Exhibit 10.2


 


INVESTMENT TECHNOLOGY
GROUP, INC.


 


2007 OMNIBUS EQUITY
COMPENSATION PLAN


 


Amended and
Restated Effective August 18, 2009


 

















 


INVESTMENT
TECHNOLOGY GROUP, INC.


 


2007
OMNIBUS EQUITY COMPENSATION PLAN


 


1.                                      Purpose


 


The purpose of the Investment Technology Group, Inc.
2007 Omnibus Equity Compensation Plan (the “Plan”) is to provide (i) designated
employees of Investment Technology Group, Inc. (the “Company”) and its
subsidiaries, and (ii) non-employee members of the board of directors of
the Company with the opportunity to receive grants of stock options, stock
units, stock awards, dividend equivalents and other stock-based awards.  The Company believes that the Plan will
encourage the participants to contribute materially to the growth of the Company,
thereby benefiting the Company’s stockholders, and will align the economic
interests of the participants with those of the stockholders.  The Plan was originally effective on May 8,
2007 upon approval by the stockholders of the Company, and previously amended
and restated on May 12, 2009 upon approval by the stockholders of the
Company.  This amendment and restatement
will be effective August 18, 2009.


 


The Investment Technology Group, Inc.
Non-Employee Directors Stock Option Plan (the “Director Plan”), the Investment
Technology Group, Inc. Amended and Restated 1994 Stock Option and
Long-term Incentive Plan (the “1994 Plan”), the Amended and Restated Investment
Technology Group, Inc. Stock Unit Award Program Subplan (the “SUA Subplan”),
the Amended and Restated Investment Technology Group, Inc. Directors’
Retainer Fee Subplan (the “Directors’ Retainer Fee Subplan”), and the Amended
and Restated Investment Technology Group, Inc. Directors’ Equity Subplan
(the “Directors’ Equity Subplan”, and collectively with the SUA Subplan and the
Directors’ Retainer Fee Subplan, the “Subplans”) were merged with and into this
Plan as of May 8, 2007.  No
additional grants will be made thereafter under the Director Plan and the 1994
Plan.  Outstanding grants under the Director
Plan, the 1994 Plan and the Subplans as of May 8, 2007 will continue in
effect according to their terms as in effect on May 8, 2007 (subject to
such amendments as the Committee (as defined below) determines appropriate,
consistent with the terms of the Director Plan, the 1994 Plan or the Subplans,
as applicable), and the shares with respect to such outstanding grants will be
issued or transferred under this Plan. 
After May 8, 2007, the Subplans shall continue in effect as
subplans of the Plan and grants and/or deferrals may continue to be made under
the Subplans with shares associated with such grants and/or deferrals being
issued under this Plan.


 


2.                                      Definitions


 


Whenever used in this Plan, the following terms will
have the respective meanings set forth below:


 


(a)                                  “Board” means the Company’s Board of Directors.


 


(b)                                 “Change in Control” means and shall be deemed to have
occurred:


 

















 


(i)                                     if any person (within the meaning of the
Exchange Act), other than the Company or a Related Party, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities representing 35% percent or more of the total
voting power of all the then-outstanding Voting Securities; or


 


(ii)                                  if the individuals who, as of the date
hereof, constitute the Board, together with those who first become directors
subsequent to such date and whose recommendation, election or nomination for
election to the Board was approved by a vote of at least a majority of the
directors then still in office who either were directors as of the date hereof
or whose recommendation, election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the members of the
Board; or


 


(iii)                               upon consummation of a merger, consolidation,
recapitalization or reorganization of the Company, reverse split of any class
of Voting Securities, or an acquisition of securities or assets by the Company
other than (i) any such transaction in which the holders of outstanding
Voting Securities immediately prior to the transaction receive (or retain),
with respect to such Voting Securities, voting securities of the surviving or
transferee entity representing more than 50 percent of the total voting power
outstanding immediately after such transaction, with the voting power of each
such continuing holder relative to other such continuing holders not
substantially altered in the transaction, or (ii) any such transaction
which would result in a Related Party beneficially owning more than 50 percent
of the voting securities of the surviving or transferee entity outstanding immediately
after such transaction; or


 


(iv)                              upon consummation of the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than any such transaction which would result in a Related Party owning or
acquiring more than 50 percent of the assets owned by the Company immediately
prior to the transaction; or


 


(v)                                 if the stockholders of the Company
approve a plan of complete liquidation of the Company.


 


(c)                                  “Code” means the Internal Revenue Code of 1986,
as amended.


 


(d)                                 “Committee” means (i) with respect to Grants to
Employees, the Compensation Committee of the Board or another committee
appointed by the Board to administer the Plan, (ii) with respect to Grants
made to Non-Employee Directors, the Board, and (iii) with respects to
Grants that are intended to be “qualified performance-based compensation” under
section 162(m) of the Code, a committee that consists of two or more
persons appointed by the Board, all of whom shall be “outside directors” as
defined under section 162(m) of the Code and related Treasury
regulations.


