Exhibit 10.2

 

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.
STOCK UNIT AWARD PROGRAM SUBPLAN

 

1.             PURPOSE

 

                This Investment Technology Group, Inc. Stock Unit Award Program
Subplan, as amended and restated herein (the “Program”) was originally
implemented by Investment Technology Group, Inc. (the “Company”) under the
Investment Technology Group, Inc. Amended and Restated 1994 Stock Option and
Long-Term Incentive Plan (the “1994 Plan”).  The Program was merged as a subplan
with and into the Investment Technology Group, Inc. 2007 Omnibus Equity
Compensation Plan (the “Plan”) effective as of May 8, 2007, and was amended and
restated, effective January 1, 2008 (the “Effective Date”).    The Program has
been further amended and restated, as set forth herein, effective (unless
otherwise set forth herein) on the Effective Date, and the Program has been
frozen as to new benefits effective for compensation earned for any calendar
year after calendar year 2008, as set forth in Section 6(a)(iii) below.

 

                The purpose of the Program is to provide an additional incentive
to selected members of senior management and key employees to increase the
success of the Company, by substituting stock units for a portion of the cash
compensation payable to such persons, which stock units represent an equity
interest in the Company to be acquired and held under the Program on a
long-term, tax-deferred basis, and otherwise to promote the purposes of the
Plan.  The Program is amended and restated herein, effective for deferrals made
from compensation earned for periods on or after the Effective Date.  Deferrals
made from compensation earned for periods prior to the Effective Date shall be
governed by the Program as in effect prior to the Effective Date.  Shares with
respect to deferrals prior to May 8, 2007 were issued under the 1994 Plan. 
Persons selected to be eligible to participate in the Program will participate
only if they elect to participate for a calendar year.

 

2.             DEFINITIONS

 

                Capitalized terms used in the Program but not defined herein
shall have the same meanings as defined in the Plan.  In addition to such terms
and the terms defined in this Program, the following terms used in the Program
shall have the meanings set forth below:

 

                2.1           “ACCOUNT” MEANS THE ACCOUNT ESTABLISHED FOR EACH
PARTICIPANT PURSUANT TO SECTION 7(G) HEREOF.

 

                2.2           “ACTUAL REDUCTION AMOUNT” MEANS THE AMOUNT BY
WHICH A GIVEN SEMI-ANNUAL OR YEAR-END BONUS PAYMENT TO A PARTICIPANT IS IN FACT
REDUCED UNDER SECTION 6.

 

                2.3           “ADMINISTRATOR” SHALL BE THE PERSON OR COMMITTEE
APPOINTED BY THE COMMITTEE TO PERFORM MINISTERIAL FUNCTIONS UNDER THE PROGRAM
AND TO EXERCISE OTHER AUTHORITY DELEGATED BY THE COMMITTEE.

 

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2.4           “ASSIGNED REDUCTION AMOUNT” MEANS AN AMOUNT DETERMINED BY THE
ADMINISTRATOR IN ACCORDANCE WITH SECTION 6(B), IN THE CASE OF AN INDIVIDUAL
CURRENT PARTICIPANT, WHICH SHALL BE USED UNDER SECTION 7(A) TO DETERMINE THE
NUMBER OF STOCK UNITS TO BE CREDITED TO THE CURRENT PARTICIPANT’S ACCOUNT
SEMI-ANNUALLY.  THE ASSIGNED REDUCTION AMOUNT DOES NOT ACCUMULATE.

 

2.5           “BASIC STOCK UNIT” MEANS A STOCK UNIT GRANTED PURSUANT TO THE
FIRST SENTENCE OF SECTION 7(A).

 

2.6           “CAUSE” SHALL BE DEEMED TO EXIST WHERE A PARTICIPANT: (I) COMMITS
ANY ACT OF FRAUD, WILLFUL MISCONDUCT OR DISHONESTY IN CONNECTION WITH THEIR
EMPLOYMENT; (II) FAILS, REFUSES OR NEGLECTS TO TIMELY PERFORM ANY MATERIAL DUTY
OR JOB RESPONSIBILITY AND SUCH FAILURE, REFUSAL OR NEGLECT IS NOT CURED AFTER
APPROPRIATE WARNING; (III) COMMITS A MATERIAL VIOLATION OF ANY LAW, RULE,
REGULATION OR BY-LAW OF ANY GOVERNMENTAL AUTHORITY (STATE, FEDERAL OR FOREIGN),
ANY SECURITIES EXCHANGE OR ASSOCIATION OR OTHER REGULATORY OR SELF-REGULATORY
BODY OR AGENCY APPLICABLE TO COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES OR
ANY GENERAL WRITTEN POLICY OR DIRECTIVE OF COMPANY OR ANY OF ITS SUBSIDIARIES OR
AFFILIATES; (V) COMMITS A CRIME INVOLVING DISHONESTY, FRAUD OR UNETHICAL
BUSINESS CONDUCT, OR A FELONY; OR (VII) IS EXPELLED OR SUSPENDED, OR IS SUBJECT
TO AN ORDER TEMPORARILY OR PERMANENTLY ENJOINING PARTICIPANT FROM AN AREA OF
ACTIVITY WHICH CONSTITUTES A SIGNIFICANT PORTION OF PARTICIPANT’S ACTIVITIES BY
THE SECURITIES AND EXCHANGE COMMISSION, THE FINANCIAL INDUSTRY REGULATORY
AUTHORITY, ANY NATIONAL SECURITIES EXCHANGE OR ANY SELF-REGULATORY AGENCY OR
GOVERNMENTAL AUTHORITY, STATE, FOREIGN OR FEDERAL.

