Document:

Exhibit 10.14.2

 

AMENDED AND
RESTATED

INVESTMENT
TECHNOLOGY GROUP, INC.

STOCK UNIT AWARD PROGRAM SUBPLAN

 

1.                                      Purpose

 

This Investment Technology Group, Inc.
Stock Unit Award Program Subplan, 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, and is now amended and
restated as set forth herein, effective January 1, 2008 (the “Effective
Date”).

 

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 semi-annual 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 Current 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 semi-annually.  The Assigned
Reduction Amount does not accumulate.

 

 

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” shall
have the meaning ascribed to such term in section 22(e)(3) of the
Code.

 

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.

 

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 

 

2

 

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.

 

(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 

 

3

 

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:

 

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 

 

4

 

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 half 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 half of the year will be calculated
based on a reasonable estimate of total compensation for the year (i.e., in the
case of a Current Participant employed since the beginning of the year by
calculating an estimated aggregate amount by which compensation will be reduced
for the year and reducing the semi-annual bonus payment by one-half 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 the compensation was reduced previously in such year).  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 semi-annual 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 semi-annual period, so
that Stock Units will be automatically granted to such Participant under Section 7(a) 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 

 

5

 

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 within 60 days 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 semi-annual grants in the proportion the Actual Reduction
Amounts and Assigned Reduction Amounts used in determining such semi-annual 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:

 

6

 

(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 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.

 

7

 

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 within 30 days of the third anniversary of the date of grant of the
Stock Units.  Notwithstanding anything in
this Section 8 to the contrary, if a Participant incurs a “separation from
service” and the third anniversary of the date of grant of Basic Stock Units
occurs within six months following the date of the Participant’s separation
from service and the Participant is a “specified employee,” the settlement date
with respect to the Participant’s Basic Stock Units shall be postponed to the
first day that is six months following the date of the Participant’s separation
from service.  For purposes of this Section 8,
the terms “separation from service” and “specified employee” shall have the
meanings ascribed to them in section 409A of the Code.  The determination of specified employees,
including the number and identity of persons considered specified employees and
the identification date, shall be made by the Committee or its designee in
accordance with the provisions of sections 416(i) and 409A of the Code and
the regulations issued thereunder.

 

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.

 

8

 

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.

 

(d)                                 Section 409A.  It is intended that the Program and Stock
Units issued hereunder 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.  If any award or benefit hereunder cannot be
provided or made at the time specified herein without incurring sanctions on
the Participant under section 409A of the Code, then such award or benefit
shall be provided in full at the earliest time thereafter when such sanctions
will not be imposed.  In no event shall a
Participant, directly or indirectly, designate the calendar year of payment. The
Program may be amended in any respect deemed by 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

  
	
  Amended and restated by the Committee:

  	
   

  	
  November 26, 2007

  

 

9Exhibit 10.19.2

 

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.

DIRECTORS’ RETAINER FEE SUBPLAN

 

SECTION 1.           Introduction.

 

This Amended and Restated Investment Technology Group, Inc.
Directors’ Retainer Fee Subplan (the “Subplan”) 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 and was merged with and into the Investment Technology Group, Inc.
2007 Omnibus Equity Compensation Plan (the “2007 Plan”) effective as of May 8,
2007, and is now amended and restated as set forth herein, effective February 7,
2008 (the “Effective Date”).  Effective
as of May 8, 2007, the Subplan continued in effect according to the terms
set forth herein as a subplan under the 2007 Plan.  The purpose of the Subplan is to provide non-employee
directors with an election to receive payment of their annual retainer fees in
the form of shares of Company Stock or cash or to defer payment of their annual
retainer fees in the form of Deferred Share Units.  The Subplan is intended to encourage
qualified individuals to accept nominations as directors of the Company and to
strengthen the mutuality of interest between the nonemployee directors and the
Company’s other stockholders.  The Subplan
is amended and restated herein, effective for deferrals made from annual retainer
fees earned for periods on or after the Effective Date.  Deferrals made from annual retainer fees
earned prior to the Effective Date shall be governed by the Subplan as in
effect prior to this amendment and restatement.

 

SECTION 2.           Definitions.

 

Capitalized terms used in the Subplan but not defined
herein shall have the same meanings as defined in the 2007 Plan.  In addition to such terms and the terms
defined in Section 1 hereof, the following terms used in the Subplan shall
have the meaning set forth below.

