice and exercise pursuant thereto shall be null and void.
If an Acquisition Event occurs but the Committee does not terminate
the outstanding Stock Options pursuant to this Section 4.2(d), then the
provisions of Section 4.2(b) and Article IX shall apply.
4.3 Minimum Purchase Price. Notwithstanding any provision of this
Plan to the contrary, if authorized but previously unissued shares of
Common Stock are issued under this Plan, such shares shall not be issued
for a consideration which is less than as permitted under applicable law.
ARTICLE V
ELIGIBILITY
5.1 General Eligibility. All Eligible Employees, prospective
employees, Consultants and Non-Employee Directors of the Company and its
Affiliates are eligible to be granted Non-Qualified Stock Options and
Restricted Stock. Eligibility for the grant of Awards and actual
participation in this Plan shall be determined by the Committee in its
sole discretion.
5.2 Incentive Stock Options. All Eligible Employees of the Company,
its Subsidiaries and its Parent (if any) are eligible to be granted
Incentive Stock Options under
-12-
this Plan. Eligibility for the grant of an Incentive Stock Option and
actual participation in this Plan shall be determined by the Committee in
its sole discretion.
5.3 General Requirement. The vesting and exercise of Awards granted
to a prospective employee or consultant are conditioned upon such
individual actually becoming an Eligible Employee or Consultant.
ARTICLE VI
STOCK OPTIONS
6.1 Stock Options. Each Stock Option granted hereunder shall be one
of two types: (a) an Incentive Stock Option intended to satisfy the
requirements of Section 422 of the Code; or (b) a Non-Qualified Stock
Option.
6.2 Grants. Subject to the provisions of Article V, the Committee
shall have the authority to grant to any Eligible Employee one or more
Incentive Stock Options, Non-Qualified Stock Options or both types of
Stock Options. To the extent that any Stock Option does not qualify as an
Incentive Stock Option (whether because of its provisions or the time or
manner of its exercise or otherwise), such Stock Option or the portion
thereof which does not qualify, shall constitute a separate Non-Qualified
Stock Option. The Committee shall have the authority to grant any
Consultant or Non-Employee Director one or more Non-Qualified Stock
Options. Notwithstanding any other provision of this Plan to the contrary
or any provision in an agreement evidencing the grant of a Stock Option to
the contrary, any Stock Option granted to an Eligible Employee of an
Affiliate (other than an Affiliate which is a Parent or a Subsidiary)
shall be a Non- Qualified Stock Option. The maximum number of shares of
Common Stock subject to a Stock Option which may be granted under this
Plan during any fiscal year of the Company to any Non- Employee Director
shall not exceed 20,000 shares (subject to any increase or decrease
pursuant to Section 4.2).
6.3 Terms of Stock Options. Stock Options granted under this Plan
shall be subject to the following terms and conditions, and shall be in
such form and contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
desirable:
(a) Exercise Price. The exercise price per share of Common
Stock subject to a Stock Option shall be determined by the Committee
at the time of grant; provided that the per share exercise price of
an Incentive Stock Option shall not be less than one hundred percent
(100%) of the Fair Market Value of the share of Common Stock at the
time of grant; and provided, further, that if an Incentive Stock
Option is granted to a Ten Percent Stockholder, the exercise price
per share shall be no less than one hundred ten percent (110%) of
the Fair Market Value of the Common Stock.
(b) Stock Option Term. The term of each Stock Option shall be
fixed by the Committee; provided, however, that no Stock Option
shall be exercisable more than ten (10) years after the date such
Stock Option is granted; and further provided that
-13-
the term of an Incentive Stock Option granted to a Ten Percent
Stockholder shall not exceed five (5) years.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at grant. If the Committee provides, in
its discretion, that any Stock Option is exercisable subject to
certain limitations (including, without limitation, that such Stock
Option is exercisable only in installments or within certain time
periods), the Committee may waive such limitations on the
exercisability at any time at or after grant in whole or in part
(including, without limitation, waiver of the installment exercise
provisions or acceleration of the time at which such Stock Option
may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion. Unless otherwise determined
by the Committee at grant, the grant shall provide that (i) in the
event the Participant engages in Detrimental Activity prior to any
exercise of the Stock Option, all Stock Options held by the
Participant shall thereupon terminate and expire, (ii) as a
condition of the exercise of a Stock Option, the Participant shall
be required to certify (or shall be deemed to have certified) at the
time of exercise in a manner acceptable to the Company that the
Participant is in compliance with the terms and conditions of the
Plan and that the Participant has not engaged in, and does not
intend to engage in, any Detrimental Activity, and (iii) in the
event the Participant engages in Detrimental Activity during the one
(1) year period commencing on the date the Stock Option is
exercised, the Company shall be entitled to recover from the
Participant at any time within one (1) year after such exercise or
vesting, and the Participant shall pay over to the Company, an
amount equal to any gain realized as a result of the exercise
(whether at the time of exercise or thereafter). The foregoing
provisions described in (i), (ii) and (iii) shall cease to apply
upon a Change in Control.