 

2.7           “CURRENT PARTICIPANT” MEANS A PARTICIPANT WHO, FOR THE CALENDAR
YEAR, HAS ELECTED, IN ACCORDANCE WITH SECTION 5 BELOW (AS MODIFIED BY SECTION 11
BELOW), TO PARTICIPATE IN THE PROGRAM AND IS, THEREFORE, SUBJECT TO MANDATORY
PAYMENT OF A PORTION OF HIS OR HER COMPENSATION FOR THE CALENDAR YEAR BY GRANT
OF STOCK UNITS UNDER THE PROGRAM.

 

2.8           “DISABILITY” SHALL HAVE THE MEANING ASCRIBED TO SUCH TERM IN
SECTION 22(E)(3) OF THE CODE.

 

2.9           “MATCHING STOCK UNIT” MEANS A STOCK UNIT GRANTED PURSUANT TO
SECTION 7(A).

 

2.10         “PARTICIPANT” MEANS AN ELIGIBLE PERSON WHO IS GRANTED STOCK UNITS
UNDER THE PROGRAM, WHICH STOCK UNITS HAVE NOT YET BEEN SETTLED.

 

2.11         “RELATED PARTY” MEANS (A) A MAJORITY-OWNED SUBSIDIARY OF THE
COMPANY; (B) AN EMPLOYEE OR GROUP OF EMPLOYEES OF THE COMPANY OR ANY
MAJORITY-OWNED SUBSIDIARY OF THE COMPANY; (C) A TRUSTEE OR OTHER FIDUCIARY
HOLDING SECURITIES UNDER AN EMPLOYEE BENEFIT PLAN OF THE COMPANY OR ANY
MAJORITY-OWNED SUBSIDIARY OF THE COMPANY; OR (D) A CORPORATION OWNED DIRECTLY OR
INDIRECTLY BY THE STOCKHOLDERS OF THE COMPANY IN SUBSTANTIALLY THE SAME
PROPORTION AS THEIR OWNERSHIP OF VOTING SECURITIES.

 

                2.12         “RETIREMENT” MEANS TERMINATION OF EMPLOYMENT (OTHER
THAN A TERMINATION FOR CAUSE) AFTER THE PARTICIPANT HAS REACHED AGE 65 OR AFTER
THE PARTICIPANT HAS REACHED AGE 55 AND HAS AT LEAST 10 YEARS OF SERVICE WITH THE
COMPANY AND ITS SUBSIDIARIES.

 

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                2.13         “STOCK UNIT” MEANS AN AWARD, GRANTED PURSUANT TO
SECTION 8 OF THE PLAN, REPRESENTING A GENERALLY NONTRANSFERABLE RIGHT TO RECEIVE
ONE SHARE OF COMPANY STOCK AT A SPECIFIED FUTURE DATE TOGETHER WITH A RIGHT TO
DIVIDEND EQUIVALENTS AS SPECIFIED IN SECTION 7(D) HEREOF AND SUBJECT TO THE
TERMS AND CONDITIONS OF THE PLAN AND THE PROGRAM.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY, IN THE CASE OF STOCK UNITS GRANTED TO EMPLOYEES OF ITG CANADA
CORP., THE COMMITTEE MAY, IN ITS DISCRETION, SETTLE SUCH STOCK UNITS BY DELIVERY
OF CASH EQUAL TO THE FAIR MARKET VALUE ON THE SETTLEMENT DATE OF THE NUMBER OF
SHARES OF COMPANY STOCK EQUAL TO THE NUMBER OF SUCH STOCK UNITS.  STOCK UNITS
ARE BOOKKEEPING UNITS, AND DO NOT REPRESENT OWNERSHIP OF COMPANY STOCK OR ANY
OTHER EQUITY SECURITY.

 

                2.14         “TERMINATION OF EMPLOYMENT” MEANS TERMINATION OF A
PARTICIPANT’S EMPLOYMENT BY THE COMPANY OR A SUBSIDIARY FOR ANY REASON,
INCLUDING DUE TO DEATH OR DISABILITY, IMMEDIATELY AFTER WHICH EVENT THE
PARTICIPANT IS NOT EMPLOYED BY THE COMPANY OR ANY SUBSIDIARY.

 

                2.15         “VOTING SECURITIES OR SECURITY” MEANS ANY
SECURITIES OF THE COMPANY WHICH CARRY THE RIGHT TO VOTE GENERALLY IN THE
ELECTION OF DIRECTORS.

 

3.             ADMINISTRATION

 

                                (A)           AUTHORITY.  THE PROGRAM SHALL BE
ESTABLISHED AND ADMINISTERED BY THE COMMITTEE, WHICH SHALL HAVE ALL AUTHORITY
UNDER THE PROGRAM AS IT HAS UNDER THE PLAN; PROVIDED, HOWEVER, THAT TERMS OF THE
GRANT OF STOCK UNITS HEREUNDER MAY NOT BE INCONSISTENT WITH THE EXPRESS TERMS
SET FORTH IN THE PROGRAM.  MINISTERIAL FUNCTIONS UNDER THE PROGRAM AND OTHER
AUTHORITY SPECIFICALLY DELEGATED BY THE COMMITTEE SHALL BE PERFORMED OR
EXERCISED BY AND AT THE DIRECTION OF THE ADMINISTRATOR.

