Exhibit
10.1


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”) dated
as of April 20, 2010 between Investment Technology Group, Inc., a
Delaware corporation (the “Company”),
and Robert C. Gasser (the “Executive”).


 


WHEREAS, the Company and the Executive
previously entered into an employment agreement on September 15, 2006 and
amended and restated such agreement on August 4, 2008 (the “Prior Agreement”); and


 


WHEREAS, the parties now wish to amend the
Prior Agreement to cause the payments and benefits to which the Executive may
become entitled following a change in control to substantially conform to the
payments and benefits to which other senior executive employees are entitled
under change in control agreements with the Company, and to make certain other
changes to comply with recently issued guidance related to section 409A of the
Code (as defined below).


 


NOW, THEREFORE, in consideration of the
foregoing and of the respective covenants and agreements herein set forth, the
Company and the Executive agree as follows:


 


ARTICLE
1



DEFINITIONS


 


SECTION 1.01       Definitions.  For purposes of this Agreement, the following
terms have the meanings set forth below:


 


“Board”
means the Board of Directors of the Company.


 


“Cause”
means the occurrence of any one or more of the following: (i) the
Executive’s willful failure to substantially perform his duties with the
Company (other than any such failure resulting from the Executive’s
Disability), after a written demand for substantial performance is delivered to
the Executive that specifically identifies the manner in which the Company
believes that the Executive has not substantially performed his duties, and the
Executive has failed to remedy the situation within fifteen (15) business days
of such written notice from the Company; (ii) gross negligence in the
performance of the Executive’s duties which results in material financial harm
to the Company; (iii) the Executive’s conviction of, or plea of guilty or
nolo contendere to, any crime involving the personal enrichment of the
Executive at the expense of the Company, or any felony; (iv) the Executive’s
willful engagement in conduct that is demonstrably and materially injurious to
the Company, monetarily or otherwise; or (v) the Executive’s willful
violation of any material provision of the Company’s code of conduct.  For purposes of this definition, no act or
failure to act, on the part of the Executive, shall be considered “ willful”
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that his action or omission was in the best interests
of the Company, or the Executive is grossly negligent.


 

















 


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


 


(a)           if any person (within the meaning of
the Securities Exchange Act of 1934, as amended (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 thirty-five percent (35%) or more of the
total voting power of all the then-outstanding Voting Securities; or


 


(b)           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


 


(c)           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 (A) 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 fifty percent (50%) 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 (B) any such
transaction which would result in a Related Party beneficially owning more than
fifty percent (50%) of the voting securities of the surviving or transferee
entity outstanding immediately after such transaction; or


 


(d)           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 fifty percent (50%) of the assets owned by the Company
immediately prior to the transaction; or


 


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


 


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


 


“Confidential
Information” means information that is not generally known to the
public and that was or is used, developed or obtained by the Company or its
Subsidiaries in connection with their business and which constitutes trade
secrets or information which the Company has made reasonable efforts to
protect.  It shall not include
information (i) required to be disclosed by court or administrative order;
(ii) lawfully obtainable from other sources or which is in the public
domain through no fault of the Executive; or (iii) the disclosure of which
is consented to in writing by the Company.


 


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“Good
Reason” means as follows:


 


(a)           Prior to a Change in Control, “Good Reason” means, without the Executive’s
written consent, (i) the material diminution of the Executive’s duties,
responsibilities, powers or authorities, including the assignment of any duties
and responsibilities inconsistent with his position as President and Chief
Executive Officer; (ii) the removal of the Executive from his office as
Chief Executive Officer; (iii) the failure to obtain a written assumption
of the employment agreement by any person acquiring all or substantially all of
the assets of the Company, whether effected by purchase of shares, purchase of
assets, merger or otherwise, prior to such acquisition; (iv) a material
reduction by the Company of the Executive’s Base Salary in effect on the date
hereof, or as the same shall be increased from time to time, unless such
reduction applies on substantially the same percentage basis to all executive
officers of the Company generally, (v) written notice to Executive from
the Company to stop the automatic renewal of the Employment Period pursuant to Section 2.01
hereof; provided that the Executive is willing and able to execute a new
contract providing terms and conditions substantially similar to those in this
Agreement and to continue providing services to the Company, (vi) material
breach by the Company of the terms of this Agreement, or (vii) relocation
of the Executive’s principal place of business to a location more than fifty
(50) miles from its current location; provided, however, that for any of the
foregoing to constitute Good Reason, the Executive must provide written
notification of his intention to resign within sixty (60) days after the
Executive knows or has reason to know of the occurrence of any such event or
condition, and, the Company shall have had thirty (30) business days from the
date of receipt of such notice to effect a cure of the event or condition
constituting Good Reason and shall have failed to do so and the Executive
actually resigns from employment within the sixty (60) day period following the
expiration of the foregoing cure period. 
In the event of a cure of such event or condition constituting Good
Reason by the Company, such event or condition shall no longer constitute Good
Reason.


 


(b)           On or after a Change in Control, “Good Reason” means, without the Executive’s
express written consent, the occurrence on or after a Change in Control of the
Company of any one or more of the following:


 


(i)            (A) the removal of the Executive from his office as
Chief Executive Officer,  or (B) a
material reduction of the Executive’s primary functional authorities, duties,
or responsibilities as President and Chief Executive Officer of the Company
from those in effect immediately prior to the Change in Control or the
assignment of duties to the Executive inconsistent with those of President and
Chief Executive Officer of the Company, other than an insubstantial and
inadvertent reduction or assignment that is remedied by the Company promptly
after receipt of notice thereof given by the Executive;


 


(ii)           the Company’s requiring the Executive to be based at a
location in excess of fifty (50) miles from the location of the Executive’s
principal job location or office immediately prior to the Change in Control;


 


(iii)          a material reduction by the Company of the Executive’s Base
Salary in effect on the date hereof, or as the same shall be increased from
time to time, unless 


 


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such reduction applies on substantially the same percentage
basis to all employees of the Company generally;


 


(iv)          a material reduction in the Executive’s participation in,
any of the Company’s annual incentive compensation plans in which the Executive
participates prior to the Change in Control unless such failure applies to all
plan participants generally;


 


(v)           the failure of the Company to obtain the assumption of the
obligations contained herein by any successor;


 


(vi)          a material breach of this Agreement by the Company; or


 


(vii)         written notice to Executive from the Company to stop the
automatic renewal of the Employment Period pursuant to Section 2.01
hereof; provided that the Executive is willing and able to execute a new
contract providing terms and conditions substantially similar to those in this
Agreement and to continue providing services to the Company;


 


provided, however,
that for any of the foregoing (i) through (vii) to constitute Good
Reason, the Executive must provide written notification of his intention to
resign within thirty (30) days after the Executive knows or has reason to know
of the occurrence of any such event or condition, and, the Company shall have
had thirty (30) business days from the date of receipt of such notice to effect
a cure of the event or condition constituting Good Reason and shall have failed
to do so and the Executive actually resigns from employment within the eighteen
(18) month period following the Change in Control as provided in Section 5.03.  In the event of a cure of such event or
condition constituting Good Reason by the Company, such event or condition
shall no longer constitute Good Reason. 
A termination of employment by the Executive within the eighteen (18)
month period following a Change in Control shall be for a Good Reason if one of
the occurrences specified above shall have occurred, notwithstanding that the
Executive may have other reasons for terminating employment, including
employment by another employer which the Executive desires to accept.