(d) Method of Exercise. Subject to whatever installment
exercise and waiting period provisions apply under sub-section (c)
above, to the extent vested, a Stock Options may be exercised in
whole or in part at any time and from time to time during the Stock
Option term by giving written notice of exercise to the Committee
specifying the number of shares to be acquired. Such notice shall be
accompanied by payment in full of the purchase price as follows: (i)
in cash or by check, bank draft or money order payable to the order
of the Company; (ii) if the Common Stock is traded on a national
securities exchange, The Nasdaq Stock Market, Inc. or quoted on a
national quotation system sponsored by the National Association of
Securities Dealers, and the Committee authorizes, through a
procedure whereby the Participant delivers irrevocable instructions
to a broker approved by the Committee to deliver promptly to the
Company an amount equal to the purchase price; or (iii) on such
other terms and conditions as may be acceptable to the Committee
(including, without limitation, the relinquishment of Stock Options
or by payment in full or in part in the form of Common Stock owned
by the Participant for a period of at least six (6) months or such
other period necessary to avoid a charge, for accounting purposes,
against the Company's earnings as reported in the Company's
financial
-14-
statements (and for which the Participant has good title free and
clear of any liens and encumbrances) based on the Fair Market Value
of the Common Stock on the payment date as determined by the
Committee). No shares of Common Stock shall be issued until payment
therefor, as provided herein, has been made or provided for.
(e) Incentive Stock Option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of
the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Eligible Employee during any
calendar year under this Plan and/or any other stock option plan of
the Company, any Subsidiary or any Parent exceeds $100,000, such
Options shall be treated as Non-Qualified Stock Options. In
addition, if an Eligible Employee does not remain employed by the
Company, any Subsidiary or any Parent at all times from the time an
Incentive Stock Option is granted until three (3) months prior to
the date of exercise thereof (or such other period as required by
applicable law), such Stock Option shall be treated as a
Non-Qualified Stock Option. Should any provision of this Plan not be
necessary in order for the Stock Options to qualify as Incentive
Stock Options, or should any additional provisions be required, the
Committee may amend this Plan accordingly, without the necessity of
obtaining the approval of the stockholders of the Company.
(f) Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the
limitations of this Plan, Stock Options shall be evidenced by such
form of agreement or grant as is approved by the Committee, and the
Committee may (i) modify, extend or renew outstanding Stock Options
granted under this Plan (provided that the rights of a Participant
are not reduced without his or her consent), and (ii) accept the
surrender of outstanding Stock Options (up to the extent not
theretofore exercised) and authorize the granting of new Stock
Options in substitution therefor (to the extent not theretofore
exercised).
(g) Deferred Delivery of Common Shares. The Committee may in
its discretion permit Participants to defer delivery of Common Stock
acquired pursuant to a Participant's exercise of an Option in
accordance with the terms and conditions established by the
Committee.
(h) Early Exercise. The Committee may provide that a Stock
Option include a provision whereby the Participant may elect at any
time before the Participant's Termination to exercise the Stock
Option as to any part or all of the shares of Common Stock subject
to the Stock Option prior to the full vesting of the Stock Option
and such shares shall be subject to the provisions of Article VII
and treated as Restricted Stock. Any unvested shares of Common Stock
so purchased may be subject to a repurchase option in favor of the
Company or to any other restriction the Committee determines to be
appropriate.
(i) Other Terms and Conditions. Stock Options may contain such
other provisions, which shall not be inconsistent with any of the
terms of this Plan, as the Committee shall deem appropriate
including, without limitation, permitting "reloads"
-15-
such that the same number of Stock Options are granted as the number
of Stock Options exercised, shares used to pay for the exercise
price of Stock Options or shares used to pay withholding taxes
("Reloads"). With respect to Reloads, the exercise price of the new
Stock Option shall be the Fair Market Value on the date of the
"reload" and the term of the Stock Option shall be the same as the
remaining term of the Stock Options that are exercised, if
applicable, or such other exercise price and term as determined by
the Committee.
ARTICLE VII
RESTRICTED STOCK
7.1 Awards of Restricted Stock. Shares of Restricted Stock may be
issued to Eligible Employees or Consultants either alone or in addition to
other Awards granted under this Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the
price (if any) to be paid by the recipient (subject to Section 7.2), the
time or times within which such Awards may be subject to forfeiture, the
vesting schedule and rights to acceleration thereof, and all other terms
and conditions of the Awards.
Unless otherwise determined by the Committee at grant, each Award of
Restricted Stock shall provide that in the event the Participant engages
in Detrimental Activity prior to, or during the one year period after, any
vesting of Restricted Stock, the Committee may direct (at any time within
one (1) year thereafter) that all unvested Restricted Stock shall be
immediately forfeited to the Company and that the Participant shall pay
over to the Company an amount equal to the Fair Market Value at the time
of vesting of any Restricted Stock which had vested in the period referred
to above. The foregoing provision shall cease to apply upon a Change in
Control.
The Committee may condition the grant or vesting of Restricted Stock
upon the attainment of specified performance goals or such other factors
as the Committee may determine, in its sole discretion.