 

                                (B)           MANNER OF EXERCISE OF AUTHORITY. 
ANY ACTION OF THE COMMITTEE OR ITS DELEGATEE WITH RESPECT TO THE PROGRAM SHALL
BE FINAL, CONCLUSIVE, AND BINDING ON ALL PERSONS, INCLUDING THE COMPANY,
SUBSIDIARIES, PARTICIPANTS GRANTED STOCK UNITS WHICH HAVE NOT YET BEEN SETTLED,
AND ANY PERSON CLAIMING ANY RIGHTS UNDER THE PROGRAM FROM OR THROUGH ANY
PARTICIPANT, EXCEPT THAT THE COMMITTEE MAY TAKE ACTION WITHIN A REASONABLE TIME
AFTER ANY SUCH ACTION SUPERSEDING OR OVERRULING A PRIOR ACTION.

 

                                (C)           LIMITATION OF LIABILITY.  EACH
MEMBER OF THE COMMITTEE OR DELEGATEE SHALL BE ENTITLED TO, IN GOOD FAITH, RELY
OR ACT UPON ANY REPORT OR OTHER INFORMATION FURNISHED TO HIM OR HER BY ANY
OFFICER OR OTHER EMPLOYEE OF THE COMPANY OR ANY SUBSIDIARY OR ANY AGENT OR
PROFESSIONAL ASSISTING IN THE ADMINISTRATION OF THE PROGRAM, SUCH MEMBER OR
PERSON SHALL NOT BE PERSONALLY LIABLE FOR ANY ACTION, DETERMINATION, OR
INTERPRETATION TAKEN OR MADE IN GOOD FAITH WITH RESPECT TO THE PROGRAM, AND SUCH
MEMBER OR PERSON SHALL, TO THE EXTENT PERMITTED BY LAW, BE FULLY INDEMNIFIED AND
PROTECTED BY THE COMPANY WITH RESPECT TO ANY SUCH ACTION, DETERMINATION, OR
INTERPRETATION.

 

                                (D)           STATUS AS SUBPLAN UNDER THE PLAN. 
THE PROGRAM CONSTITUTES A SUBPLAN IMPLEMENTED UNDER THE PLAN, TO BE ADMINISTERED
IN ACCORDANCE WITH THE TERMS OF THE PLAN.  ACCORDINGLY, ALL OF THE TERMS AND
CONDITIONS OF THE PLAN ARE HEREBY INCORPORATED BY REFERENCE,

 

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AND, IF ANY PROVISION OF THE PROGRAM OR A STATEMENT OR DOCUMENT RELATING TO
STOCK UNITS GRANTED HEREUNDER CONFLICTS WITH A PROVISION OF THE PLAN, THE
PROVISION OF THE PLAN SHALL GOVERN.

 

4.             STOCK SUBJECT TO THE PROGRAM

 

Shares of Company Stock delivered upon settlement of Stock Units under the
Program shall be shares reserved and available under the Plan.  Accordingly,
Stock Units may be granted under the Program if sufficient shares are then
reserved and available under the Plan, and the number of shares delivered in
settlement of Stock Units hereunder shall be counted against the shares reserved
and available under the Plan.  Awards may be granted under the Plan even though
the effect of such grants will be to reduce the number of shares remaining
available for grants hereunder.  Stock Units granted under the Program in place
of compensation under the Plan resulting from an award intended to comply with
the applicable requirements of section 162(m) of the Code shall be subject to
the annual per-person limitations under the Plan.  Stock Units granted under the
Program in place of compensation under the Company’s Pay-for-Performance
Incentive Plan shall be subject to annual per-person limitations under the
Pay-for-Performance Plan.

 

5.             ELIGIBILITY AND ELECTION

 

The Committee may select any person who is eligible to be granted an Award under
the Plan to be eligible to be granted Stock Units under the Program in lieu of
compensation otherwise payable to the person (such persons are referred to
herein as “Eligible SUA Participants”).  A Participant who is selected to be an
Eligible SUA Participant in one year will not necessarily be selected to be an
Eligible SUA Participant in a subsequent year.  An Eligible SUA Participant may
elect to participate in the Program and, therefore, be a Current Participant for
a calendar year by filing a written irrevocable election with the Company prior
to the beginning of that calendar year.  Participation elections (for persons
who continue to be Eligible SUA Participants) will automatically carry forward
for subsequent calendar years unless the Participant irrevocably elects in
writing, by no later than the last day of the immediately preceding calendar
year, not to participate in the Program for a calendar year.  Notwithstanding
the foregoing, an Eligible SUA Participant may make an election to participate
in the Program within 30 days after first becoming an Eligible SUA Participant,
but, notwithstanding any provision of this Program to the contrary, only with
respect to compensation earned for services provided after the effective date of
the election, which, in the case of bonus payable for a period beginning prior
to and ending after the effective date of the election, shall be prorated for
the portion of the period beginning after the effective date of the election.

 

6.             MANDATORY REDUCTION OF BONUS COMPENSATION

 

(A)          (I)  AMOUNT OF MANDATORY REDUCTION.  A CURRENT PARTICIPANT’S CASH
COMPENSATION EARNED FOR THE CALENDAR YEAR OF PARTICIPATION SHALL BE
AUTOMATICALLY REDUCED BY AN AMOUNT DETERMINED IN ACCORDANCE WITH THE FOLLOWING
SCHEDULE:

 

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0% of the first $200,000 of annual compensation;
15% of the next $100,000 of annual compensation; and
20% of annual compensation in excess of $300,000.

