EXHIBIT 10.11
MARKETAXESS HOLDINGS INC.
2004 ANNUAL PERFORMANCE INCENTIVE PLAN
1. PURPOSE
The purpose of this Plan is to attract, retain and motivate key employees
by providing performance awards to designated key employees of the Company or
its Subsidiaries. This Plan is effective for calendar years of the Company
commencing on or after January 1, 2004, subject to approval by the stockholders
of the Company in accordance with the laws of the State of Delaware.
2. DEFINITIONS
Unless the context otherwise requires, the words which follow shall have
the following meaning:
(a) "Award" -- shall mean the Performance Award awarded under the Plan,
provided that for any Performance Period the Committee may, in its sole
discretion, define "Award" to mean the total annual performance award as
determined by aggregating any Performance Award and Long Term Incentive Plan
Award.
(b) "Board" -- shall mean the Board of Directors of the Company.
(c) "Change of Control" -- shall have the meaning set forth in Exhibit A
hereto.
(d) "Code" -- shall mean the Internal Revenue Code of 1986, as amended and
any successor thereto.
(e) "Code Section 162(m)" -- shall mean the exception for performance
based compensation under Section 162(m) of the Code or any successor section and
the Treasury regulations promulgated thereunder.
(f) "Company" -- shall mean MarketAxess Holdings Inc. and any successor by
merger, consolidation or otherwise.
(g) "Committee" -- shall mean the Compensation Committee of the Board or
such other Committee of the Board that is appointed by the Board to administer
this Plan.
(h) "Common Stock" -- means the common stock, $0.001 par value per share,
of the Company.
(i) "Individual Target Award" -- shall mean the targeted Performance Award
for a Performance Period as specified by the Committee in accordance with
Section 5 hereof.
(j) "Long Term Incentive Plan Award" -- shall mean the amount, if any,
paid or payable under Section 7 hereof.
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(k) "Participant" -- shall mean an executive employee of the Company or
any Subsidiary selected, in accordance with Section 4 hereof, to be eligible to
receive an Award in accordance with this Plan.
(l) "Performance Award" -- shall mean the amount paid or payable under
Section 6 hereof.
(m) "Performance Goals" -- shall mean the objective performance goals,
formulas and standards described in Section 6 hereof.
(n) "Performance Period" -- shall mean the period of one to three Plan
Years (as specified by the Committee) over which achievement of the Performance
Goals is to be measured.
(o) "Plan" -- shall mean the MarketAxess Holdings Inc. 2004 Annual
Performance Incentive Plan.
(p) "Plan Year" -- shall mean a calendar year of the Company.
(q) "Pro Rata" -- shall mean a portion of an Award based on the number of
days worked during a Performance Period as compared to the total number of days
in the Performance Period.
(r) "Registration Date" -- shall mean the first date (i) on which the
Company sells its Common Stock in a bona fide, firm commitment underwriting
pursuant to a registration statement under the Securities Act of 1933, as
amended or (ii) any class of common equity securities of the Company are
required to be registered under Section 12 of the Securities Exchange Act of
1934, as amended.
(s) "Subsidiary" -- shall mean any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
3. ADMINISTRATION AND INTERPRETATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall have
the exclusive authority and responsibility to: (i) interpret the Plan; (ii)
approve the designation of eligible Participants; (iii) set the performance
criteria for Awards within the Plan guidelines; (iv) determine whether a Long
Term Incentive Plan Award will be payable with respect to any Performance Award
to be earned for a Performance Period; (v) determine the timing and form of
amounts to be paid out under the Plan and the conditions for payment thereof;
(vi) certify attainment of Performance Goals and other material terms; (vii)
reduce Awards as provided herein; (viii) authorize the payment of all benefits
and expenses of the Plan as they become payable under the Plan; (ix) adopt,
amend and rescind rules and regulations relating to the Plan; and (x) make all
other determinations and take all other actions necessary or desirable for the
Plan's administration, including, without limitation, correcting any defect,
supplying any omission or reconciling any inconsistency in this Plan in the
manner and to the extent it shall deem necessary to carry this Plan into effect.
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Decisions of the Committee shall be made by a majority of its members. All
decisions of the Committee on any question concerning the selection of
Participants and the interpretation and administration of the Plan shall be
final, conclusive and binding upon all parties. The Committee may rely on
information, and consider recommendations, provided by the Board or the
executive officers of the Company.
4. ELIGIBILITY AND PARTICIPATION
(a) For each Performance Period, the Committee shall select the employees
of the Company or its Subsidiaries who are to participate in the Plan from among
the executive employees of the Company or its Subsidiaries.
(b) No person shall be entitled to any Award under this Plan for a
Performance Period unless the individual is designated as a Participant for the
Performance Period. The Committee may add to or delete individuals from the list
of designated Participants at any time and from time to time, in its sole
discretion.