7.2 Awards and Certificates. An Eligible Employee or Consultant
selected to receive Restricted Stock shall not have any rights with
respect to such Award, unless and until such Participant has delivered to
the Company a fully executed copy of the applicable Award agreement
relating thereto and has otherwise complied with the applicable terms and
conditions of such Award. Further, such Award shall be subject to the
following conditions:
(a) Purchase Price. The purchase price of Restricted Stock
shall be fixed by the Committee. Subject to Section 4.3, the
purchase price for shares of Restricted Stock may be zero to the
extent permitted by applicable law, and, to the extent not so
permitted, such purchase price may not be less than par value.
(b) Acceptance. Awards of Restricted Stock must be accepted
within a period of ninety (90) days (or such shorter period as the
Committee may specify at
-16-
grant) after the Award date by executing a Restricted Stock Award
agreement and by paying whatever price (if any) the Committee has
designated thereunder.
(c) Legend. Each Participant receiving shares of Restricted
Stock shall be issued a stock certificate in respect of such shares
of Restricted Stock, unless the Committee elects to use another
system, such as book entries by the transfer agent, as evidencing
ownership of shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant, and shall, in addition
to such legends required by applicable securities laws, bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the
following form:
"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
MarketAxess Holdings Inc. (the "Company") Stock
Incentive Plan (the "Plan") and an Agreement entered
into between the registered owner and the Company dated
__________. Copies of such Plan and Agreement are on
file at the principal office of the Company."
(d) Custody. If stock certificates are issued in respect of
shares of Restricted Stock, the Committee may require that any stock
certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed and that,
as a condition to the grant of such Award of Restricted Stock, the
Participant shall have delivered a duly signed stock power, endorsed
in blank, relating to the Common Stock covered by such Award.
7.3 Restrictions and Conditions on Restricted Stock Awards. Shares
of Restricted Stock awarded pursuant to this Plan shall be subject to
Article IX and the following restrictions and conditions:
(a) Restriction Period; Vesting and Acceleration of Vesting.
(i) The Participant shall not be permitted to Transfer shares of
Restricted Stock awarded under this Plan during the period or
periods set by the Committee (the "Restriction Period") commencing
on the date of such Award, as set forth in the Restricted Stock
Award agreement and such agreement shall set forth a vesting
schedule and any events which would accelerate vesting of the shares
of Restricted Stock. Within these limits, based on service,
attainment of performance goals pursuant to Section 7.3(a)(ii) below
and/or such other factors or criteria as the Committee may determine
in its sole discretion, the Committee may provide for the lapse of
such restrictions in installments in whole or in part, or may
accelerate the vesting of all or any part of any Restricted Stock
Award and/or waive the deferral limitations for all or any part of
any Restricted Stock Award.
-17-
(ii) Performance Goals, Formulae or Standards. If the
grant of shares of Restricted Stock or the lapse of
restrictions is based on the attainment of performance goals,
the Committee shall establish the Performance Goals and the
applicable vesting percentage of the Restricted Stock Award
applicable to each Participant or class of Participants in
writing prior to the beginning of the applicable fiscal year
or at such later date as otherwise determined by the
Committee. Such performance goals may incorporate provisions
for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar
type events or circumstances.
(b) Rights as Stockholder. Except as provided in this
subsection (b) and subsection (a) above and as otherwise determined
by the Committee, the Participant shall have, with respect to the
shares of Restricted Stock, all of the rights of a holder of shares
of Common Stock of the Company including, without limitation, the
right to receive any dividends, the right to vote such shares and,
subject to and conditioned upon the full vesting of shares of
Restricted Stock, the right to tender such shares. The Committee
may, in its sole discretion, determine at the time of grant that the
payment of dividends shall be deferred until, and conditioned upon,
the expiration of the applicable Restriction Period.
(c) Lapse of Restrictions. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock subject
to such Restriction Period, the certificates for such shares shall
be delivered to the Participant. All legends shall be removed from
said certificates at the time of delivery to the Participant except
as otherwise required by applicable law or other limitations imposed
by the Committee.
ARTICLE VIII
NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY/DIRECTORSHIP
8.1 Non-Transferability.
(a) Except as otherwise specifically provided herein, no Stock
Option shall be Transferable by the Participant otherwise than by
will or by the laws of descent and distribution. All Stock Options
shall be exercisable, during the Participant's lifetime, only by the
Participant. Shares of Restricted Stock may not be Transferred prior
to the date on which such shares are issued, or if later, the date
on which any applicable restriction, performance or deferral period
lapses. Any attempt to Transfer any such Award shall be void and
immediately cancelled, and no such Award shall in any manner be
liable for or subject to the debts, contracts, liabilities,
-18-
engagements or torts of any person who shall be entitled to such
Award, nor shall it be subject to attachment or legal process for or
against such person.
(b) Notwithstanding the foregoing, the Committee may determine
at the time of grant or thereafter that a Non-Qualified Stock Option
that is otherwise not Transferable pursuant to this Section 8.1 is
Transferable to a Family Member in whole or in part and in such
circumstances, and under such conditions, as specified by the
Committee. A Non- Qualified Stock Option that is Transferred to a
Family Member pursuant to the preceding sentence (i) may not be
subsequently Transferred otherwise than by will or by the laws of
descent and distribution and (ii) remains subject to the terms of
this Plan and the Stock Option agreement. Any shares of Common Stock
acquired upon the exercise of a Stock Option by a permissible
transferee of a Stock Option or a permissible transferee pursuant to
a Transfer after the exercise of the Stock Option shall be subject
to the terms of this Plan and the Stock Option agreement, including,
without limitation, the provisions of Article XI hereof.
