EXHIBIT 10.12
INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of
________________, 2004 by and between MarketAxess Holdings Inc., a Delaware
corporation (the "Company"), and ______________ ("Indemnitee").
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance and/or adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation.
WHEREAS, although Indemnitee may be entitled to indemnification
pursuant to the Company's Certificate of Incorporation and Bylaws and the
Delaware General Corporation Law ("DGCL"), the DGCL expressly provides that the
indemnification provisions set forth therein are not exclusive, and thereby
contemplates that contracts may be entered into between the Company and members
of the board of directors, officers and other persons with respect to
indemnification.
WHEREAS, the Company has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of
the Company's stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the future.
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance expenses on behalf
of, such persons to the fullest extent permitted by applicable law so that they
will serve or continue to serve the Company free from undue concern that they
will not be so indemnified.
WHEREAS, this Agreement is a supplement to and in furtherance of the
Certificate of Incorporation and the Bylaws of the Company and any resolutions
adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to
diminish or abrogate any rights of Indemnitee thereunder.
WHEREAS, Indemnitee believes that this Agreement is desirable to
augment the protection available under the Company's Certificate of
Incorporation, the Company's Bylaws and insurance, and may not be willing to
serve as a director without the additional protection provided for under this
Agreement, and the Company desires Indemnitee to serve in such capacity and
Indemnitee is willing to serve and continue to serve on the condition that he be
so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. SERVICES TO THE COMPANY. Indemnitee will serve or continue to
serve, at the will of the Company in accordance with the Company's Bylaws, as a
director of the
Company for so long as Indemnitee is duly elected or appointed or until
Indemnitee tenders his or her resignation.
2. DEFINITIONS. As used in this Agreement:
(a) "Beneficial Owner" shall have the meaning given to such term
in Rule 13d-3 under the Exchange Act; PROVIDED, HOWEVER, that Beneficial Owner
shall exclude any Person otherwise becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the Company with another
entity.
(b) A "Change in Control" shall be deemed to occur upon the
earliest to occur after the date of this Agreement of any of the following
events:
(i) Change in Board of Directors. During any period of two (2)
consecutive years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period constitute the Board
of Directors of the Company (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 Sections 2(b)(ii) or 2(b)(iii))
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 period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a least a majority of the members of the Board;
(ii) Corporate Transactions. The effective date of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving entity;
(iii) Liquidation. The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets;
and
(iv) Other Events. There occurs any other event of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or a response to any similar item on any similar schedule or
form) promulgated under the Exchange Act (as defined below), whether or not the
Company is then subject to such reporting requirement.
(c) "Corporate Status" describes the status of a person who is or
was a director, officer, employee or agent of the Company or of any other
corporation, limited liability company, partnership or joint venture, trust,
employee benefit plan or other enterprise which such person is or was serving at
the request of the Company.
2
(d) "Disinterested Director" means a director of the Company who
is not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(e) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(f) "Enterprise" shall mean the Company and any other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise of which Indemnitee is or was serving
at the request of the Company as a director, officer, employee, agent or
fiduciary.
(g) "Expenses" shall include all reasonable attorneys' fees and
expenses, retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or expenses
of the types customarily incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in, or otherwise participating in, a Proceeding. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in settlement by
Indemnitee or the amount of judgments or fines against Indemnitee.
(h) Reference to "other enterprise" shall include employee
benefit plans; references to "fines" shall include any excise tax assessed with
respect to any employee benefit plan; references to "serving at the request of
the Company" shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the best interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in
manner "not opposed to the best interests of the Company" as referred to in this
Agreement.
(i) "Person" shall have the meaning as set forth in Sections
13(d) and 14(d) of the Exchange Act; PROVIDED, however, that Person shall
exclude (i) the Company, (ii) any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, and (iii) any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.