 

(a)           “Deferred
Share Unit” means a fully vested Stock Unit entitling the holder to receive one
share of Company Stock per Stock Unit in accordance with the terms of the Subplan.

 

(b)           “Director”
means a member of the Board who is not, and has not been during the preceding
three months, (i) an employee of the Company or any parent or subsidiary
of the Company or (ii) a consultant who has received, during the preceding
12-month period, payments in excess of $150,000 from the Company and its
subsidiaries for consulting services.

 

(c)           “Subplan
Benefits” means the benefits described in Sections 5 and 6 hereof.

 

 

SECTION 3.           Administration.

 

The Subplan shall be administered by the
Committee.  The Committee shall have full
authority to construe and interpret the Subplan, and any action of the
Committee with respect to the Subplan shall be final, conclusive, and binding
on all persons.

 

SECTION 4.           Cash
or Stock Election.

 

Each Director may elect to receive his or her annual
retainer fee in the form of cash or fully vested shares of Company Stock.  In addition, each Director may elect to defer
receipt of his or her annual retainer fee in the form of Deferred Share Units
as provided in Section 5 below.  If
a Director elects to receive his or her annual retainer fee in the form of
vested shares of Company Stock, the shares will be distributed on the date the
annual retainer fee is otherwise payable in accordance with the Company’s
regular retainer fee payment practices, and the amount of Company Stock
distributed shall be the number of shares of Company Stock having an aggregate
Fair Market Value on the payment date equal to the amount of the Director’s
annual retainer fee that is otherwise payable on that date.  Fractional shares will be rounded up to the
nearest whole share.  A Director’s election
to receive his or her annual retainer fee in the form of cash or vested shares
of Company Stock shall continue in effect until the Director notifies the
Company in writing, in a manner consistent with Section 5 below, that the
Director wishes to prospectively change his or her election.  If a Director fails to make any election
under the Subplan, the Director’s annual retainer fee shall be paid in cash.

 

SECTION 5.           Deferred
Share Unit Accounts.

 

The Company shall maintain a Deferred Share Unit
account (an “Account”) for each Director who has elected to defer his or her
annual retainer.  Deferred Share Units
will be credited to each such Account as follows:

 

(a)           Each
Director may make an irrevocable election on or before December 31 by
written notice to the Company, to defer payment of all of the compensation otherwise
payable as his or her annual retainer fee for service as a Director for the
following calendar year.  Notwithstanding
the foregoing, a Director may make such an election within 30 days after first
becoming eligible to participate in the Subplan, with respect to compensation
payable after the effective date of the election.  All compensation which a Director elects to
defer pursuant to this Section 5(a) shall be credited in the form of
Deferred Share Units to the Director’s Account. 
The number of Deferred Share Units so credited will be equal to the
number of shares of Company Stock having an aggregate Fair Market Value (on the
date the compensation would otherwise have been paid) equal to the amount by
which the Director’s compensation was reduced pursuant to the deferral
election.  Deferrals of compensation
hereunder shall continue until the Director notifies the Company in writing
that the Director wishes his or her compensation for the following calendar
year, and succeeding periods to be paid on a current basis either in the form
of cash or Company Stock.

 

(b)           As
of each date on which a cash dividend is paid on Company Stock, there shall be
credited to each Account that number of Deferred Share Units (including

 

2

 

fractional units) determined by (i) multiplying the amount of such
dividend (per share) by the number of Deferred Share Units in such Account; and
(ii) dividing the total so determined by the Fair Market Value of a share
of Company Stock on the date of payment of such cash dividend.  The additions to a Director’s Account
pursuant to this Section 5(b) shall continue until the Director’s
Subplan Benefit is fully paid in accordance with Section 6 below.

 

SECTION 6.           Subplan
Benefits.

 

(a)           Form.  The Subplan Benefit of a Director shall
consist of shares of Company Stock equal in number to the Deferred Share Units
in the Director’s Account.  Any
fractional Deferred Share Units shall be rounded up to the nearest whole
Deferred Share Unit.

 

(b)           Distribution.

 

(i)      The Subplan Benefit of a Director shall be
distributed within 30 days after the date of termination of the Director’s
service on the Board.