8.2 Termination. The following rules apply with regard to the
Termination of a Participant.
(a) Rules Applicable to Stock Options. Unless otherwise
determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter:
(i) Termination by Reason of Death, Disability or
Retirement. If a Participant's Termination is by reason of
death, Disability or Retirement, all Stock Options that are
held by such Participant that are vested and exercisable at
the time of the Participant's Termination may be exercised by
the Participant (or, in the case of death, by the legal
representative of the Participant's estate) at any time within
a period of one (1) year from the date of such Termination,
but in no event beyond the expiration of the stated terms of
such Stock Options; provided, however, that in the case of
Retirement, if the Participant dies within such exercise
period, all unexercised Stock Options held by such Participant
shall thereafter be exercisable, to the extent to which they
were exercisable at the time of death, for a period of one (1)
year from the date of such death, but in no event beyond the
expiration of the stated term of such Stock Options.
(ii) Involuntary Termination Without Cause or for Good
Reason. If a Participant's Termination is by involuntary
termination without Cause or for Good Reason, all Stock
Options that are held by such Participant that are vested and
exercisable at the time of the Participant's Termination may
be exercised by the Participant at any time within a period of
ninety (90) days from the date of such Termination, but in no
event beyond the expiration of the stated term of such Stock
Options.
-19-
(iii) Voluntary Termination. If a Participant's
Termination is voluntary (other than a voluntary termination
described in Section 8.2(a)(iv)(y) below), all Stock Options
that are held by such Participant that are vested and
exercisable at the time of the Participant's Termination may
be exercised by the Participant at any time within a period of
thirty (30) days from the date of such Termination, but in no
event beyond the expiration of the stated terms of such Stock
Options.
(iv) Termination for Cause. If a Participant's
Termination (x) is for Cause or (y) is a voluntary Termination
(as provided in sub-section (c) above) after the occurrence of
an event that would be grounds for a Termination for Cause,
all Stock Options, whether vested or not vested, that are held
by such Participant shall thereupon terminate and expire as of
the date of such Termination.
(v) Unvested Stock Options. Stock Options that are not
vested as of the date of a Participant's Termination for any
reason shall terminate and expire as of the date of such
Termination.
(b) Rules Applicable to Restricted Stock. Unless otherwise
determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter, subject to the applicable
provisions of the Restricted Stock Award agreement and this Plan,
upon a Participant's Termination for any reason during the relevant
Restriction Period, all Restricted Stock still subject to
restriction will vest or be forfeited in accordance with the terms
and conditions established by the Committee at grant or thereafter.
ARTICLE IX
CHANGE IN CONTROL PROVISIONS
9.1 Benefits. In the event of a Change in Control of the Company,
except as otherwise provided by the Committee in an Award agreement, a
Participant's employment agreement with the Company or an Affiliate, as
approved by the Committee, or other written agreement approved by the
Committee (as such agreement may be amended from time to time), a
Participant's unvested Awards shall not vest and a Participant's Award
shall be treated in accordance with one of the following methods as
determined by the Committee:
(a) (i) Stock Options, whether or not then vested, shall be
continued, assumed, have new rights substituted therefor or be
treated in accordance with Section 4.2 hereof, as determined by the
Committee, and (ii) restrictions to which any shares of Restricted
Stock granted prior to the Change in Control are subject shall not
lapse upon a Change in Control and the Restricted Stock shall, where
appropriate in the sole discretion of the Committee, receive the
same distribution as other Common Stock on such terms as determined
by the Committee; provided that, the Committee may decide to award
additional Restricted Stock in lieu of any cash distribution.
Notwithstanding anything to the contrary herein, for purposes
-20-
of Incentive Stock Options, any assumed or substituted Stock Option
shall comply with the requirements of Treasury Regulation Section
1.425-1 (and any amendments thereto).
(b) The Committee, in its sole discretion, may provide for the
purchase of any Stock Option by the Company or an Affiliate for an
amount of cash equal to the excess of the Change in Control Price
(as defined below) of the shares of Common Stock covered by such
Stock Options, over the aggregate exercise price of such Stock
Options. For purposes of this Section 9.1, Change in Control Price
shall mean the highest price per share of Common Stock paid in any
transaction related to the applicable Change in Control of the
Company.
(c) Notwithstanding anything else herein, the Committee may,
in its sole discretion, provide for accelerated vesting of a Stock
Option or accelerated lapsing of restrictions on shares of
Restricted Stock at any time.
(d) If the Company and the other party to a transaction
constituting a Change in Control agree that such transaction shall
be treated as a "pooling of interests" for financial reporting
purposes, and if the transaction is in fact so treated, then the
acceleration of exercisability, vesting or lapse of the vesting
period of a Stock Option or of the applicable Restriction Period
shall not occur to the extent that the Company's independent public
accountants determine in good faith that such acceleration would
preclude ""pooling of interests" accounting.