 

The foregoing notwithstanding, the Committee may, prior to the beginning of the
calendar year, adjust the schedule applicable to an individual Current
Participant and in no event will the amount by which cash compensation is
reduced exceed the amount of bonus payable to the Participant for the calendar
year.  For purposes of the Program, the amount by which cash compensation is
reduced hereunder shall be calculated without regard to any reductions in
compensation resulting from Participant’s contributions under any section
401(k), section 125, pension plan, or other plan of the Company or a subsidiary,
and such amount shall not be deemed a reduction in the Participant’s
compensation for purposes of any such section 401(k), section 125, pension plan,
or other plan of the Company or a subsidiary.  For the avoidance of doubt,
effective for bonus payments for calendar year 2008 that are due after
December 31, 2008 and on or before March 15, 2009, references to annual
compensation in this Section 6 shall mean annual cash compensation and shall not
include any awards under the Company’s Equity Deferral Award Program.

 

(ii)  Grandfathered Schedule.  In lieu of the schedule set forth in
Section 6(a)(i) above, each Current Participant who participated in the Program
for the portion of calendar year 2003 prior to June 30 and who made a one-time
written election (in the form specified by the Committee) on or prior to
June 30, 2003 to have any and all mandatory reductions under the Program based
on the following schedule shall have all reductions hereunder based on such
following schedule:

 

5% of the first $100,000 of annual compensation;
10% of the next $100,000 of annual compensation;
15% of the next $100,000 of annual compensation; and
20% of annual compensation in excess of  $300,000.

 

(iii)  Program Frozen After 2008.  This Program shall not apply to compensation
earned for any calendar year after calendar year 2008, no such compensation
shall be reduced under the Program, and no Stock Units will be granted under the
Program in respect of such compensation.  For the avoidance of doubt, this
Program will apply (in accordance with its terms, including Section 11 below) to
annual bonus for calendar year 2008 that is paid after December 31, 2008 and on
or before March 15, 2009.

 

(B)               MANNER OF REDUCTION OF COMPENSATION.  AMOUNTS BY WHICH
COMPENSATION IS REDUCED UNDER SECTION 6(A)(I) OR (II) WILL BE SUBTRACTED FROM
BONUS AMOUNTS IN RESPECT OF SERVICES DURING THE YEAR OTHERWISE PAYABLE TO THE
CURRENT PARTICIPANT AT OR FOLLOWING THE END OF THE FIRST HALF OF SUCH YEAR AND
AT OR FOLLOWING THE END OF THE YEAR.  THE AMOUNT BY WHICH THE BONUS AMOUNT
PAYABLE WILL BE REDUCED FOLLOWING THE END OF THE FIRST HALF OF THE YEAR WILL BE
CALCULATED BASED ON A REASONABLE ESTIMATE OF TOTAL COMPENSATION FOR THE YEAR
(I.E., IN THE CASE OF A CURRENT PARTICIPANT EMPLOYED SINCE THE BEGINNING OF THE
YEAR BY CALCULATING AN ESTIMATED AGGREGATE AMOUNT BY WHICH COMPENSATION WILL BE
REDUCED FOR THE YEAR AND

 

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REDUCING THE SEMI-ANNUAL BONUS PAYMENT BY ONE-HALF OF SUCH AMOUNT), AND WILL BE
CALCULATED AT THE TIME THE YEAR-END BONUS AMOUNT OTHERWISE BECOMES PAYABLE BASED
ON ACTUAL COMPENSATION FOR THE YEAR, TAKING INTO ACCOUNT THE AMOUNT BY WHICH
COMPENSATION PREVIOUSLY HAS BEEN REDUCED FOR THE YEAR (I.E., BY CALCULATING THE
ACTUAL AMOUNT BY WHICH COMPENSATION WILL BE REDUCED FOR THE YEAR AND REDUCING
THE YEAR-END BONUS PAYMENT BY THAT AMOUNT LESS THE AMOUNT BY WHICH THE
COMPENSATION WAS REDUCED PREVIOUSLY IN SUCH YEAR).

 

7.             GRANT OF STOCK UNITS

 

(A)           AUTOMATIC GRANT OF STOCK UNITS.  EXCEPT AS SET FORTH BELOW, EACH
PARTICIPANT SHALL BE AUTOMATICALLY GRANTED BASIC STOCK UNITS AS OF THE DATE THE
PARTICIPANT’S BONUS WOULD HAVE OTHERWISE BEEN PAID, IN A NUMBER EQUAL TO THE
PARTICIPANT’S ACTUAL REDUCTION AMOUNT OR ASSIGNED REDUCTION AMOUNT (AS
APPLICABLE) DIVIDED BY THE FAIR MARKET VALUE OF A SHARE OF COMPANY STOCK ON SUCH
DATE. IN ADDITION, EACH PARTICIPANT SHALL BE AUTOMATICALLY GRANTED MATCHING
STOCK UNITS AS OF THE DATE THE PARTICIPANT’S BONUS WOULD HAVE OTHERWISE BEEN
PAID, IN A NUMBER EQUAL TO 20% OF THE NUMBER OF BASIC STOCK UNITS GRANTED UNDER
THIS SECTION 7(A) AT THAT DATE. STOCK UNITS SHALL BE CREDITED TO THE
PARTICIPANT’S ACCOUNT AS OF THE DATE OF GRANT.  OTHER PROVISIONS OF THE PROGRAM
NOTWITHSTANDING, NO GRANT OF STOCK UNITS SHALL BE EFFECTIVE UNTIL THE DATE OF
GRANT SPECIFIED IN THIS SECTION 7(A).

