Exhibit 10.1

 

INVESTMENT TECHNOLOGY GROUP, INC.

 

2007 OMNIBUS EQUITY COMPENSATION PLAN

VARIABLE COMPENSATION STOCK UNIT AWARD PROGRAM SUBPLAN

 

1.                                      Purpose

 

Investment Technology Group, Inc. (the “Company”) established the Investment
Technology Group, Inc. Variable Compensation Stock Unit Award Program Subplan
(previously titled the Investment Technology Group, Inc. Equity Deferral Award
Program Subplan) (the “Program”) as a sub-plan under the Investment Technology
Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”), effective as of
January 1, 2009 (the “Effective Date”).  The Company previously amended and
restated the Program, effective August 15, 2011, November 17, 2011, January 1,
2014, February 5, 2014 and February 3, 2015.   The Company hereby amends and
restates the Program to make certain design changes, effective May 19, 2015.

 

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 automatically substituting stock units for a portion of the variable
compensation to be earned by 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 to otherwise promote the purposes of the Plan.

 

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:

 

(a)                                “Actual Reduction Amount” means the amount by
which a Participant’s Variable Compensation is reduced, which may be up to 100%
of such Variable Compensation, as determined by the Committee.

 

(b)                                “Administrator” shall be the person or
committee appointed by the Committee to perform the functions, and exercise the
authority and responsibilities, set forth in Section 3(b) below.

 

(c)                                 “Basic Unit” means a Stock Unit together
with any Dividend Equivalents credited thereon granted pursuant to
Section 6(a) hereof.

 

(d)                                “Cause” shall be deemed to exist where a
Participant: (i) commits any act of fraud, willful misconduct or dishonesty in
connection with the Participant’s 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 the Company or any of
its Subsidiaries or affiliates or any general written policy or directive of the
Company or any of its Subsidiaries or affiliates; (iv) commits a crime involving
dishonesty, fraud or unethical business conduct, or a felony; or (v) is expelled
or suspended, or is subject to an order temporarily or permanently enjoining the
Participant from an area of activity which constitutes a significant portion of
the 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.

 

(e)                                 “Code” means the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder.

 

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

 

(g)                                 “Matching Unit” means a Stock Unit granted
pursuant to Section 6(a) hereof.

 

(h)                                “Participant” means any employee who has been
selected by the Committee as eligible to participate

 

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in the Program.

 

(i)                                    “Performance-Based Unit” means a Basic
Unit or a Matching Unit granted pursuant to Section 6(a) hereof to individuals
designated by the Committee that vests based on achievement of certain
performance goals specified by the Committee during the performance period
designated by the Committee.

 

(j)                                   “Retirement” means Termination of
Employment (other than a termination for Cause) (i) on or after the Participant
has reached age 65 or (ii) on or after the date on which (x) the sum of the age
of the Participant and the Participant’s years of continuous service with the
Company or its Subsidiaries total 70 or more and (y) the Participant has reached
age 55 and has completed at least 10 years of continuous service with the
Company or its Subsidiaries.

 

(k)                                “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, and for Basic
Units only, together with a right to Dividend Equivalents to the extent
specified in Section 6(e) hereof, and subject to the terms and conditions of the
Plan and the Program.  Stock Units are bookkeeping units, and do not represent
ownership of Company Stock or any other equity security of the Company.

 

(l)                                    “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.

 

(m)                            “Variable Compensation” means the aggregate
amount of discretionary variable compensation awarded to a Participant for a
fiscal year before reduction pursuant to this Program and before deferral
pursuant to any agreement or any other plan or program of the Company whereby
compensation is deferred, including, without limitation, a plan whereby
compensation is deferred in accordance with section 401(k) of the Code or
reduced in accordance with section 125 of the Code and the Stock Unit Award
Program Subplan.  Notwithstanding the foregoing, Variable Compensation may also
include amounts awarded under the Company’s Pay-for Performance Program if the
Committee so determines. In no event shall a Participant’s annual base salary be
considered Variable Compensation.

 

3.                                      Administration

 

(a)                                Committee Authority and Discretion.  The
Program shall be administered and interpreted by the Committee.  The Committee
shall have the authority and discretion under the Program as it has under the
Plan, with the terms and conditions relating to the administration of the Plan
incorporated herein by reference; provided, however, that terms of the grant of
Stock Units hereunder may not be inconsistent with the express terms set forth
in the Program.

 

(b)                                Administrator.  The Administrator shall
perform and exercise ministerial functions under the Program and other authority
and responsibilities specifically delegated to it by the Committee, or
explicitly set forth in this Program.  Without limiting the foregoing, the
Administrator shall have the authority and responsibility to review and approve
changes to the Program to facilitate administration of the Program.

 

(c)                                 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, 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.  Stock Units granted under the Program in place of
compensation under the Plan resulting from an award intended to comply with the

 

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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.                                      Mandatory Reduction of Variable
Compensation

 

A Participant’s Variable Compensation to be earned for each calendar year of
participation shall be automatically reduced by the Actual Reduction Amount.  In
no event will the Actual Reduction Amount for any Participant with respect to
any calendar year exceed the amount of the Participant’s Variable Compensation
for the applicable calendar year.