 


(e)                                  “Company” means Investment Technology Group, Inc.
and any successor corporation.


 


(f)                                    “Company Stock” means the common stock of the Company.


 


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(g)                                 “Dividend Equivalent” means an amount determined by
multiplying the number of shares of Company Stock subject to a Grant by the
per-share cash dividend, or the per-share fair market value (as determined by
the Committee) of any dividend in consideration other than cash, paid by the
Company on its Company Stock.


 


(h)                                 “Employee” means a person classified as an employee
of the Employer (including an officer or director who is also an employee) for
payroll purposes, as determined in the sole discretion of the Employer.  Notwithstanding the foregoing, if a person is
engaged in a non-employee status (including, but not limited to, as an
independent contractor, an individual being paid through an employee leasing
company or other third party agency) and is subsequently reclassified by the
Company, the Internal Revenue Service, or a court as an employee for payroll
purposes, such person, for purposes of this Plan, shall be deemed an Employee
from the actual (and not the effective) date of such reclassification, unless
expressly provided otherwise by the Company.


 


(i)                                     “Employer” means the Company and its subsidiaries.


 


(j)                                     “Exchange Act” means the Securities Exchange Act of 1934,
as amended.


 


(k)                                  “Exercise Price” means the per share price at which
shares of Company Stock may be purchased under an Option, as designated by the
Committee.


 


(l)                                     “Fair
Market Value,” unless otherwise required by an applicable
provision of the Code, as of any date, means the closing sales price of the
Common Stock as reported on the New York Stock Exchange on the date of grant;
provided, however, that at any time that the Common Stock is not quoted on the
New York Stock Exchange on such trading days, Fair Market Value shall be
determined by the Committee in its discretion.


 


(m)                               “Grant” means an Option, Stock Unit, Stock
Award, SAR, Dividend Equivalent or Other Stock-Based Award granted under the
Plan.


 


(n)                                 “Grant Agreement” means the written instrument that sets
forth the terms and conditions of a Grant, including all amendments thereto.


 


(o)                                 “Incentive Stock Option” means an Option that is intended to meet
the requirements of an incentive stock option under section 422 of the Code.


 


(p)                                 “Non-Employee Director” means a member of the Board who is not
an employee of the Employer.


 


(q)                                 “Nonqualified Stock Option” means an Option that is not intended to
be taxed as an incentive stock option under section 422 of the Code.


 


(r)                                    “Option” means an option to purchase shares of
Company Stock, as described in Section 7.


 


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(s)                                  “Other Stock-Based Award” means any Grant based on, measured by or
payable in, Company Stock (other than a Grant described in Sections 7, 8, 9 or
10(a) of the Plan), as described in Section 10(b).


 


(t)                                    “Participant” means an Employee or Non-Employee
Director designated by the Committee to participate in the Plan.


 


(u)                                 “Person” means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, an estate, a trust, a joint venture, an unincorporated organization or
a governmental entity or any department, agency or political subdivision
thereof.


 


(v)                                 “Plan” means this Investment Technology Group, Inc.
2007 Omnibus Equity Compensation Plan, as in effect from time to time.


 


(w)                               “Related Party” means (a) a Subsidiary of the
Company; (b) an employee or group of employees of the Company or any
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.


 


(x)                                   “SAR” means a stock appreciation right as
described in Section 10(a).


 


(y)                                 “Stock Award” means an award of Company Stock as
described in Section 9.


 


(z)                                   “Stock Unit” means an award of a phantom unit
representing a share of Company Stock, as described in Section 8.


 


(aa)                            “Subsidiary” or “Subsidiaries” means, with respect to any Person, any
corporation, partnership, limited liability company, association or other
business entity of which (a) if a corporation, fifty (50) percent or more of
the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or
combination thereof; or (b) if a partnership, limited liability company,
association or other business entity, fifty (50) percent or more of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that
Person or a combination thereof.  For
purposes of this definition, a Person or Persons will be deemed to have a fifty
(50) percent or more ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons are allocated
fifty (50) percent or more of partnership, limited liability company,
association or other business entity gains or losses or control the managing
director or member or general partner of such partnership, limited liability
company, association or other business entity.


 


(bb)                          “Voting Securities or Security” means any securities of the Company
which carry the right to vote generally in the election of directors.


 


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3.                                      Administration


 


(a)                                  Committee.  The Plan
shall be administered and interpreted by the Compensation Committee of the
Board or another committee appointed by the Board to administer the Plan with
respect to grants to Employees.  The Plan
shall be administered and interpreted by the Board with respect to grants to
Non-Employee Directors.  The Board or
committee, as applicable, that has authority with respect to a specific Grant
shall be referred to as the “Committee” with respect to that Grant.  Ministerial functions may be performed by an
administrative committee comprised of Company employees appointed by the
Committee.