(j) The term "Proceeding" shall include any threatened, pending
or completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise
by reason of the fact that Indemnitee is or was a director of the Company, by
reason of any action taken by him or of any action on his part while acting as
director of the Company, or by reason of the fact that he is or was serving at
the request of the Company as a director, officer, employee or agent of another
corporation, limited liability company, partnership, joint venture, trust or
3
other enterprise, in each case whether or not serving in such capacity at the
time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under this Agreement;
except one initiated by Indemnitee to enforce his rights under this Agreement;
provided that, the term Proceeding shall not include any threatened, pending or
completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding by Indemnitee against the Company, including, but not
limited to, proceedings initiated by Indemnitee or involving a counterclaim by
Indemnitee.
(k) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent: (i) the Company
or Indemnitee in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement. The Company agrees to pay the reasonable fees and expenses of the
Independent Counsel referred to above and to fully indemnify such counsel
against any and all Expenses, claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.
3. INDEMNITY IN THIRD-PARTY PROCEEDINGS. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is,
or is threatened to be made, a party to or a participant in any Proceeding,
other than a Proceeding by or in the right of the Company to procure a judgment
in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the
fullest extent permitted by applicable law against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and, in the case of a criminal proceeding had no reasonable cause to believe
that his conduct was unlawful.
4. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The
Company shall indemnify Indemnitee in accordance with the provisions of this
Section 4 if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with such Proceeding or any claim, issue or matter therein, if Indemnitee acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company. No indemnification for Expenses shall be made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been finally adjudged by a court to be liable to the
Company unless, and only to the extent that, the Delaware Court of Chancery or
any court in which the Proceeding was brought shall determine upon application
that, despite the adjudication
4
of liability but in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnification.
5. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY
SUCCESSFUL. Notwithstanding any other provisions of this Agreement, to the
fullest extent permitted by applicable law and to the extent that Indemnitee is
a party to (or a participant in) and is successful, on the merits or otherwise,
in any Proceeding or in defense of any claim, issue or matter therein, in whole
or in part, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee is not wholly
successful in such Proceeding, the Company also shall indemnify Indemnitee
against all Expenses reasonably incurred in connection with a claim, issue or
matter related to any claim, issue, or matter on which the Indemnitee was
successful. For purposes of this Section and without limitation, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.
6. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any
other provision of this Agreement, to the fullest extent permitted by applicable
law and to the extent that Indemnitee is, by reason of his Corporate Status, a
witness in any Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith.
7. ADDITIONAL INDEMNIFICATION.
(a) Notwithstanding any limitation in Sections 3, 4, or 5, the
Company shall indemnify Indemnitee to the fullest extent permitted by applicable
law if Indemnitee is a party to or threatened to be made a party to any
Proceeding (including a Proceeding by or in the right of the Company to procure
a judgment in its favor) against all Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee in connection with
the Proceeding; PROVIDED, HOWEVER, that the Company shall have the right to
consent to any settlement, which consent shall not be unreasonably withheld. No
indemnity shall be made under this Section 7(a) on account of Indemnitee's
conduct which constitutes a breach of Indemnitee's duty of loyalty to the
Company or its stockholders or is an act or omission not in good faith or which
involves intentional misconduct or a knowing violation of the law.
(b) For purposes of Section 7(a), the meaning of the phrase "to
the fullest extent permitted by applicable law" shall include, but not be
limited to:
(i) to the fullest extent permitted by the provision of the
DGCL that authorizes or contemplates additional indemnification by agreement, or
the corresponding provision of any amendment to or replacement of the DGCL; and
5
(ii) to the fullest extent authorized or permitted by any
amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its
officers and directors.
8. EXCLUSIONS. Notwithstanding any provision in this Agreement, the
Company shall not be obligated under this Agreement to make any indemnity in
connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or under another valid and enforceable
indemnity provision, except with respect to any excess beyond the amount paid
under any insurance policy or other indemnity provision and except for any
payments which are required to be disgorged by Indemnitee;
(b) for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Company within the
meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or
similar provisions of other federal or state statutory law or common law; or
(c) in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of
any Proceeding) initiated by Indemnitee against the Company's directors,
officers, employees or other indemnitees, unless
(i) such indemnification is expressly required to be made by
applicable law;
(ii) the Board of Directors of the Company authorized the
Proceeding (or any part of any Proceeding) prior to its initiation; or
(iii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company to the fullest extent
permitted by applicable law.
