EXHIBIT 10.10
MARKETAXESS HOLDINGS INC.
2004 STOCK INCENTIVE PLAN
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TABLE OF CONTENTS
ARTICLE I PURPOSE........................................................... 1
ARTICLE II DEFINITIONS...................................................... 1
ARTICLE III ADMINISTRATION.................................................. 7
ARTICLE IV SHARE LIMITATION................................................. 10
ARTICLE V ELIGIBILITY....................................................... 13
ARTICLE VI STOCK OPTIONS.................................................... 13
ARTICLE VII STOCK APPRECIATION RIGHTS....................................... 18
ARTICLE VIII RESTRICTED STOCK............................................... 21
ARTICLE IX PERFORMANCE SHARES............................................... 23
ARTICLE X PERFORMANCE UNITS................................................. 25
ARTICLE XI OTHER STOCK-BASED AWARDS......................................... 26
ARTICLE XII CHANGE IN CONTROL PROVISIONS.................................... 28
ARTICLE XIII TERMINATION OR AMENDMENT OF PLAN............................... 29
ARTICLE XIV UNFUNDED PLAN................................................... 30
ARTICLE XV GENERAL PROVISIONS............................................... 30
ARTICLE XVI EFFECTIVE DATE OF PLAN.......................................... 34
ARTICLE XVII TERM OF PLAN................................................... 34
ARTICLE XVIII NAME OF PLAN.................................................. 34
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MARKETAXESS HOLDINGS INC.
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2004 STOCK INCENTIVE PLAN
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ARTICLE I
PURPOSE
The purpose of this MarketAxess Holdings Inc. 2004 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 Eligible Employees, Consultants
and Non-Employee Directors 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 EVENT" 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 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 any Stock Option, Stock
Appreciation Right, Restricted Stock, Performance Shares, Performance Units or
Other Stock-Based Award. All Awards shall be granted by, confirmed by, and
subject to the terms of, a written agreement executed by the Company and the
Participant.
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 XII.
2.7 "CHANGE IN CONTROL PRICE" has the meaning set forth in Section 12.1.
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, which committee or subcommittee shall
consist of two or more non-employee directors, each of whom is intended to be,
to the extent required by Rule 16b-3 promulgated under Section 16(b) of the
Exchange Act, 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. 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. If for any
reason the appointed Committee does not meet the requirements of Rule 16b-3,
such noncompliance with the requirements of Rule 16b-3 shall not affect the
validity of Awards, grants, interpretations or other actions of the Committee.
2.10 "COMMON STOCK" means the Common Stock, $.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 natural person who is an advisor or consultant
to the Company or its Affiliates.
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
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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 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). For purposes of sub-sections (a), (c), (d) and (f) above, the
General Counsel or the Chief Executive Officer of the Company shall have
authority to provide the Participant with written authorization to engage in the
activities contemplated thereby and no other person shall each 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) 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 XVI.
2.17 "ELIGIBLE EMPLOYEES" 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.
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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, Inc.; or (b) if not traded on any such
national securities exchange or The Nasdaq Stock Market, Inc., 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. For purposes of the grant of any Award, the applicable date shall be
the date prior to which the Award is granted, provided that for purposes of the
exercise of any Award the applicable date shall be the date a notice of exercise
is received by the Committee or, if not a day on which the applicable market is
open, the next day that it is open.
2.20 "FAMILY MEMBER" means "family member" as defined in Section A.1.(5)
of the general instructions of Form S-8.
2.21 "GOOD REASON" means, with respect to a Participant's Termination of
Employment: (a) in the case where there is no employment 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, 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, 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 "OTHER STOCK-BASED AWARD" means an Award under Article XI of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock, including, without limitation, an Award valued
by reference to an Affiliate.
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2.26 "PARENT" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.27 "PARTICIPANT" means an Eligible Employee, Non-Employee Director or
Consultant to whom an Award has been granted pursuant to this Plan.
2.28 "PERFORMANCE CYCLE" has the meaning set forth in Section 10.1.
2.29 "PERFORMANCE PERIOD" has the meaning set forth in Section 9.1.
2.30 "PERFORMANCE SHARE" means an Award made pursuant to Article IX of
this Plan of the right to receive Common Stock or cash of an equivalent value at
the end of a specified Performance Period.
2.31 "PERFORMANCE UNIT" means an Award made pursuant to Article X of this
Plan of the right to receive a fixed dollar amount, payable in cash or Common
Stock or a combination of both.
2.32 "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.
2.33 "PLAN" means this MarketAxess Holdings Inc. 2004 Stock Incentive
Plan, as amended from time to time.
2.34 "REFERENCE STOCK OPTION" has the meaning set forth in Section 7.1.
2.35 "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.
2.36 "RESTRICTED STOCK" means an Award of shares of Common Stock under
this Plan that is subject to restrictions under Article VIII.
2.37 "RESTRICTION PERIOD" has the meaning set forth in Subsection 8.3(a)
with respect to Restricted Stock.
2.38 "RETIREMENT" means a Termination of Employment or Termination of
Consultancy without Cause at or after age 65 or such earlier date after age 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 65 or, with the consent of the Board, before age 65
but after age 50.