 


(b)                                 Committee Authority. 
The Committee shall have the sole authority to (i) determine the
Participants to whom Grants shall be made under the Plan, (ii) determine
the type, size and terms and conditions of the Grants to be made to each such
Participant, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms and conditions of any previously issued Grant, subject to the
provisions of Section 18 below, and (v) deal with any other matters
arising under the Plan.


 


(c)                                  Committee Determinations. 
The Committee shall have full power and express discretionary authority
to administer and interpret the Plan, to make factual determinations and to
adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. 
The Committee’s interpretations of the Plan and all determinations made
by the Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interest in the Plan or in any
awards granted hereunder.  All powers of
the Committee shall be executed in its sole discretion, in the best interest of
the Company, not as a fiduciary, and in keeping with the objectives of the Plan
and need not be uniform as to similarly situated Participants.


 


4.                                      Grants


 


(a)                                  Grants under the Plan may consist of
Options as described in Section 7, Stock Units as described in Section 8,
Stock Awards as described in Section 9, and SARs or Other Stock-Based
Awards as described in Section 10. 
All Grants shall be subject to such terms and conditions as the
Committee deems appropriate and as are specified in writing by the Committee to
the Participant in the Grant Agreement.


 


(b)                                 All Grants shall be made conditional upon
the Participant’s acknowledgement, in writing or by acceptance of the Grant,
that all decisions and determinations of the Committee shall be final and
binding on the Participant, his or her beneficiaries and any other person
having or claiming an interest under such Grant.  Grants under a particular Section of the
Plan need not be uniform as among the Participants.


 


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5.                                      Shares Subject to the Plan


 


(a)                                  Shares Authorized. 
The total aggregate number of shares of Company Stock that may be issued
under the Plan is the sum of the following (i) 1,300,000 new shares of
Company Stock plus (ii) that number of shares of Company Stock
subject to outstanding grants under the Plan as of May 12, 2009 plus (iii) that
number of shares remaining available for issuance under the Plan but not
subject to previously exercised, vested or paid grants as of May 12, 2009; provided that of the total number of
shares of Company Stock described in (i), 50,000 shares shall be used solely to
grant Options.


 


(b)                                 Source of Shares; Share Counting. 
Shares issued under the Plan may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan.  If and to the extent Options or SARs granted
under the Plan (including options granted under the Director Plan, the 1994
Plan and the Subplans) terminate, expire, or are canceled, forfeited, exchanged
or surrendered without having been exercised, and if and to the extent that any
Stock Awards, Stock Units, or Other Stock-Based Awards (including any stock
awards, stock units or other-stock based awards granted under the Director
Plan, the 1994 Plan and the Subplans) are forfeited or terminated, or otherwise
are not paid in full, the shares reserved for such Grants shall again be
available for purposes of the Plan. 
Shares of Company Stock surrendered in payment of the Exercise Price of
an Option shall again be available for purposes of the Plan.  To the extent any Grants are
paid in cash, and not in shares of Company Stock, any shares previously subject
to such Grants shall again be available for issuance or transfer under the
Plan.


 


(c)                                  Individual Limits. 
All Grants under the Plan shall be expressed in shares of Company
Stock.  The maximum aggregate number of
shares of Company Stock with respect to which all Grants may be made under the
Plan to any individual during any calendar year shall be 1,000,000 shares,
subject to adjustment as described in subsection (d) below.  A Participant may not accrue Dividend
Equivalents during any calendar year in excess of $1,000,000.  The individual limits of this subsection (c) shall
apply without regard to whether the Grants are to be paid in Company Stock or
cash.  All cash payments (other than with
respect to Dividend Equivalents) shall equal the Fair Market Value of the
shares of Company Stock to which the cash payments relate.


 


(d)                                 Adjustments. 
If there is any change in the number or kind of shares of Company Stock
outstanding by reason of a stock dividend, spinoff, stock split or reverse
stock split, or by reason of a combination, reorganization, recapitalization or
reclassification affecting the outstanding Company Stock as a class without the
Company’s receipt of consideration, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that any
individual participating in the Plan may be granted in any year, the number of
shares covered by outstanding Grants, the kind of shares issued under the Plan
and outstanding Grants, and the price per share of outstanding Grants shall be
equitably adjusted by the Committee, as the Committee deems appropriate, to
reflect any increase or decrease in the number of, or change in the kind or
value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under Grants;
provided, however, that any fractional shares resulting from such adjustment
shall be 


 


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eliminated.  In
addition, the Committee shall have discretion to make the foregoing equitable
adjustments in any circumstances in which an adjustment is not mandated by this
subsection (d) or applicable law, including in the event of a Change in
Control.  Any adjustments to outstanding
Grants shall be consistent with section 409A or 422 of the Code, to the extent
applicable.  Any adjustments determined
by the Committee shall be final, binding and conclusive.


 


6.                                      Eligibility for
Participation


 


(a)                                  Eligible Persons. 
All Employees, including Employees who are officers or members of the
Board, and all Non-Employee Directors shall be eligible to participate in the
Plan.