 


On or after a Change in Control, for purposes
of this Agreement, it shall be a material breach of this Agreement by the
Company if the Company decreases the Executive’s Total Annual Compensation by
more than thirty-three percent (33%).


 


“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.


 


“Permanent
Disability” means those circumstances under which the Executive is
determined to be eligible to receive disability benefits under the Company’s
long-term disability plan or program, or, in the absence of such a plan or
program, “Disability” will be as defined in Section 22(e)(3) of the
Code.


 


“Related
Party” means (i) a Subsidiary of the Company; (ii) an
employee or group of employees of the Company or any Subsidiary of the Company;
(iii) a trustee or other fiduciary 


 


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holding securities under an
employee benefit plan of the Company or any majority-owned Subsidiary of the
Company; or (iv) a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportion as their
ownership of Voting Securities.


 


“Subsidiary”
or “Subsidiaries” means, with
respect to any Person, any corporation, partnership, limited liability company,
association or other business entity of which (i) if a corporation, fifty
percent (50%) 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 (ii) if a partnership, limited
liability company, association or other business entity, fifty percent (50%) 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 percent (50%) or more ownership interest
in a partnership, limited liability company, association or other business entity
if such Person or Persons are allocated fifty percent (50%) 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.


 


“Total Annual Compensation” shall mean the
sum of the Executive’s base salary and average annual bonus (paid or payable to
Executive under Section 4.02 hereof with respect to the three calendar years
immediately preceding the calendar year in which the Date of Termination
occurs) as in effect immediately prior to the Change in Control. For the
avoidance of doubt, annual bonuses shall include any bonus amounts paid in the
form of Basic Units awarded under the Company’s Equity Deferral Award Program
Subplan (or any successor thereto).


 


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


 


ARTICLE
2



EMPLOYMENT


 


SECTION 2.01       Employment.  The Company shall employ the Executive, and
the Executive shall accept employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on October 4,
2006 (the “Start Date”) and ending as
provided in Section 5.01 (the “Employment Period”);
provided that the Employment Period shall automatically be extended for periods
of one-year unless either party gives written notice to the other party at
least 90 days prior to the end of the Employment Period or at least 90 days
prior to the end of any one-year renewal period that the Employment Period
shall not be further extended.


 


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ARTICLE
3



POSITION AND DUTIES


 


SECTION 3.01       Position
and Duties.  During the
Employment Period, the Executive shall serve as Chief Executive Officer and
President of the Company and shall have all duties, authority and
responsibilities normally incident to such position.  In such capacity, the Executive shall report
to the Board and shall have such responsibilities, powers and duties as may
from time to time be prescribed by the Board; provided that such
responsibilities, powers and duties are substantially consistent with those
customarily assigned to individuals serving in such position at comparable
companies.  During the Employment Period,
the Executive shall devote substantially all of his working time and efforts to
the business and affairs of the Company and its Subsidiaries.  The Executive shall not directly or indirectly
render any services of a business, commercial or professional nature to any
other person or for-profit organization not related to the business of the
Company or its Subsidiaries, whether for compensation or otherwise, without
prior written consent of the Board, such consent not to be unreasonably
withheld; provided that the foregoing shall not be construed as preventing the
Executive from serving on civic, educational, philanthropic or charitable
boards or committees, maintaining his personal investments, or, serving with
the prior written consent of the Board, in its sole discretion, on corporate
boards.


 


SECTION 3.02       Board
Seat.  On the Start Date, the
Company caused the Executive to be elected to the Board, and the Executive
serves as a member of the Board.  During
the Employment Period, the Company shall use its best efforts to cause the
Executive to be nominated and reelected to the Board.


 


SECTION 3.03       Executive
Representations.  The
Executive hereby represents and warrants to the Company that he is not subject
or a party to any employment agreement, non-competition covenant,
non-disclosure agreement or other agreement, covenant, understanding or
restriction of any nature whatsoever which would prohibit the Executive from
executing this Agreement and performing fully his duties and responsibilities
hereunder, or which would in any manner, directly or indirectly, limit or
affect the duties and responsibilities which may now or in the future be
assigned to the Executive by the Company. 
Further, the Company expects the Executive not to, and the Executive
hereby acknowledges and agrees that he will not, use any proprietary or
confidential information of any prior employer in the performance of his duties
for the Company.


 


ARTICLE
4



BASE SALARY, BONUS AND BENEFITS


 


SECTION 4.01       Base
Salary.  During the Employment
Period, the Executive’s  base salary will
be $750,000 per annum (the “Base Salary”);
provided that for the period from the Start Date through December 31,
2006, the Executive was paid an aggregate of $250,000.  The Executive’s Base Salary shall be reviewed
periodically for increase, but not decrease, by the Compensation Committee of
the Board (the “Committee”) pursuant to the
Committee’s normal performance review policies for senior level executives;
provided that no provision of this 


 


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Agreement
shall prohibit a reduction in the Executive’s Base Salary as part of an across
the board reduction in the base salaries of executive officers generally, so
long as such reduction applies on substantially the same percentage basis to
all executive officers of the Company generally.  The Base Salary will be payable in accordance
with the normal payroll practices of the Company.


 


SECTION 4.02       Bonuses.  In addition to the Base Salary, during the
Employment Period, the Executive received or shall be eligible to receive bonus
payments as follows: (a) For the period from the Start Date through December 31,
2006, the Executive received a guaranteed bonus of $520,000; (b) For the
2007 calendar year, the Executive was eligible to receive a performance bonus
of up to a maximum of $1,575,000 based upon attainment of performance
objectives established by the Committee in accordance with Exhibit B
hereto; (c) For the 2008 calendar year and each calendar year thereafter,
the Executive shall be eligible to receive a performance bonus subject to
attainment of performance objectives to be established by the Committee
pursuant to the terms of the Company’s Amended and Restated Pay-for-Performance
Incentive Plan, as may be further amended, or under any replacement or
successor plan and the requirements (if any) to qualify as “performance-based”
compensation under section 162(m) of the Code.  In addition, the Executive shall be eligible
to receive such other performance-based, discretionary or other bonuses as the
Committee may determine, in its sole and absolute discretion.  The Executive’s guaranteed bonus hereunder
was paid prior to December 31, 2006. 
Performance bonuses, if any, shall be paid on or after January 1
but before March 15 of the calendar year following the calendar year for
which the performance bonus is earned.