 

6.                                      Grant of Stock Units

 

(a)                                Automatic Grant of Stock Units.  Each
Participant shall be automatically granted Basic Units on the date the year end
Variable Compensation would otherwise be paid to the Participant in cash (the
“Date of Grant”), in a number equal to the Participant’s Actual Reduction Amount
divided by the Fair Market Value of a share of Company Stock on such Date.  In
addition, unless the Committee determines otherwise, each Participant shall be
automatically granted Matching Units on the Date of Grant, in a number equal to
10% of the number of Basic Units granted under this Section 6(a) as of the Date
of Grant.  With respect to any Participant paid in foreign currency, the number
of Basic Units and Matching Units granted to any such Participant shall be based
on such exchange rate as the Company reasonably determines.  All Stock Units
shall be credited to Participants on the Date of Grant.

 

(b)                                Discretionary Grants.  Notwithstanding any
provision of the Program or the Plan to the contrary, the Committee may
determine, in its sole discretion, to grant stock options representing a number
of shares of Company Stock with a Black Scholes value equal to the Actual
Reduction Amount, based on the current Fair Market Value of a share of Company
Stock on the Date of Grant, in accordance with, and subject to, such terms and
conditions as the Committee deems appropriate.  Furthermore, notwithstanding any
provision of the Program or the Plan to the contrary, the Committee may
determine, in its sole discretion, to award Stock Units to any Participant at
such time or times and subject to such terms and conditions as the Committee
deems appropriate.

 

(c)                                 Vesting; Risk of Forfeiture; Cancellation of
Certain Stock Units.

 

(i)                                  Unless the Committee determines otherwise,
Basic Units shall vest in equal annual installments on each of the first, second
and third anniversaries of the Date of Grant, if the Participant remains
continuously employed by the Company or its Subsidiaries on each applicable
vesting date.  Unless the Committee determines otherwise, Matching Units shall
vest 100% on the third anniversary of the Date of Grant, if the Participant
remains continuously employed by the Company or its Subsidiaries through such
vesting date.  Except as provided in clauses (ii) through (iv) below, if the
Participant’s employment with the Company or its Subsidiaries terminates for any
reason prior to a vesting date, unless the Committee provides otherwise, all
unvested Basic Units and Matching Units shall be forfeited to the Company.
 Basic Units and Matching Units that vest pursuant to this Section 6(c)(i) shall
be settled on the schedule set forth in Section 7(a) below.  Performance-Based
Units will vest in accordance with the terms specified by the Committee with
respect to an individual grant hereunder.

 

(ii)                               Notwithstanding any provision of the Program
to the contrary, all Basic Units and Matching Units that are not
Performance-Based Units shall vest in full and all Performance-Based Units shall
vest as if target performance had been achieved at 100%, in each case, at the
time a Participant’s employment terminates due to his or her death or
Disability, and all Basic Units and Matching Units held by such Participant
shall be settled within 60 days thereafter.

 

(iii)                            Notwithstanding any provision of the Program to
the contrary, if a Participant’s employment is terminated on account of
Retirement or by the Company or one of its Subsidiaries for any reason other
than Cause (but not on account of death or Disability), the Committee may, in
its sole discretion, determine that, subject to the Participant’s execution and
non-revocation of a written release of any and all claims against the Company
and all related parties and an agreement containing confidentiality,
non-competition, non-solicitation, invention assignment covenants and/or such
other restrictions as the Committee determines, on a case-by-case basis at the
time of the Participant’s termination of employment, in each case in a form
acceptable to the Company, in its sole discretion,

 

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the Participant shall continue to vest in all Basic Units and Matching Units as
if the Participant continued in employment with the Company or its Subsidiaries
on each applicable vesting date and the Basic Units and Matching Units shall be
settled on the schedule set forth in Section 7(a) below; provided that any such
arrangement shall be structured in a manner that complies with the applicable
requirements of section 409A of the Code.  Notwithstanding any provision of this
Section 6(c)(iii) to the contrary, the Committee shall be permitted to delegate
its authority under this Section 6(c)(iii) to the Administrator as it deems
appropriate.

 

(iv)                           Notwithstanding any provision of the Program to
the contrary, all Basic Units and Matching Units that are not Performance-Based
Units shall vest in full, and all Performance-Based Units shall vest in full
based on the greater of (i) the Company’s actual performance level achieved with
respect to the performance goals as of the occurrence of the Change in Control,
or (ii) the target performance level as to the performance goals, in either
case, upon the occurrence of a Change in Control, if the Participant is employed
by the Company or its Subsidiaries on the date of the Change in Control, and in
such event the Basic Units and Matching Units shall be settled within 30 days
following the Change in Control.

 

(d)                                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.