 


(b)                                 Selection of Participants. 
The Committee shall select the Employees and Non-Employee Directors to
receive Grants and shall determine the number of shares of Company Stock subject
to each Grant.


 


7.                                      Options


 


(a)                                  General Requirements. The Committee may grant Options to an
Employee or Non-Employee Director upon such terms and conditions as the
Committee deems appropriate under this Section 7.  The Committee shall determine the number of
shares of Company Stock that will be subject to each Grant of Options to
Employees and Non-Employee Directors.


 


(b)                                 Type of Option, Price and Term.


 


(i)                                     The Committee may grant Incentive Stock
Options or Nonqualified Stock Options or any combination of the two, all in
accordance with the terms and conditions set forth herein.  Incentive Stock Options may be granted only
to Employees of the Company or its parents or subsidiaries, as defined in
section 424 of the Code.  Nonqualified
Stock Options may be granted to Employees or Non-Employee Directors.


 


(ii)                                  The Exercise Price of Company Stock
subject to an Option shall be determined by the Committee and may be equal to
or greater than the Fair Market Value of a share of Company Stock on the date
the Option is granted.  However, an
Incentive Stock Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any parent or subsidiary, as defined
in section 424 of the Code, unless the Exercise Price per share is not less
than 110% of the Fair Market Value of the Company Stock on the date of grant.


 


(iii)                               The Committee shall determine the term of each Option,
which shall not exceed ten years from the date of grant.  However, an Incentive Stock Option that is
granted to an Employee who, at the time of grant, owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary, as defined in section 424 of the Code, may
not have a term that exceeds five years from the date of grant.


 


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(c)                                  Exercisability of Options.


 


(i)                                     Options shall become exercisable in
accordance with such terms and conditions as may be determined by the Committee
and specified in the Grant Agreement. 
The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.


 


(ii)                                  The Committee may provide in a Grant
Agreement that the Participant may elect to exercise part or all of an Option
before it otherwise has become exercisable. 
Any shares so purchased shall be restricted shares and shall be subject
to a repurchase right in favor of the Company during a specified restriction
period, with the repurchase price equal to the lesser of (A) the Exercise
Price or (B) the Fair Market Value of such shares at the time of
repurchase, or such other restrictions as the Committee deems appropriate.


 


(iii)                               Options granted to persons who are non-exempt
employees under the Fair Labor Standards Act of 1938, as amended, may not be
exercisable for at least six months after the date of grant (except that such
Options may become exercisable, as determined by the Committee, upon the
Participant’s death, Disability or retirement, or upon a Change in Control or
other circumstances permitted by applicable regulations).


 


(d)                                 Termination of Employment or Service. 
Except as provided in the Grant Agreement, an Option may only be
exercised while the Participant is employed by the Employer, or providing
service as a Non-Employee Director.  The
Committee shall determine in the Grant Agreement under what circumstances and
during what time periods a Participant may exercise an Option after termination
of employment or service.


 


(e)                                  Exercise of Options. 
A Participant may exercise an Option that has become exercisable, in
whole or in part, by delivering a notice of exercise to the Company.  The Participant shall pay the Exercise Price
for the Option (i) in cash, (ii) if permitted by the Committee, by
delivering shares of Company Stock owned by the Participant and having a Fair
Market Value on the date of exercise equal to the Exercise Price or by
attestation to ownership of shares of Company Stock having an aggregate Fair
Market Value on the date of exercise equal to the Exercise Price, (iii) by
payment through a broker in accordance with procedures permitted by Regulation
T of the Federal Reserve Board, or (iv) by such other method as the
Committee may approve.  Shares of Company
Stock used to exercise an Option shall have been held by the Participant for
the requisite period of time to avoid adverse accounting consequences to the
Company with respect to the Option. 
Payment for the shares pursuant to the Option, and any required
withholding taxes, must be received by the time specified by the Committee
depending on the type of payment being made, but in all cases prior to the
issuance of the Company Stock.


 


(f)                                    Limits on Incentive Stock Options. 
Each Incentive Stock Option shall provide that, if the aggregate Fair
Market Value of the stock on the date of the grant with respect to which
Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year, under the Plan or any other stock option plan of the
Company or a parent or subsidiary, as defined in section 424 of the Code,
exceeds $100,000, then the Option, as to the excess, shall be treated as a
Nonqualified Stock Option.  An Incentive
Stock Option shall not be 


 


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granted to any person who is not an Employee of the
Company or a parent or subsidiary, as defined in section 424 of the Code.


 


8.                                      Stock Units


 


(a)                                  General Requirements. 
The Committee may grant Stock Units to an Employee or Non-Employee
Director, upon such terms and conditions as the Committee deems appropriate
under this Section 8.  Each Stock
Unit shall represent the right of the Participant to receive a share of Company
Stock or an amount based on the value of a share of Company Stock.  All Stock Units shall be credited to
bookkeeping accounts on the Company’s records for purposes of the Plan.