2.39 "RULE 16B-3" means Rule 16b-3 under Section 16(b) of the Exchange Act
as then in effect or any successor provision.
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2.40 "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.
2.41 "STOCK APPRECIATION RIGHT" shall mean the right pursuant to an Award
granted under Article VII. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of a Stock Option in
exchange for an amount in cash and/or stock equal to the difference between (i)
the Fair Market Value on the date such Stock Option (or such portion thereof) is
surrendered, of the Common Stock covered by such Stock Option (or such portion
thereof), and (ii) the aggregate exercise price of such Stock Option (or such
portion thereof). A Non-Tandem Stock Appreciation Right shall mean the right to
receive an amount in cash and/or stock equal to the difference between (x) the
Fair Market Value of a share of Common Stock on the date such right is
exercised, and (y) the aggregate exercise price of such right, otherwise than on
surrender of a Stock Option.
2.42 "STOCK OPTION" or "OPTION" means any option to purchase shares of
Common Stock granted to Eligible Employees, Non-Employee Directors or
Consultants granted pursuant to Article VI.
2.43 "SUBSIDIARY" means any subsidiary corporation of the Company within
the meaning of Section 424(f) of the Code.
2.44 "TEN PERCENT STOCKHOLDER" means a person owning stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company, its Subsidiaries or its Parent.
2.45 "TERMINATION" means a Termination of Consultancy, Termination of
Directorship or Termination of Employment, as applicable.
2.46 "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.
2.47 "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 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.
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2.48 "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.
2.49 "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.
2.50 "TRANSITION PERIOD" means the period beginning with the Registration
Date and ending as of the earlier of: (i) the date of the first annual meeting
of stockholders of the Company at which directors are to be elected that occurs
after the close of the third calendar year following the calendar year in which
the Registration Date occurs; or (ii) the expiration of the "reliance period"
under Treasury Regulation Section 1.162-27(f)(2).
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,
pursuant to the terms of this Plan, to Eligible Employees, Consultants and
Non-Employee Directors: (i) Stock Options, (ii) Stock Appreciation Rights, (iii)
Restricted Stock, (iv) Performance Shares, (v) Performance Units; and (vi) Other
Stock-Based Awards. 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, or any
combination thereof, are to be granted hereunder to one or
more Eligible Employees, Consultants or Non-Employee
Directors;
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(c) to determine 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, or 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, to what extent and under what
circumstances grants of Options and other Awards under this
Plan are to operate on a tandem basis and/or in conjunction
with or apart from other awards made by the Company outside of
this Plan;
(f) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Stock and/or Restricted
Stock under Section 6.4(d);
(g) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with
respect to an Award under this Plan shall be deferred either
automatically or at the election of the Participant;
(h) to determine whether a Stock Option is an Incentive Stock
Option or Non-Qualified Stock Option;
(i) to determine whether to require a Participant, as a condition
of the granting of any Award, to not sell or otherwise dispose
of shares acquired pursuant to the exercise 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;
(j) to modify, extend or renew an Award, subject to Article XIII
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;
(k) to offer to buy out an Award 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;
and
(l) solely to the extent permitted by applicable law, to determine
whether, to what extent and under what circumstances to
provide loans (which may be
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on a recourse basis and shall bear interest at the rate the
Committee shall provide) to Participants in order to exercise
Options under the Plan.
3.3 GUIDELINES. Subject to Article XIII 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 responsibilities (to the extent permitted by applicable law and
applicable stock exchange rules), 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 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 of such domestic or foreign
jurisdictions. Notwithstanding the foregoing, no action of the Committee under
this Section 3.3 shall impair the rights of any Participant without the
Participant's consent. To the extent applicable, this Plan is intended to comply
with the applicable requirements of Rule 16b-3, and this Plan shall be limited,
construed and interpreted in a manner so as to comply therewith.
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 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 (to the extent permitted by
applicable law and applicable exchange rules) may grant
authority to officers to grant Awards and/or execute
agreements or other documents on behalf of the Committee.
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(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.
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 LIMITATION
4.1 SHARES. (a) The aggregate number of shares of Common Stock that may be
issued or used for reference purposes or with respect to which Awards may be
granted under this Plan shall not exceed 7,200,000 shares, plus any Common Stock
available for grant under the Company's 2001 and 2000 Stock Incentive Plans as
of the Registration Date, up to a maximum of 2,054,405 (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 Option, Stock Appreciation Right or Other
Stock-Based Awards granted under this Plan expires, terminates or is canceled
for any reason without having been exercised in full, the number of shares of
Common Stock underlying any unexercised Award shall again be available for the
purpose of Awards under the Plan. If any shares of Restricted Stock, Performance
Units, Performance Shares or Other Stock-Based Awards denominated in shares of
Common Stock awarded under this Plan to a Participant are forfeited for any
reason, the number of forfeited shares of Restricted Stock, Performance Units,
Performance Shares or
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Other Stock-Based Awards denominated in shares of Common Stock shall again be
available for the purposes of Awards under the Plan. If a Tandem Stock
Appreciation Right or a Limited Stock Appreciation Right is granted in tandem
with an Option, such grant shall only apply once against the maximum number of
shares of Common Stock which may be issued under this Plan. In addition, to the
extent permitted under Section 422 of the Code and the Treasury Regulations
thereunder, in determining the number of shares of Common Stock available for
Awards, 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 purpose of Awards under this Plan.
