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 


 

















 


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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