 

(ii)     In the case of the death of a Director, the
Director’s Subplan Benefit shall be distributed within 60 days after the date
of the Director’s death to the Director’s estate as beneficiary, unless the
Director has requested a different distribution by written notice to the Committee.

 

SECTION 7.           General.

 

(a)           Nontransferabilily.  Except as provided in Section 6(b)(ii),
no payment of any Subplan Benefit of a Director shall be anticipated, assigned,
attached, garnished, optioned, transferred or made subject to any creditor’s
process, whether voluntarily or involuntarily or by operation of law.  Any act in violation of this subsection shall
be void.

 

(b)           Compliance
with Legal and Trading Requirements. 
The Subplan shall be subject to all applicable laws, rules and
regulations, including, but not limited to, federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as
may be required.

 

(c)           Amendment.  The Committee may amend, alter, suspend,
discontinue, or terminate the Subplan without the consent of stockholders of
the Company or individual Directors, except that any such action will be
subject to the approval of the Company’s stockholders at the next annual
meeting of the stockholders having a record date after the date such action was
taken if such stockholder approval is required by any federal or state law or
regulation or the rules of any automated quotation system or securities
exchange on which the Company Stock may be quoted or listed, or if the
Committee determines in its discretion to seek such stockholder approval; provided,
however, that, without the consent of an affected Director, no
amendment, alteration, suspension, discontinuation, or termination 

 

3

 

of the Subplan may impair or, in any other manner, adversely affect the
rights of such Director to accrued Subplan Benefits hereunder.

 

(d)           Unfunded
Status of Awards.  The Subplan (other
than Section 4 hereof) is intended to constitute an “unfunded” plan of
deferred compensation.  With respect to
any payments not yet made to a Director, nothing contained in the Subplan shall
give any such Director any rights that are greater than those of a general
creditor of the Company; provided, however, that the Company may
authorize the creation of trusts or make other arrangements to meet the Company’s
obligations under the Subplan to deliver cash, or other property pursuant to
any award, which trusts or other arrangements shall be consistent with the “unfunded”
status of the Subplan unless the Company otherwise determines with the consent
of each affected Director.

 

(e)           Nonexclusivity
of the Subplan.  The adoption of the
Subplan shall not be construed as creating any limitations on the power of the
Board or the Committee to adopt such other compensation arrangements as it may
deem desirable, including, without limitation, the granting of Options and
other awards otherwise than under the Subplan, and such arrangements may be
either applicable generally or only in specific cases.

 

(f)            Adjustments.  The adjustment provisions in Section 5(d) of
the 2007 Plan are incorporated herein by reference and shall apply in the case
of Company Stock and Deferred Share Units granted hereunder.

 

(g)           No
Right to Remain on the Board. 
Neither the Subplan nor the crediting of Deferred Share Units under the
Subplan shall be deemed to give any individual a right to remain a director of
the Company or create any obligation on the part of the Board to nominate any
Director for reelection by the stockholders of the Company.

 

(h)           Section 409A
..  It is intended that this Subplan and
awards issued hereunder will comply with Section 409A of the Code (and any
regulations and guidelines issued thereunder) to the extent the awards are
subject thereto, and this Subplan and such awards shall be interpreted on a
basis consistent with such intent.  All
payments to be made upon a termination of service under this Subplan may only
be made upon a “separation from service” under Section 409A of the
Code.  In no event shall a Director,
directly or indirectly, designate the calendar year of payment.  This Subplan and any award agreements issued
thereunder may be amended in any respect deemed by the Committee to be
necessary in order to preserve compliance with Section 409A of the Code.

 

(i)            Governing
Law.  The validity, construction, and
effect of the Subplan shall be determined in accordance with the laws of the
State of Delaware without giving effect to principles of conflict of laws.

 

(j)            Titles
and Headings.  The titles and
headings of the Sections in the Subplan are for convenience of reference
only.  In the event of any conflict, the
text of the Subplan, rather than such titles or headings, shall control.

 

4

 

(k)           Effective
Date.  This Subplan, as amended and
restated herein shall become effective as of the Effective Date.

 

	
  Amended and restated by the Committee effective:

  	
   

  	
  May 8, 2007

  
	
  Amended and restated by the Committee effective:

  	
   

  	
  February 7, 2008

  

 

5

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