(b) The maximum number of shares of Common Stock subject to an Award which
may be granted under this Plan during any fiscal year of the Company to any
Non-Employee Director shall not exceed 30,000 shares (subject to any increase or
decrease pursuant to Section 4.2).
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 that 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 Award or under other Awards granted under
11
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 or in the applicable Award agreement, 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
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 an "Acquisition Event"), then
the Committee may, in its sole discretion, terminate all
outstanding and unexercised Awards effective as of the date of
the Acquisition Event, by delivering notice of termination to
each Participant at least 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 Awards that are then outstanding (without
regard to any limitations on exercisability otherwise
contained in the Award agreements), but any such exercise
shall be contingent on 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
12
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 Awards pursuant to this Section 4.2(d), then the
provisions of Section 4.2(b) and Article XII 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 that
is less than as permitted under applicable law.
ARTICLE V
ELIGIBILITY
5.1 GENERAL ELIGIBILITY. All Eligible Employees, prospective employees and
Consultants of the Company and its Affiliates, and Non-Employee Directors of the
Company, are eligible to be granted Awards. 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. Notwithstanding the foregoing, only Eligible
Employees of the Company, its Subsidiaries and its Parent (if any) are eligible
to be granted Incentive Stock Options under 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 OPTIONS. Stock Options may be granted alone or in addition to other
Awards granted under this Plan. Each Stock Option granted under this Plan shall
be of one of two types: (a) an Incentive Stock Option or (b) a Non-Qualified
Stock Option.
6.2 GRANTS. 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. The Committee shall have the authority
to grant any Consultant or Non-Employee Director one or more Non-Qualified 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.
6.3 INCENTIVE STOCK OPTIONS. Notwithstanding anything in the Plan to the
contrary, no term of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered,
13
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify the Plan under Section 422 of the Code, or, without the consent
of the Participants affected, to disqualify any Incentive Stock Option under
such Section 422.
6.4 TERMS OF OPTIONS. 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 100%
(or, in the case of a Ten Percent Stockholder, 110%) of the
Fair Market Value of the Common Stock at the time of grant.
(b) Stock Option Term. The term of each Stock Option shall be
fixed by the Committee, provided that no Stock Option shall be
exercisable more than 10 years after the date the Option is
granted; and provided further that the term of an Incentive
Stock Option granted to a Ten Percent Stockholder shall not
exceed five 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 Option agreement
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 year period commencing on the date the Stock
Option is exercised or becomes vested, the Company shall be
entitled to recover from the Participant at any time within
one 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
14
provisions described in subsections (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 subsection (c)
above, to the extent vested, Stock Options may be exercised in
whole or in part at any time during the Option term, by giving
written notice of exercise to the Company specifying the
number of shares of Common Stock to be purchased. 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) solely to the extent
permitted by applicable law, 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 reasonably
acceptable to 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
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 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) Non-Transferability of Options. No Stock Option shall be
Transferable by the Participant otherwise than by will or by
the laws of descent and distribution, and all Stock Options
shall be exercisable, during the Participant's lifetime, only
by the Participant. Notwithstanding the foregoing, the
Committee may determine, in its sole discretion, at the time
of grant or thereafter that a Non-Qualified Stock Option that
is otherwise not Transferable pursuant to this Section 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
applicable Award agreement. Any shares of Common Stock
acquired upon the exercise of a Non-Qualified Stock Option by
a permissible transferee of a Non-Qualified Stock Option or a
permissible transferee pursuant to a Transfer after the
exercise of the Non-Qualified Stock Option shall be subject to
the terms of this Plan and the applicable Award agreement.
15
(f) Termination by Death, Disability or Retirement. Unless
otherwise determined by the Committee at grant, or if no
rights of the Participant are reduced, thereafter, if
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 year
from the date of such Termination, but in no event beyond the
expiration of the stated term 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 year from the date of
such death, but in no event beyond the expiration of the
stated term of such Stock Options.
(g) Involuntary Termination Without Cause or for Good Reason.
Unless otherwise determined by the Committee at grant, or if
no rights of the Participant are reduced, thereafter, 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 90 days from
the date of such Termination, but in no event beyond the
expiration of the stated term of such Stock Options.
(h) Voluntary Termination. Unless otherwise determined by the
Committee at grant, or if no rights of the Participant are
reduced, thereafter, if a Participant's Termination is
voluntary (other than a voluntary termination described in
subsection (i)(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 30 days from the
date of such Termination, but in no event beyond the
expiration of the stated term of such Stock Options.
(i) Termination for Cause. Unless otherwise determined by the
Committee at grant, or if no rights of the Participant are
reduced, thereafter, if a Participant's Termination (x) is for
Cause or (y) is a voluntary Termination (as provided in
sub-section (h) 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.
(j) Unvested Stock Options. Unless otherwise determined by the
Committee at grant, or if no rights of the Participant are
reduced, thereafter, 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.
16
(k) 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. 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.
