Exhibit
10.1


 


LPL Investment Holdings Inc.


DIRECTOR RESTRICTED STOCK PLAN


 


1.             DEFINED TERMS


 


Exhibit A, which is incorporated by reference, defines the terms
used in the Plan and sets forth certain operational rules related to those
terms.


 


2.             PURPOSE


 


The Plan has been established to advance the interests of the Company
by providing for the grant to Participants of Awards.


 


3.             ADMINISTRATION


 


The Administrator has discretionary authority, subject
only to the express provisions of the Plan, to interpret the Plan; determine
eligibility for and grant Awards; determine, modify or waive the terms and
conditions of any Awards; prescribe forms, rules and procedures; and
otherwise do all things necessary to carry out the purposes of the Plan.  Determinations of the Administrator made
under the Plan will be conclusive and will bind all parties.


 


4.             LIMITS
ON AWARDS UNDER THE PLAN


 


(a)           Number of Shares.


 


The maximum number of shares of Stock that may be
delivered in satisfaction of Awards under the Plan shall be 50,000.  A maximum of two grants (made semi-annually)
may be made to any person in any calendar year. 
The maximum number of shares of Stock for which Awards may be granted to
any Participant with respect to any single grant shall be equal to $100,000
divided by the Fair Market Value of Stock on the date of grant.  The number of shares of Stock delivered in
satisfaction of Awards shall be determined net of shares of Stock withheld by
the Company in satisfaction of tax withholding requirements with respect to the
Award and, for the avoidance of doubt, without including any shares of Stock
which are forfeited to or repurchased by the Company due to failure to vest.


 


(b)           Type of Shares. 
Stock delivered by the Company under the Plan may be authorized but
unissued Stock or previously issued Stock acquired by the Company.  No fractional shares of Stock will be
delivered under the Plan.


 

















 


5.             ELIGIBILITY AND PARTICIPATION


 


The Administrator will select
Participants from among those non-employee directors of the Company who, in the
opinion of the Administrator, are in a position to make a significant
contribution to the success of the Company.


 


6.             RULES APPLICABLE TO AWARDS


 


(a)           Provisions. 
The Administrator will determine the terms of all Awards, subject to the
limitations provided herein.  By
accepting (or, under such rules as the Administrator may prescribe, being
deemed to have accepted) an Award, the Participant agrees to the terms of the
Award and the Plan.


 


(b)           Term of Plan. 
No Awards may be made after March 15, 2020, but previously granted
Awards may continue beyond that date in accordance with their terms.


 


(c)           Transferability. 
Awards may be transferred only as the Administrator expressly provides
in writing.


 


(d)           Vesting, Etc.  
Awards will vest on the second anniversary of the date of grant.  Without limiting the foregoing, the
Administrator may at any time accelerate the vesting of an Award, regardless of
any adverse or potentially adverse tax consequences resulting from such
acceleration.  Unless the Administrator
expressly provides otherwise, however, the following rules will apply:
upon termination of Service, unvested Awards will immediately terminate and
shall be forfeited without payment therefor.


 


(e)           Taxes. 
The Administrator will make such provision for the withholding and
payment of taxes as it deems necessary. 
Such taxes shall be remitted to the Company by cash or check acceptable
to the Administrator or by other means acceptable to the Administrator.


 


(f)            Dividend Equivalents, Etc. 
The Administrator may in its sole discretion provide for the payment of
amounts in lieu of cash dividends or other cash distributions with respect to
Stock subject to an Award.  Any payment
of dividend equivalents or similar payments shall be established and
administered consistent either with exemption from, or compliance with, the
requirements of Section 409A.


 


(g)           Rights Limited. 
Nothing in the Plan will be construed as giving any person the right to
continued service with the Company, or any rights as a stockholder except as to
shares of Stock actually issued under the Plan. 
The loss of existing or potential profit in Awards will not constitute
an element of damages in the event of termination of Service for any reason,
even if the termination is in violation of an obligation of the Company to the
Participant.


 


(h)           Section 409A. 
Each Award shall contain such terms as the Administrator determines, and
shall be construed and administered, such that the Award either (i) qualifies
for an exemption from the requirements of Section 409A to the extent
applicable, or (ii) satisfies such requirements.


 


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(i)            Certain Requirements of
Corporate Law.  Awards shall be granted and administered
consistent with the requirements of applicable Delaware law relating to the
issuance of stock and the consideration to be received therefor, and with the
applicable requirements of the stock exchanges or other trading systems on
which the Stock is listed or entered for trading, in each case as determined by
the Administrator.