9.2 Change in Control. Unless otherwise determined by the Committee
in the applicable Award agreement or other written agreement approved by
the Committee, a "Change in Control" shall be deemed to have occurred:
(a) upon any "person" as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than the Company,
any trustee or other fiduciary holding securities under any
employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of
Common Stock of the Company), becoming the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more
than 50% of the combined voting power of the Company's then
outstanding securities;
(b) a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in
which no person (other than those covered by the exceptions in
(a) above) acquires
-21-
more than fifty percent (50%) of the combined voting power of
the Company's then outstanding securities shall not constitute
a Change in Control of the Company; or
(c) upon the stockholders of the Company approval of a
plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or
substantially all of the Company's assets other than the sale
or disposition of all or substantially all of the assets of
the Company to a person or persons who beneficially own,
directly or indirectly, at least fifty percent (50%) or more
of the combined voting power of the outstanding voting
securities of the Company at the time of the sale.
9.3 Registration Date not a Change in Control. For purposes of the
Plan, the Registration Date shall not be deemed to be a Change in Control.
ARTICLE X
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or the
Committee may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of this Plan (including any amendment
deemed necessary to ensure that the Company may comply with any regulatory
requirement referred to in Article XIII), or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless
otherwise required by law or specifically provided herein, the rights of a
Participant with respect to Awards granted prior to such amendment,
suspension or termination, may not be impaired without the consent of such
Participant and, provided further, no amendment may be made which would
(i) increase the aggregate number of shares of Common Stock that may be
issued under this Plan; (ii) change the classification of employees,
Consultants or Non-Employee Directors eligible to receive Awards under
this Plan; (iii) decrease the minimum option price of any Stock Option; or
(iv) extend the maximum Stock Option period under Section 6.3 without the
approval of the stockholders of the Company in accordance with the laws of
the State of Delaware, and, solely to the extent applicable to Incentive
Stock Options, Section 422 of the Code. In no event may this Plan be
amended without the approval of the stockholders of the Company in
accordance with the applicable laws of the State of Delaware to increase
the aggregate number of shares of Common Stock that may be issued under
this Plan, decrease the minimum exercise price of any Stock Option, or to
make any other amendment that would require stockholder approval under the
rules of any exchange or system on which the Company's securities are
listed or traded at the request of the Company.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action
by the Committee shall impair the rights of any holder without the
holder's consent.
ARTICLE XI
-22-
COMPANY CALL RIGHTS; RIGHTS OF FIRST REFUSAL
11.1 Company Call Rights.
(a) In the event of a Participant's Termination for Cause, a
Participant's voluntary termination of his/her employment within
ninety (90) days after the occurrence of an event that would be
grounds for a Termination for Cause or the discovery that a
Participant engaged in Detrimental Activity, the Company may
repurchase from the Participant (or his or her transferee) any
shares of Common Stock previously acquired by the Participant
through the exercise of a Stock Option granted under this Plan or an
award of Restricted Stock granted under this Plan at a repurchase
price equal to the lesser of (A) the original purchase price or
exercise price (as applicable), if any or (B) the Fair Market Value
of a share of Common Stock on the date of Termination or the date of
repurchase, as selected by the Committee.
(b) In the event of a Termination for any reason other than
for Cause (including Termination due to Retirement, death,
Disability, involuntary termination without Cause, for Good Reason
or resignation), the Company may at any time within the later of one
year after a Participant incurs a Termination or the date a
Participant acquires shares of Common Stock upon the exercise of a
Stock Option following his or her Termination for any reason other
than for Cause: (i) repurchase from the Participant each outstanding
vested Stock Option based on the difference between the exercise
price of a share of Common Stock relating to such Stock Option and
the Fair Market Value of a share of Common Stock on the date of
Termination and (ii) repurchase from the Participant any shares of
Common Stock previously acquired by the Participant through the
exercise of a Stock Option under this Plan at a repurchase price
equal to the Fair Market Value on the date of Termination or the
date of repurchase, as selected by the Committee.
(c) In the event of a Termination for any reason other than
for Cause (including termination due to Retirement, death,
Disability, involuntary termination without Cause or resignation),
the Company may at any time within one year after a Participant
incurs a Termination other than for Cause repurchase from the
Participant any shares of Common Stock previously acquired by the
Participant pursuant to an award of Restricted Stock under this Plan
at a repurchase price equal to Fair Market Value as of the date of
Termination or as of the date of repurchase, as selected by the
Committee.
(d) (i) If the Company elects to exercise call rights under
this Section 11.1, it shall do so by delivering to the Participant a
notice of such election, specifying the number of shares to be
purchased and such closing date and time that, solely for purposes
of sub- sections (b) or (c), is within the applicable one year
period. Such closing shall take place at the Company's principal
executive offices.