(l) 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). Notwithstanding the
foregoing, an outstanding Option may not be modified to reduce
the exercise price thereof nor may a new Option at a lower
price be substituted for a surrendered Option (other than
adjustments or substitutions in accordance with Section 4.2),
unless such action is approved by the stockholders of the
Company.
(m) Buyout and Settlement Provisions. The Committee may at any
time 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 that such offer is
made.
(n) 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.
(o) 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 VIII 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.
17
(p) 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" 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
STOCK APPRECIATION RIGHTS
7.1 TANDEM STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a "Reference Stock
Option") granted under this Plan ("Tandem Stock Appreciation Rights"). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the grant
of such Reference Stock Option.
7.2 TERMS AND CONDITIONS OF TANDEM STOCK APPRECIATION RIGHTS. Tandem Stock
Appreciation Rights granted hereunder shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, and the following:
(a) Term. A Tandem Stock Appreciation Right or applicable portion
thereof granted with respect to a Reference Stock Option shall
terminate and no longer be exercisable upon the termination or
exercise of the Reference Stock Option, except that, unless
otherwise determined by the Committee, in its sole discretion,
at the time of grant, a Tandem Stock Appreciation Right
granted with respect to less than the full number of shares
covered by the Reference Stock Option shall not be reduced
until and then only to the extent the exercise or termination
of the Reference Stock Option causes the number of shares
covered by the Tandem Stock Appreciation Right to exceed the
number of shares remaining available and unexercised under the
Reference Stock Option.
(b) Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that
the Reference Stock Options to which they relate shall be
exercisable in accordance with the provisions of Article VI,
and shall be subject to the provisions of Section 6.4(c).
18
(c) Method of Exercise. A Tandem Stock Appreciation Right may be
exercised by the Participant by surrendering the applicable
portion of the Reference Stock Option. Upon such exercise and
surrender, the Participant shall be entitled to receive an
amount determined in the manner prescribed in this Section
7.2. Stock Options which have been so surrendered, in whole or
in part, shall no longer be exercisable to the extent the
related Tandem Stock Appreciation Rights have been exercised.
(d) Payment. Upon the exercise of a Tandem Stock Appreciation
Right a Participant shall be entitled to receive up to, but no
more than, an amount in cash and/or Common Stock (as chosen by
the Committee in its sole discretion) equal in value to the
excess of the Fair Market Value of one share of Common Stock
over the Option exercise price per share specified in the
Reference Stock Option agreement multiplied by the number of
shares in respect of which the Tandem Stock Appreciation Right
shall have been exercised, with the Committee having the right
to determine the form of payment.
(e) Deemed Exercise of Reference Stock Option. Upon the exercise
of a Tandem Stock Appreciation Right, the Reference Stock
Option or part thereof to which such Stock Appreciation Right
is related shall be deemed to have been exercised for the
purpose of the limitation set forth in Article IV of the Plan
on the number of shares of Common Stock to be issued under the
Plan.
(f) Non-Transferability. Tandem Stock Appreciation Rights shall be
Transferable only when and to the extent that the underlying
Stock Option would be Transferable under Section 6.4(e) of the
Plan.
7.3 NON-TANDEM STOCK APPRECIATION RIGHTS. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan.
7.4 TERMS AND CONDITIONS OF NON-TANDEM STOCK APPRECIATION RIGHTS.
Non-Tandem Stock Appreciation Rights granted hereunder shall be subject to such
terms and conditions, not inconsistent with the provisions of this Plan, as
shall be determined from time to time by the Committee, and the following:
(a) Term. The term of each Non-Tandem Stock Appreciation Right
shall be fixed by the Committee, but shall not be greater than
10 years after the date the right is granted.
(b) Exercisability. Non-Tandem Stock Appreciation Rights 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
such right is exercisable subject to certain limitations
(including, without limitation, that it is exercisable only in
installments or within certain time periods), the Committee
may waive
19
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 right 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 Award agreement shall provide that (i) in the
event the Participant engages in Detrimental Activity prior to
any exercise of the Non-Tandem Stock Appreciation Right, all
Non-Tandem Stock Appreciation Rights held by the Participant
shall thereupon terminate and expire, (ii) as a condition of
the exercise of a Non-Tandem Stock Appreciation Right, 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
year period commencing on the date the Non-Tandem Stock
Appreciation Right is exercised or becomes vested, the Company
shall be entitled to recover from the Participant at any time
within one 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 subsections (i), (ii) and (iii) shall cease to
apply upon a Change in Control.
(c) Method of Exercise. Subject to whatever installment exercise
and waiting period provisions apply under subsection (b)
above, Non-Tandem Stock Appreciation Rights may be exercised
in whole or in part at any time in accordance with the
applicable Award agreement, by giving written notice of
exercise to the Company specifying the number of Non-Tandem
Stock Appreciation Rights to be exercised.
(d) Payment. Upon the exercise of a Non-Tandem Stock Appreciation
Right a Participant shall be entitled to receive, for each
right exercised, up to, but no more than, an amount in cash
and/or Common Stock (as chosen by the Committee in its sole
discretion) equal in value to the excess of the Fair Market
Value of one share of Common Stock on the date the right is
exercised over the Fair Market Value of one share of Common
Stock on the date the right was awarded to the Participant.