 


(j)            Stockholders Agreement.  Unless
otherwise specifically provided, all Awards and Stock issued hereunder will be
subject to the Stockholders Agreement and the transfer and other restrictions,
rights, and obligations set forth therein, except that (1) the Stock
granted under the Plan (A) is not deemed to be Registrable Securities
under Sections 6.5 or 6.1(g) of the Stockholders Agreement, without
limitation of the rights of the Company under Section 6.4 of the
Stockholders Agreement (which right, and the manner of its exercise, shall be
in the discretion of the Company or underwriters, as the case may be) and (B) is
not entitled to the preemptive rights described under Section 7.1 of the
Stockholders Agreement, and (2) Participant acknowledges that for purposes
of Section 4.4 of the Stockholders Agreement, the term “IPO” shall mean
any underwritten initial public offering or offerings irrespective of aggregate
gross proceeds.  This paragraph does not
grant Participant any additional rights under the Stockholders Agreement,
including without limitation pursuant to Section 9.6 thereof.


 


7.             EFFECT OF CERTAIN TRANSACTIONS


 


(a)           Change in Control.  In the event of a Change in
Control, Awards will vest in full and such shares will be delivered, prior to
the Change in Control, in each case on a basis that gives the holder of the
Award a reasonable opportunity, as determined by the Administrator, following
the delivery of the shares to participate as a stockholder in the Change in Control.


 


(b)           Changes in and
Distributions With Respect to Stock


 


(1) 
Basic Adjustment Provisions.  In the event
of a stock dividend, stock split or combination of shares (including a reverse
stock split), recapitalization or other change in the Company’s capital
structure, the Administrator shall make appropriate adjustments to the maximum
number of shares specified in Section 4(a) that may be delivered
under the Plan and will also make appropriate adjustments to the number and
kind of shares of stock or securities subject to Awards then outstanding or
subsequently granted and any other provision of Awards affected by such change.


 


(2) 
Certain Other Adjustments.  The
Administrator may also make adjustments of the type described in Section 7(b)(1) above
to take into account distributions to stockholders other than those provided
for in Section 7(a) and 7(b)(1), or any other event, if the
Administrator determines that adjustments are appropriate to avoid distortion
in the operation of the Plan and to preserve the value of Awards made
hereunder, having due regard for the requirements of Section 409A, where
applicable.


 


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(3) 
Continuing Application of Plan Terms.  References in
the Plan to shares of Stock will be construed to include any stock or
securities resulting from an adjustment pursuant to this Section 7.


 


8.             LEGAL CONDITIONS ON DELIVERY OF STOCK


 


The Company will use
commercially reasonable efforts to satisfy applicable legal requirements for
the issuance of shares of Stock pursuant to the granting of any Award.  The Company will not be obligated to deliver
any shares of Stock pursuant to the Plan or to remove any restriction from
shares of Stock previously delivered under the Plan until: (i) the Company
is satisfied that all legal matters in connection with the issuance and
delivery of such shares have been addressed and resolved; (ii) if the
outstanding Stock is at the time of delivery listed on any stock exchange or
national market system, the shares to be delivered have been listed or
authorized to be listed on such exchange or system upon official notice of
issuance; and (iii) all conditions of the Award have been satisfied or
waived.  If the sale of Stock has not
been registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to receipt of unrestricted Stock, such representations
or agreements as counsel for the Company may consider appropriate to avoid
violation of such Act.  Each certificate
issued in respect of Stock underlying an Award shall be deposited with the
Company, or its designee, together with, if requested by the Company, a stock
power executed in blank by the Participant, and shall bear a legend determined
by the Company that discloses the restrictions on transferability imposed on
such Stock.  Upon the vesting of Awards
and the satisfaction of any withholding tax liability pursuant to an Award, a
certificate or certificates evidencing such Stock shall be delivered to the
Participant or other evidence of unrestricted Stock shall be provided to the
Participant.


 


9.             AMENDMENT AND TERMINATION


 


The Administrator may at
any time or times amend the Plan or any outstanding Award for any purpose which
may at the time be permitted by law, and may at any time terminate the Plan as
to any future grants of Award; provided, that
except as otherwise expressly provided in the Plan the Administrator may not,
without the Participant’s consent, alter the terms of an Award so as to affect
materially and adversely the Participant’s rights under the Award, unless the
Administrator expressly reserved the right to do so at the time of the
Award.  Any amendments to the Plan shall
be conditioned upon stockholder approval only to the extent, if any, such
approval is required by law (including the Code), as determined by the
Administrator.


 


10.          OTHER COMPENSATION ARRANGEMENTS


 


The
existence of the Plan or the grant of any Award will not in any way affect the
Company’s right to award a person bonuses or other compensation in addition to Award
under the Plan.