9. ADVANCES OF EXPENSES. Notwithstanding any provision of this
Agreement to the contrary, to the fullest extent permitted by applicable law the
Company shall advance the expenses incurred by Indemnitee in connection with any
Proceeding within thirty (30) days after the receipt by the Company of a
statement or statements requesting such advances from time to time, whether
prior to or after final disposition of any Proceeding. Advances shall be
unsecured and interest free. Advances shall be made without regard to
Indemnitee's ability to repay the expenses and without regard to Indemnitee's
ultimate entitlement to indemnification under the other provisions of this
Agreement. Advances shall include any and all reasonable Expenses incurred
pursuing an action to enforce this right of advancement, including Expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed. The Indemnitee shall qualify for advances solely upon the
execution and delivery to the Company of an undertaking providing that the
Indemnitee undertakes to repay the advance to the extent that it is ultimately
determined that Indemnitee is not entitled to be indemnified by the Company.
This Section 9 shall not apply to any claim made by Indemnitee for which
indemnity is excluded pursuant to Section 8.
6
10. PROCEDURE FOR NOTIFICATION AND DEFENSE OF CLAIM.
(a) Within thirty (30) days after service of process of
Indemnitee relating to notice of the commencement of any Proceeding, Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The omission to notify the Company within such
thirty (30) day period will not relieve the Company from any liability which it
may have to Indemnitee under this Agreement except to the extent the failure of
Indemnitee to provide such notice within thirty (30) days after receipt by
Indemnitee of notice of the commencement of any Proceeding adversely affects the
Company's rights, legal position, ability to defend or ability to obtain
insurance coverage with respect to such Proceeding. The omission to notify the
Company will not relieve the Company from any liability which it may have to
Indemnitee otherwise than under this Agreement. The Secretary of the Company
shall, promptly upon receipt of such a request for indemnification, advise the
Board in writing that Indemnitee has requested indemnification.
(b) If the Company shall be obligated to pay the Expenses of any
Proceeding against the Indemnitee, the Company shall be entitled to assume and
control the defense of such Proceeding (with counsel consented to by the
Indemnitee, which consent shall not be unreasonably withheld), upon the delivery
to the Indemnitee of written notice of its election so to do. After delivery of
such notice, consent to such counsel by the Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to the Indemnitee under
this Agreement for any fees of counsel subsequently incurred by the Indemnitee
with respect to the same Proceeding, PROVIDED that if (i) the employment of
separate counsel by the Indemnitee has been previously authorized by the
Company, (ii) the Indemnitee or counsel selected by the Company shall have
concluded that there may be a conflict of interest between the Company and the
Indemnitee or among Indemnitees jointly represented in the conduct of any such
defense or (iii) the Company shall not, in fact, have employed counsel, to which
Indemnitee has consented as aforesaid, to assume the defense of such Proceeding,
then the reasonable fees and expenses of Indemnitee's counsel shall be at the
expense of the Company. Notwithstanding the foregoing, the Indemnitee shall have
the right to employ counsel in any such Proceeding at the Indemnitee's expense.
(c) The Company will be entitled to participate in the Proceeding
at its own expense. The Company will not, without prior written consent of the
Indemnitee, effect any settlement of a claim against the Indemnitee in any
threatened or pending Proceeding unless such settlement solely involves the
payment of money and includes an unconditional release of the Indemnitee from
all liability on any claims that are or were threatened to be made against the
Indemnitee in the Proceeding.
11. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.