(e) Non-Transferability. No Non-Tandem Stock Appreciation Rights
shall be Transferable by the Participant otherwise than by
will or by the laws of descent and distribution, and all such
rights shall be exercisable, during the Participant's
lifetime, only by the Participant.
7.5 LIMITED STOCK APPRECIATION RIGHTS. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a Limited Stock Appreciation Right.
Limited Stock Appreciation
20
Rights may be exercised only upon the occurrence of a Change
in Control or such other event as the Committee may, in its
sole discretion, designate at the time of grant or thereafter.
Upon the exercise of Limited Stock Appreciation Rights, except
as otherwise provided in an Award agreement, the Participant
shall receive in cash and/or Common Stock, as determined by
the Committee, an amount equal to the amount (i) set forth in
Section 7.2(d) with respect to Tandem Stock Appreciation
Rights or (ii) set forth in Section 7.4(d) with respect to
Non-Tandem Stock Appreciation Rights.
ARTICLE VIII
RESTRICTED STOCK
8.1 AWARDS OF RESTRICTED STOCK. Shares of Restricted Stock may be issued
either alone or in addition to other Awards granted under the Plan. The
Committee shall determine the Eligible Employees, Consultants and Non-Employee
Directors, to whom, and the time or times at which, grants of Restricted Stock
shall be made, the number of shares to be awarded, the price (if any) to be paid
by the Participant (subject to Section 8.2), 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 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 set forth on Exhibit A as the
Committee may determine in its sole discretion.
8.2 AWARDS AND CERTIFICATES. Eligible Employees, Consultants and
Non-Employee Directors selected to receive Restricted Stock shall not have any
rights with respect to such Award, unless and until such Participant has
delivered a fully executed copy of the agreement evidencing the Award to the
Company 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 60 days (or such shorter period as the Committee
may specify at grant)
21
after the grant date, by executing a Restricted Stock
agreement and by paying whatever price (if any) the Committee
has designated thereunder.
(c) Legend. Each Participant receiving 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 the MarketAxess Holdings
Inc. (the "Company") 2004 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 of any grant 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.
8.3 RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock awarded
pursuant to this Plan shall be subject to the following restrictions and
conditions:
(a) Restriction Period. (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 8.3(a)(ii) below and/or
such other factors or criteria as the Committee may determine
in its sole discretion, the Committee may condition the grant
or 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.
(i) Objective Performance Goals, Formulae or Standards.
If the grant of shares of Restricted Stock or the lapse of
restrictions is based
22
on the attainment of performance goals, the Committee shall
establish the objective performance goals and the applicable
vesting percentage of the Restricted Stock 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 and while the outcome
of the performance goals are substantially uncertain. 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.
The applicable performance goals shall be based on one or more
of the performance goals set forth in Exhibit A hereto.
(b) Rights as a 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) Termination. 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.
(d) Lapse of Restrictions. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock,
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 IX
PERFORMANCE SHARES
9.1 AWARD OF PERFORMANCE SHARES. Performance Shares may be awarded either
alone or in addition to other Awards granted under this Plan. The Committee
shall determine the Eligible Employees, Consultants and Non-Employee Directors,
to whom, and the time or times at which, Performance Shares shall be awarded,
the number of Performance Shares to be awarded to any person, the duration of
the period (the "Performance Period") during which, and
23
the conditions under which, receipt of the Shares will be deferred, and the
other terms and conditions of the Award in addition to those set forth in
Section 9.2.
Unless otherwise determined by the Committee at grant, each Award of
Performance Shares shall provide that in the event the Participant engages in
Detrimental Activity prior to, or during the one year period after, any vesting
of Performance Shares, the Committee may direct (at any time within one year
thereafter) that all unvested Performance Shares shall be immediately forfeited
to the Company and that the Participant shall pay over to the Company an amount
equal to any gain the Participant realized from any Performance Shares which had
vested in the period referred to above. The foregoing provision shall cease to
apply upon a Change in Control.
Except as otherwise provided herein, the Committee shall condition the
right to payment of any Performance Share upon the attainment of objective
performance goals established pursuant to Section 9.2(c) below.
9.2 TERMS AND CONDITIONS. Performance Shares awarded pursuant to this
Article IX shall be subject to the following terms and conditions:
(a) Earning of Performance Share Award. At the expiration of the
applicable Performance Period, the Committee shall determine
the extent to which the performance goals established pursuant
to Section 9.2(c) are achieved and the percentage of each
Performance Share Award that has been earned.
(b) Non-Transferability. Subject to the applicable provisions of
the Award agreement and this Plan, Performance Shares may not
be Transferred during the Performance Period.
(c) Objective Performance Goals, Formulae or Standards. The
Committee shall establish the objective performance goals for
the earning of Performance Shares based on a Performance
Period applicable to each Participant or class of Participants
in writing prior to the beginning of the applicable
Performance Period or at such later date while the outcome of
the performance goals are substantially uncertain. 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.
The applicable performance goals shall be based on one or more
of the performance goals set forth in Exhibit A hereto.