 


11.          MISCELLANEOUS


 


(a)           Waiver of Jury Trial.  By accepting
an Award under the Plan, each Participant 


 


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waives any right to a
trial by jury in any action, proceeding or counterclaim concerning any rights
under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be
delivered in connection therewith, and agrees that any such action, proceedings
or counterclaim shall be tried before a court and not before a jury.  By accepting an Award under the Plan, each
Participant certifies that no officer, representative, or attorney of the
Company has represented, expressly or otherwise, that the Company would not, in
the event of any action, proceeding or counterclaim, seek to enforce the
foregoing waivers.


 


(b)           Limitation of Liability. 
Notwithstanding anything to the contrary in the Plan, neither the
Company, nor the Administrator, nor any person acting on behalf of the Company,
or the Administrator, shall be liable to any Participant or to the estate or
beneficiary of any Participant or to any other holder of an Award by reason of
any acceleration of income, or any additional tax, asserted by reason of the failure
of an Award to satisfy the requirements Section 409A or by reason of Section 4999
of the Code.


 


12.          ESTABLISHMENT
OF SUB-PLANS


 


The Board may from time
to time establish one or more sub-plans under the Plan for purposes of
satisfying applicable blue sky, securities or tax laws of various
jurisdictions.  The Board shall establish
such sub-plans by adopting supplements to the Plan setting forth (i) such
limitations on the Administrator’s discretion under the Plan as the Board deems
necessary or desirable and (ii) such additional terms and conditions not
otherwise inconsistent with the Plan as the Board shall deem necessary or
desirable.  All supplements adopted by
the Board shall be deemed to be part of the Plan, but each supplement shall
apply only to Participants within the affected jurisdiction and the Company
shall not be required to provide copies of any supplement to Participants in
any jurisdiction that is not affected.


 


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EXHIBIT A


 


Definition of Terms


 


The following terms, when used in the Plan, will have the meanings and
be subject to the provisions set forth below:


 


“Administrator”:  The Board.


 


“Award”: Stock subject to restrictions requiring that it be
redelivered or offered for sale to the Company if specified conditions are not
satisfied.


 


“Board”:  The Board of
Directors of the Company.


 


“Code”: 
The U.S. Internal Revenue Code of 1986 as from time to time amended and
in effect, or any successor statute as from time to time in effect.


 


“Company”:  LPL Investment
Holdings Inc.


 


“Change in Control”:  the consummation of
(i) any consolidation or merger of the Company with or into any other
Person, or any other corporate reorganization, transaction or transfer of
securities of the Company by its stockholders, or series of related
transactions (including the acquisition of capital stock of the Company),
whether or not the Company is a party thereto, in which the stockholders of the
Company immediately prior to such consolidation, merger, reorganization or
transaction, own, directly or indirectly, capital stock either (A) representing
directly or indirectly through one or more entities, less than fifty percent
(50%) of the equity economic interests in or voting power of the Company or
other surviving entity immediately after such consolidation, merger,
reorganization or transaction or (B) that does not directly, or indirectly
through one or more entities, have the power to elect a majority of the entire
board of directors or other similar governing body of the Company or other
surviving entity immediately after such consolidation, merger, reorganization
or transaction, (ii) any transaction or series of related transactions,
whether or not the Company is party thereto, after giving effect to which in
excess of fifty percent (50%) of the Company’s voting power is owned directly,
or indirectly through one or more entities, by any person and its “affiliates”
or “associates” (as such terms are defined in the Exchange Act Rules) or any “group”
(as defined in the Exchange Act Rules) other than, in each case, the Company or
an affiliate of the Company immediately following the Closing, or (iii) a
sale or other disposition of all or substantially all of the consolidated
assets of the Company (each of the foregoing, a “Business Combination”),
provided that, notwithstanding the foregoing, the following transactions shall
in no event constitute a Change in Control: (A) a Business Combination
following which the individuals or entities who were beneficial owners of the
outstanding securities entitled to vote generally in the election of directors
of the Company immediately prior to such Business Combination beneficially own,
directly or indirectly, 50% or more of the outstanding securities entitled to
vote generally in the election of directors of the resulting, surviving or
acquiring corporation in such transaction or (B) an IPO.


 


“Fair Market Value”: As defined in the Stockholders Agreement.


 


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“IPO”: An underwritten public offering and sale of Stock for
cash pursuant to an effective registration statement filed by the Company.


 


“Participant”:  A person who
is granted an Award under the Plan.


 


“Plan”:  The LPL
Investment Holdings Inc. Director Restricted Stock Plan as from time to time
amended and in effect.


 


“Section 409A”:  Section 409A
of the Code.


 


“Service”: A Participant’s service relationship with the Company
as a non-employee member of the Board.


 


“Stock”:  Common Stock
of the Company, par value $0.001 per share.


 


“Stockholders
Agreement”: Stockholders Agreement, dated as of December 28,
2005 among the Company and certain affiliates, stockholders and certain
Participants, as amended from time to time.


 


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