5. INDIVIDUAL TARGET AWARD
For each Participant for each Performance Period, the Committee may, in
its sole discretion, specify a targeted performance award. The Individual Target
Award may be expressed, at the Committee's sole discretion, as a fixed dollar
amount, a percentage of base pay, or an amount determined pursuant to an
objective formula or standard. The Committee's establishment of an Individual
Target Award for a Participant for a Performance Period shall not imply or
require that the same level Individual Target Award (if any such award is
established by the Committee for the relevant employee) be set for any
subsequent Performance Period. At the time the Performance Goals are established
(as provided in subsection 6.2 below), the Committee shall prescribe a formula
to be used to determine the percentages (which may be greater than one-hundred
percent (100%)) of an Individual Target Award that may be earned or payable
based upon the degree of attainment of the Performance Goals during the
Performance Period. Notwithstanding anything else herein, the Committee may, in
its sole discretion, elect to pay a Participant an amount that is more or less
than the Participant's Individual Target Award (or attained percentages thereof)
regardless of the degree of attainment of the Performance Goals; provided that
no discretion to reduce an Award earned based on achievement of the applicable
Performance Goals shall be permitted for the Performance Period in which a
Change of Control of the Company occurs, or during such Performance Period with
regard to the prior Performance Period if the Awards for the prior Performance
Period have not been made by the time of the Change of Control of the Company,
with regard to individuals who were Participants at the time of the Change of
Control of the Company.
6. PERFORMANCE AWARD PROGRAM
6.1 PERFORMANCE AWARDS. Subject to the satisfaction of any conditions on
payment imposed by the Committee pursuant to Sections 6.4 and 8 herein, each
Participant shall be eligible to receive up to the achieved percentage of their
Individual Target Award for such Performance Period (or, subject to the last
sentence of Section 5, such greater or lesser amount as determined by the
Committee in its sole discretion) based upon the attainment of the objective
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Performance Goals established pursuant to subsection 6.2 and the formula
established pursuant to Section 5. Except as specifically provided in Sections 5
or 8, no Performance Award shall be made to a Participant for a Performance
Period unless the minimum Performance Goals for such Performance Period are
attained.
6.2 OBJECTIVE PERFORMANCE GOALS, FORMULAE OR STANDARDS. The Committee in
its sole discretion shall establish the objective performance goals, formulae or
standards and the Individual Target Award (if any) applicable to each
Participant or class of Participants for a Performance Period in writing prior
to the beginning of such 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 similar type events or circumstances. The
Performance Goals shall be based on one or more of the following criteria: (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, the 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.
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6.3 PAYMENT DATE; COMMITTEE CERTIFICATION. The Performance Awards may be
paid at such time after the Performance Period in which they are earned, as
determined by the Committee but not before the Committee certifies in writing
that the Performance Goals specified pursuant to subsection 6.2 were, in fact,
satisfied (except to the extent provided in Section 8 with regard to Change of
Control of the Company, death or certain other termination situations). The
Committee shall use its best efforts to make a determination with regard to
satisfaction of the Performance Goals within two and one-half (2 1/2) months
after the end of each Performance Period. The Committee may defer payment of any
Performance Award and may place such additional conditions on payment thereof as
it shall determine in its sole discretion.
6.4 CHANGE OF CONTROL. In the event of a Change of Control of the Company,
any unpaid portion of any Performance Award that has been earned and certified,
but is being deferred by the Committee in accordance with Section 6.3 shall
immediately fully vest and be paid out.
6.5 FORM OF PAYMENT. In the sole discretion of the Committee, Performance
Awards may be paid in whole or in part in cash or Common Stock, provided that
any Common Stock shall be used only if payment of such Common Stock is a
permitted award under another plan maintained by the Company which was approved
by the shareholders of the Company.
7. LONG TERM INCENTIVE PLAN AWARD PROGRAM
7.1 LONG TERM INCENTIVE PLAN AWARD. A Participant may be entitled to
receive a Long Term Incentive Plan Award subject to the terms of this Section 7,
as determined by the Committee in its sole discretion. As of the effective date
of the Plan, the Committee has not implemented a Long Term Incentive Plan Award
plan or program.
7.2 ALLOCATION OF LONG TERM INCENTIVE PLAN AWARD. To the extent the
Committee grants a Long Term Incentive Plan Award, the Participant's Long Term
Incentive Plan Award for any Performance Period shall be allocated to the
unfunded bookkeeping account maintained for the Participant under any long term
incentive plan maintained by the Company so long as such plan provides for
increase in value based only on either a reasonable rate of interest or on one
or more predetermined actual investments (whether or not actually invested
therein), such that the amount payable by the employer at the later date will be
based on the actual rate of return of a specific investment (including any
decrease as well as any increase in the value of an investment). Such allocation
shall be credited retroactively as of the end of the Performance Period for
which it is credited.