(ii) At such closing, the Company will pay the Participant
the repurchase price as specified in this Section 11.1 in cash, or
by cancellation of
-23-
indebtedness of the Participant to the Company; provided, however,
the Company may elect to pay the repurchase price in three (3) equal
installments with the first installment paid at the closing and
subsequent installments paid on the first two (2) anniversaries of
the closing. The installment payments shall bear interest at the
applicable federal rate.
11.2 Transfer Limit. (a) No Participant shall, directly or
indirectly, prior to the Registration Date or such other date determined
by the Committee, Transfer (i) any shares of Common Stock acquired through
the exercise of a Stock Option under this Plan or (ii) any shares of
Common Stock acquired by the Participant pursuant to an award of
Restricted Stock under this Plan prior to the Participant's Termination
and expiration of the time period provided in Sections 11.1(b) or (c)
hereof (the "Transfer Restriction Period"). Notwithstanding the foregoing,
the Participant shall have the right to Transfer such shares of Common
Stock to a "Permissible Transferee" who takes the shares subject to the
terms of the Plan and applicable Award agreement. Permissible Transferees
shall mean Family Members, any stockholder of the Company, or any employee
of the Company.
(b) After the Transfer Restriction Period, no Participant
shall Transfer (i) any Common Stock acquired through the exercise of
a Stock Option under this Plan or (ii) any shares of Common Stock
acquired by the Participant pursuant to an award of Restricted Stock
to any Person other than a Permissible Transferee unless in each
such instance the Participant (or his or her estate or legal
representative) shall have first offered to the Company the Common
Stock proposed to be Transferred pursuant to a bona fide offer to a
third party.
(c) Notice of Proposed Transfer. Prior to any proposed
Transfer of the Common Stock acquired either through the exercise of
a Stock Option under this Plan or pursuant to an award of Restricted
Stock, the Participant shall give a written notice (the "Transfer
Notice") to the Company describing fully the proposed Transfer,
including the number of shares of Common Stock, the name and address
of the proposed Transferee (the "Proposed Transferee") and, if the
Transfer is voluntary, the proposed Transfer price, and containing
such information necessary to show that the Participant has obtained
a bona fide binding offer to Transfer the Common Stock for cash from
a third party. The Participant shall provide a separate Transfer
Notice with regard to each Proposed Transferee. The Transfer Notice
shall be signed by both the Participant and the Proposed Transferee
and must constitute a binding and unconditional commitment of the
Participant and the Proposed Transferee for the Transfer of the
Common Stock to the Proposed Transferee for cash subject only to the
right of first refusal specified herein.
(d) Bona Fide Transfer. If the Company determines that the
information provided by the Participant in the Transfer Notice is
insufficient to establish the bona fide nature of a proposed
voluntary Transfer, the Company shall give the Participant written
notice of the Participant's failure to comply with the procedure
described herein, and the Participant shall have no right to
Transfer the Common Stock without first complying
-24-
with this procedure. The Participant shall not be permitted to
Transfer the Common Stock if the proposed Transfer is not bona fide.
(e) Exercise of Right of First Refusal. If the Company
determines the proposed Transfer to be a bona fide Transfer, the
Company shall have the right to repurchase all or any part of the
shares of Common Stock at the proposed Transfer price per share, by
delivering to the Participant (or his or her estate or legal
representative) written notice of such exercise within twenty (20)
days after the date the Company has determined that the proposed
Transfer is bona fide. The Company's exercise or failure to exercise
the right of first refusal with respect to any proposed Transfer
described in a Transfer Notice shall not affect the Company's right
to exercise the right of first refusal with respect to any proposed
Transfer described in any other Transfer Notice, whether or not such
other Transfer Notice is issued by the Participant or issued by a
person other than the Participant with respect to a proposed
Transfer to the same Proposed Transferee. If the Company exercises
the right of first refusal, the Company and the Participant shall
thereupon consummate the sale of the Common Stock to the Company
within twenty (20) days after the date the Company has determined
that the proposed Transfer is bona fide (unless a longer period is
offered by the Proposed Transferee); provided, however, that in the
event the Transfer Notice provides for the payment for the Common
Stock other than in cash, the Company shall have the option of
paying for the Common Stock by the present value cash equivalent of
the consideration described in the Transfer Notice as reasonably
determined by the Company. For purposes of the foregoing,
cancellation of any indebtedness of the Participant to the Company
shall be treated as payment to the Participant in cash to the extent
of the unpaid principal and any accrued interest canceled.
(f) Failure to Exercise Right of First Refusal. If the Company
fails to exercise the right of first refusal with respect to any
share of Common Stock within the period specified in sub-section (e)
above, and the Company has not given notice to the Participant that
the proposed Transfer is not a bona fide Transfer pursuant to
sub-section (d) above, the Participant may conclude a Transfer to
the Proposed Transferee of the Common Stock on the terms and
conditions described in the Transfer Notice, provided such Transfer
occurs not later than twenty (20) days after the date the Company
has determined that the proposed Transfer is bona fide. The Company
shall have the right to demand further assurances from the
Participant and the Proposed Transferee (in a form satisfactory to
the Company) that the Transfer of the Common Stock was actually
carried out on the terms and conditions described in the Transfer
Notice. No Common Stock shall be transferred on the books of the
Company until the Company has received such assurances, if so
demanded, and has approved the proposed Transfer as bona fide. Any
proposed Transfer on terms and conditions different from those
described in the Transfer Notice, as well as any subsequent proposed
Transfer by the Participant (or his or her estate or legal
representative), shall again be subject to the right of first
refusal and shall require compliance by the Participant with the
procedure described in this Section 11.2.