(d) Dividends. Unless otherwise determined by the Committee at the
time of grant, amounts equal to any dividends declared during
the Performance Period with respect to the number of shares of
Common Stock covered by a Performance Share will not be paid
to the Participant.
(e) Payment. Following the Committee's determination in accordance
with subsection (a) above, shares of Common Stock or, as
determined by the
24
Committee in its sole discretion, the cash equivalent of such
shares shall be delivered to the Eligible Employee, Consultant
or Non-Employee Director, or his legal representative, in an
amount equal to such individual's earned Performance Share.
Notwithstanding the foregoing, the Committee may, in its sole
discretion, award an amount less than the earned Performance
Share and/or subject the payment of all or part of any
Performance Share to additional vesting, forfeiture and
deferral conditions as it deems appropriate.
(f) Termination. Subject to the applicable provisions of the Award
agreement and this Plan, upon a Participant's Termination for
any reason during the Performance Period for a given Award,
the Performance Shares in question will vest or be forfeited
in accordance with the terms and conditions established by the
Committee at grant.
(g) Accelerated Vesting. Based on service, performance and/or such
other factors or criteria, if any, as the Committee may
determine, the Committee may, at or after grant, accelerate
the vesting of all or any part of any Performance Share Award
and/or waive the deferral limitations for all or any part of
such Award.
ARTICLE X
PERFORMANCE UNITS
10.1 AWARD OF PERFORMANCE UNITS. Performance Units may be awarded either
alone or in addition to other Awards granted under this Plan. The Committee
shall determine the Eligible Employees, Consultants and Non-Employee Directors,
to whom, and the time or times at which, Performance Units shall be awarded, the
number of Performance Units to be awarded to any person, the duration of the
period (the "Performance Cycle") during which, and the conditions under which, a
Participant's right to Performance Units will be vested, the ability of
Participants to defer the receipt of payment of such Units, and the other terms
and conditions of the Award in addition to those set forth in Section 10.2.
A Performance Unit shall have a fixed dollar value.
Unless otherwise determined by the Committee at grant, each Award of
Performance Units shall provide that in the event the Participant engages in
Detrimental Activity prior to, or during the one year period after, any vesting
of Performance Units, the Committee may direct (at any time within one year
thereafter) that all unvested Performance Units shall be immediately forfeited
to the Company and that the Participant shall pay over to the Company an amount
equal to any gain the Participant realized from any Performance Units which had
vested in the period referred to above. The foregoing provision shall cease to
apply upon a Change in Control.
The Committee shall condition the vesting of Performance Units upon the
attainment of objective performance goals established pursuant to Section
10.2(a).
25
10.2 TERMS AND CONDITIONS. The Performance Units awarded pursuant to this
Article X shall be subject to the following terms and conditions:
(a) Performance Goals. The Committee shall establish the objective
performance goals for the earning of Performance Units based
on a Performance Cycle applicable to each Participant or class
of Participants in writing prior to the beginning of the
applicable Performance Cycle or at such later date while the
outcome of the performance goals are substantially uncertain.
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. The applicable performance goals shall be
based on one or more of the performance goals set forth in
Exhibit A hereto.
(b) Non-Transferability. Subject to the applicable provisions of
the Award agreement and this Plan, Performance Unit Awards may
not be Transferred.
(c) Vesting. At the expiration of the Performance Cycle, the
Committee shall determine the extent to which the performance
goals have been achieved, and the percentage of the
Performance Unit Award of each Participant that has vested.
(d) Payment. Subject to the applicable provisions of the Award
agreement and this Plan, at the expiration of the Performance
Cycle, cash and/or share certificates of an equivalent value
(as the Committee may determine in its sole discretion) shall
be delivered to the Participant, or his legal representative,
in payment of the vested Performance Units covered by the
Performance Unit Award.
(e) Termination. Subject to the applicable provisions of the Award
agreement and this Plan, upon a Participant's Termination for
any reason during the Performance Cycle for a given Award, the
Performance Units in question will vest or be forfeited in
accordance with the terms and conditions established by the
Committee at grant.
(f) Accelerated Vesting. Based on service, performance and/or such
other factors or criteria, if any, as the Committee may
determine, the Committee may, at or after grant, accelerate
the vesting of all or any part of any Performance Unit and/or
waive the deferral limitations for all or any part of such
Award.
ARTICLE XI
OTHER STOCK-BASED AWARDS
26
11.1 OTHER AWARDS. The Committee is authorized to grant to Eligible
Employees, Consultants and Non-Employee Directors Other Stock-Based Awards that
are payable in, valued in whole or in part by reference to, or otherwise based
on or related to shares of Common Stock, including but not limited to, shares of
Common Stock awarded purely as a bonus and not subject to any restrictions or
conditions, shares of Common Stock in payment of the amounts due under an
incentive or performance plan sponsored or maintained by the Company or an
Affiliate, stock equivalent units, restricted stock units, and Awards valued by
reference to book value of shares of Common Stock. Other Stock-Based Awards may
be granted either alone or in addition to or in tandem with other Awards granted
under the Plan.