 


SECTION 4.03       Equity
Awards.


 


(a)           Contemporaneously with the Executive’s
Start Date, the Executive was granted 31,250 restricted stock units (“RSUs”), which number of RSUs represented 6,250 RSUs for the
period October 4, 2006 through December 31, 2006 and 25,000 RSUs for
the 2007 calendar year.  The foregoing
RSUs shall vest in three equal annual installments commencing on the first
anniversary of the date of grant; provided that the performance objective
established by the Committee in accordance with Exhibit B hereof is
satisfied.  The RSUs shall be subject in
all respects to terms of the Restricted Share Agreement by and between the
Company and the Executive dated as of the Start Date and in substantially the
form provided to the Executive and the Company’s 1994 Stock Option and
Long-Term Incentive Plan, as amended and restated.


 


(b)           Contemporaneously with the Executive’s
Start Date, the Executive was granted a nonqualified stock option to purchase a
number of shares of the Company’s common stock equal to a Black Scholes value
for the option of $1,156,000, which represented $231,000 for the period October 4,
2006 through December 31, 2006 and $925,000 for the 2007 calendar
year.  The foregoing option shall become
exercisable in three equal annual installments commencing on the first
anniversary of the date of grant and shall be subject in all respects to the terms
of the Stock Option Agreement by and between the Company and the Executive
dated as of the Start Date and in substantially the form provided to the
Executive and the Company’s 1994 Stock Option and Long-Term Incentive Plan, as
amended and restated.  In the event of a
Change in Control at a time when the Executive is employed by the Company
(including all Subsidiaries), the Option shall become fully vested and
exercisable and shall remain exercisable until 5:00 pm, Eastern time, on the
fifth anniversary of the Start Date, without regard to whether 


 


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the Executive’s
employment with the Company or any of its Subsidiaries continues after such
Change in Control.


 


(c)           On March 24, 2008, the Executive
was granted RSUs representing a number of shares of the Company’s common stock
equal to $925,000 and on January 2, 2008, the Executive was granted an
additional nonqualified stock option grant representing a number of shares of
the Company’s common stock equal to a Black Scholes value for the option of
$925,000, in each case based on the current stock price of a share of Company
common stock on the date of grant.  The
foregoing RSU grant shall vest according to performance objectives established
by the Committee and in accordance with the requirements of section 162(m) of
the Code relating to the “performance-based” compensation (if any) and shall be
subject to terms of the agreement pursuant to which it is granted (which shall
reflect the provisions hereof) and the Company’s 2007 Omnibus Equity
Compensation Plan (the “2007 Equity Compensation
Plan”).  The foregoing
nonqualified stock option grant shall vest and become exercisable, as
applicable, in equal annual installments over the three-year period commencing
on the first anniversary of the date of grant and shall be subject in all
respects to terms of the agreement pursuant to which it is granted (which
agreement shall reflect the provisions hereof) and the 2007 Equity Compensation
Plan.


 


(d)           For calendar years during the
Employment Period following the 2008 calendar year, the Executive shall be
eligible to receive equity awards as and when equity awards are granted to
senior officers generally, with the amount and terms of such awards determined
on the same bases as awards granted to senior officers generally.


 


(e)           All equity awards granted to the
Executive shall be subject in all respects to the Company’s Net Share Retention
Program.


 


SECTION 4.04       Benefits.  The Executive shall be eligible for the
following benefits during the Employment Period:


 


(a)           participation in such retirement,
medical, life insurance and disability insurance coverages and fringe benefit
plans and programs as are, or may during the Employment Period be, made
available generally for other senior executive officers of the Company, subject
in all respects to the terms of the applicable plans and programs, as in effect
from time to time;


 


(b)           participation in the Company’s Stock
Unit Award Program, pursuant to which the Executive may elect to defer a part
of his Base Salary and bonus compensation, subject in all respect to the terms
of the plan; and


 


(c)           up to a maximum of five (5) weeks
of paid vacation annually during the Employment Period, in accordance with the
Company’s vacation policy.


 


SECTION 4.05       Expenses.  The Company shall reimburse the Executive for
all reasonable expenses incurred by him in the course of performing his duties
under this Agreement which are consistent with the Company’s policies in effect
from time to time with respect to 


 


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travel,
entertainment and other business expenses (“Reimbursable
Expenses”), subject to the Company’s requirements with respect to
reporting and documentation of expenses.


 


ARTICLE
5



TERM AND TERMINATION


 


SECTION 5.01       Term.  Subject to the renewal provisions of Section 2.01,
the Employment Period will terminate on December 31, 2009; provided that (a) the
Employment Period shall terminate prior to such date upon the Executive’s
death, and (b) the Employment Period may be terminated by either party at
any time pursuant to this Article 5.


 


SECTION 5.02       Termination
for Good Reason or Without Cause Prior to a Change in Control.  If the Employment Period shall be terminated
prior to a Change in Control (a) by the Executive for Good Reason or (b) by
the Company not for Cause, in either case subject to the Executive’s execution
and non-revocation of a Release (as defined below), the Executive shall be
provided solely:


 


(i)            an amount equal to the Executive’s Base Salary payable
through the Date of Termination,


 


(ii)           the amount of the Executive’s Base Salary at the rate in
effect on the Date of Termination (before any reduction thereof giving rise to
Good Reason) plus an amount equal to the average annual bonus paid or payable
to Executive under Section 4.02 hereof with respect to the three calendar
years immediately preceding the calendar year in which the Date of Termination
occurs. For the avoidance of doubt, annual bonuses shall include any bonus
amounts paid in the form of Basic Units awarded under the Company’s Equity
Deferral Award Program Subplan (or any successor thereto). If the number of
calendar years during which the Executive has been employed by the Company
prior to the calendar year of the Date of Termination is less than three, then
the foregoing average shall be based on the annual bonuses paid or payable to
the Executive for the actual number of calendar years during which the
Executive was employed by the Company preceding the calendar year of termination.  In addition, for purposes of the foregoing
calculation only, the Executive’s bonus with respect to the 2006 calendar year
shall be deemed to be $1,575,000,


