Exhibit 10.13.2

 

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.

PAY-FOR-PERFORMANCE INCENTIVE PLAN

 

1. PURPOSE

 

The purpose of this Pay-For-Performance Incentive Plan (the “Plan”) is to assist
Investment Technology Group, Inc. (the “Company”) and its subsidiaries in
attracting, retaining, and rewarding, by payment of competitive levels of
compensation, employees who occupy key positions relating to the Company and
specified business units, and motivating such employees to expend greater
efforts in promoting the growth and annual profitability of the Company and its
subsidiaries, through the award of annual incentives.

 

2. DEFINITIONS

 

In addition to the terms defined in Section 1 hereof, the following terms used
in the Plan shall have the meanings set forth below:

 

(a) “Award” means the amount potentially payable to a Participant upon
achievement of specified Performance Objectives for a Performance Period, as
provided in Section 4, subject to possible forfeiture and other terms and
conditions of the Plan.

 

(b) “Business Unit” means the Company or any department, division, subsidiary,
or other business unit or function of the Company for which separate operational
financial results are available to the Committee, as designated by the Committee
from time to time.

 

(c) “Business Unit Income” means the pre-tax net income of a specified Business
Unit for the Performance Period, subject to the provisions of Section 4(b).

 

(d) “Code” means the Internal Revenue Code of 1986, as amended. References to
any provision of the Code or regulation thereunder shall be deemed to include
successor provisions or regulations.

 

(e) “Committee” means the Compensation Committee of the Board of Directors, or
such subcommittee thereof as may be designated by the Board of Directors or the
Compensation Committee to administer the Plan. In appointing members of the
Committee, the Board shall consider whether each member qualifies as an “outside
director” for purposes of section 162(m) of the Code and regulations thereunder.

 

(f)  “Disability” shall have the meaning ascribed to such term in
section 22(e)(3) of the Code.

 

(g) “Eligible Employee” means each executive officer or key employee who is in
charge of a Business Unit or whose performance can be expected to have a
substantial effect on the results of a Business Unit, as determined by the
Committee.

 

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(h) “Participant” means an Eligible Employee granted an Award by the Committee
for a designated Performance Period.

 

(i) “Performance Objectives” means the measures of performance pre-established
by the Committee in accordance with Section 4, the achievement of which, in a
given Performance Period, is a condition of payment of final Awards.

 

(j) “Performance Period” means the fiscal year (or such other period established
by the Committee) to which an Award relates; provided, however, that, with
respect to any Participant, the Committee may determine to grant an Award after
the start of a Performance Period, and for any such Participant, the Performance
Period shall be the portion of the fiscal year (or such other period established
by the Committee) subsequent to such grant, as determined by the Committee, in
each case, in compliance with section 162(m) of the Code.

 

(k) “Revenues” means all revenues generated by a specified Business Unit for the
Performance Period.

 

(l) “EVA” (economic value added) means the amount by which a Business Unit’s
after-tax income exceeds the cost of the capital used by the Business Unit
during the Performance Period. To determine such cost of the capital used, the
Committee will, when it establishes a Performance Objective based on EVA,
determine the average cost of capital for the Company (stated as a percentage)
for the Performance Period, which cost of capital will be multiplied by the
amount of capital actually used by the Business Unit during the Performance
Period.

 

3. ADMINISTRATION

 

(a) Generally. The Committee shall administer the Plan in accordance with its
terms, and shall have all powers necessary to accomplish such purpose. The
Committee shall have the power and authority to construe and interpret the Plan,
to define the terms used herein, to prescribe, amend, and rescind rules and
regulations as well as forms and notices relating to the administration of the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan. Any action or determination of the Committee with
respect to the Plan shall be conclusive and binding upon all persons, including
the Company, Participants, and stockholders.

 

(b) Limitation of Liability. Each member of the Committee shall be entitled to,
in good faith, rely or act upon any report or other information furnished to him
by any officer or other employee of the Company or any subsidiary, the Company’s
independent certified public accountants, or any executive compensation
consultant, legal counsel, or other professional retained by the Company to
assist in the administration of the Plan. Neither a member of the Committee nor
any officer or employee of the Company or a subsidiary acting on behalf of the
Committee shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and such
persons shall, to the extent permitted by law, be fully indemnified, reimbursed,
and protected by the Company, as provided in the

 

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Company’s Certificate of Incorporation and By-Laws, with respect to any such
action, determination, or interpretation.