 

(B)           RISK OF FORFEITURE; CANCELLATION OF CERTAIN STOCK UNITS.  THE
BASIC STOCK UNITS, TOGETHER WITH ANY DIVIDEND EQUIVALENTS CREDITED THEREON,
SHALL AT ALL TIMES BE FULLY VESTED AND NON-FORFEITABLE.  MATCHING STOCK UNITS
(TOGETHER WITH ANY DIVIDEND EQUIVALENTS CREDITED THEREON) WILL VEST 100% ON THE
THIRD ANNIVERSARY OF THE DATE OF GRANT, IF THE PARTICIPANT REMAINS CONTINUOUSLY
EMPLOYED BY THE COMPANY THROUGH SUCH VESTING DATE; PROVIDED THAT (I) ALL
MATCHING STOCK UNITS (TOGETHER WITH DIVIDEND EQUIVALENTS CREDITED THEREON) WILL
VEST IN FULL AT THE TIME OF RETIREMENT OF THE PARTICIPANT OR UPON THE OCCURRENCE
OF A CHANGE IN CONTROL, BUT IN EITHER SUCH EVENT THE MATCHING STOCK UNITS SHALL
CONTINUE TO BE SETTLED ON THE SCHEDULE SET FORTH IN SECTION 8(A) BELOW; AND
(II) ALL MATCHING STOCK UNITS (TOGETHER WITH DIVIDEND EQUIVALENTS CREDITED
THEREON) WILL VEST IN FULL AT THE TIME A PARTICIPANT’S EMPLOYMENT TERMINATES DUE
TO HIS OR HER DEATH OR DISABILITY, AND ALL STOCK UNITS HELD BY SUCH PARTICIPANT
SHALL BE SETTLED, SUBJECT TO SECTION 9(D) BELOW, WITHIN 60 DAYS THEREAFTER.

 

IF THE PARTICIPANT’S EMPLOYMENT BY THE COMPANY TERMINATES FOR ANY REASON OTHER
THAN RETIREMENT, DEATH OR DISABILITY PRIOR TO A VESTING DATE, UNLESS THE
COMMITTEE PROVIDES OTHERWISE, ALL UNVESTED MATCHING STOCK UNITS, TOGETHER WITH
ANY DIVIDEND EQUIVALENTS CREDITED THEREON, SHALL BE FORFEITED TO THE COMPANY. 
THE FOREGOING NOTWITHSTANDING, IF, AT THE END OF A GIVEN YEAR (UPON CALCULATION
OF YEAR-END BONUSES), THE AGGREGATE OF THE PARTICIPANT’S ACTUAL REDUCTION
AMOUNTS AND ANY ASSIGNED REDUCTION AMOUNTS USED TO DETERMINE THE NUMBER OF STOCK
UNITS CREDITED UNDER SECTION 7(A) FOR SUCH YEAR EXCEEDS THE AMOUNT BY WHICH THE
FULL-YEAR’S COMPENSATION SHOULD HAVE BEEN REDUCED UNDER SECTION 6(A) (THE
“CORRECTED FULL-YEAR AMOUNT”), THE PARTICIPANT SHALL BE PAID, PRIOR TO MARCH 15
OF THE FOLLOWING YEAR, IN CASH, WITHOUT INTEREST, THE AMOUNT (IF ANY) BY WHICH
SUCH ACTUAL REDUCTION AMOUNTS AND ASSIGNED REDUCTION AMOUNTS EXCEEDED SUCH
CORRECTED FULL-YEAR AMOUNT, AND ANY STOCK UNITS (INCLUDING BASIC STOCK UNITS AND
MATCHING STOCK UNITS RELATING THERETO) CREDITED TO THE

 

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PARTICIPANT UNDER SECTION 7 AS A RESULT OF SUCH EXCESS ACTUAL REDUCTION AMOUNTS
AND ASSIGNED REDUCTION AMOUNTS SHALL BE CANCELLED.  UNLESS OTHERWISE DETERMINED
BY THE ADMINISTRATOR, THE STOCK UNITS TO BE CANCELLED SHALL BE CANCELLED FROM
EACH OF THE SEMI-ANNUAL GRANTS IN THE PROPORTION THE ACTUAL REDUCTION AMOUNTS
AND ASSIGNED REDUCTION AMOUNTS USED IN DETERMINING SUCH SEMI-ANNUAL GRANT BORE
TO THE AGGREGATE OF THE ACTUAL REDUCTION AMOUNTS AND ASSIGNED REDUCTION AMOUNTS
USED IN DETERMINING ALL GRANTS OF STOCK UNITS OVER THE FULL YEAR.

 

(C)           NONTRANSFERABILITY.  STOCK UNITS AND ALL RIGHTS RELATING THERETO
SHALL NOT BE TRANSFERABLE OR ASSIGNABLE BY A PARTICIPANT, OTHER THAN BY WILL OR
THE LAWS OF DESCENT AND DISTRIBUTION, AND SHALL NOT BE PLEDGED, HYPOTHECATED, OR
OTHERWISE ENCUMBERED IN ANY WAY OR SUBJECT TO EXECUTION, ATTACHMENT, OR SIMILAR
PROCESS.

 

(D)           DIVIDEND EQUIVALENTS ON STOCK UNITS.  DIVIDEND EQUIVALENTS SHALL
BE CREDITED ON STOCK UNITS AS FOLLOWS:

 

(i)            Cash and Non-Company Stock Dividends.  If the Company declares
and pays a dividend or distribution on Company Stock in the form of cash or
property other than shares of Company Stock, then a number of additional Stock
Units shall be credited to a Participant’s Account as of the payment date for
such dividend or distribution equal to (i) the number of Stock Units credited to
the Account as of the record date for such dividend or distribution multiplied
by (ii) the amount of cash plus the fair market value of any property other than
shares actually paid as a dividend or distribution on each outstanding share of
Company Stock at such payment date, divided by (iii) the Fair Market Value of a
share of Company Stock at such payment date.