Subject to the provisions of this Plan, the Committee shall have authority
to determine the Eligible Employees, Consultants and Non-Employee Directors, to
whom, and the time or times at which, such Awards shall be made, the number of
shares of Common Stock to be awarded pursuant to such Awards, and all other
conditions of the Awards. The Committee may also provide for the grant of Common
Stock under such Awards upon the completion of a specified performance period.
The Committee may condition the grant or vesting of Other Stock-Based
Awards upon the attainment of specified performance goals set forth on Exhibit A
as the Committee may determine, in its sole discretion.
11.2 TERMS AND CONDITIONS. Other Stock-Based Awards made pursuant to this
Article XI shall be subject to the following terms and conditions:
(a) Non-Transferability. Subject to the applicable provisions of
the Award agreement and this Plan, shares of Common Stock
subject to Awards made under this Article XI may not be
Transferred prior to the date on which the shares are issued,
or, if later, the date on which any applicable restriction,
performance or deferral period lapses.
(b) Dividends. Unless otherwise determined by the Committee at the
time of Award, subject to the provisions of the Award
agreement and this Plan, the recipient of an Award under this
Article XI shall not be entitled to receive, currently or on a
deferred basis, dividends or dividend equivalents with respect
to the number of shares of Common Stock covered by the Award,
as determined at the time of the Award by the Committee, in
its sole discretion.
(c) Vesting. Any Award under this Article XI and any Common Stock
covered by any such Award shall vest or be forfeited to the
extent so provided in the Award agreement, as determined by
the Committee, in its sole discretion.
(d) Price. Common Stock issued on a bonus basis under this Article
XI may be issued for no cash consideration; Common Stock
purchased pursuant to a purchase right awarded under this
Article XI shall be priced, as determined by the Committee in
its sole discretion.
27
ARTICLE XII
CHANGE IN CONTROL PROVISIONS
12.1 BENEFITS. In the event of a Change in Control of the Company (as
defined below), and except as otherwise provided by the Committee in an Award
agreement, a Participant's unvested Award 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) Awards, whether or not then vested, shall be continued,
assumed, have new rights substituted therefor or be treated in
accordance with Section 4.2(d) hereof, as determined by the
Committee, and restrictions to which any shares of Restricted
Stock or any other Award granted prior to the Change in
Control are subject shall not lapse upon a Change in Control
and the Restricted Stock or other Award 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 or other Award in
lieu of any cash distribution. Notwithstanding anything to the
contrary herein, for purposes 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 Awards 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 Awards, over the aggregate exercise price of such
Awards. For purposes of this Section 12.1, Change in Control
Price shall mean the highest price per share of Common Stock
paid in any transaction related to a Change in Control of the
Company.
(c) Notwithstanding anything else herein, the Committee may, in
its sole discretion, provide for accelerated vesting or lapse
of restrictions, of an Award at any time.
12.2 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 occur if (i) 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), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities; (ii) during
any period of two consecutive years individuals who at the beginning of such
period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in paragraph (i), (iii), or
28
(iv) of this section) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board;
(iii) 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 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 (i) above)
acquires more than 50% of the combined voting power of the Company's then
outstanding securities shall not constitute a Change in Control of the Company;
or (iv) the stockholders of the Company approve a plan of complete liquidation
of the Company or the consummation of the sale or disposition by the Company of
all or substantially all of the Company's assets other than (x) 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 50% or more of
the combined voting power of the outstanding voting securities of the Company at
the time of the sale or (y) pursuant to a spinoff type transaction, directly or
indirectly, of such assets to the stockholders of the Company.
Notwithstanding the foregoing, for purposes of the Plan the Registration Date or
any change in the composition of the Board within one year after the
Registration Date shall not be considered a Change in Control.
ARTICLE XIII
TERMINATION OR AMENDMENT OF PLAN
13.1 TERMINATION OR AMENDMENT. Notwithstanding any other provision of this
Plan, the Board may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of the Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XV), 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, without the
approval of the holders of the Company's Common Stock entitled to vote in
accordance with applicable law, no amendment may be made which would (i)
increase the aggregate number of shares of Common Stock that may be issued under
this Plan (except by operation of Section 4.2); (ii) change the classification
of individuals eligible to receive Awards under this Plan; (iii) extend the
maximum option period under Section 6.4; (iv) materially alter the performance
goals for Restricted Stock, Performance Units, Performance Shares or Other
Stock-Based Awards as set forth in Exhibit A; or (v) require stockholder
approval in order for this Plan to continue to comply with the applicable
provisions of Section 162(m) of the Code or, 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
29
aggregate number of shares of Common Stock that may be issued under this Plan,
decrease the minimum exercise price of any Award, 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 XIV
UNFUNDED PLAN
14.1 UNFUNDED STATUS OF 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 XV
GENERAL PROVISIONS
15.1 LEGEND. The Committee may require each person receiving shares of
Common Stock pursuant to a Stock Option or other Award under the Plan to
represent to and agree with the Company in writing that the Participant is
acquiring the shares without a view to distribution thereof. 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 the Plan shall
be subject to such stop 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 exchange 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.
15.2 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.
15.3 NO RIGHT TO EMPLOYMENT/DIRECTORSHIP/CONSULTANCY. Neither this Plan
nor the grant of any Option or other 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
30
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, consultancy or directorship at any time.