 


(b)                                 Terms of Stock Units. 
The Committee may grant Stock Units that are payable on terms and
conditions determined by the Committee, which may include payment based on
achievement of performance goals.  Stock
Units may be paid at the end of a specified vesting or performance period, or
payment may be deferred to a date authorized by the Committee.  The Committee shall determine the number of
Stock Units to be granted and the requirements applicable to such Stock Units.


 


(c)                                  Payment With Respect to Stock Units. 
Payment with respect to Stock Units shall be made in cash, in Company
Stock, or in a combination of the two, as determined by the Committee.  The Grant Agreement shall specify the maximum
number of shares that can be issued under the Stock Units.


 


(d)                                 Requirement of Employment or Service. 
The Committee shall determine in the Grant Agreement under what
circumstances a Participant may retain Stock Units after termination of the
Participant’s employment or service, and the circumstances under which Stock
Units may be forfeited.


 


9.                                      Stock Awards


 


(a)                                  General Requirements. The Committee may issue shares of
Company Stock to an Employee or Non-Employee Director under a Stock Award, upon
such terms and conditions as the Committee deems appropriate under this Section 9.  Shares of Company Stock issued pursuant to
Stock Awards may be issued for cash consideration or for no cash consideration,
and subject to restrictions or no restrictions, as determined by the
Committee.  The Committee may establish
conditions under which restrictions on Stock Awards shall lapse over a period
of time or according to such other criteria as the Committee deems appropriate,
including restrictions based upon the achievement of specific performance
goals.  The Committee shall determine the
number of shares of Company Stock to be issued pursuant to a Stock Award.


 


(b)                                 Requirement of Employment or Service.  The
Committee shall determine in the Grant Agreement under what circumstances a
Participant may retain Stock Awards after termination of the Participant’s
employment or service, and the circumstances under which Stock Awards may be
forfeited.


 


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(c)           Restrictions on Transfer. 
While Stock Awards are subject to restrictions, a Participant may not
sell, assign, transfer, pledge or otherwise dispose of the shares of a Stock
Award except upon death as described in Section 15(a).  Each certificate for a share of a Stock Award
shall contain a legend giving appropriate notice of the restrictions in the
Grant.  The Participant shall be entitled
to have the legend removed when all restrictions on such shares have lapsed.  The Company may retain possession of any
certificates for Stock Awards until all restrictions on such shares have
lapsed.


 


(d)           Right to Vote and to Receive Dividends. 
The Committee shall determine to what extent, and under what conditions,
the Participant shall have the right to vote shares of Stock Awards and to
receive any dividends or other distributions paid on such shares during the
restriction period.


 


10.                               Stock Appreciation Rights
and Other Stock-Based Awards


 


(a)           SARs.  The Committee
may grant SARs to an Employee or Non-Employee Director separately or in tandem
with an Option.  The following provisions
are applicable to SARs:


 


(i)            Base Amount. 
The Committee shall establish the base amount of the SAR at the time the
SAR is granted.  The base amount of each
SAR shall be equal to the per share Exercise Price of the related Option or, if
there is no related Option, an amount that is at least equal to the Fair Market
Value of a share of Company Stock as of the date of Grant of the SAR.


 


(ii)           Tandem SARs. 
The Committee may grant tandem SARs either at the time the Option is
granted or at any time thereafter while the Option remains outstanding;
provided, however, that, in the case of an Incentive Stock Option, SARs may be
granted only at the date of the grant of the Incentive Stock Option.  In the case of tandem SARs, the number of SARs
granted to a Participant that shall be exercisable during a specified period
shall not exceed the number of shares of Company Stock that the Participant may
purchase upon the exercise of the related Option during such period.  Upon the exercise of an Option, the SARs
relating to the Company Stock covered by such Option shall terminate.  Upon the exercise of SARs, the related Option
shall terminate to the extent of an equal number of shares of Company Stock.


 


(iii)          Exercisability. 
An SAR shall be exercisable during the period specified by the Committee
in the Grant Agreement and shall be subject to such vesting and other
restrictions as may be specified in the Grant Agreement.  The Committee may grant SARs the exercise of
which is subject to achievement of performance goals or other conditions.  The Committee may accelerate the
exercisability of any or all outstanding SARs at any time for any reason.  The Committee shall determine in the Grant
Agreement under what circumstances and during what periods a Participant may
exercise an SAR after termination of employment or service.  A tandem SAR shall be exercisable only while
the Option to which it is related is exercisable.


 


(iv)          Grants to Non-Exempt Employees. 
SARs granted to persons who are non-exempt employees under the Fair
Labor Standards Act of 1938, as amended, may not be 


 


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exercisable for at least six months after the date of
grant (except that such SARs may become exercisable, as determined by the
Committee, upon the Participant’s death, Disability or retirement, or upon a
Change in Control or other circumstances permitted by applicable regulations).


