Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Executive Chair and Transition of Chief Executive Officer Role
On January 9, 2023, MarketAxess Holdings Inc. (the "Company") announced via
press release that, effective April 3, 2023 (the "Effective Date"),
Mr. Richard M. McVey, currently Chairman of the Board of Directors ("Board") and
Chief Executive Officer of the Company will become Executive Chairman of the
Board and Mr. Christopher R. Concannon, currently President and Chief Operating
Officer, will be promoted to Chief Executive Officer of the Company. The Board
elected Messrs. Concannon and McVey to such roles on January 3, 2023, subject to
the Chair of the Compensation and Talent Committee (the "Committee") of the
Board's approval of the terms of Messrs. Concannon's and McVey's employment
agreements, which occurred on January 6, 2023. Mr. Concannon will also continue
to serve as a director on the Company's Board and the Company intends to have
continued independent Board leadership in the form of a Lead Independent
Director.
Mr. Concannon, age 55, has been the President and Chief Operating Officer and a
director of the Company since January 2019. He previously served as President
and Chief Operating Officer of Cboe Global Markets, Inc., one of the world's
largest exchange holding companies, a position he was appointed to upon Cboe's
acquisition of Bats Global Markets, Inc. in 2017. Until Bats' acquisition by
Cboe, Mr. Concannon served as Chief Executive Officer from March 2015.
Mr. Concannon has more than 20 years of experience as an executive at Nasdaq,
Virtu Financial, Instinet and as an attorney at Morgan, Lewis & Bockius, LLP and
the SEC. Mr. Concannon has received a B.A. from Catholic University, an M.B.A.
from St. John's University, and a J.D. from Catholic University's Columbus
School of Law.
There were no arrangements or understandings pursuant to which Mr. Concannon was
selected as Chief Executive Officer of the Company. Mr. Concannon does not have
a family relationship with any director or executive officer of the Company.
There have been no transactions since the beginning of the Company's last fiscal
year, and there are no currently proposed transactions, in which the Company was
or is to be a participant, in which the amount involved exceeds $120,000 and in
which Mr. Concannon had, or will have, a direct or indirect material interest.
On January 6, 2023, the Company entered into new employment letter agreements
with each of Mr. McVey and Mr. Concannon, each of which will be effective as of
the Effective Date. Capitalized terms used but not defined below have the
meanings set forth in the relevant employment agreements described below.
Employment Agreement with Mr. Concannon
Mr. Concannon's new employment agreement (the "Concannon Agreement") provides
that Mr. Concannon will be employed by the Company as its Chief Executive
Officer for an initial five-year term, with successive one-year automatic
renewals unless either party elects not to extend the term at least 90 days
prior to the last day of the term. Under the Concannon Agreement,
Mr. Concannon's minimum annual base salary is $650,000 per year and he is
eligible to receive an annual cash bonus and annual equity awards. The terms and
conditions of any annual cash bonus or equity award will be determined by the
Committee in its sole discretion, and the awards will be granted under the
Company's annual performance incentive plan or equity plan, as applicable, each
as in effect at the time of the award. The annual cash incentive for the 2023
calendar year, and any annual equity award made in 2024 based on the 2023
performance year, will be calculated on a pro-rata basis taking into account the
award percentages that correspond to Mr. Concannon's positions before and after
the Effective Date.
The Concannon Agreement provides that Mr. Concannon's employment may be
terminated by him or by the Company at any time. In the event of a termination
of Mr. Concannon's employment (i) due to his death or by the Company as a result
of his having a Disability within the Change of Control Protection Period; or
(ii) whether during or outside a Change in Control Protection Period (x) by the
Company other than for a Cause Event; or (y) by Mr. Concannon as a result of his
resignation for Good Reason, then, subject to his execution of a waiver and
general release, Mr. Concannon will be entitled to:
• receive his base salary for 24 months after termination;
• be paid an amount equal to two times his Average Bonus, to be paid in 24
monthly installments;
• be paid any accrued and earned but unpaid annual bonus for the year prior
to the year of termination; and
• payment of the cost of continuation health coverage under COBRA for
Mr. Concannon, his spouse and his dependents for up to 18 months
following termination.
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In the event that Mr. Concannon's employment is terminated (i) due to the
Company providing a notice of non-extension of the term or (ii) outside of a
Change in Control Protection Period due to his death or Disability, then,
subject to his execution of a waiver and general release, Mr. Concannon will be
entitled to:
• continue to receive his base salary for 12 months after termination;
• be paid an amount equal to his Average Bonus, paid in 12 monthly
installments;
• be paid any accrued and earned but unpaid annual bonus for the year prior
to the year of termination; and
• payment of the cost of continuation health coverage under COBRA for
Mr. Concannon, his spouse and his dependents for up to 12 months
following termination.