 


(iii)          a pro rated portion of the bonus for the calendar year in
which the Executive’s Date of Termination occurs, determined by multiplying the
full year bonus that would otherwise have been payable to the Executive based
upon the achievement of applicable performance objectives by a fraction, the
numerator of which is the number of days during which Executive was employed by
the Company in the year of his termination and the denominator of which is 365,


 


(iv)          all outstanding options held by the Executive that are
vested as of the Date of Termination shall remain exercisable by the Executive
until the earlier of the first anniversary of the Date of Termination or the
expiration of the option term in accordance with the terms of the Company’s
1994 Stock Option and Long-Term Incentive Plan, as amended and restated, the
2007 Equity Compensation Plan, or under any replacement or successor plan,


 


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(v)           as to all outstanding equity awards held by the Executive
as of the Date of Termination that are not vested, the Executive shall continue
to vest in those equity awards as if he had remained employed by the Company
through the first anniversary of the Date of Termination and any performance
objectives applicable to awards granted and performance periods that began
prior to January 2, 2009 were deemed satisfied as of the Date of
Termination and any outstanding options that vest during the one-year period
following the Date of Termination shall remain exercisable until the earlier of
one-year period following the applicable vesting date or the expiration of the
option term,


 


(vi)          continued medical coverage at the level in effect at the
Date of Termination (or generally comparable coverage) for himself and, where
applicable, his spouse and dependents, on the same terms as such coverage is
available to employees generally, as the same may be changed from time to time
for employees generally, as if Executive had continued in employment, until the
end of the one (1) year period following the Date of Termination.  The COBRA health care continuation coverage
period under section 4980B of the Code, or any replacement or successor
provision of United States tax law, shall run concurrently with the period of
continued coverage following the Date of Termination, and


 


(vii)         the Executive’s entitlements under any other benefit plan or
program, including but not limited to, accrued, unused vacation, shall be as
determined thereunder, except that severance benefits shall not be payable
under any other plan or program.  In
addition, promptly following any such termination, the Executive shall also be
reimbursed all Reimbursable Expenses incurred by the Executive prior to such
termination.


 


The amount described in clause (i) of
this Section 5.02 will be paid within thirty (30) days following the date
the Employment Period terminates and will be paid in accordance with the
Company’s normal payroll practices.  The
amount described in clause (ii) of this Section 5.02 less two times
the dollar limit in effect under section 401(a)(17) of the Code for the
calendar year in which the Executive’s termination occurs will be paid in a
lump sum within thirty (30) days following the Date of Termination and the
remaining amount will be paid in installments over the 12-month period
following the Date of Termination, with payments commencing within thirty (30)
days following the Date of Termination. The amount described in clause (iii) above
will be paid at the time provided and in accordance with the applicable terms
of the annual bonus plan in effect for the fiscal year in which the Executive’s
Date of Termination occurs. Notwithstanding any provision of this Section 5.02
to the contrary, if, at the time of the Executive’s termination of employment
with the Company, the Company has securities which are publicly traded on an
established securities market and the Executive is a “specified employee” (as
defined in section 409A of the Code) and it is necessary to postpone the
commencement of any payments or benefits otherwise payable pursuant to Section 5.02
of this Agreement as a result of such termination of employment to prevent any
accelerated or additional tax under section 409A of the Code, then the Company
will postpone the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid
or provided to the Executive), until the first payroll date that occurs after
the date that is six months following the Executive’s “separation of service”
with the Company (within the meaning of such term under Code section 409A) and
will be paid in a lump sum to the Executive on such date.  If the Executive dies during the postponement
period prior to the payment of the postponed amount, the amounts 


 


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withheld on account of
section 409A of the Code shall be paid to the personal representative of the
Executive’ s estate within sixty (60) days after the date of the Executive’s
death.


 


The payments and benefits due to the
Executive under this Section 5.02 shall only be paid if the Executive
executes and does not revoke a written release, substantially in the form
attached hereto as Exhibit A (with such modifications at the time
of the Executive’s termination as the Company’s General Counsel deems necessary
or appropriate to comply with applicable law or regulation), of any and all
claims against the Company and all related parties with respect to all matters
arising out of the Executive’s employment by the Company, or the termination
thereof (other than claims for any entitlements under the terms of this
Agreement, under any plans or programs of the Company under which the Executive
has accrued and is due a benefit, or as otherwise contemplated by Exhibit A)
(the “Release”).  In the event the Executive fails to execute,
or revokes the Release, no payments and benefits shall be provided under this Section 5.02
and the Executive shall be entitled to receive solely the Base Salary through
the Date of Termination and reimbursement of all Reimbursable Expenses incurred
by the Executive prior to such termination; provided that the Executive’s
entitlements under any other benefit plan or program, including but not limited
to, accrued, unused vacation, shall be as determined thereunder, except that
severance benefits shall not be payable under any plan or program.  Notwithstanding any provision of this Agreement
to the contrary, in no event shall the timing of the Executive’s execution of
the Release, directly or indirectly, result in the Executive designating the
calendar year of payment and to the extent payment could be made in more than
one taxable year, payment shall be made in the later taxable year.


 


SECTION 5.03       Termination
for Good Reason or Without Cause On or Within Eighteen Months After a Change in
Control.  If the Employment
Period shall be terminated on or within eighteen (18) months after a Change in
Control (a) by the Executive for Good Reason or (b) by the Company
not for Cause and not due to the Executive’s Death or Permanent Disability, in
either case subject to the Executive’s execution and non-revocation of a
Release, the Executive shall be provided solely:


 


(i)            an amount equal to the Executive’s Base Salary payable
through the Date of Termination,


 


(ii)           two times the sum of (A) the amount of the Executive’s
Base Salary at the rate in effect prior to the Date of Termination or the date
of the Change in Control (whichever is higher) and (B) the average annual
bonus paid or payable to Executive under Section 4.02 hereof with respect
to the three calendar years immediately preceding the calendar year in which
the Date of Termination occurs. For the avoidance of doubt, annual bonuses shall
include any bonus amounts paid in the form of Basic Units awarded under the
Company’s Equity Deferral Award Program Subplan (or any successor
thereto).   If the number of calendar
years during which the Executive has been employed by the Company prior to the
calendar year of the Date of Termination is less than three, then the foregoing
average shall be based on the annual bonuses paid or payable to the Executive
for the actual number of calendar years during which the Executive was employed
by the Company preceding the calendar year of termination.  In addition, for purposes of the foregoing
calculation only, the Executive’s bonus with respect to the 2006 calendar year
shall be deemed to be $1,575,000,


