Document:

Exhibit 10.16.1

 

INVESTMENT TECHNOLOGY GROUP, INC.

 

AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

 

1.                                      Purpose.  The purpose of this Amended and Restated Employee Stock Purchase Plan (the “Plan”) of Investment Technology Group, Inc. (the “Company”) is to encourage stock ownership by Employees (as defined below) of the Company and its Subsidiaries (as defined below) and thereby provide Employees with an incentive to contribute to the profitability and success of the Company, and to provide a benefit that will assist the Company in competing to attract and retain Employees of high quality.  The Plan, which is intended to qualify as an “employee stock purchase plan” meeting the requirements of Section 423 of the Code for one or more Offerings, is for the exclusive benefit of eligible Employees of the Company and its Subsidiaries.

 

2.                                      Definitions.  For purposes of the Plan, in addition to the terms defined in Section 1, terms are defined as set forth below:

 

(a)                                 “Account” means the account maintained on behalf of the Participant by the Custodian for the purpose of investing in Stock and engaging in other transactions permitted under the Plan.

 

(b)                                 “Administrator” means a committee of two (2) or more Board members appointed by the Board to administer the Plan. Unless otherwise designated by the Board, the Administrator shall be the Compensation Committee of the Board as constituted by the Board from time to time.

 

(c)                                  “Board” means the Board of Directors of the Company.

 

(d)                                 “Code” means the Internal Revenue Code of 1986, as amended from time to time.  References to any provision of the Code will be deemed to include successor provisions thereto and regulations thereunder.

 

(e)                                  “Custodian” means Computershare, or such successor thereto as may be appointed by the Administrator.

 

(f)                                   “Earnings” means that portion of a Participant’s compensation which constitutes gross salary under the payroll system of the Company and its Subsidiaries and payable to a Participant during a given pay period.

 

(g)                                  “Employee” means a person classified as an employee of the Company or a Subsidiary (including an officer or director who is also an employee) for payroll purposes, as determined in the sole discretion of the Company.  Notwithstanding the foregoing, if a person is engaged in a non-employee status (including, but not limited to, as an independent contractor, an individual being paid through an employee leasing company or other third party agency) and is

 

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subsequently reclassified by the Company, the Internal Revenue Service, or a court as an employee for payroll purposes, such person, for purposes of this Plan, shall be deemed an Employee from the actual (and not the effective) date of such reclassification, unless expressly provided otherwise by the Company.

 

(h)                                 “Enrollment Date” means the first day of each Offering Period.

 

(i)                                     “Fair Market Value,” unless otherwise required by an applicable provision of the Code, as of any date, means the closing sales price of the Stock as reported on the New York Stock Exchange on that date.

 

(j)                                    “Offering” means an offering of Stock pursuant to Purchase Rights under the Plan.

 

(k)                                 “Offering Period” means the period designated by the Administrator with respect to which Participants will be granted Purchase Rights.  Until such time as the Administrator specifies otherwise, Offering Period will mean the approximately six-month period beginning on the first trading day in November and ending on the last trading day of April or beginning on the first trading day in May and ending on the last trading day of October.

 

(l)                                     “Participant” means an Employee of the Company or a Subsidiary who satisfies the eligibility criteria set forth in Section 5 and is participating in the Plan.

 

(m)                             “Purchase Date” means the last day of each Offering Period.

 

(n)                                 “Purchase Right” means a Participant’s option to purchase shares, which is deemed to be outstanding and exercisable during an Offering Period in accordance with the Plan.  A Purchase Right represents an “option” as such term is used under Section 423 of the Code.

 

(o)                                 “Stock” means the common stock, par value $0.01 per share, of the Company, and such other securities as may be substituted or resubstituted for Stock under Section 4.

 

(p)                                 “Subsidiary” or “Subsidiaries” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing more than 50% of the total combined voting power of all classes of stock in one of the other corporations in the chain, including a corporation that becomes a Subsidiary during the term of the Plan.

 

3.                                      Administration.

 

(a)                                 Administrator.  The Plan will be administered by the Administrator.  The Administrator will have full authority to adopt, amend, suspend, waive, and rescind such rules and regulations and appoint such agents as it may deem necessary or advisable to administer the Plan, to correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and rules and regulations thereunder, and to make all other

 

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decisions and determinations under the Plan (including determinations relating to eligibility).  The Administrator shall have the authority to delegate routine day-to-day administration of the Plan to such officers and employees of the Company as the Administrator deems appropriate.