-25-
(g) Assignment of Right of First Refusal. The Company shall
have the right to assign the right of first refusal at any time,
whether or not there has been an attempted Transfer, to one or more
persons as may be selected by the Company, from time to time.
(h) Application to Transferees. This Section 11.2 shall apply
to any transferee (other than to a transferee who acquires the
Common Stock pursuant to sub- section (f) above) in the same manner
as it applies to a Participant.
11.3 Alternative Call Rights and Rights of First Refusal. The
Committee may provide in the applicable Award agreement alternative (or
no) call rights and/or rights of first refusal at the time of grant (or,
thereafter, if no rights of the Participant are reduced) as it may decide
in its sole discretion.
11.4 Effect of Registration. Notwithstanding the foregoing, unless
otherwise determined by the Committee, the Company shall cease to have
rights pursuant to this Article XI on and after the Registration Date.
ARTICLE XII
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments as to which a
Participant has a fixed and vested interest but which are not yet made to
a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general unsecured
creditor of the Company.
ARTICLE XIII
GENERAL PROVISIONS
13.1 Legend. The Committee may require each person receiving shares
pursuant to an Award under this Plan to represent to and agree with the
Company in writing that the Participant is acquiring the shares without a
view to distribution thereof and such other securities law related
representations as the Committee shall request. In addition to any legend
required by this Plan, the certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions
on Transfer.
All certificates for shares of Common Stock delivered under this
Plan shall be subject to such stock transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed or any national securities
association system upon whose system the Common Stock is then quoted, any
applicable Federal or state securities law, and any applicable corporate
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
-26-
13.2 Other Plans. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject
to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases. In the event of any conflict between the provisions of
this Plan and any agreement, approved by the Board or the Committee,
between the Company and any employee, Consultant or Non-Employee Director,
the provisions of such agreement shall govern.
13.3 No Right to Employment/Directorship/Consultancy. Neither this
Plan nor the grant of any Award hereunder shall give any Participant or
other employee, Consultant or Non- Employee Director any right with
respect to continuance of employment, consultancy or directorship by the
Company or any Affiliate, nor shall they be a limitation in any way on the
right of the Company or any Affiliate by which an employee is employed or
a Consultant or Non- Employee Director is retained to terminate his or her
employment or consultancy at any time.
13.4 Withholding of Taxes. The Company shall have the right to
deduct from any payment to be made to a Participant, or to otherwise
require, prior to the issuance or delivery of any shares of Common Stock
or the payment of any cash hereunder, payment by the Participant of, any
Federal, state or local taxes required by law to be withheld. Upon the
vesting of Restricted Stock, or upon making an election under Section
83(b) of the Code, a Participant shall pay all required withholding to the
Company.
Any statutorily required withholding obligation with regard to any
Eligible Employee may be satisfied, subject to the consent of the
Committee, by reducing the number of shares of Common Stock otherwise
deliverable or by delivering shares of Common Stock already owned. Any
fraction of a share of Common Stock required to satisfy such tax
obligations shall be disregarded and the amount due shall be paid instead
in cash by the Participant.
13.5 Listing and Other Conditions.
(a) Unless otherwise determined by the Committee, as long as
the Common Stock is listed on a national securities exchange or
system sponsored by a national securities association, the issue of
any shares of Common Stock pursuant to an Award shall be conditioned
upon such shares being listed on such exchange or system. The
Company shall have no obligation to issue such shares unless and
until such shares are so listed, and the right to exercise any Stock
Option with respect to such shares shall be suspended until such
listing has been effected.
(b) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock pursuant
to an Award is or may in the circumstances be unlawful or result in
the imposition of excise taxes on the Company under the statutes,
rules or regulations of any applicable jurisdiction, the Company
shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or
registration under the Securities Act or otherwise with respect to
shares of Common Stock or Awards, and the right to
-27-
exercise any Stock Option shall be suspended until, in the opinion
of said counsel, such sale or delivery shall be lawful and will not
result in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension under this
Section 13.5, an Award affected by such suspension which shall not
then have expired or terminated shall be reinstated as to all shares
available before such suspension and as to shares which would
otherwise have become available during the period of such
suspension, but no such suspension shall extend the term of any
Stock Option.
(d) A Participant shall be required to supply the Company with
any certificates, representations and information that the Company
requests and otherwise cooperate with the Company in obtaining any
listing, registration, qualification, exemption, consent or approval
the Company deems necessary or appropriate.