 

4. AWARDS

 

(a) Granting of Awards. Prior to the date on which Performance Objectives must
be established in order to comply with section 162(m) of the Code with respect
to each Performance Period, the Committee, in its sole discretion, shall select
the Eligible Employees to whom Awards will be granted for such Performance
Period and will establish the amount of each Award or the formula by which such
amount may be determined, the Performance Objectives relating to such Award, and
other terms of such Award. An Eligible Employee may be granted an Award for more
than one Business Unit.

 

(b) Performance Objectives. The Performance Objectives for an Award shall
consist of a specified percentage or percentages of the Business Unit Income,
Revenues and/or EVA of a Business Unit, the results of which the Committee
believes will be substantially affected by the performance of the Participant.
The Committee may specify that the final Award shall be a payment of such
specified percentage or percentages to the Participant, or shall be a payment of
an amount specified or determined by formula in some other manner but
conditioned upon achievement of such specified percentage or percentages (in
each case subject to the terms of the Plan). The Committee may specify in the
Performance Objectives a target amount of Business Unit Income, Revenues, or EVA
of such Business Unit required before any or specified parts of the Award will
become payable, and may express the Performance Objectives by way of a
comparison with like measures of Business Unit performance in one or more prior
periods or similar measures of performance of other companies or businesses;
provided, however, that the Committee shall include such terms in the case of a
Performance Objective based on Revenues as may be necessary so that achievement
of the Performance Objective is substantially uncertain. The Committee shall, in
its sole discretion, establish Awards and Performance Objectives, subject to
Section 4(c). Performance Objectives shall be objective and shall otherwise meet
the requirements of section 162(m)(4)(C) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27(e)(2)). Performance Objectives may
differ for Awards to different Participants. Only the business criteria
specified in this Section 4(b) may be used in establishing Performance
Objectives upon which the maximum amount of final payment of an Award is
conditioned, although the Committee may consider other measures of performance
as a basis for reducing such amount (including under Section 4(d)). To the
extent consistent with section 162(m)(4)(C) of the Code and regulations
thereunder (including Treasury Regulation 1.162-27(e)(2)), the Committee may do
the following:

 

(i) provide that the Business Unit Income, Revenues, or EVA of the Business Unit
considered as the Performance Objective shall be adjusted downward to reflect
specified charges, expenses, and other amounts (including amounts that would
otherwise constitute bonuses (under the Plan or otherwise), capital charges,
general and administrative expenses, or taxes);

 

(ii) adjust or modify Awards or terms of Awards and Performance Objectives
(x) in recognition of unusual or nonrecurring events affecting the Company or
any Business Unit, or the

 

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financial statements or results thereof, or in response to changes in applicable
laws (including tax, disclosure, and other laws), regulations, accounting
principles, or other circumstances deemed relevant by the Committee, (y) with
respect to any Participant whose position or duties with the Company or any
subsidiary changes during a Performance Period, or (z) with respect to any
person who first becomes a Participant after the first day of the Performance
Period, in each case subject to Section 4(h);

 

(iii) defer all or any part of any interim payments until certification of the
final Award for the Performance Period;

 

(iv) defer all or any part of final Award payments, including until the earliest
time such payments may be made without causing them to fail to be deductible by
the Company under section 162(m) of the Code; such deferrals may include
deferrals in the form of units valued by reference to the value of Company
stock, settleable in cash or by issuance of shares drawn from any other plan of
the Company under which issuance of such shares to a Participant is authorized;
and

 

(v) consider other performance criteria in exercising discretion under
Section 4(d) hereof.

 

(c) Maximum Award. The maximum percentage of Business Unit Income, Revenues and
EVA of a Business Unit that may be specified as the Performance Objectives and
therefore potentially payable under an Award to any Participant for any
Performance Period shall be 30%, 10%, and 25%, respectively. In addition, the
maximum combined percentage of the Business Unit Income, Revenues and EVA of a
Business Unit that may be specified as the Performance Objectives for Awards to
all Participants with respect to any one Business Unit shall be 30%, 10% and
25%, respectively.

 

(d) Determination of Amounts Payable; Limits on Discretion. As promptly as
practicable following the end of each Performance Period, the Committee shall
determine whether and the extent to which the terms of Awards have been
satisfied, including the extent to which Performance Objectives have been
achieved and other material terms of Awards have been satisfied, and the amounts
payable to each Participant with respect to his or her Award. Such
determinations shall be set forth in a written certification (including for this
purpose approved minutes of the meeting at which such determinations were made).
The Committee may, in its sole discretion, in view of its assessment of the
business strategy of the Company and Business Units thereof, performance of
comparable organizations, economic and business conditions, personal performance
of the Participant, and any other circumstances deemed relevant, decrease the
amount determined to be payable as a final Award or cancel such Award. Other
provisions of the Plan notwithstanding, the Committee shall have no discretion
to increase the amounts payable with respect to an Award.

