Exhibit 10.3

 

AMENDED AND RESTATED
INVESTMENT TECHNOLOGY GROUP, INC.
STOCK UNIT AWARD PROGRAM

 

1.             PURPOSE

 

This Investment Technology Group, Inc. Stock Unit Award Program, 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 (the “Effective Date”). Effective as of the
Effective Date, the Program shall continue in effect according to the terms set
forth herein as a subplan under the 2007 Plan.

 

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
QUARTERLY 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.

 

2.4           “ASSIGNED REDUCTION AMOUNT” MEANS AN AMOUNT DETERMINED BY THE
ADMINISTRATOR IN ACCORDANCE WITH SECTION 6(B), IN THE CASE OF AN INDIVIDUAL
PARTICIPANT, WHICH

 

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SHALL BE USED UNDER SECTION 7(A) TO DETERMINE THE NUMBER OF STOCK UNITS TO BE
CREDITED TO THE CURRENT PARTICIPANT’S ACCOUNT IN RESPECT OF A GIVEN CALENDAR
QUARTER. THE ASSIGNED REDUCTION AMOUNT DOES NOT ACCUMULATE FROM ONE QUARTER TO
THE NEXT.

 

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, 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” MEANS (A) THE INABILITY TO ENGAGE IN ANY SUBSTANTIAL
GAINFUL ACTIVITY BY REASON OF ANY MEDICALLY DETERMINABLE PHYSICAL OR MENTAL
IMPAIRMENT THAT CAN BE EXPECTED TO RESULT IN DEATH OR TO LAST FOR A CONTINUOUS
PERIOD OF NOT LESS THAN TWELVE (12) MONTHS; OR (B) ANY MEDICALLY DETERMINABLE
PHYSICAL OR MENTAL IMPAIRMENT THAT CAN BE EXPECTED TO RESULT IN DEATH OR TO LAST
FOR A CONTINUOUS PERIOD OF NOT LESS THAN TWELVE (12) MONTHS, BY REASON OF WHICH
A PARTICIPANT RECEIVES INCOME REPLACEMENT BENEFITS FOR A PERIOD OF NOT LESS THAN
THREE (3) MONTHS UNDER AN ACCIDENT AND HEALTH PLAN COVERING EMPLOYEES OF THE
PARTICIPANT’S EMPLOYER.

 

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.

 

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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.

 

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.

 

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(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, 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 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.

 

(ii)  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.

 

(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 THREE CALENDAR QUARTERS 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 THREE CALENDAR
QUARTERS WILL BE REDUCED WILL BE CALCULATED BASED ON A REASONABLE ESTIMATE OF
TOTAL COMPENSATION FOR THE YEAR, TAKING INTO ACCOUNT THE AMOUNT BY WHICH
COMPENSATION PREVIOUSLY HAS BEEN REDUCED FOR THE YEAR (I.E., IN THE CASE OF A
CURRENT PARTICIPANT EMPLOYED SINCE THE BEGINNING OF THE YEAR AND FOR WHOM
ESTIMATED ANNUAL COMPENSATION HAS NOT VARIED DURING THE YEAR, BY CALCULATING AN
ESTIMATED AGGREGATE AMOUNT BY WHICH COMPENSATION WILL BE REDUCED FOR THE YEAR
AND REDUCING THE QUARTERLY BONUS PAYMENT BY ONE-FOURTH 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
COMPENSATION WAS REDUCED IN PREVIOUS QUARTERS). THE FOREGOING NOTWITHSTANDING,
THE ADMINISTRATOR MAY DETERMINE IN THE CASE OF ANY INDIVIDUAL PARTICIPANT,
INCLUDING A PARTICIPANT WHO IS NOT PAID A BONUS ON A QUARTERLY BASIS, THE EXTENT
(IF ANY) TO WHICH ANY BONUS AMOUNTS OTHER THAN THE PARTICIPANT’S YEAR-END BONUS
AMOUNT SHALL BE REDUCED TAKING INTO ACCOUNT THE TERMS OF THE PARTICIPANT’S
COMPENSATION ARRANGEMENT AND THE PARTICIPANT’S INDIVIDUAL CIRCUMSTANCES. IN SUCH
CASES, THE ADMINISTRATOR MAY ASSIGN TO THE PARTICIPANT AN ASSIGNED REDUCTION
AMOUNT FOR EACH CALENDAR QUARTER, SO THAT STOCK UNITS WILL BE AUTOMATICALLY
GRANTED TO SUCH PARTICIPANT UNDER SECTION 7(A)

 

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AT TIMES AND IN AMOUNTS COMPARABLE TO GRANTS TO OTHER PARTICIPANTS, SUCH THAT,
ON A FULL-YEAR BASIS, THE AGGREGATE OF THE PARTICIPANT’S ASSIGNED REDUCTION
AMOUNTS AND ANY ACTUAL REDUCTION AMOUNTS USED TO DETERMINE THE NUMBER OF STOCK
UNITS CREDITED TO THE PARTICIPANT’S ACCOUNT UNDER SECTION 7(A) FOR SUCH YEAR
WILL EQUAL THE AGGREGATE AMOUNT BY WHICH THE PARTICIPANT’S FULL-YEAR’S
COMPENSATION IS TO BE REDUCED (AFTER GIVING EFFECT TO ADJUSTMENTS UNDER SECTION
7(B)).

 

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 AS SOON AS PRACTICABLE 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 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 FOUR
QUARTERLY GRANTS IN THE PROPORTION THE ACTUAL REDUCTION AMOUNTS

 

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AND ASSIGNED REDUCTION AMOUNTS USED IN DETERMINING SUCH QUARTERLY 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).

 

(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

 

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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
PROMPTLY FOLLOWING THE THIRD ANNIVERSARY OF THE DATE OF GRANT OF THE STOCK
UNITS; PROVIDED, HOWEVER, THAT THE COMMITTEE MAY, IN ITS DISCRETION, ACCELERATE
THE SETTLEMENT DATE OF ANY OR ALL 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.

 

(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.

 

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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, EXCEPT INSOFAR AS THE COMMITTEE’S ACTION
RESULTS IN ACCELERATED SETTLEMENT OF THE STOCK UNITS.

 

(D)           SECTION 409A. IT IS INTENDED THAT THE PROGRAM AND STOCK UNITS
ISSUED HEREUNDER WILL 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. THE PROGRAM AND ANY STOCK UNIT AGREEMENT
ISSUED HEREUNDER MAY BE AMENDED IN ANY RESPECT DEEMED BY THE BOARD OR THE
COMMITTEE TO BE NECESSARY IN ORDER TO PRESERVE COMPLIANCE WITH SECTION 409A OF
THE CODE.

 

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 (effective May 8, 2007)

 

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