(a) Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 10(a), a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall be made
in the specific case:
7
(i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or
(ii) if a Change in Control shall not have occurred,
(A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Board,
(B) by a committee of Disinterested Directors
designated by a majority vote of the Disinterested Directors,
even though less than a quorum of the Board,
(C) if there are no such Disinterested Directors or,
if such Disinterested Directors so direct, by Independent
Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee or
(D) if so directed by the Board, by the stockholders
of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be
made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. Any costs or expenses (including
attorneys' fees and expenses and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall
be borne by the Company (irrespective of the determination as to Indemnitee's
entitlement to indemnification) and the Company hereby indemnifies and agrees to
hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 11(a)
hereof, the Independent Counsel shall be selected as provided in this Section
11(b). If a Change in Control shall not have occurred, the Independent Counsel
shall be selected by the Board of Directors, and the Company shall give written
notice to Indemnitee advising him of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Board of Directors, in which event the preceding
sentence shall apply), and Indemnitee shall give written notice to the Company
advising it of the identity of the Independent Counsel so selected. In either
event, Indemnitee or the Company, as the case may be, may, within 10 days after
such written notice of selection shall have been given, deliver to the Company
or to Indemnitee, as the case may be, a written objection to such selection;
PROVIDED, HOWEVER, that such objection may be asserted only on the ground that
the Independent Counsel so selected does not meet the requirements of
"Independent Counsel" as defined in Section 2 of this Agreement, and the
8
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 10(a)
hereof, no Independent Counsel shall have been selected and not objected to,
either the Company or Indemnitee may petition a court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 11(a) hereof. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement,
Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
12. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that presumption.
(b) Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of conduct.
(c) If the person, persons or entity empowered or selected under
Section 11 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days after
receipt by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification, absent a prohibition of such
indemnification under applicable law; PROVIDED, HOWEVER, that such 60-day period
may be extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person, persons or entity making the determination with respect to
entitlement to indemnification in good faith requires such additional time for
the obtaining or evaluating of documentation and/or information relating
thereto; and PROVIDED, FURTHER, that the foregoing provisions of this Section
12(b) shall not apply (i) if the determination of entitlement to indemnification
is to be made by the stockholders pursuant to Section 11(a) of this Agreement
and if (A) within fifteen (15) days after receipt by the Company of the request
for such determination the Board of Directors has resolved to submit such
determination to the stockholders for their consideration at an annual
9
meeting thereof to be held within seventy-five (75) days after such receipt and
such determination is made thereat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is made by Independent
Counsel pursuant to Section 11(a) of this Agreement.
(d) The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of
NOLO CONTENDERE or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
(e) RELIANCE AS SAFE HARBOR. For purposes of any determination of
good faith, Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with the reasonable care
by the Enterprise. The provisions of this Section 12(e) shall not be deemed to
be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement.
(f) ACTIONS OF OTHERS. The knowledge and/or actions, or failure
to act, of any director, officer, agent or employee of the Enterprise shall not
be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
13. REMEDIES OF INDEMNITEE.
(a) In the event that
(i) a determination is made pursuant to Section 11 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement,
(ii) advancement of Expenses is not timely made pursuant to
Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall
have been made pursuant to Section 11(a) of this Agreement within 45 days after
receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to
Section 5 or 6 or the last sentence of Section 11(a) of this Agreement within
ten (10) days after receipt by the Company of a written request therefor, or
10
(v) payment of indemnification pursuant to Section 3, 4 or 7
of this Agreement is not made within ten (10) days after a determination has
been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication by a court of his entitlement to
such indemnification or advancement of Expenses.
Alternatively, Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. The Company shall not oppose Indemnitee's
right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 11(a) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section 13 shall be conducted in all respects as a DE NOVO trial, or
arbitration, on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. In any judicial proceeding or arbitration commenced
pursuant to this Section 13, the Company shall have the burden of proving
Indemnitee is not entitled to indemnification or advancement of Expenses, as the
case may be.
(c) If a determination shall have been made pursuant to Section
11(a) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 13, absent a prohibition of such
indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 13 that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement. The Company
shall indemnify Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (within ten (10) days after receipt by the Company of a
written request therefor) advance, to the extent not prohibited by Section 402
of the Sarbanes-Oxley Act of 2002 or other applicable law, such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for indemnification or advance of Expenses from the
Company under this Agreement or under any directors' and officers' liability
insurance policies maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, as the case may be.
14. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; SUBROGATION.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Company's Certificate of Incorporation, the Company's Bylaws, any
agreement, a vote of stockholders or a resolution of directors, or otherwise. No
amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of
11
any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. To the extent that a change in Delaware
law, whether by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Company's
Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy
or policies providing liability insurance for directors, officers, employees, or
agents of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be an insured under such policy or
policies in accordance with its or their terms to the maximum extent of the
coverage available for any such director, officer, employee or agent under such
policy or policies. The Company may, but will not be required to, create a trust
fund, grant a security interest or use other means, including, without
limitation, a letter of credit, to ensure the payment of such amounts as may be
necessary to satisfy the obligations to indemnify and advance Expenses pursuant
to this Agreement. If, at the time of the receipt of a notice of a claim
pursuant to the terms hereof, the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company and Indemnitee shall mutually cooperate and
take all reasonable actions to cause such insurers to pay on behalf of the
insureds, all amounts payable as a result of such proceeding in accordance with
the terms of all applicable policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable (or for which advancement is
provided hereunder) hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, the Certificate of
Incorporation, the Bylaws, contract, agreement or otherwise.
(e) The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as a
director, officer, employee or agent of any other corporation, limited liability
company, partnership, joint venture, trust, employee benefit plan or other
enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of expenses from such other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise.
12
15. DURATION OF AGREEMENT, SUCCESSORS AND ASSIGNS. This Agreement
shall continue until and terminate upon the later of: (a) twenty years after
Indemnitee has ceased to occupy any positions or have any relationships
described in Section 1 of this Agreement; and (b) the final termination of all
actions, suits, proceedings or investigations pending or threatened during such
twenty year period to which Indemnitee may be subject by reason of the fact that
Indemnitee is or was a director of the Company or is or was serving at the
request of the Company as a director, officer, employee agent or fiduciary of
any other entity, including, but not limited to, another corporation,
partnership, joint venture or trust, or by reason of anything done or not done
by Indemnitee in any such capacity. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of and be
enforceable by Indemnitee and his personal and legal representatives, heirs,
executors, administrators, distributees, legatees and other successors.
16. SEVERABILITY. If any provision or provisions of this Agreement
or any application of any provision hereof shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law; (b)
such provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
17. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director of the Company, and the Company
acknowledges that Indemnitee is relying upon this Agreement in serving as a
director of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof; PROVIDED, HOWEVER,
that this Agreement is a supplement to and in furtherance of the Certificate of
Incorporation of the Company, the Bylaws of the Company and applicable law, and
shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder.
13
18. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties thereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement
nor shall any waiver constitute a continuing waiver.
19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to the Indemnitee under
this Agreement or otherwise.
20. NOTICES. Any notices or other communications required or
permitted under, or otherwise in connection with this Agreement, shall be in
writing and shall be deemed to have been duly given when delivered in person or
upon confirmation of receipt when transmitted by facsimile transmission (but
only if followed by transmittal by national overnight courier or hand for
delivery on the next business day) or on receipt after dispatch by registered or
certified mail, postage prepaid, addressed, or on the next business day if
transmitted by national overnight courier, in each case as follows: (i) if to
the Company, directed to the Chief Executive Officer and General Counsel at its
principal place of business; and (ii) if to the Indemnitee, to such address as
set forth below their name on the signature page to this Agreement; or such
other persons or addresses as shall be furnished in writing by the Indemnitee to
the Company.
21. CONTRIBUTION. To the fullest extent permissible by applicable
law, if the indemnification provided for in this Agreement is unavailable to
Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying
Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,
employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).
22. APPLICABLE LAW AND CONSENT TO JURISDICTION. This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. Except with respect to any arbitration commenced
by Indemnitee pursuant to Section 13 of this Agreement, the Company and
Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought
only in the Chancery Court of the State of Delaware (the "Delaware Court"), and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Delaware Court for purposes of any action or proceeding arising out of or
in connection with this Agreement, (iii) appoint, to the extent such party is
not otherwise subject to service of process in the State of Delaware,
irrevocably Corporation Service Company, 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808 as its agent in the State of Delaware as such party's
agent for acceptance of legal process in
14
connection with any such action or proceeding against such party with the same
legal force and validity as if served upon such party personally within the
State of Delaware, (iv) waive any objection to the laying of venue of any such
action or proceeding in the Delaware Court, and (v) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the
Delaware Court has been brought in an improper or inconvenient forum.
23. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
24. MISCELLANEOUS. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed as of the day and year first above written.
MarketAxess Holdings Inc. Indemnitee
By:
------------------------------------- ----------------------------------
Richard M. McVey
Chief Executive Officer Name:_____________________________
Address:__________________________
----------------------------------
15