 


(v)           Value of SARs. 
When a Participant exercises SARs, the Participant shall receive in
settlement of such SARs an amount equal to the value of the stock appreciation
for the number of SARs exercised.  The
stock appreciation for an SAR is the amount by which the Fair Market Value of
the underlying Company Stock on the date of exercise of the SAR exceeds the
base amount of the SAR as described in subsection (i).


 


(vi)          Form of Payment. 
The Committee shall determine whether the stock appreciation for an SAR
shall be paid in the form of shares of Company Stock, cash or a combination of
the two.  For purposes of calculating the
number of shares of Company Stock to be received, shares of Company Stock shall
be valued at their Fair Market Value on the date of exercise of the SAR.  If shares of Company Stock are to be received
upon exercise of an SAR, cash shall be delivered in lieu of any fractional
share.


 


(b)           Other Stock-Based Awards. 
The Committee may grant other awards not specified in Sections 7, 8 or 9
or subsection (a) above that are based on or measured by Company Stock to
Employees and Non-Employee Directors, on such terms and conditions as the
Committee deems appropriate.  Other
Stock-Based Awards may be granted subject to achievement of performance goals
or other conditions and may be payable in Company Stock or cash, or in a
combination of the two, as determined by the Committee in the Grant Agreement.


 


11.          Dividend Equivalents.


 


(a)           General Requirements. 
When the Committee makes a Grant under the Plan, the Committee may grant
Dividend Equivalents in connection with the Grant, under such terms and
conditions as the Committee deems appropriate under this Section 11.  Dividend Equivalents may be paid to
Participants currently or may be deferred, as determined by the Committee.  All Dividend Equivalents that are not paid
currently shall be credited to bookkeeping accounts on the Company’s records
for purposes of the Plan.  Dividend
Equivalents may be accrued as a cash obligation, or may be converted to Stock
Units for the Participant, and deferred Dividend Equivalents may accrue
interest, all as determined by the Committee. 
The Committee may provide that Dividend Equivalents shall be payable
based on the achievement of specific performance goals.


 


(b)           Payment with Respect to Dividend
Equivalents.  Dividend Equivalents may be payable in cash
or shares of Company Stock or in a combination of the two, as determined by the
Committee.


 


12.                               Qualified
Performance-Based Compensation


 


(a)           Designation as Qualified
Performance-Based Compensation.  The Committee
may determine that Stock Units, Stock Awards, Dividend Equivalents or Other
Stock-Based 


 


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Awards granted to an Employee shall be considered “qualified
performance-based compensation” under section 162(m) of the Code, in which
case the provisions of this Section 12 shall apply.  The Committee may also grant Options or SARs
under which the exercisability of the Options is subject to achievement of
performance goals as described in this Section 12 or otherwise.


 


(b)           Performance Goals. 
When Grants are made under this Section 12, the Committee shall
establish in writing (i) the objective performance goals that must be met,
(ii) the period during which performance will be measured, (iii) the
maximum amounts that may be paid if the performance goals are met, and (iv) any
other conditions that the Committee deems appropriate and consistent with the
requirements of section 162(m) of the Code for “qualified
performance-based compensation.”  The
performance goals shall satisfy the requirements for “qualified
performance-based compensation,” including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the performance goals be established in such a way that a third party with
knowledge of the relevant facts could determine whether and to what extent the
performance goals have been met.  The
Committee shall not have discretion to increase the amount of compensation that
is payable, but may reduce the amount of compensation that is payable, pursuant
to Grants identified by the Committee as “qualified performance-based
compensation.”


 


(c)           Criteria Used for Objective Performance
Goals.  The Committee shall use objectively
determinable performance goals based on one or more of the following
criteria:  stock price, earnings per
share, price-earnings multiples, net earnings, operating earnings, revenue,
number of days sales outstanding in accounts receivable, productivity, margin,
EBITDA (earnings before interest, taxes, depreciation and amortization), net
capital employed, return on assets, shareholder return, return on equity,
return on capital employed, growth in assets, unit volume, sales, cash flow,
market share, relative performance to a comparison group designated by the
Committee, or strategic business criteria consisting of one or more objectives
based on meeting specified revenue goals, market penetration goals, customer
growth, geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures.  The
performance goals may relate to one or more business units or the performance
of the Company as a whole, or any combination of the foregoing.  Performance goals need not be uniform as
among Participants.


 


(d)           Timing of Establishment of Goals. The Committee shall establish the
performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) 90 days
after the beginning of the performance period or (ii) the date on which
25% of the performance period has been completed, or such other date as may be
required or permitted under applicable regulations under section 162(m) of
the Code.


 


(e)           Certification of Results. 
The Committee shall certify the performance results for the performance
period specified in the Grant Agreement after the performance period ends.  The Committee shall determine the amount, if
any, to be paid pursuant to each Grant based on the achievement of the performance
goals and the satisfaction of all other terms of the Grant Agreement.