15.4 WITHHOLDING OF TAXES. The Company shall have the right to deduct from
any payment to be made pursuant to this Plan, 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 other
Award that is taxable upon vesting), 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
Participant 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.
15.5 NO ASSIGNMENT OF BENEFITS. No Award or other benefit payable under
this Plan shall, except as otherwise specifically provided by law or permitted
by the Committee, be Transferable in any manner, and any attempt to Transfer any
such benefit shall be void, and any such benefit shall not in any manner be
liable for or subject to the debts, contracts, liabilities, engagements or torts
of any person who shall be entitled to such benefit, nor shall it be subject to
attachment or legal process for or against such person.
15.6 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 Option or other Award 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 Option or other 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 exercise any
Option or other Award shall be suspended until, in the opinion
of said counsel, such sale or delivery shall be lawful or will
not result in the imposition of excise taxes on the Company.
31
(c) Upon termination of any period of suspension under this
Section 15.6, any 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 Award.
(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.
15.7 STOCKHOLDERS AGREEMENT AND OTHER REQUIREMENTS. Notwithstanding
anything herein to the contrary, as a condition to the receipt of shares of
Common Stock pursuant to an 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, 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 (or other agreement).
15.8 GOVERNING LAW. This Plan and actions taken in connection herewith
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).
15.9 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.
15.10 OTHER BENEFITS. No Award granted or paid out under this Plan shall
be deemed compensation for purposes of computing benefits under any retirement
plan of the Company or its Affiliates 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.
15.11 COSTS. The Company shall bear all expenses associated with
administering this Plan, including expenses of issuing Common Stock pursuant to
any Awards hereunder.
15.12 NO RIGHT TO SAME BENEFITS. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
15.13 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
32
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 the Plan.
15.14 SECTION 16(B) OF THE EXCHANGE ACT. 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.
15.15 SUCCESSOR 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.
15.16 SEVERABILITY OF PROVISIONS. If any provision of the Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.
15.17 PAYMENTS 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.
15.18 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.
15.19 HEADINGS AND CAPTIONS. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
15.20 POST-TRANSITION PERIOD. Following the Transition Period, any Award
granted under the Plan that is intended to be "performance-based compensation"
under Section 162(m) of the Code, shall be subject to the approval of the
material terms of the Plan by a majority of the
33
stockholders of the Company in accordance with Section 162(m) of the Code and
the regulations promulgated thereunder.
ARTICLE XVI
EFFECTIVE DATE OF PLAN
The Plan shall become effective upon the date specified by the Board in
its resolution adopting the Plan, subject to the approval of the Plan by the
stockholders of the Company in accordance with the requirements of the laws of
the State of Delaware.
ARTICLE XVII
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the date the Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.
ARTICLE XVIII
NAME OF PLAN
This Plan shall be known as "The MarketAxess Holdings Inc. 2004 Stock
Incentive Plan."
34
EXHIBIT A
PERFORMANCE GOALS
Performance goals established for purposes of the vesting of
performance-based Awards of Restricted Stock, Other Stock-Based Awards,
Performance Units and/or Performance Shares shall be based on one or more of the
following performance goals ("Performance Goals"): (i) the attainment of certain
target levels of, or a specified increase in, enterprise value or value creation
targets of the Company (or any subsidiary, division or other operational unit of
the Company); (ii) the attainment of certain target levels of, or a percentage
increase in after-tax or pre-tax profits of the Company, including without
limitation that attributable to continuing and/or other operations of the
Company (or in either case a subsidiary, division, or other operational unit of
the Company); (iii) the attainment of certain target levels of, or a specified
increase in, operational cash flow of the Company (or a subsidiary, division, or
other operational unit of the Company); (iv) the attainment of a certain level
of reduction of, or other specified objectives with regard to limiting the level
of increase in all or a portion of, the Company's bank debt or other long-term
or short-term public or private debt or other similar financial obligations of
the Company, which may be calculated net of cash balances and/or other offsets
and adjustments as may be established by the Committee; (v) the attainment of a
specified percentage increase in earnings per share or earnings per share from
continuing operations of the Company (or a subsidiary, division or other
operational unit of the Company); (vi) the attainment of certain target levels
of, or a specified percentage increase in, net sales, revenues, net income or
earnings before income tax or other exclusions of the Company (or a subsidiary,
division, or other operational unit of the Company); (vii) the attainment of
certain target levels of, or a specified increase in, return on capital employed
or return on invested capital of the Company (or any subsidiary, division or
other operational unit of the Company); (viii) the attainment of certain target
levels of, or a percentage increase in, after-tax or pre-tax return on
stockholder equity of the Company (or any subsidiary, division or other
operational unit of the Company); (ix) the attainment of certain target levels
in the fair market value of the shares of the Company's Common Stock; (x) the
growth in the value of an investment in the Company's Common Stock assuming the
reinvestment of dividends; or (xi) a transaction that results in the sale of all
or substantially all of the stock or assets of the Company.
In addition, such Performance Goals may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations. The Committee may: (i)
designate additional business criteria on which the performance goals may be
based or (ii) adjust, modify or amend the aforementioned business criteria.
i