Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On August 12, 2021, MarketAxess Holdings Inc. ("MarketAxess") entered into a
severance protection agreement ( the "Severance Protection Agreement") with
Christopher N. Gerosa. The Severance Protection Agreement provides Mr. Gerosa
with severance payments and benefits upon a qualifying termination of
employment, subject to Mr. Gerosa's execution of a waiver and general release.
The Severance Protection Agreement has an initial term of five years and renews
thereafter for successive one-year terms, unless the Company provides written
notice of nonrenewal at least twelve months prior to the expiration date of the
then-applicable term; provided, that if the agreement is in effect at the time
of a Change in Control (as defined in the Severance Protection Agreement), the
term shall continue in perpetuity thereafter.
Upon a termination of employment by the Company without Cause (as defined in the
Severance Protection Agreement) prior to a Change in Control or following the
second anniversary of a Change in Control, or upon resignation by Mr. Gerosa for
Good Reason (as defined in the Severance Protection Agreement) following the
second anniversary of a Change in Control, Mr. Gerosa shall receive the
following: (i) a severance payment equal to 1.0 times the sum of
(x) Mr. Gerosa's base salary (as in effect on the termination date, or if
greater, as of immediately prior to the Change in Control) plus (y) the average
of the annual cash bonuses earned by and payable to Mr. Gerosa for the three
years preceding the year in which the termination date occurs (or, if greater,
the three years preceding the year in which a Change in Control occurs), payable
in regular installments over twelve months; (ii) a pro-rata bonus payment for
the year of termination equal to the average of the annual cash bonuses earned
by and payable to Mr. Gerosa for the three years preceding the year in which the
termination date occurs (or, if greater, the three years preceding the year in
which a Change in Control occurs), prorated based on the number of days worked
during the year in which termination occurs, payable in a lump sum; (iii) to the
extent earned but not paid, the annual bonus for the year preceding the year in
which the termination date occurs, generally payable at the same time as other
bonuses to senior executives; (iv) payment of any COBRA health and welfare
premiums for twelve months following the termination date (or, in lieu thereof,
taxable monthly payments in an after-tax amount equal to such COBRA health and
welfare premiums); and (v) with respect to any then-unvested equity or
equity-based incentive awards, (A) any such award subject solely to time- or
service-based vesting shall continue to become vested, exercisable and payable
on the same schedule for twelve months following the termination date as if
Mr. Gerosa had remained actively employed, and (B) any such award subject to
performance-based vesting shall continue to become vested, exercisable and
payable on the same schedule for twelve months following the termination date as
if Mr. Gerosa had remained actively employed (x) based on actual performance for
any performance period that is completed during such twelve month period, or
(y) based on target performance level for any performance period that is not
completed during such twelve month period.
Upon a termination of employment by the Company without Cause or resignation by
Mr. Gerosa for Good Reason within two years following a Change in Control,
Mr. Gerosa shall receive the following: (i) a severance payment equal to 1.5
times the sum of (x) Mr. Gerosa's base salary (as in effect on the termination
date, or if greater, as of immediately prior to the Change in Control) plus
(y) the average of the annual cash bonuses earned by and payable to Mr. Gerosa
for the three years preceding the year in which the termination date occurs (or,
if greater, the three years preceding the year in which a Change in Control
occurs), payable in a lump sum; (ii) a pro-rata bonus payment for the year of
termination equal to the average of the annual cash bonuses earned by and
payable to Mr. Gerosa for the three years preceding the year in which the
termination date occurs (or, if greater, the three years preceding the year in
which a Change in Control occurs), prorated based on the number of days worked
during the year in which termination occurs, payable in a lump sum; (iii) to the
extent earned but not paid, the annual bonus for the year preceding the year in
which the termination date occurs, generally payable at the same time as other
bonuses to senior executives; (iv) payment of any COBRA health and welfare
premiums for eighteen months following the termination date (or in lieu thereof,
taxable monthly payments in an after-tax amount equal to such COBRA health and
welfare premiums); and (v) with respect to any then-unvested equity or
equity-based incentive awards, (A) any such award subject solely to time- or
service-based vesting shall immediately vest in full, and (B) any such award
subject to performance-based vesting shall immediately vest (x) based on actual
performance for any performance period that is completed prior to Mr. Gerosa's
termination date, or (y) based on target performance level for any performance
period that is not completed prior to Mr. Gerosa's termination date.
Upon a termination of employment due to death or disability, Mr. Gerosa shall
receive the following: (i) a severance payment equal to 0.5 times the sum of
(x) Mr. Gerosa's base salary (as in effect on the termination date, or if
greater, as of immediately prior to the Change in Control) plus (y) the average
of the annual cash bonuses earned by and payable to Mr. Gerosa for the three
years preceding the year in which the termination date occurs (or, if greater,
the three years preceding the year in which a Change in Control occurs), payable
in a lump sum; (ii) a pro-rata bonus payment for the year of termination equal
to 0.5 times the average of the annual cash bonuses earned by and payable to
Mr. Gerosa for the three years preceding the year in which the termination date
occurs (or, if greater, the three years preceding the year in which a Change in
Control occurs), prorated based on the number of days worked during the year in
which termination occurs, payable in a lump sum; (iii) to the extent earned but
not paid, the annual bonus for the year preceding the year in which the
termination date occurs, generally payable at the same time as other bonuses to
senior executives; (iv) payment of any COBRA health and welfare premiums for
twelve months following the termination date (or in lieu thereof, taxable
monthly payments in an after-tax amount equal to such COBRA health and welfare
premiums); and (v) with respect to any then-unvested equity or equity-based
incentive awards, (A) 100% of any such award subject solely to time- or
service-based vesting shall immediately vest in full and the remainder shall be
immediately forfeited, and (B) 100% of any such award subject to
performance-based vesting shall immediately vest (x) based on actual performance
for any performance period that is completed prior to Mr. Gerosa's termination
date, or (y) based on target performance level for any performance period that
is not completed prior to Mr. Gerosa's termination date.
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The Severance Protection Agreement also provides that if any payments or
benefits paid or provided to Mr. Gerosa would be subject to, or result in, the
imposition of the excise tax imposed by Internal Revenue Code Section 4999, then
the amount of such payments will be automatically reduced to the minimum extent
necessary such that no portion of the payment is subject to the excise tax,
unless Mr. Gerosa would, on a net after-tax basis, receive less compensation
than if the payment were not so reduced.
In connection with entering into the Severance Protection Agreement, Mr. Gerosa
also executed a Proprietary Information and Non-Competition Agreement.
The foregoing description of the Severance Protection Agreement is a summary
only and is qualified in its entirety by the full text of the agreement, which
is attached hereto as Exhibit 10.1, and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
10.1 Severance Protection Agreement, dated as of August 12, 2021, by and
between MarketAxess Holdings Inc. and Christopher N. Gerosa
104 Cover Page Interactive File (the cover page tags are embedded within the
Inline XBRL document).
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