 


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(f)            Death, Disability or Other Circumstances. 
The Committee may provide in the Grant Agreement that Grants under this Section 12
shall be payable, in whole or in part, in the event of the Participant’s death
or disability, a Change in Control or under other circumstances consistent with
the Treasury regulations and rulings under section 162(m) of the Code.


 


13.                               Deferrals


 


The Committee may permit or require a Participant to
defer receipt of the payment of cash (including dividend equivalents) or the
delivery of shares that would otherwise be due to the Participant in connection
with any Grant.  The Committee shall
establish rules and procedures for any such deferrals, consistent with
applicable requirements of section 409A of the Code.


 


14.                               Withholding of Taxes


 


(a)           Required Withholding. 
All Grants under the Plan shall be subject to applicable federal
(including FICA), state and local tax withholding requirements.  The Company may require that the Participant
or other person receiving or exercising Grants pay to the Company the amount of
any federal, state or local taxes that the Company is required to withhold with
respect to such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grants.


 


(b)           Election to Withhold Shares. 
If the Committee so permits, a Participant may elect to satisfy the
Company’s tax withholding obligation with respect to Grants paid in Company
Stock by having shares withheld, at the time such Grants become taxable, up to
an amount that does not exceed the minimum applicable withholding tax rate for
federal (including FICA), state and local tax liabilities.  The election must be in a form and manner
prescribed by the Committee.


 


15.                               Transferability of Grants


 


(a)           Restrictions on Transfer. 
Except as described in subsection (b) below, only the Participant
may exercise rights under a Grant during the Participant’s lifetime, and a
Participant may not transfer those rights except by will or by the laws of
descent and distribution.  When a
Participant dies, the personal representative or other person entitled to
succeed to the rights of the Participant may exercise such rights.  Any such successor must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Participant’s will or under the applicable laws of descent and distribution.


 


(b)           Transfer of Nonqualified Stock Options to
or for Family Members.  Notwithstanding subsection (a) above,
the Committee may provide, in a Grant Agreement, that a Participant may
transfer Nonqualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
the applicable securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject
to the same terms and conditions as were applicable to the Option immediately
before the transfer.


 


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16.                               Consequences of a Change
in Control


 


(a)           In the event of a Change in Control, the
Committee may take any one or more of the following actions with respect to
some or all outstanding Grants, without the consent of any Participant: (i) the
Committee may determine that outstanding Options and SARs shall be fully
exercisable, and restrictions on outstanding Stock Awards and Stock Units shall
lapse, as of the date of the Change in Control or at such other time as the
Committee determines, (ii) the Committee may require that Participants
surrender their outstanding Options and SARs in exchange for one or more payments
by the Company, in cash or Company Stock as determined by the Committee, in an
amount equal to the amount by which the then Fair Market Value of the shares of
Company Stock subject to the Participant’s unexercised Options and SARs exceeds
the Exercise Price, or Base Amount, as applicable, if any, and on such terms as
the Committee determines, (iii) after giving Participants an opportunity
to exercise their outstanding Options and SARs, the Committee may terminate any
or all unexercised Options and SARs at such time as the Committee deems
appropriate, (iv) with respect to Participants holding Stock Units, Other
Stock-Based Awards or Dividend Equivalents, the Committee may determine that
such Participants shall receive one or more payments in settlement of such
Stock Units, Other Stock-Based Awards or Dividend Equivalents, in such amount
and form and on such terms as may be determined by the Committee, (v) if
the Company is the surviving corporation, the Committee may determine that
Grants will remain outstanding after the Change in Control, or (vi) if the
Company is not the surviving corporation, the Committee may determine that
Grants that remain outstanding after the Change in Control shall be converted
to similar grants of the surviving corporation (or a parent or subsidiary of
the surviving corporation).  Such
acceleration, surrender, termination, settlement or conversion shall take place
as of the date of the Change in Control or such other date as the Committee may
specify.


 


(b)           Other Transactions. 
The Committee may provide in a Grant Agreement that a sale or other
transaction involving a subsidiary or other business unit of the Company shall
be considered a Change in Control for purposes of a Grant, or the Committee may
establish other provisions that shall be applicable in the event of a specified
transaction.


 


17.                               Requirements for Issuance
of Shares


 


No Company Stock shall be issued in connection with
any Grant hereunder unless and until all legal requirements applicable to the
issuance of such Company Stock have been complied with to the satisfaction of
the Committee.  The Committee shall have
the right to condition any Grant made to any Participant hereunder on such
Participant’s undertaking in writing to comply with such restrictions on his or
her subsequent disposition of such shares of Company Stock as the Committee
shall deem necessary or advisable, and certificates representing such shares
may be legended to reflect any such restrictions.  Certificates representing shares of Company
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed
thereon.  Except as determined under Section 9(a),
no Participant shall have any right as a shareholder with respect to Company
Stock covered by a Grant until shares have been issued to the Participant.