 

(e)                                 Dividend Equivalents on Basic Units. 
Dividend Equivalents shall be credited on Basic Units in the manner set forth
below for any awards granted hereunder prior to May 19, 2015.  Unless the
Committee determines otherwise, no Dividend Equivalent Rights shall be credited
on any Basic Units granted hereunder on or after May 19, 2015.  In no event
shall Dividend Equivalents be credited with respect to Matching Units.

 

(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 each Participant as of the payment
date for such dividend or distribution equal to (A) the number of Basic Units
credited to the Participant as of the record date for such dividend or
distribution multiplied by (B) 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 (C) the
Fair Market Value of a share of Company Stock at such payment date.  Any such
additional Stock Units credited to a Participant hereunder shall vest according
to the same schedule as the underlying Basic Units to which they relate and
shall be settled in accordance with the applicable provisions of the Program.

 

(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 each
Participant as of the payment date for such dividend or distribution or forward
split equal to (A) the number of Basic Units credited to the Participant as of
the record date for such dividend or distribution or split multiplied by (B) 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.  Any such additional Stock Units credited to a Participant
hereunder shall vest according to the same schedule as the underlying Basic
Units to which they relate and shall be settled in accordance with the
applicable provisions of the Program.

 

(f)                                  Adjustments to Stock Units.  The number of
Stock Units credited to each Participant shall be appropriately adjusted, in
order to prevent dilution or enlargement of the 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(d) of
the Plan, taking into account any Stock Units credited to the Participant in
connection with such event under Section 6(e) hereof.

 

7.                                      Settlement

 

(a)                                Issuance and Delivery of Shares in
Settlement.

 

(i)                                  Except as otherwise provided in
Section 6(c) above in the case of a Participant’s Retirement, termination
without Cause, death or Disability, or in the event of a Change in Control,
Basic Units shall be settled by

 

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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 vested Basic Units credited to the Participant as of the
applicable date on which such Basic Units vest, within 30 days after the date on
which such Basic Units vest as set forth in Section 6(c) above.

 

(ii)                               Except as otherwise provided in
Section 6(c) above in the case of a Participant’s Retirement, termination
without Cause, death or Disability, or in the event of a Change in Control,
Matching Units 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 vested Matching Units
credited to the Participant as of the applicable date on which such Matching
Units vest within 30 days after the date on which such Matching Units vest as
set forth in Section 6(c) above.

 

(iii)                            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.  In the event there
are fractional shares, the Company may settle any fractional share in accordance
with Section 19(f) of the Plan.  In no event shall the Company in fact issue
fractional shares.  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.

 

(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.  Unless the Committee determines
otherwise, the Company will 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.

 

8.                                      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 Participant 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
Participant’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.

 

(c)                                 Changes to the Program.  The Committee may
amend, alter, suspend, discontinue, or terminate the Program without the consent
of the 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.  Except to the extent the
Committee determines that Stock Units will continue to vest and be settled as
provided in Section 6(c)(iii) above, it is intended that the Program and Stock
Units issued hereunder be exempt from section 409A of the Code by settling such
Stock Units within the short-term deferral exception set forth in the
regulations under section 409A of the Code, and the Program and such Stock Units
shall be interpreted on a basis consistent with such intent.  If the Committee
determines that Stock Units will continue to vest under Section 6(c)(iii) above,
to the extent that such determination results in such Stock Units being deemed
to constitute deferred compensation subject to the requirements of section 409A
of the Code, payment shall only be made under the Program upon an event and in a
manner permitted by section 409A of the Code.  If any payment or

 

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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 payment or benefit shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed.  For purposes of section
409A of the Code, each payment made under the Program shall be treated as a
separate payment, and if a payment is not made by the designated payment date
under the Program, the payment shall be made by December 31 of the calendar year
in which the designated date occurs.  To the extent that any provision of the
Program would cause a conflict with the requirements of section 409A of the
Code, or would cause the administration of the Program to fail to satisfy the
requirements of section 409A, such provision shall be deemed null and void to
the extent permitted by applicable law.  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.

 

(e)                                 Recoupment Policy.  All Stock Units under
this Program will be subject to any compensation clawback and recoupment
policies that may be applicable to any Participant, as in effect from time to
time and as approved by the Committee or Board.

 

9.                                      Effective Date and Termination of
Program

 

The Program as set forth herein shall become effective as of the Effective
Date.  Unless earlier terminated under Section 8(c) hereof, the Program shall
terminate at such time after 2009 when no Stock Units previously granted under
the Program remain outstanding.

 

Adopted by the Committee:

 

October 7, 2008

Revised by the Committee:

 

February 9, 2010

Amended and Restated by the Committee:

 

August 15, 2011

Amended by the Committee:

 

November 17, 2011

Amended and Restated by the Committee:

 

January 1, 2014

Amended and Restated by the Committee:

 

February 5, 2014

Amended and Restated by the Committee:

 

February 3, 2015

Amended and Restated by the Committee:

 

May 19, 2015

 

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