Document:

Exhibit 10.4

 

INVESTMENT TECHNOLOGY GROUP, INC.

STOCK UNIT GRANT AGREEMENT 

FOR NON-EMPLOYEE DIRECTORS

 

THIS GRANT AGREEMENT, dated as of                 
(the “Date of Grant”), is entered into by and between Investment Technology
Group, Inc. (the “Company”), a Delaware corporation, and                          ,
a member of the Board of Directors of the Company (the “Director”).

 

WHEREAS, the Director has been awarded the following Grant under the Amended
and Restated Investment Technology Group, Inc. Directors’ Equity Subplan (the “Subplan”),
a subplan of the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation
Plan (the “2007 Plan”); 

 

WHEREAS, capitalized terms used herein and not defined herein shall
have the meanings set forth in the Subplan and in the 2007 Plan. In the event
of any conflict between this Grant Agreement, the Subplan and the 2007 Plan,
the Subplan and the 2007 Plan shall control; and

 

WHEREAS, the Director is not employed by the Company, a Subsidiary of
the Company or a parent of the Company and is not otherwise ineligible to
participate in the Subplan.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the parties
hereto agree as follows:

 

1.   Grant
of Stock Units.  Subject to the terms and conditions set forth in
this Grant Agreement, the Subplan and the 2007
Plan, the Director is hereby awarded       
Stock Units that represent hypothetical shares
of Company Stock on a one-for-one basis (the “Stock Unit Grant”).

 

2.   Grant Subject to Plan Provisions. This Stock Unit Grant is granted pursuant to the Subplan
and the 2007 Plan, the terms of which are incorporated herein by reference, and
in all respects shall be interpreted in accordance with the Subplan and the
2007 Plan. This Stock Unit Grant is subject to interpretations, regulations and
determinations concerning the Subplan and the 2007 Plan established from time
to time by the Committee in accordance with the provisions of the Subplan and
the 2007 Plan, including, but not limited to, provisions pertaining to (a) the
registration, qualification or listing of the shares issued under the 2007 Plan,
(b) changes in capitalization, (c) requirements of applicable law and (d) all other
provisions of the Subplan and the 2007 Plan. The Committee has the authority to
interpret and construe this Grant Agreement pursuant to the terms of the Subplan
and the 2007 Plan, and its decisions are conclusive as to any questions arising
hereunder.

 

 

3.   Stock
Unit Account. The Company shall establish and maintain a Stock Unit bookkeeping
account (the “Account”) on its records for the Director and shall record
in the Account the number of Stock Units awarded to the Director. No shares of
stock shall be issued to the Director at the time the Stock Unit Grant is made.

 

4.   Vesting
of the Stock Unit Grant.

 

(a)   Subject to the terms and conditions of this Grant Agreement, the Subplan
and the 2007 Plan, this Stock Unit Grant shall become vested and
the restrictions on the Stock Unit Grant shall lapse in three approximately equal
annual installments, beginning on the first anniversary of the Date of Grant if
the Director is serving as a Non-Employee Director, or is deemed to be serving
as a Non-Employee Director in accordance with Section 5 below, as of each
applicable vesting date; provided, however, that the Stock Unit
Grant shall become immediately vested in full (i) immediately prior to the
effectiveness of a Change in Control if the Director is serving as a
Non-Employee Director, or is deemed to be serving as a Non-Employee Director in
accordance with Section 5 below, as of such date or (ii) in the event that the
Director ceases to serve as a Non-Employee Director due to the Director’s death
or Disability (as defined below). In the event the Director ceases to serve as
a Non-Employee Director for any other reason not described or provided for
herein, any portion of the Stock Unit Grant that has not yet vested shall be
forfeited.

 

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

 

(b)  The
lapse of restrictions on the Stock Unit Grant shall be cumulative, but shall
not exceed 100% of the Stock Unit Grant. If the foregoing vesting schedule
would produce fractional Stock Units, the number of Stock Units on which the
restrictions lapse shall be rounded down to the nearest whole Stock Unit.