 


11

















 


(iii)          a pro rated portion of the bonus for the calendar year in
which the Executive’s Date of Termination occurs, determined by multiplying the
full year bonus that would otherwise have been payable to the Executive based
upon the achievement of applicable performance objectives by a fraction, the
numerator of which is the number of days during which Executive was employed by
the Company in the year of his termination and the denominator of which is 365,


 


(iv)          continued health, dental and vision insurance coverage for
himself and, where applicable, his spouse and dependents, on terms no less
favorable than those in effect immediately prior to the Change in Control (or
at the option of the Executive, as in effect on the Date of Termination), until
the earlier of (A) the end of the two-year period following the Date of
Termination or (B) the date on which the Executive is eligible to receive
substantially comparable health, dental and/or vision coverage under a plan or
plans of a subsequent employer.  The Executive
shall promptly notify the Company in writing of the date the Executive is
eligible to receive health, dental and/or vision coverage under the plan or
plans of a subsequent employer and shall provide a written description to the
Company of the health, dental and vision plans and programs provided to the
Executive by such employer,


 


(v)           the Company
shall pay to Executive an amount in cash equal to the premium cost that the
Company would have paid to maintain disability and life insurance coverage for
Executive and, where applicable, his spouse and dependents, under the Company’s
disability and life insurance plans or programs (in each case, as in effect on
the day immediately preceding the Change in Control or, at the option of
Executive, on his Date of Termination) had Executive remained employed by the
Company for a period equal to the lesser of (x) two years following the
Date of Termination or (y) until Executive is provided by another employer
with benefits substantially comparable to the benefits provided by such
disability and/or life insurance plans or programs; and such payments shall be
made on the first payroll date of each month commencing with the first month
following Executive’s Date of Termination and each month thereafter until fully
paid in accordance with this subparagraph (v). 
The Executive shall promptly inform the
Company in writing when he obtains other employment and shall provide a written
description to the Company of the disability and life insurance plans and
programs provided to Executive by such employer.  Payment under this clause (v) shall be
subject to the six-month delay described below, to the extent necessary to
comply with section 409A of the Code, and


 


(vi)          the Executive’s entitlements under any other benefit plan
or program, including but not limited to, accrued, unused vacation, shall be as
determined thereunder, except that severance benefits shall not be payable
under any other plan or program.  In
addition, promptly following any such termination, the Executive shall also be
reimbursed all Reimbursable Expenses incurred by the Executive prior to such
termination.


 


The amount described in clause (i) of
this Section 5.03 will be paid in accordance with standard payroll
practices of the Company; the amount described in clause (ii) of this Section 5.03
will be paid in a single lump sum within ten (10) days following the date
the Employment Period terminates and the amount described in clause (iii) above
will be paid at the time provided and in accordance with the applicable terms
of the annual bonus plan in effect for the fiscal year in which the Executive’s
Date of Termination occurs.


 


12

















 


Notwithstanding any provision of this Section 5.03
to the contrary, if, at the time of the Executive’s termination of employment
with the Company, the Company has securities which are publicly traded on an
established securities market and the Executive is a “specified employee” (as
defined in section 409A of the Code) and it is necessary to postpone the
commencement of any payments or benefits otherwise payable pursuant to Section 5.03
of this Agreement as a result of such termination of employment to prevent any
accelerated or additional tax under section 409A of the Code, then the Company
will postpone the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid
or provided to the Executive), until the first payroll date that occurs after
the date that is six months following the Executive’s “separation of service”
with the Company (within the meaning of such term under Code Section 409A)
and will be paid in a lump sum to the Executive on such date.  If the Executive dies during the postponement
period prior to the payment of the postponed amount, the amounts withheld on
account of section 409A of the Code shall be paid to the personal
representative of the Executive’ s estate within sixty (60) days after the date
of the Executive’s death.


 


In the event the Executive fails to execute,
or revokes the Release, no amounts shall be payable under this Section 5.03
and the Executive shall be entitled to receive solely the Base Salary through
the Date of Termination and reimbursement of all Reimbursable Expenses incurred
by the Executive prior to such termination; provided that the Executive’s
entitlements under any other benefit plan or program, including but not limited
to, accrued, unused vacation, shall be as determined thereunder, except that
severance benefits shall not be payable under any plan or program.  Notwithstanding any provision of this
Agreement to the contrary, in no event shall the timing of the Executive’s
execution of the Release, directly or indirectly, result in the Executive
designating the calendar year of payment and to the extent payment could be
made in more than one taxable year, payment shall be made in the later taxable
year.


 


Anything in this Agreement to the contrary
notwithstanding, the Executive shall be entitled to the benefits described in
this Section 5.03, if the Executive’s employment with the Company is
terminated by the Company (other than for Cause) within six months prior to the
date on which a Change in Control occurs, and it is reasonably demonstrated
that such termination (i) was at the request of a third party who has
taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise
arose in connection with or anticipation of a Change in Control.  In such event, amounts will be payable
hereunder only following the Change in Control. 
For the avoidance of doubt, the Executive shall not be entitled to the
payments and benefits provided in Section 5.03 hereof upon any termination
of his employment with the Company (a) because of his death, (b) because
of his Permanent Disability, (c) by the Company for Cause, or (d) by
the Executive other than for Good Reason.


 


SECTION 5.04       Termination
Due to Death or Disability, Termination for Cause or Resignation Other Than
Good Reason.  If the
Employment Period shall be terminated (a) due to death or by the Company
due to Permanent Disability of the Executive (subject to the requirements of
applicable law), (b) by the Company for Cause, or (c) as a result of
the Executive’s resignation or leaving of his employment, other than for Good
Reason, the Executive shall be entitled to receive solely the Base Salary
through the Date of Termination and reimbursement of all Reimbursable Expenses
incurred by the Executive prior to such termination; provided that in the event
the Employment Period is terminated due to death or by 


 


13

















 


the Company
due to Permanent Disability of the Executive, all outstanding equity awards
held by the Executive as of the Date of Termination shall become fully vested
and exercisable (and any performance objectives applicable to awards will be
deemed satisfied as of the Date of Termination) in accordance with the terms of
the Company’s 1994 Stock Option and Long-Term Incentive Plan, as amended and
restated, the 2007 Equity Compensation Plan, or under any replacement or
successor plan.  The Executive’s
entitlements under any other benefit plan or program, including but not limited
to, accrued, unused vacation, shall be as determined thereunder, except that severance
benefits shall not be payable under any plan or program.


 


SECTION 5.05       Notice
of Termination.  Any
termination by the Company for Permanent Disability or Cause or without Cause
or by the Executive with or without Good Reason shall be communicated by
written Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice
which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment under
the provision indicated.