7.3 PAYMENT DATE. The Participant shall have no right to receive payment
of the Long Term Incentive Plan Awards until he has a right to receive such
amounts under the terms of any long term incentive plan maintained by the
Company (or a successor plan).
7.4 FORM OF PAYMENT. In the sole discretion of the Committee, Long Term
Incentive Plan Awards may be paid in whole or in part in cash or Common Stock,
provided that any Common Stock shall be used only if payment of such Common
Stock is a permitted award
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under another plan maintained by the Company which was approved by the
shareholders of the Company.
8. PARTIAL AWARDS
The Committee, in its sole and absolute discretion, may make a full or Pro
Rata Award to Participants for a Performance Period in circumstances that the
Committee deems appropriate including, but not limited to, a Participant's
death, disability, retirement or other termination of employment during such
Performance Period and the Committee shall be required to make at least a Pro
Rata Award through the date of a Change of Control of the Company to each
Participant who is a Participant at the time of such Change of Control. All such
Awards shall be based on achievement of the Performance Goals for the
Performance Period except that, in the case of death, disability or Change of
Control of the Company during the Performance Period (or such other termination
situations as determined by the Committee) an amount equal to or less than any
Individual Target Awards may be made by the Committee either during or after the
Performance Period without regard to actual achievement of the Performance
Goals. Furthermore, upon a Change of Control of the Company the Committee may,
in its sole discretion as determined by the Committee, make an Award (payable
immediately) equal to a Pro Rata portion (through the date of the Change of
Control of the Company) of the Individual Target Award payable upon achieving,
but not surpassing, the Performance Goals for the relevant Performance Period;
with, if so determined by the Committee, a corresponding Long Term Incentive
Plan Award. Any such immediate Pro Rata payment and Long Term Incentive Plan
Award shall be offset against any other Award of the same types made for such
Performance Period under this Plan.
9. NON-ASSIGNABILITY
No Award under this Plan or payment thereof nor any right or benefit under
this Plan shall be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance, garnishment, execution or levy of any kind or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber and to the
extent permitted by applicable law, charge, garnish, execute upon or levy upon
the same shall be void and shall not be recognized or given effect by the
Company.
10. NO RIGHT TO EMPLOYMENT
Nothing in the Plan or in any notice of award pursuant to the Plan shall
confer upon any person the right to continue in the employment of the Company or
one of its subsidiaries or affiliates nor affect the right of the Company or any
of its subsidiaries or affiliates to terminate the employment of any
Participant.
11. AMENDMENT OR TERMINATION
While the Company hopes to continue the Plan indefinitely, it reserves the
right in its Board (or a duly authorized committee thereof) to amend, suspend or
terminate the Plan or to adopt a new plan in place of this Plan at any time;
provided, that no such amendment shall, without the prior approval of the
stockholders of the Company in accordance with the laws of the State of Delaware
to the extent required under Code Section 162(m): (i) alter the Performance
Goals as set forth in Section 6.2; (ii) change the class of eligible employees
set forth in Section
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4(a); or (iii) implement any change to a provision of the Plan requiring
stockholder approval in order for the Plan to comply with the requirements of
Code Section 162(m). Furthermore, no amendment, suspension or termination shall,
without the consent of the Participant, alter or impair a Participant's right to
receive payment of an Award for a Performance Period otherwise payable
hereunder.
12. SEVERABILITY
In the event that any one or more of the provisions contained in the Plan
shall, for any reason, be held to be invalid, illegal or unenforceable, in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of the Plan and the Plan shall be construed as if such invalid,
illegal or unenforceable provisions had never been contained therein.
13. WITHHOLDING
The Company shall have the right to make such provisions as it deems
necessary or appropriate to satisfy any obligations it may have to withhold
federal, state or local income or other taxes incurred by reason of payments
pursuant to the Plan.
14. GOVERNING LAW
This Plan and any amendments thereto shall be construed, administered, and
governed in all respects in accordance with the laws of the State of Delaware
(regardless of the law that might otherwise govern under applicable principles
of conflict of laws).
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EXHIBIT A
Change of Control of the Company shall mean that one (1) of the following
have occurred:
(i) any "person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (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 fifty percent (50%) or more of the combined voting power of
the Company's then outstanding securities;
(ii) during any period of two (2) 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 (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 fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person (other than those covered by the
exceptions in (1) above) acquires more than fifty percent (50%) of the combined
voting power of the Company's then outstanding securities shall not constitute a
Change of 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 fifty
percent (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, the Company's Registration Date or any
change in the composition of the Board within six (6) months after the
Registration Date shall not be considered a Change of Control.
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