 

(e) Termination. If a Participant ceases to be employed by the Company or a
participating subsidiary prior to the end of a Performance Period for any reason
other than death, Disability, normal retirement, or early retirement with the
approval of the Committee, no final Award for such Performance Period shall be
payable to such Participant. If such cessation of employment

 

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results from such Participant’s death, Disability, normal retirement, or early
retirement with the approval of the Committee, the Committee shall determine, in
its sole discretion and in such manner as it may deem reasonable (subject to
Section 4(h)), the amount payable as a final Award under Section 4(d) achieved
or resulting from the portion of such Performance Period completed at the date
of cessation of employment, and the amount of the final Award payable based on
such determinations. The Committee may base such determination on the
performance achieved for the full year, in which case its determination shall be
made as promptly as practicable following the Performance Period. Such
determinations shall be set forth in a written certification, as specified in
Section 4(d). Such Participant or his or her beneficiary shall be entitled to
receive payment of such final Award, reduced by any payments previously
received, on or after January 1 but before March 15 of the year following the
year in which the relevant Performance Period ends; provided that such payment
may only be made at the earliest time such payment may be made without causing
the payment to fail to be deductible by the Company under Code section 162(m).
In the event the final Award is less than the payments previously made to the
Participant, the Participant shall repay such amounts to the Company forthwith.
The foregoing notwithstanding, no payment shall be made hereunder if such
payment shall be duplicative of severance amounts paid to the participant or his
or her beneficiary.

 

(f) Payment of Awards. Except as provided in Section 4(e) and this
Section 4(f) and subject to the other provisions of Section 4, each Participant
may receive interim payments as frequently as semimonthly, at the Committee’s
discretion, provided, however, that any such payments made exceeding the final
Award as certified by the Committee shall be repaid to the Company forthwith. If
and to the extent specified by the Committee, each Participant shall have the
right to defer his or her receipt of part or all of any payment due with respect
to an Award under and in accordance with the terms and conditions of any
deferred compensation plan then available to Participant as an employee of the
Company. If a Participant dies prior to payment (including deferred payment) of
a final Award hereunder, any payments due to such Participant shall be paid to
the Participant’s estate, unless the Participant designated a certain
person(s) as beneficiary(ies) in an election form filed with the Committee and
specifically applicable to amounts payable under the Plan at the same time such
payments would have otherwise been payable to the Participant in accordance with
Section 4(e) and without regard to any deferral election.

 

(g) Tax Withholding. The Company and any participating subsidiary shall have the
right to deduct from any amount payable hereunder any amounts that federal,
state, local, and foreign tax laws require to be withheld with respect to such
payment.

 

(h) Conformity of Plan to Code section 162(m). It is the intent of the Company
that compensation under the Plan (other than post-termination compensation)
shall constitute “performance-based compensation” within the meaning of Code
section 162(m)(4)(C) and regulations thereunder (including Treasury Regulation
1.162-27(e)). Accordingly, terms used in the Plan shall be interpreted in a
manner consistent with section 162(m) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27). If any provision of the Plan or any
agreement evidencing an Award hereunder does not comply or is inconsistent with
the provisions of section 162(m)(4)(C) of the Code or regulations thereunder
(including Treasury

 

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Regulation 1.162-27(e)) required to be met in order that compensation (other
than post-termination compensation) shall constitute “performance-based
compensation,” such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements, and no adjustment to an Award or its
related Performance Objectives shall be authorized or made, and no
post-termination payment shall be authorized or made under Section 4(e), if and
to the extent that such authorization or the making of such adjustment or
payment would contravene such requirements.

 

5. GENERAL PROVISIONS

 

(a) No Rights to Final Award or Rights to Participate. Until the Committee has
determined to make a final Award to a Participant under Section 4(d) or (e), a
Participant’s selection to participate, grant of an Award, and other events
under the Plan shall not be construed as a commitment that any Award shall
become a final Award or that payment will be made with respect to an Award under
the Plan. Nothing in the Plan shall be deemed to give any Eligible Employee any
right to participate in the Plan except upon determination of the Committee
under Section 4. The foregoing and Section 5(b) notwithstanding, the Committee
may authorize legal commitments with respect to Awards under the terms of an
employment agreement or other agreement with a Participant, to the extent of the
Committee’s authority under the Plan, including commitments that limit the
Committee’s future discretion under the Plan, but in all cases subject to
Section 4(h).