 


SECTION 5.06       Date
of Termination.  “Date of Termination” shall mean (a) if
the Employment Period is terminated as a result of a Permanent Disability, five
(5) days after a Notice of Termination is given, (b) if the
Employment Period is terminated for any other reason other than by the
Executive for Good Reason, the latest of the date of receipt of the Notice of
Termination, or the end of any applicable correction period, or (c) if the
Employment Period is terminated by the Executive for Good Reason, within the
time periods set forth in the definition of Good Reason under Section 1.01
and Section 5.03, as applicable.


 


SECTION 5.07       No Duty
to Mitigate.  Except as
expressly provided to the contrary therein, the Executive shall have no duty to
seek new employment or other duty to mitigate following a termination of
employment as described in Section 5.02 or 5.03 above, as applicable, and no
compensation or benefits described in Section 5.02 or 5.03 shall be
subject to reduction or offset on account of any subsequent compensation
received by the Executive.


 


ARTICLE
6



CONFIDENTIAL INFORMATION


 


SECTION 6.01       Nondisclosure
and Nonuse of Confidential Information.  The Executive will not disclose or use at any
time during or after the Employment Period any Confidential Information of
which the Executive is or becomes aware, whether or not such information is
developed by him, except to the extent he reasonably believes that such
disclosure or use is directly related to and appropriate in connection with the
Executive’s performance of duties assigned to the Executive pursuant to this
Agreement.  Under all circumstances and
at all times, the Executive will take all appropriate steps to safeguard
Confidential Information in his possession and to protect it against
disclosure, misuse, espionage, loss and theft.


 


14

















 


ARTICLE
7



INTELLECTUAL PROPERTY


 


SECTION 7.01       Ownership
of Intellectual Property.  In
the event that the Executive as part of his activities on behalf of the Company
generates, authors or contributes to any invention, design, new development,
device, product, method of process (whether or not patentable or reduced to
practice or comprising Confidential Information), any copyrightable work
(whether or not comprising Confidential Information) or any other form of
Confidential Information relating directly or indirectly to the business of the
Company as now or hereinafter conducted (collectively, “Intellectual Property”), the Executive
acknowledges that such Intellectual Property is the sole and exclusive property
of the Company and hereby assigns all right title and interest in and to such
Intellectual Property to the Company. 
Any copyrightable work prepared in whole or in part by the Executive
during the Employment Period will be deemed “a work made for hire” under Section 201(b) of
the Copyright Act of 1976, as amended, and the Company will own all of the
rights comprised in the copyright therein. 
The Executive will promptly and fully disclose all Intellectual Property
and will cooperate with the Company to protect the Company’s interests in and
rights to such Intellectual Property (including providing reasonable assistance
in securing patent protection and copyright registrations and executing all
documents as reasonably requested by the Company, whether such requests occur
prior to or after termination of Executive’s employment hereunder).


 


ARTICLE
8



DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT


 


SECTION 8.01       Delivery
of Materials upon Termination of Employment.  As requested by the Company, from time to
time and upon the termination of the Executive’s employment with the Company
for any reason, the Executive will promptly deliver to the Company all copies
and embodiments, in whatever form or medium, of all Confidential Information or
Intellectual Property in the Executive’s possession or within his control
(including written records, notes, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing any Confidential Information or
Intellectual Property) irrespective of the location or form of such material
and, if requested by the Company, will provide the Company with written
confirmation that to the best of his knowledge all such materials have been
delivered to the Company.  This provision
shall not prevent the Executive from retaining his personal property, including
his personal information contained on any electronic device.


 


ARTICLE
9



NONCOMPETITION AND NONSOLICITATION


 


SECTION 9.01       Noncompetition.  The Executive hereby acknowledges that during
his employment with the Company, the Executive has and will become familiar
with trade secrets and other Confidential Information concerning the Company,
its Subsidiaries and their respective predecessors, and that the Executive’s
services have been and will be of special, 


 


15

















 


unique and
extraordinary value to the Company.  In
addition, the Executive hereby agrees that at any time during the Employment
Period, and for a period of one year after the Date of Termination (such
one-year period referred to as the “Noncompetition
Period”), the Executive will not, directly or indirectly, own,
manage, control, participate in, consult with, render services for, or in any
manner engage in, any business competing with the businesses of the Company or
its Subsidiaries as such businesses exist or are in process or are being
demonstrably planned as of the Date of Termination, within any geographical
area in which, as of the Date of Termination, the Company or its Subsidiaries
engage or demonstrably plan to engage in such businesses.  It will not be considered a violation of this
Section 9.01 for the Executive to be a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly
traded, so long as the Executive has no active participation in the business of
such corporation.


 


SECTION 9.02       Nonsolicitation.  The Executive hereby agrees that (a) during
the Employment Period and for a period of one year after the Date of
Termination (such one-year period referred to as the “Nonsolicitation Period”) the Executive will
not, directly or indirectly through another entity, induce or attempt to induce
any employee of the Company or its Subsidiaries to leave the employ of the
Company or its Subsidiaries, or in any way interfere with the relationship
between the Company or its Subsidiaries and any employee thereof or otherwise
employ or receive the services of an individual who was an employee of the
Company or its Subsidiaries at any time during such Nonsolicitation Period,
except any such individual whose employment has been terminated by the Company
and (b) during the Nonsolicitation Period, the Executive will not induce
or attempt to induce any customer, supplier, client, broker, licensee or other
business relation of the Company or its Subsidiaries to cease doing business
with the Company or its Subsidiaries.


 


SECTION 9.03       Enforcement.  If, at the enforcement of Sections 9.01 or
9.02, a court holds that the duration or scope restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration or scope reasonable under such circumstances will be
substituted for the stated duration or scope and that the court will be
permitted to revise the restrictions contained in this Section 9 to cover
the maximum duration and scope permitted by law.


 


ARTICLE
10



EQUITABLE RELIEF


 


SECTION 10.01     Equitable
Relief.  The Executive
acknowledges that (a) the covenants contained herein are reasonable, (b) the
Executive’s services are unique, and (c) a breach or threatened breach by
him of any of his covenants and agreements with the Company contained in
Sections 6.01, 7.01, 8.01, 9.01 or 9.02 could cause irreparable harm to the
Company for which it would have no adequate remedy at law.  Accordingly, and in addition to any remedies
which the Company may have at law, in the event of an actual or threatened
breach by the Executive of his covenants and agreements contained in Sections
6.01, 7.01, 8.01, 9.01 or 9.02, the Company shall have the absolute right to apply
to any court of competent jurisdiction for such injunctive or other equitable
relief as such court may deem necessary or appropriate in the circumstances.