 

(c)   Unless
otherwise provided by the Committee, all amounts receivable in connection with
any adjustments to the Company Stock under Section 5(d) of the 2007 Plan, as
incorporated within the Subplan, shall be subject to the vesting schedule in
this Section 4.

 

5.   Continued
Service as an Employee. If the Director ceases to serve as a Non-Employee
Director and, immediately thereafter, the Director is employed by the Employer,
then, solely for the purposes of Sections 4 and 6 herein, the Director shall
not be deemed to have ceased to serve as a Non-Employee Director at that time,
and his or her continued employment by the Employer shall be deemed to be
continued service as a Non-Employee Director. If the Director becomes employed
by the Employer, the distribution of shares as described in Section 6 below
shall be subject to applicable federal (including FICA), state and local tax
withholding requirements pursuant to Section 14 of the 2007 Plan. 

 

6.   Distribution
of Shares. The Company shall distribute to the Director (or the Director’s
heirs in the event of the Director’s death) at the time of vesting of the Stock
Unit Grant in accordance with Section 4 above (but not later than March 15 of
the calendar year following the calendar year in which the Stock Units vest), a
number of shares of Company Stock equal to the number of Stock Units then held
by the Director that became vested at such time (subject to any applicable tax
withholding under Section 5 above); provided, however, that, 

 

2

 

if the Director so elected in
accordance with the terms of the Subplan and the 2007 Plan, distribution of the
shares of Company Stock subject to the Stock Unit Grant shall be deferred until
the time the Director ceases to be a Non-Employee Director for any reason
(except as otherwise provided in Section 5 above), in accordance with the terms
of the Subplan and the 2007 Plan.

 

7.   Rights
and Restrictions. The Stock Unit Grant shall not be transferable, other
than by will or under the laws of descent and distribution (or pursuant to a
beneficiary designation authorized by the Committee). Prior to vesting of the Stock
Unit Grant and delivery of the shares of Company Stock to the Director, the
Director shall not have any rights or privileges of a stockholder as to the
shares of Company Stock subject to the Stock Unit Grant. Specifically, the
Director shall not have the right to receive dividends or the right to vote
such shares of Company Stock, nor shall the Director have the right to sell,
assign, pledge, hypothecate, encumber, transfer or otherwise dispose of, in
whole or in part, the Stock Unit Grant, prior to vesting of the Stock Unit
Grant and delivery of the shares of Company Stock. The Director shall not have
any interest in any fund or specific assets of the Company by reason of this Stock
Unit Grant or the Account established for the Director.

 

8.   Limitations.
Nothing herein shall limit the Company's right to issue Company Stock, or Stock
Units or other rights to purchase Company Stock subject to vesting, expiration
and other terms and conditions deemed appropriate by the Company and its
affiliates. Nothing expressed or implied herein is intended or shall be
construed to confer upon or give to any Person, other than the parties hereto,
any right, remedy or claim under or by reason of this Grant Agreement or of any
term, covenant or condition hereof.

 

9.   Expenses
of Issuance of Company Stock. The issuance of stock certificates hereunder
shall be without charge to the Director. The Company shall pay, and indemnify
the Director from and against any issuance, stamp or documentary taxes (other
than transfer taxes) or charges imposed by any governmental body, agency or
official (other than income taxes) by reason of the issuance of Company Stock.

 

10. Terms
are Binding. The terms of this Grant Agreement shall be binding upon the
executors, administrators, heirs, successors, transferees and assignees of the Director
and the Company.

 

11. Compliance
with Law. The transfer of Company Stock hereunder shall be subject to the
terms, conditions and restrictions as set forth in the governing instruments of
the Company, Company policies, applicable federal and state securities laws or
any other applicable laws or regulations, and approvals by any governmental or
regulatory agency as may be required. By signing this Grant Agreement, the
Director agrees not to sell any Company Stock at a time when applicable laws or
the Company policies prohibit a sale.

 

12. References.  References
herein to rights and obligations of the Director shall apply, where
appropriate, to the Director’s legal representative or estate without regard to
whether specific reference to such legal representative or estate is contained
in a particular provision of this Grant Agreement.