The Concannon Agreement further provides that any compensation received by
Mr. Concannon will be subject to any compensation recapture policies adopted by
the Company that are generally applicable to the Company's executive officers.
Mr. Concannon will continue to be subject to the terms of the Proprietary
Information and Non-Competition Agreement previously entered into with the
Company and he entered into an Indemnification Agreement with the Company on
January 6, 2023, which is materially consistent with the form of indemnification
agreement previously filed by the Company.
Equity Awards
In connection with the entry into the Concannon Agreement, Mr. Concannon will be
entitled to receive on the Effective Date the following equity awards under the
Company's 2020 Equity Incentive Plan (the "Incentive Plan"): (i) restricted
stock units with a target grant date fair value of $1.05 million (as determined
by the Committee by dividing award value by the average closing price of Company
stock on the ten trading days leading up to and including the grant date,
rounded to the nearest whole number), which award will be granted pursuant to,
and will be subject to the terms and conditions of, the Form of Restricted Stock
Unit Agreement for Mr. Concannon filed as Exhibit 10.3 hereto; and
(ii) performance stock units with a target grant date fair value of
$2.45 million (as determined by the Committee based on the Monte Carlo method),
which award will be granted pursuant to, and will be subject to the terms and
conditions of, the Form of Performance Stock Unit Agreement for Mr. Concannon
filed as Exhibit 10.4 hereto.
Employment Agreement with Mr. McVey
Mr. McVey's new employment agreement (the "McVey Agreement") provides that
Mr. McVey will be employed by the Company as its Executive Chairman for a term
expiring on the date of the Company's 2025 annual meeting of stockholders. The
term may be extended by mutual written agreement of the parties at any time. The
expected duties of Mr. McVey as Executive Chairman are set forth in the McVey
Agreement and include transitioning his prior responsibilities to the new Chief
Executive Officer and managing the transition of relationships with key clients
and stakeholders. It is expected that Mr. McVey will spend approximately 66% on
average of his business time during the term on the performance of duties as
Executive Chairman.
Mr. McVey's minimum annual base salary is $650,000 per year and he is eligible
to receive an annual cash bonus and annual equity awards. The terms and
conditions of any annual cash bonus and equity award will be determined by the
Committee in its sole discretion. The annual cash incentive for the 2023
calendar year, and any annual equity award made in 2024 based on the 2023
performance year, will be calculated on a pro-rata basis taking into account the
award percentages that correspond to Mr. McVey's positions before and after the
Effective Date.
The McVey Agreement provides that Mr. McVey's employment may be terminated by
him or by the Company at any time. In the event of a termination of Mr. McVey's
employment outside the Change in Control Protection Period other than (i) due to
his death, (ii) by Mr. McVey voluntarily (other than as a result of his
resignation for Good Reason); or (iii) by the Company as a result of his having
a Disability or for a Cause Event, then, subject to his execution of a waiver
and general release, Mr. McVey will be entitled to:
• continue to receive his base salary for 24 months after termination;
• be paid an amount equal to two times his Average Bonus, to be paid in 24
monthly installments;
• be paid any accrued and earned but unpaid annual bonus for the year prior
to the year of termination; and
. . .
Item 7.01 Regulation FD Disclosure
On January 9, 2023, the Company issued a press release announcing that
Mr. McVey, Chairman of the Board and Chief Executive Officer of the Company will
transition to the role of Executive Chairman of the Board, while Mr. Concannon,
the Company's current President and Chief Operating Officer, will be promoted to
Chief Executive Officer of the Company, effective as of April 3, 2023. The press
release is attached hereto as Exhibit 99.1 and is incorporated by reference into
this Item 7.01.
The information included in this Current Report on Form 8-K (including Exhibit
99.1 hereto) that is furnished pursuant to this Item 7.01 shall not be deemed to
be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that Section or
Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, and shall
not be incorporated by reference into any filing of the Company, whether made
before or after the date hereof, regardless of any general incorporation
language in such filing, unless expressly incorporated by specific reference
into such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
10.1 Employment Letter Agreement dated as of January 6, 2023, by and between
Christopher R. Concannon and MarketAxess Holdings Inc.
10.2 Employment Letter Agreement dated as of January 6, 2023, by and between
Richard M. McVey and MarketAxess Holdings Inc.
10.3 Form of Restricted Stock Unit Award Agreement for Christopher R.
Concannon pursuant to the MarketAxess Holdings Inc. 2020 Equity Incentive
Plan.
10.4 Form of Performance Stock Unit Agreement for Christopher R. Concannon
pursuant to the MarketAxess Holdings Inc. 2020 Equity Incentive Plan.
99.1 Press Release issued by MarketAxess Holdings Inc. on January 9, 2023.
104 Cover Page Interactive File (the cover page tags are embedded within the
Inline XBRL document).
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