 

(ii)           Company Stock Dividends and Splits.  If the Company declares and
pays a dividend or distribution on Company Stock in the form of additional
shares of Company Stock, or there occurs a forward split of Company Stock, then
a number of additional Stock Units shall be credited to the Participant’s
Account as of the payment date for such dividend or distribution or forward
split equal to (i) the number of Stock Units credited to the Account as of the
record date for such dividend or distribution or split multiplied by (ii) the
number of additional shares of Company Stock actually paid as a dividend or
distribution or issued in such split in respect of each outstanding share of
Company Stock.

 

(E)           ADJUSTMENTS TO STOCK UNITS.  THE NUMBER OF STOCK UNITS CREDITED TO
EACH PARTICIPANT’S ACCOUNT SHALL BE APPROPRIATELY ADJUSTED, IN ORDER TO PREVENT
DILUTION OR ENLARGEMENT OF PARTICIPANTS’ RIGHTS WITH RESPECT TO SUCH STOCK
UNITS, TO REFLECT ANY CHANGES IN THE NUMBER OF OUTSTANDING SHARES OF COMPANY
STOCK RESULTING FROM ANY EVENT REFERRED TO IN SECTION 5.5 OF THE PLAN, TAKING
INTO ACCOUNT ANY STOCK UNITS CREDITED TO THE PARTICIPANT IN CONNECTION WITH SUCH
EVENT UNDER SECTION 7(D).

 

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(F)            FRACTIONAL SHARES.  THE NUMBER OF STOCK UNITS CREDITED TO A
PARTICIPANT’S ACCOUNT SHALL INCLUDE FRACTIONAL SHARES CALCULATED TO AT LEAST
THREE DECIMAL PLACES, UNLESS OTHERWISE DETERMINED BY THE COMMITTEE.

 

(G)           ACCOUNTS AND STATEMENTS. THE ADMINISTRATOR SHALL ESTABLISH, OR
CAUSE TO BE ESTABLISHED, AN ACCOUNT FOR EACH PARTICIPANT.  AN INDIVIDUAL
STATEMENT OF EACH PARTICIPANT’S ACCOUNT WILL BE ISSUED TO EACH PARTICIPANT NOT
LESS FREQUENTLY THAN ANNUALLY.  SUCH STATEMENTS SHALL REFLECT THE STOCK UNITS
CREDITED TO THE PARTICIPANT’S ACCOUNT, TRANSACTIONS THEREIN DURING THE PERIOD
COVERED BY THE STATEMENT, AND OTHER INFORMATION DEEMED RELEVANT BY THE
ADMINISTRATOR.  SUCH STATEMENT MAY INCLUDE INFORMATION REGARDING OTHER PLANS AND
COMPENSATORY ARRANGEMENTS FOR DIRECTORS.

 

(H)           CONSIDERATION FOR STOCK UNITS.  STOCK UNITS SHALL BE GRANTED FOR
THE GENERAL PURPOSES SET FORTH IN SECTION 1 OF THE PROGRAM. EXCEPT AS SPECIFIED
IN SECTION 6 AND 7 OF THE PROGRAM, A PARTICIPANT SHALL NOT BE REQUIRED TO PAY
ANY CASH CONSIDERATION OR OTHER TANGIBLE OR DEFINABLE CONSIDERATION FOR STOCK
UNITS.  NO NEGOTIATION SHALL TAKE PLACE BETWEEN THE COMPANY AND ANY PARTICIPANT
AS TO THE AMOUNT, TIMING, OR OTHER TERMS OF AN AWARD OF STOCK UNITS.

 

8.             SETTLEMENT

 

(A)           ISSUANCE AND DELIVERY OF SHARES IN SETTLEMENT.  EXCEPT AS
OTHERWISE PROVIDED IN SECTION 7(B) ABOVE IN THE CASE OF A PARTICIPANT’S DEATH OR
DISABILITY, STOCK UNITS (TOGETHER WITH ANY DIVIDEND EQUIVALENTS CREDITED
THEREON) SHALL BE SETTLED BY ISSUANCE AND DELIVERY TO THE PARTICIPANT (OR
FOLLOWING HIS OR HER DEATH, TO THE PARTICIPANT’S DESIGNATED BENEFICIARY) OF A
NUMBER OF SHARES OF COMPANY STOCK EQUAL TO THE NUMBER OF SUCH STOCK UNITS WITHIN
30 DAYS OF THE THIRD ANNIVERSARY OF THE DATE OF GRANT OF THE STOCK UNITS.

 