 

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13. Notices.  Any
notice required or permitted to be given under this Grant Agreement shall be in
writing and shall be deemed to have been given when delivered personally or by
courier, or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently, by
similar process, give notice of:

 

If to the
Company:

 

Investment
Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention: General Counsel

 

If to the
Director:

 

At the
Director’s most recent address shown on the Company’s corporate records, or at
any other address at which the Director may specify in a notice delivered to
the Company in the manner set forth herein.

 

14. Section
409A. It is intended that the Stock Unit Grant issued hereunder shall comply
with Section 409A of the Code (and any regulations and guidelines issued
thereunder) to the extent the Stock Unit Grant is subject thereto, and the Stock
Unit Grant shall be interpreted on a basis consistent with such intent. This Grant
Agreement may be amended without the consent of the Director in any respect
deemed by the Committee to be necessary in order to preserve compliance with
Section 409A of the Code.

 

15. Costs.
In any action at law or in equity to enforce any of the provisions or rights under
this Grant Agreement, including any arbitration proceedings to enforce such
provisions or rights, the unsuccessful party to such litigation or arbitration,
as determined by the court in a final judgment or decree, or by the panel of
arbitrators in its award, shall pay the successful party or parties all costs,
expenses and reasonable attorneys' fees incurred by the successful party or
parties (including without limitation costs, expenses and fees on any appeals),
and if the successful party recovers judgment in any such action or proceeding
such costs, expenses and attorneys' fees shall be included as part of the
judgment. 

 

16. Further
Assurances. The Director agrees to perform all acts and execute and deliver
any documents that may be reasonably necessary to carry out the provisions of
this Grant Agreement, including but not limited to all acts and documents
related to compliance with federal and/or state securities laws.

 

17. Counterparts.
For convenience, this Grant Agreement may be executed in any number of
identical counterparts, each of which shall be deemed a complete original in
itself and may be introduced in evidence or used for any other purposes without
the production of any other counterparts.

 

18. Governing
Law. This Grant Agreement shall be construed and enforced in accordance
with Section 6(h) of the Subplan.

 

4

 

19. Entire
Agreement. This Grant Agreement, together with the Subplan and the 2007
Plan, sets forth the entire agreement between the parties with reference to the
subject matter hereof, and there are no agreements, understandings, warranties,
or representations, written, express, or implied, between them with respect to
the Stock Unit Grant other than as set forth herein or therein, all prior
agreements, promises, representations and understandings relative thereto being
herein merged.

 

20. Amendment;
Waiver. This Grant Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived
only by a written instrument executed by the parties hereto or, in the case of
a waiver, by the party waiving compliance. Any such written instrument must be
approved by the Committee to be effective as against the Company. The failure
of any party at any time or times to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce the same.
No waiver by any party of the breach of any term or provision contained in this
Grant Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Grant Agreement.

 

21. Severability.
Any provision of this Grant Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned have executed this Grant Agreement
as of the date first above written.

 

	
   

  	
  INVESTMENT TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Robert C. Gasser

  
	
   

  	
  Title: CEO and President

  

 

 

I hereby
accept the Stock Unit Grant described in this Grant Agreement, and I agree to
be bound by the terms of the Subplan, the 2007 Plan and this Grant Agreement. I
hereby acknowledge that a copy of the Plan and the Plan prospectus have been
delivered to me. I hereby further agree that all the decisions and
determinations of the Committee shall be final and binding.

 

 

	
   

  	
   

  	
   

  
	
   

  	
      [Insert Name of the
  Director]

  

 

6Exhibit
10.5

 

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 (the “Effective Date”). Effective as
of the Effective Date, the Subplan shall continue 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 fractional

 

2

 

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 at the time 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 a reasonable
time as determined by the Company, after 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. This Subplan and any award agreements issued
thereunder may be amended in any respect deemed by the Board or the Committee
to be necessary in order to preserve compliance with section 409A of the Code.

 

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

 

4

 

(k)           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.

 

Amended and Restated by
the Committee effective:  May 8, 2007.

 

5

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