 


16

















 


ARTICLE
11



INDEMNIFICATION


 


SECTION 11.01     General
Indemnification.  The Company
agrees that if the Executive is made a party, or is threatened to be made a
party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (each, a “Proceeding”),
by reason of the fact that he is or was a director, officer or employee of the
Company or is or was serving at the request of the Company as a director,
officer, member, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is the Executive’s
alleged action in an official capacity while serving as a director, officer,
member, employee or agent, the Executive shall be indemnified and held harmless
by the Company to the fullest extent permitted or authorized by applicable law
and the Company’s certificate of incorporation or bylaws, against all cost,
expense, liability and loss (including, without limitation, attorney’s fees,
judgments, damages, settlements, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
the Executive in connection therewith (collectively, the “Expenses”), and such indemnification shall
continue as to the Executive even if he has ceased to be a director, member,
employee or agent of the Company or other entity and shall inure to the benefit
of the Executive’s heirs, estate, executors and administrators.


 


SECTION 11.02     Advances
of Expenses.  Expenses to be
incurred by the Executive in connection with any Proceeding shall be paid by
the Company in advance within thirty (30) days after receipt of written request
by the Executive specifying the Expenses for which the Executive seeks an
advancement but not later than December 31 of the calendar year following
the calendar year in which the expenses are actually incurred, provided that
the Executive has delivered to the Company a written, signed undertaking to
reimburse the Company for Expenses if it is finally determined by a court of
competent jurisdiction that the Executive is not entitled under this Agreement
to indemnification with respect to such Expenses.


 


SECTION 11.03     Notice
of Claim.  The Executive shall
give to the Company notice of any claim made against the Executive for which
indemnification will or could be sought under this Agreement, but the Executive’s
failure to give such notice shall not relieve the Company of any liability the
Company may have to the Executive except to the extent that the Company is
prejudiced thereby.  In addition, the
Executive shall give the Company such information and cooperation as it may
reasonably require and as shall be within the Executive’s power and at such
time and places as are convenient for the Executive.


 


SECTION 11.04     Defense
of Claim.  With respect to any
Proceeding as to which the Executive notifies the Company of the commencement
thereof:


 


(a)           the Company shall be entitled to
participate therein at its own expense; and


 


(b)           except as otherwise provided below,
to the extent that it may wish, the Company will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to the Executive.  The Executive also shall have the right to
employ the Executive’s own counsel in 


 


17

















 


such action,
suit or proceeding if the Executive reasonably concludes that failure to do so
would involve a conflict of interest between the Company and the Executive, and
under such circumstances the fees and expenses of such counsel shall be at the
expense of the Company, subject to the provisions herein; and


 


(c)           the Company shall not be liable to
indemnify the Executive under this Agreement for any amounts paid in settlement
of any action or claim effected without its written consent.  The Company shall not settle any action or
claim in any manner that would not include a full and unconditional release of
the Executive without the Executive’s prior written consent.  Neither the Company nor the Executive will
unreasonably withhold or delay their consent to any proposed settlement.


 


SECTION 11.05     Non-exclusivity.  The Executive’s rights conferred in this Article 11
shall not be exclusive of any other right the Executive may have or hereafter
may acquire under any statute, provision of the declaration of trust or
certificate of incorporation or by-laws of the Company or any subsidiary, or
any agreement, vote of shareholders or disinterested directors or trustees or
otherwise.


 


SECTION 11.06     Insurance.  The Company agrees to continue and maintain a
directors’ and officers’ liability insurance policy covering the Executive to
the extent the Company provides such coverage for its other executive officers.


 


ARTICLE
12



EXCISE TAX


 


SECTION 12.01     Application
of 280G.  In the event that it
shall be determined that any payment or distribution in the nature of
compensation (within the meaning of section 280G(b)(2) of the Code) to or
for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment”
within the meaning of section 280G of the Code, the aggregate present value of
the Payments under the Agreement shall be reduced (but not below zero) to the
Reduced Amount (defined below), provided that the reduction shall be made only
if the Accounting Firm (described below) determines that the reduction will
provide the Executive with a greater net after-tax benefit than would no
reduction.  The “Reduced
Amount” shall be an amount expressed in present value which
maximizes the aggregate present value of Payments under this Agreement without
causing any Payment under this Agreement to be subject to the Excise Tax
(defined below), determined in accordance with section 280G(d)(4) of the
Code.  The term “Excise Tax”
means the excise tax imposed under section 4999 of the Code, together with any
interest or penalties imposed with respect to such excise tax.  The Company shall reduce the Payments under
this Agreement on a non-discretionary basis in such a way as to minimize the
reduction in the economic value deliverable to the Executive.  Where one Payment has the same value for this
purpose and they are payable at different times, they will be reduced on a pro
rata basis.  Only amounts payable under
this Agreement shall be reduced pursuant to this Section 12.01.  If, as a result of subsequent events or
conditions, it is determined that payments have been reduced by more than the
minimum amount required under this Section 12.01, then an additional
payment shall be made to the Executive in an amount equal to the 


 


18

















 


excess
reduction within 60 days of the date on which the amount of the excess
reduction is determined, but not later than December 31 of the year in
which the excess reduction is determined.


 


All determinations to be made under this Article 12
shall be made by an independent certified public accounting firm selected by
the Company immediately prior to the Change in Control (the “Accounting Firm”), which shall provide its determinations
and any supporting calculations both to the Company and the Executive within 10
days of the Change in Control.  Any such
determination by the Accounting Firm shall be binding upon the Company and the
Executive.  All of the fees and expenses
of the Accounting Firm in performing the determinations referred to in this Section shall
be borne solely by the Company.