THE COMMITTEE MAY, IN ITS DISCRETION, MAKE DELIVERY OF SHARES HEREUNDER BY
DEPOSITING SUCH SHARES INTO AN ACCOUNT MAINTAINED FOR THE PARTICIPANT (OR OF
WHICH THE PARTICIPANT IS A JOINT OWNER, WITH THE CONSENT OF THE PARTICIPANT)
ESTABLISHED IN CONNECTION WITH THE COMPANY’S EMPLOYEE STOCK PURCHASE PLAN OR
ANOTHER PLAN OR ARRANGEMENT PROVIDING FOR INVESTMENT IN COMPANY STOCK AND UNDER
WHICH THE PARTICIPANT’S RIGHTS ARE SIMILAR IN NATURE TO THOSE UNDER A STOCK
BROKERAGE ACCOUNT.  IF THE COMMITTEE DETERMINES TO SETTLE STOCK UNITS BY MAKING
A DEPOSIT OF SHARES INTO SUCH AN ACCOUNT, THE COMPANY MAY SETTLE ANY FRACTIONAL
SHARE BY MEANS OF SUCH DEPOSIT.  IN OTHER CIRCUMSTANCES OR IF SO DETERMINED BY
THE COMMITTEE, THE COMPANY SHALL INSTEAD PAY CASH IN LIEU OF FRACTIONAL SHARES,
ON SUCH BASIS AS THE COMMITTEE MAY DETERMINE.  IN NO EVENT WILL THE COMPANY IN
FACT ISSUE FRACTIONAL SHARES.  NOTWITHSTANDING ANY PROVISION OF THE PROGRAM TO
THE CONTRARY, IN THE CASE OF STOCK UNITS GRANTED TO EMPLOYEES OF ITG CANADA
CORP., THE COMMITTEE MAY, IN ITS DISCRETION, SETTLE SUCH STOCK UNITS BY DELIVERY
OF CASH EQUAL TO THE FAIR MARKET VALUE ON THE SETTLEMENT DATE OF THE NUMBER OF
SHARES OF COMPANY STOCK EQUAL TO THE NUMBER OF SUCH STOCK UNITS.  UPON
SETTLEMENT OF STOCK UNITS, ALL OBLIGATIONS OF THE COMPANY IN RESPECT OF SUCH
STOCK UNITS SHALL BE TERMINATED, AND THE SHARES SO DISTRIBUTED SHALL NO LONGER
BE SUBJECT TO ANY RESTRICTION OR OTHER PROVISION OF THE PROGRAM.

 

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(B)           TAX WITHHOLDING.  THE COMPANY AND ANY SUBSIDIARY MAY DEDUCT FROM
ANY PAYMENT TO BE MADE TO A PARTICIPANT ANY AMOUNT THAT FEDERAL, STATE, LOCAL,
OR FOREIGN TAX LAW REQUIRES TO BE WITHHELD WITH RESPECT TO THE SETTLEMENT OF
STOCK UNITS.  AT THE ELECTION OF THE COMMITTEE, THE COMPANY MAY WITHHOLD FROM
THE SHARES OF COMPANY STOCK TO BE DISTRIBUTED IN SETTLEMENT OF STOCK UNITS THAT
NUMBER OF SHARES HAVING A FAIR MARKET VALUE, AT THE SETTLEMENT DATE, EQUAL TO
THE AMOUNT OF SUCH WITHHOLDING TAXES.

 

(C)           NO ELECTIVE DEFERRAL.  PARTICIPANTS MAY NOT ELECT TO FURTHER DEFER
SETTLEMENT OF STOCK UNITS OR OTHERWISE TO CHANGE THE APPLICABLE SETTLEMENT DATE
UNDER THE PROGRAM.

 

9.             GENERAL PROVISIONS

 

(A)           NO RIGHT TO CONTINUED EMPLOYMENT.  NEITHER THE PROGRAM NOR ANY
ACTION TAKEN HEREUNDER, INCLUDING THE GRANT OF STOCK UNITS, WILL BE CONSTRUED AS
GIVING ANY EMPLOYEE THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE COMPANY OR ANY
OF ITS SUBSIDIARIES, NOR WILL IT INTERFERE IN ANY WAY WITH THE RIGHT OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES TO TERMINATE SUCH EMPLOYEE’S EMPLOYMENT AT
ANY TIME.

 

(B)           NO RIGHTS TO PARTICIPATE; NO STOCKHOLDER RIGHTS.  NO PARTICIPANT
OR EMPLOYEE WILL HAVE ANY CLAIM TO PARTICIPATE IN THE PROGRAM, AND THE COMPANY
WILL HAVE NO OBLIGATION TO CONTINUE THE PROGRAM.  A GRANT OF STOCK UNITS WILL
CONFER ON THE PARTICIPANT NONE OF THE RIGHTS OF A STOCKHOLDER OF THE COMPANY
(INCLUDING NO RIGHTS TO VOTE OR RECEIVE DIVIDENDS OR DISTRIBUTIONS) UNTIL
SETTLEMENT BY DELIVERY OF COMPANY STOCK, AND THEN ONLY TO THE EXTENT THAT SUCH
STOCK UNIT HAS NOT OTHERWISE BEEN FORFEITED BY THE PARTICIPANT.

 

(C)           CHANGES TO THE PROGRAM.  THE COMMITTEE MAY AMEND, ALTER, SUSPEND,
DISCONTINUE, OR TERMINATE THE PROGRAM WITHOUT THE CONSENT OF PARTICIPANTS;
PROVIDED, HOWEVER, THAT, WITHOUT THE CONSENT OF AN AFFECTED PARTICIPANT, NO SUCH
ACTION SHALL MATERIALLY AND ADVERSELY AFFECT THE RIGHTS OF SUCH PARTICIPANT WITH
RESPECT TO OUTSTANDING STOCK UNITS.

 