 

(b) No Rights to Employment. Nothing contained in the Plan or in any documents
evidencing an Award shall confer upon any Eligible Employee or Participant any
right to continue as an Eligible Employee or in the employ of the Company or a
subsidiary or constitute any contract or agreement of employment, or interfere
in any way with the right of the Company or a subsidiary to reduce such person’s
compensation, to change the position held by such person, or to terminate the
employment of such person, with or without cause.

 

(c) Non-Transferability. No benefit payable under, or interest in, this Plan
shall be transferable by a Participant except upon a Participant’s death by will
or the laws of descent and distribution or to a designated beneficiary, or
otherwise be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any such attempted action shall
be void.

 

(d) Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for
incentive and deferred compensation. With respect to any amounts payable to a
Participant pursuant to an Award, nothing contained in the Plan (or in any
documents related thereto), nor the creation or adoption of the Plan, the grant
of any Award, or the taking of any other action pursuant to the provisions of
the Plan shall give any such Participant any rights that are greater than those
of a general creditor of the Company.

 

(e) Participation in Other Compensation or Benefit Plans. Nothing in the Plan
shall preclude any Participant from participation in any other compensation or
benefit plan of the Company.

 

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(f) Governing Law. The Plan and all related documents shall be governed by, and
construed in accordance with, the laws of the State of New York (except to the
extent the Delaware General Corporation Law and provisions of federal law may be
applicable), without reference to principles of conflict of laws. If any
provision hereof shall be held by a court of competent jurisdiction to be
invalid and unenforceable, the remaining provisions of the Plan shall continue
to be fully effective.

 

(g)  Section 409A.  The Plan is intended to comply with the short-term deferral
rule set forth in the regulations under section 409A of the Code, in order to
avoid application of section 409A to the Plan.  If and to the extent that any
payment under this Plan is deemed to be deferred compensation subject to the
requirements of section 409A, this Plan shall be administered so that such
payments are made in accordance with the requirements of section 409A.  In no
event shall a Participant, directly or indirectly, designate the calendar year
of payment.

 

(h) Amendment and Termination of Plan and Awards. The Board of Directors may, at
any time, terminate or, from time to time, amend, modify, or suspend the Plan,
provided that any such action shall be subject to stockholder approval if and to
the extent required by law, regulation, or the rules of any stock exchange or
automated quotation system upon which the Company’s Common Stock may be listed
or quoted, or to comply with Code section 162(m). Except as provided in
Section 4 (including the limitation under Section 4(h)) and under Section 5(a),
the Committee may modify the terms and provisions of any Awards theretofore
awarded to any Participants which have not become final Awards and been settled
by payment (or would have been settled by payment but for an election to defer
payment pursuant to Section 4(f)).

 

(i) Effective Date. The Plan was originally effective as of January 1, 1997, for
Performance Periods beginning on or after such date, and shall remain in effect
until such time as it may be terminated pursuant to Section 5(h).  The effective
date of the Plan as amended and restated herein is February 7, 2008.

 

(j) Stockholder Approval. Prior to completion of the initial Performance Period
under the Plan, the Plan shall be submitted to, and must be approved in a
separate vote by, the affirmative votes of the holders of a majority of voting
securities present in person or represented by proxy and entitled to vote on the
subject matter, at a meeting of Company stockholders duly held in accordance
with the Delaware General Corporation Law, or any adjournment thereof, or by the
written consent of the holders of a majority of voting securities entitled to
vote, in accordance with applicable provisions of the Delaware General
Corporation Law and section 162(m) of the Code. Any Awards granted under the
Plan prior to such approval of stockholders shall be effective when granted, but
if stockholders fail to approve the Plan as specified hereunder, any previously
granted Award shall be forfeited and cancelled and any payments previously made
with respect to such Awards shall be repaid to the Company forthwith, and no
Awards shall be thereafter granted under the Plan. In addition, the Committee
may determine to submit the Plan to stockholders for reapproval at such times,
if any, required in order that compensation under the Plan shall qualify as
“performance-based compensation” under Code section 162(m) and the regulations
thereunder.

 

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As approved by the Compensation Committee and adopted by the Board of Directors
on March 26, 1997.

 

Amended by the Board of Directors on June 30, 2000.

 

Amended and Restated by the Board of Directors on March 19, 2003.

 

Amended and Restated by the Board of Directors effective February 7, 2008.

 

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