 


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18.                               Amendment and Termination
of the Plan


 


(a)           Amendment.  The Board may
amend or terminate the Plan at any time; provided, however, that the Board
shall not amend the Plan without approval of the stockholders of the Company if
such approval is required in order to comply with the Code or applicable laws,
or to comply with applicable stock exchange requirements.  No amendment or termination of this Plan
shall, without the consent of the Participant, materially impair any rights or
obligations under any Grant previously made to the Participant under the Plan,
unless such right has been reserved in the Plan or the Grant Agreement, or
except as provided in Section 19(b) below.  Notwithstanding anything in the Plan to the
contrary, the Board may amend the Plan in such manner as it deems appropriate
in the event of a change in applicable law or regulations.


 


(b)           No Repricing Without Stockholder Approval. 
Except as otherwise provided in Section 5(d), the terms of
outstanding Grants may not be amended to reduce the exercise price of
outstanding Options or the base amount of outstanding SARs or to cancel
outstanding Options or SARs in exchange for cash, other awards, Options with an
exercise price that is less than the exercise price of the original Options or
SARs with a base amount that is less than the base amount for the original
SARs, without stockholder approval.


 


(c)           Stockholder Approval for “Qualified
Performance-Based Compensation.”  If Grants
are made under Section 12 above, the Plan must be reapproved by the
Company’s stockholders no later than the first stockholders meeting that occurs
in the fifth year following the year in which the stockholders previously
approved the provisions of Section 12, if additional Grants are to be made
under Section 12 and if required by section 162(m) of the Code or the
regulations thereunder.


 


(d)           Termination of Plan. 
The Plan shall terminate on May 7, 2017, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval
of the stockholders.  The termination of
the Plan shall not impair the power and authority of the Committee with respect
to an outstanding Grant.


 


19.                               Miscellaneous


 


(a)           Grants in Connection with Corporate
Transactions and Otherwise.  Nothing
contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees, or for other proper corporate purposes, or (ii) limit
the right of the Company to grant stock options or make other stock-based
awards outside of this Plan.  Without
limiting the foregoing, the Committee may make a Grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company in substitution for a grant made by such
corporation.  The terms and conditions of
the Grants may vary from the terms and conditions required by the Plan and from
those of the substituted stock incentives, as determined by the Committee


 


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(b)           Compliance with Law. 
The Plan, the exercise of Options and the obligations of the Company to
issue or transfer shares of Company Stock under Grants shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as
may be required.  With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act.  In addition, it is the intent of the Company
that Incentive Stock Options comply with the applicable provisions of section
422 of the Code, that Grants of “qualified performance-based compensation”
comply with the applicable provisions of section 162(m) of the Code and
that, to the extent applicable, Grants are either exempt from, or comply with,
the requirements of section 409A of the Code. 
To the extent that any legal requirement of section 16 of the Exchange
Act or section 422, 162(m) or 409A of the Code as set forth in the Plan
ceases to be required under section 16 of the Exchange Act or section 422, 162(m) or
409A of the Code, that Plan provision shall cease to apply.  The Committee may revoke any Grant if it is
contrary to law or modify a Grant to bring it into compliance with any valid
and mandatory government regulation.  The
Committee may also adopt rules regarding the withholding of taxes on
payments to Participants.


 


(c)           Enforceability. 
The Plan shall be binding upon and enforceable against the Company and
its successors and assigns.


 


(d)           Funding of the Plan; Limitation on Rights. 
This Plan shall be unfunded.  The
Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the payment of any Grants under
this Plan.  Nothing contained in the Plan
and no action taken pursuant hereto shall create or be construed to create a
fiduciary relationship between the Company and any Participant or any other
person.  No Participant or any other
person shall under any circumstances acquire any property interest in any
specific assets of the Company.  To the
extent that any person acquires a right to receive payment from the Company
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company.


 


(e)           Rights of Participants. 
Nothing in this Plan shall entitle any Employee, Non-Employee Director
or other person to any claim or right to receive a Grant under this Plan.  Neither this Plan nor any action taken
hereunder shall be construed as giving any individual any rights to be retained
by or in the employment or service of the Employer.


 


(f)            No Fractional Shares. 
No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant.  The
Committee shall determine whether cash, other awards or other property shall be
issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.


 


(g)           Employees Subject to Taxation Outside the
United States.  With respect to Participants who are subject
to taxation in countries other than the United States, the Committee may make
Grants on such terms and conditions as the Committee deems appropriate to
comply with the laws of the applicable countries, and the Committee may create
such procedures, addenda and subplans and make such modifications as may be
necessary or advisable to comply with such laws.


 


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(h)           Governing Law. 
The validity, construction, interpretation and effect of the Plan and
Grant Agreements issued under the Plan shall be governed and construed by and
determined in accordance with the laws of the State of New York, without giving
effect to the conflict of laws provisions thereof.


 


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