(D)           SECTION 409A.  IT IS INTENDED THAT THE PROGRAM AND STOCK UNITS
ISSUED HEREUNDER COMPLY WITH SECTION 409A OF THE CODE (AND ANY REGULATIONS AND
GUIDELINES ISSUED THEREUNDER) TO THE EXTENT THE PROGRAM AND STOCK UNITS ARE
SUBJECT THERETO, AND THE PROGRAM AND SUCH STOCK UNITS SHALL BE INTERPRETED ON A
BASIS CONSISTENT WITH SUCH INTENT.  IF ANY AWARD OR BENEFIT HEREUNDER CANNOT BE
PROVIDED OR MADE AT THE TIME SPECIFIED HEREIN WITHOUT INCURRING SANCTIONS ON THE
PARTICIPANT UNDER SECTION 409A OF THE CODE, THEN SUCH AWARD OR BENEFIT SHALL BE
PROVIDED IN FULL AT THE EARLIEST TIME THEREAFTER WHEN SUCH SANCTIONS WILL NOT BE
IMPOSED.  IN NO EVENT SHALL A PARTICIPANT, DIRECTLY OR INDIRECTLY, DESIGNATE THE
CALENDAR YEAR OF PAYMENT. THE PROGRAM MAY BE AMENDED IN ANY RESPECT DEEMED BY
THE COMMITTEE TO BE NECESSARY IN ORDER TO PRESERVE COMPLIANCE WITH SECTION 409A
OF THE CODE.  NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THIS PROGRAM, IF
A PARTICIPANT IS DEEMED ON THE DATE OF HIS OR HER “SEPARATION FROM SERVICE”
(WITHIN THE MEANING OF TREAS. REG. SECTION 1.409A-1(H)) WITH THE COMPANY TO BE A
“SPECIFIED EMPLOYEE” (WITHIN THE MEANING OF TREAS. REG. SECTION 1.409A-1(I)),
THEN WITH REGARD TO ANY PAYMENT THAT IS CONSIDERED DEFERRED COMPENSATION UNDER
SECTION 409A PAYABLE ON ACCOUNT OF A “SEPARATION FROM SERVICE” THAT IS REQUIRED
TO BE DELAYED

 

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PURSUANT TO SECTION 409A(A)(2)(B) OF THE CODE (AFTER TAKING INTO ACCOUNT ANY
APPLICABLE EXCEPTIONS TO SUCH REQUIREMENT), SUCH PAYMENT SHALL BE MADE ON THE
DATE THAT IS THE EARLIER OF (I) THE EXPIRATION OF THE SIX (6)-MONTH PERIOD
MEASURED FROM THE DATE OF THE PARTICIPANT’S “SEPARATION FROM SERVICE,” OR
(II) THE DATE OF THE PARTICIPANT’S DEATH (THE “DELAY PERIOD”).  UPON THE
EXPIRATION OF THE DELAY PERIOD, ALL PAYMENTS DELAYED PURSUANT TO THIS
SECTION 9(D) (WHETHER THEY WOULD HAVE OTHERWISE BEEN PAYABLE IN A SINGLE SUM OR
IN INSTALLMENTS IN THE ABSENCE OF SUCH DELAY) SHALL BE PAID TO THE PARTICIPANT
IN A LUMP SUM AND ANY REMAINING PAYMENTS DUE UNDER THIS PROGRAM SHALL BE PAID IN
ACCORDANCE WITH THE NORMAL PAYMENT DATES SPECIFIED FOR THEM HEREIN. 
NOTWITHSTANDING ANY PROVISION OF THIS PROGRAM TO THE CONTRARY, FOR PURPOSES OF
ANY PROVISION OF THIS PROGRAM PROVIDING FOR THE PAYMENT OF ANY AMOUNTS OR
BENEFITS UPON OR FOLLOWING A TERMINATION OF EMPLOYMENT, REFERENCES TO A
PARTICIPANT’S “TERMINATION OF EMPLOYMENT” (AND COROLLARY TERMS) WITH THE COMPANY
SHALL BE CONSTRUED TO REFER TO THE PARTICIPANT’S “SEPARATION FROM SERVICE”
(WITHIN THE MEANING OF TREAS. REG. SECTION 1.409A-1(H)) WITH THE COMPANY. 
WHENEVER A PAYMENT UNDER THIS PROGRAM SPECIFIES A PAYMENT PERIOD WITH REFERENCE
TO A NUMBER OF DAYS (E.G., “PAYMENT SHALL BE MADE WITHIN THIRTY (30) DAYS AFTER
TERMINATION OF EMPLOYMENT”), THE ACTUAL DATE OF PAYMENT WITHIN THE SPECIFIED
PERIOD SHALL BE WITHIN THE SOLE DISCRETION OF THE COMPANY.

 

10.          EFFECTIVE DATE AND TERMINATION OF PROGRAM

 

                THE PROGRAM AS SET FORTH HEREIN SHALL BECOME EFFECTIVE AS OF THE
EFFECTIVE DATE, AND SHALL APPLY TO DEFERRALS FROM COMPENSATION EARNED FOR
PERIODS ON OR AFTER THE EFFECTIVE DATE.  UNLESS EARLIER TERMINATED UNDER
SECTION 9(C), THE PROGRAM SHALL TERMINATE AT SUCH TIME AFTER 2007 AS NO STOCK
UNITS PREVIOUSLY GRANTED UNDER THE PROGRAM REMAIN OUTSTANDING.

 

Adopted by the Committee:

June 4, 1998

Amended and restated by the Committee:

February 25, 1999

Amended and restated by the Committee:

March 20, 2002

Amended and restated by the Committee:

September 3, 2002

Amended and restated by the Committee:

June 30, 2003

Amended and restated by the Board:

November 17, 2005

Amended and restated by the Committee:

March 20, 2006

Amended and restated by the Committee:

March 15, 2007

Amended and restated by the Committee:

November 26, 2007

Amended and restated by the Committee:

October 7 , 2008

 

11.          SPECIAL 2008 ELECTION

 

Notwithstanding any provision of the Program to the contrary, a Participant may
elect in writing on or before December 1, 2008 to cease participation in the
Program effective with respect to the reduction of bonus payments for calendar
year 2008 that are due after December 31, 2008 and on or before March 15, 2009,
which payments, if any, shall instead be made to the Participant in cash on the
due date for the bonus (which is after December 31, 2008 and on or before
March 15, 2009).  For the avoidance of doubt, such an election

 

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shall not affect any reduction of compensation or grant of Stock Units under the
Program during calendar year 2008 or earlier years.

 

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