13.6 Stockholders Agreement and Other Requirements. Notwithstanding
anything herein to the contrary, as a condition to the receipt of shares
of Common Stock pursuant to a Stock Option or Restricted Stock award under
this Plan, to the extent required by the Committee, the Participant shall
execute and deliver a stockholder's agreement or such other documentation
which shall set forth certain restrictions on transferability of the
shares of Common Stock acquired upon exercise or purchase, a right of
first refusal of the Company with respect to shares, and such other terms
as the Board or Committee shall from time to time establish. Such
stockholder's agreement or other documentation shall apply to the Common
Stock acquired under the Plan and covered by such stockholder's agreement
or other documentation. The Company may require, as a condition of
exercise, the Participant to become a party to any other existing
stockholder agreement.
13.7 Governing Law. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law
that might otherwise govern under applicable Delaware principles of
conflict of laws).
13.8 Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in
the feminine gender in all cases where they would so apply, and wherever
any words are used herein in the singular form they shall be construed as
though they were also used in the plural form in all cases where they
would so apply. To the extent applicable, this Plan shall be limited,
construed and interpreted in a manner so as to comply with the applicable
requirements of Rule 16b-3; however, noncompliance with Rule 16b-3 shall
have no impact on the effectiveness of an Award under this Plan.
13.9 Other Benefits. No Award payment under this Plan shall be
deemed compensation for purposes of computing benefits under any
retirement plan of the Company or its subsidiaries nor affect any benefits
under any other benefit plan now or subsequently in effect under which the
availability or amount of benefits is related to the level of
compensation.
-28-
13.10 Costs. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock
pursuant to any Awards hereunder.
13.11 No Right to Same Benefits. The provisions of Stock Options
need not be the same with respect to each Participant, and such Stock
Options to individual Participants need not be the same in subsequent
years.
13.12 Death/Disability. The Committee may in its discretion require
the transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will
(in the case of the Participant's death) or such other evidence as the
Committee deems necessary to establish the validity of the transfer of an
Award. The Committee may also require that the agreement of the transferee
to be bound by all of the terms and conditions of this Plan.
13.13 Section 16(b) of the Exchange Act. On and after the
Registration Date, all elections and transactions under this Plan by
persons subject to Section 16 of the Exchange Act involving shares of
Common Stock are intended to comply with any applicable exemptive
condition under Rule 16b-3. The Committee may establish and adopt written
administrative guidelines, designed to facilitate compliance with Section
16(b) of the Exchange Act, as it may deem necessary or proper for the
administration and operation of this Plan and the transaction of business
thereunder.
13.14 Successors and Assigns. The Plan shall be binding on all
successors and permitted assigns of a Participant, including, without
limitation, the estate of such Participant and the executor, administrator
or trustee of such estate.
13.15 Severability of Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and this
Plan shall be construed and enforced as if such provisions had not been
included; provided, however, that if the Company's Call Rights and Rights
of First Refusal set forth in Article XI shall be held invalid or
unenforceable, the Stock Options granted under the Plan shall be cancelled
and terminated.
13.16 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part
of this Plan, and shall not be employed in the construction of this Plan.
13.17 Securities Act Compliance. Except as the Company or Committee
shall otherwise determine, this Plan is intended to comply with Section
4(2) or Rule 701 of the Securities Act, and any provisions inconsistent
with such Section or Rule of the Securities Act shall be inoperative and
shall not affect the validity of the Plan.
13.18 Successors and Assigns. The Plan shall be binding on all
successors and permitted assigns of a Participant, including, without
limitation, the estate of such Participant and the executor, administrator
or trustee of such estate.
-29-
13.19 Payment to Minors, Etc. Any benefit payable to or for the
benefit of a minor, an incompetent person or other person incapable of
receipt thereof shall be deemed paid when paid to such person's guardian
or to the party providing or reasonably appearing to provide for the care
of such person, and such payment shall fully discharge the Committee, the
Board, the Company, its Affiliates and their employees, agents and
representatives with respect thereto.
13.20 Agreement. As a condition to the grant of an Award, if
requested by the Company and the lead underwriter of any public offering
of the Common Stock (the "Lead Underwriter"), a Participant shall
irrevocably agree not to sell, contract to sell, grant any option to
purchase, transfer the economic risk of ownership in, make any short sale
of, pledge or otherwise transfer or dispose of, any interest in any Common
Stock or any securities convertible into, derivative of, or exchangeable
or exercisable for, or any other rights to purchase or acquire Common
Stock (except Common Stock included in such public offering or acquired on
the public market after such offering) during such period of time
following the effective date of a registration statement of the Company
filed under the Securities Act that the Lead Underwriter shall specify
(the "Lock-up Period"). The Participant shall further agree to sign such
documents as may be requested by the Lead Underwriter to effect the
foregoing and agree that the Company may impose stop-transfer instructions
with respect to Common Stock acquired pursuant to an Award until the end
of such Lock-up Period.
ARTICLE XIV
EFFECTIVE DATE OF PLAN
The Plan shall become effective upon adoption by the Board or such later
date as provided in the adopting resolution, subject to the approval of this
Plan by the stockholders of the Company within twelve (12) months before or
after adoption of the Plan by the Board in accordance with the requirements of
the laws of the State of Delaware.
ARTICLE XV
TERM OF PLAN
No Award shall be granted pursuant to this Plan on or after the tenth
anniversary of the earlier of the date this Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may,
and the Committee's authority to administer the terms of such Awards shall,
extend beyond that date.
-30-