 


ARTICLE
13



MISCELLANEOUS


 


SECTION 13.01     Dispute
Resolution.  In the event of
any dispute under the provisions of this Agreement, other than a dispute in
which the primary relief sought is an equitable remedy such as an injunction,
the parties shall be required to have the dispute, controversy or claim settled
by arbitration in New York, New York in accordance with the National Rules for
the Resolution of Employment Disputes then in effect of the American
Arbitration Association, before an arbitrator agreed to by both parties.  If the parties cannot agree upon the choice
of arbitrator, the Company and the Executive will each choose an
arbitrator.  The two arbitrators will
then select a third arbitrator who will serve as the actual arbitrator for the
dispute, controversy or claim.  Any award
entered by the arbitrators shall be final, binding and nonappealable and
judgment may be entered thereon by either party in accordance with applicable
law in any court of competent jurisdiction. 
This arbitration provision shall be specifically enforceable.  The arbitrators shall have no authority to
modify any provision of this Agreement or to award a remedy for a dispute
involving this Agreement other than a benefit specifically provided under or by
virtue of the Agreement.  If the
Executive prevails on any material issue which is the subject of such
arbitration or lawsuit, the Company shall be responsible for all of the fees of
the American Arbitration Association and the arbitrators and any expenses
relating to the conduct of the arbitration (including the Company’s and
Executive’s reasonable attorneys’ fees and expenses).  Otherwise, each party shall be responsible
for its own expenses relating to the conduct of the arbitration (including
reasonable attorneys’ fees and expenses) and shall share the fees of the
American Arbitration Association.  Any
reimbursement that may become payable to the Executive pursuant to this Section 13.01
shall be made within thirty (30) days following the date on which it is
determined that the Executive is the prevailing party and entitled to such
reimbursement, but not later than December 31 of the calendar year
following the calendar year in which the Executive is finally determined to be
the prevailing party.


 


SECTION 13.02     Legal
Fees.  The Company shall
promptly pay up to $15,000 of the Executive’s legal fees incurred in
negotiating this Agreement and other documents relating to the Executive’s
employment and equity grants as contemplated hereunder.


 


19

















 


SECTION 13.03     Remedies
Cumulative; No Waiver.  No
remedy conferred upon a party by this Agreement is intended to be exclusive of
any other remedy, and each and every such remedy shall be cumulative and shall
be in addition to any other remedy given under this Agreement or now or
hereafter existing at law or in equity. 
Except as otherwise expressly provided herein, including but not limited
to Section 1.01 “Good Reason,” no delay or omission by a party in
exercising any right, remedy or power under this Agreement or existing at law
or in equity shall be construed as a waiver thereof, and any such right, remedy
or power may be exercised by such party from time to time and as often as may
be deemed expedient or necessary by such party in its sole discretion.


 


SECTION 13.04     Consent
to Amendments.  The provisions
of this Agreement may be amended or waived only by a written agreement executed
and delivered by the Company and the Executive. 
No other course of dealing between the parties to this Agreement or any
delay in exercising any rights hereunder will operate as a waiver of any rights
of any such parties.


 


SECTION 13.05     Successors
and Assigns.  All covenants
and agreements contained in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the respective successors
and assigns of the parties hereto whether so expressed or not; provided that
the Executive may not assign his rights or delegate his obligations under this
Agreement without the written consent of the Company and the Company may assign
this Agreement only to a successor to all or substantially all of its assets.


 


SECTION 13.06     Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.


 


SECTION 13.07     Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures
of more than one party, but all of which counterparts taken together will
constitute one and the same agreement.


 


SECTION 13.08     Descriptive
Headings.  The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.


 


SECTION 13.09     Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally to the recipient, two (2) business days after the date when
sent to the recipient by reputable express courier service (charges prepaid) or
four (4) business days after the date when mailed to the recipient by
certified or registered mail, return receipt requested and postage
prepaid.  Such notices, demands and other
communications will be sent to the Executive and to the Company at the
addresses set forth below,


 


	
  If
  to the Executive:

  	
  To the last address
  delivered to the Company by the Executive in the manner set forth herein.

  



 


20

















 


	
  If
  to the Company:

  	
  Investment
  Technology Group, Inc.

  
	
   

  	
  380
  Madison Avenue

  
	
   

  	
  New
  York, New York 10017

  
	
   

  	
  Attn:
  General Counsel

  



 


or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to
the sending party.


 


SECTION 13.10     Withholding.  The Company may withhold from any amounts
payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.  The Executive shall bear all
expense of, and be solely responsible for, all federal, state, local and
foreign taxes due with respect to any payment received under this Agreement.


 


SECTION 13.11     No Third
Party Beneficiary.  This
Agreement will not confer any rights or remedies upon any person other than the
Company, the Executive and their respective heirs, executors, successors and
assigns.


 


SECTION 13.12     Entire
Agreement.  This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
in any way to the subject matter hereof.


 


SECTION 13.13     Section 409A.  This Agreement is intended to comply with the
applicable provisions of section 409A of the Code and shall be interpreted to
avoid any penalty sanctions under section 409A of the Code.  If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions under section
409A of the Code, then such benefit or payment shall be provided in full at the
earliest time thereafter when such sanctions will not be imposed.  For purposes of section 409A of the Code, all
payments to be made upon the termination of the Employment Period under this
Agreement may only be made upon a “separation from service” under section 409A
of the Code, each payment made under this Agreement shall be treated as a
separate payment and the right to a series of installment payments under this
Agreement is to be treated as a right to a series of separate payments.  In no event shall the Executive, directly or
indirectly, designate the calendar year of payment.


 


SECTION 13.14     Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party.  Any reference to any federal, state, local or
foreign statute or law will be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The use of the word “including” in this
Agreement means “including without limitation” and is intended by the parties
to be by way of example rather than limitation.


 


SECTION 13.15     Survival.  Article 5, Sections 6.01, 7.01, 8.01 and
Articles 9, 10, 11, 12 and 13 will survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period, and the Agreement shall otherwise 


 


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remain in full
force to the extent necessary to enforce any rights and obligations arising
hereunder during the Employment Period.


 


SECTION 13.16     GOVERNING
LAW.  ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE
GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.


 


SECTION 13.17     Reimbursements
and In Kind Benefits.  All
Reimbursable Expenses, any other reimbursements, and in kind benefits,
including any third-party payments, provided under this Agreement shall be made
or provided in accordance with the requirements of section 409A of the Code,
including, where applicable, the requirement that (i) any reimbursement or
in kind benefit is for expenses incurred during the Executive’s lifetime (or during
a shorter period of time specified in this Agreement), (ii) the amount of
expenses eligible for reimbursement, or in kind benefits provided, during a
calendar year may not affect the expenses eligible for reimbursement, or in
kind benefits to be provided, in any other calendar year, (iii) the
reimbursement or payment of an eligible expense will be made on or before the
last day of the calendar year following the year in which the expense is
incurred, and (iv) the right to reimbursement or in kind benefits is not
subject to liquidation or exchange for another benefit.


 


[SIGNATURE PAGE FOLLOWS]


 


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IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date and year first above written.


 


	
   

  	
  INVESTMENT
  TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maureen O’Hara

  
	
   

  	
  Printed
  Name: Maureen O’Hara

  
	
   

  	
  Title:
  Chairperson of the Board of Directors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert C. Gasser

  
	
   

  	
  Robert
  C. Gasser

  
	
   

  	
  President
  and CEO

  



 


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