 

(b)                                 Offerings.  The Administrator may authorize one or more Offerings under the Plan that are not designed to comply with the requirements of Code Section 423 but with the requirements of the foreign jurisdictions in which those Offerings are conducted. Such Offerings shall be separate from any Offerings designed to comply with the Code Section 423 requirements but may be conducted concurrently with those Offerings.  To the extent required by Code Section 423, the Participants in each separate Offering shall have equal rights and privileges under that Offering in accordance with the requirements of Section 423(b)(5) of the Code and the applicable Treasury Regulations thereunder.

 

(c)                                  The Custodian.  The Custodian will act as custodian under the Plan, and will perform such duties as are set forth in the Plan and in any agreement between the Company and the Custodian.  The Custodian will establish and maintain, as agent for each Participant, an Account and any subaccounts as may be necessary or desirable for the administration of the Plan.

 

4.                                      Stock Subject to Plan.  Subject to adjustment as hereinafter provided, the total number of shares of Stock reserved and available for issuance upon exercise of Purchase Rights or otherwise under the Plan will be 1,548,313.  Any shares of Stock delivered by the Company under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.  Shares acquired in the open market through dividend reinvestment will not count against this limit.  The number and kind of such shares of Stock subject to the Plan will be proportionately adjusted, as determined by the Board, in the event of any extraordinary dividend or other distribution, recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event affecting the Stock.

 

5.                                      Enrollment and Contributions.

 

(a)                                 Eligibility.  An Employee of the Company or a Subsidiary may enroll in the Plan for any Offering Period if such Employee is employed at the Enrollment Date, unless:

 

(i)                                     At the time of enrollment, the Employee’s customary employment is 20 hours or less per week or the Employee’s customary employment is for not more than five months in any calendar year, or the Employee cannot legally enter into the obligations of a Participant;

 

(ii)                                  Such person would upon enrollment be deemed to own, for purposes of Section 423(b)(3) of the Code, an aggregate of five percent or more of the total combined voting power or value of all outstanding shares of all classes of the Company or of any parent or Subsidiary (including in such person’s ownership the maximum number of shares that he or she could acquire under Section 6(c)); or

 

(iii)                               with respect to a Subsidiary, the Administrator determines prior to the start date of an Offering Period, that Employees of that Subsidiary shall not participate in the Plan.

 

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The Administrator may allow Employees who would otherwise be excluded under Section 5(a)(i) to participate in one or more separate Offerings the Plan to the extent required under local law.

 

The Company will notify an Employee of the date as of which he or she is eligible to initially enroll in the Plan, and the prescribed enrollment procedures.

 

(b)                                 Initial Enrollment.  An Employee who is or who will become eligible on or before a given Enrollment Date under Section 5(a) may, after receiving current information about the Plan, initially enroll in the Plan by completing and submitting a properly completed enrollment form, including thereon the Employee’s election as to the rate of payroll or other authorized form of contributions for the Offering Period in accordance with enrollment procedures prescribed by the Administrator (which may include accessing the Custodian’s website and enrolling electronically) on or before the start date of the Offering Period.

 

(c)                                  Reenrollment for Subsequent Offering Periods.  A Participant whose enrollment in and payroll or other authorized form of contributions under the Plan continue throughout an Offering Period will automatically be reenrolled in the Plan for the next Offering Period unless (i) the Participant terminates enrollment before the Enrollment Date for the next Offering Period, (ii) on such Enrollment Date he or she is ineligible to participate under Section 5 or (iii) such other form of contributions are not permitted for such subsequent Offering Period.  The rate of payroll or other authorized form of contributions for a Participant who is automatically reenrolled for an Offering Period will be the same as the rate of payroll or other authorized form of contributions in effect at the end of the preceding Offering Period, unless the Participant submits a new enrollment form on or prior to the Enrollment Date for the Offering Period designating a different rate of payroll or other authorized form of contributions.

 

(d)                                 Payroll or Other Contributions.  An enrolled Participant will make contributions under the Plan by means of payroll deductions from each payroll period which ends during the Offering Period or one or more other forms of contributions specified by the Administrator for a particular Offering during that Offering Period, at the rate elected by the Participant in his or her enrollment form submitted for the Offering Period.  The rate of payroll or other authorized form of contributions elected by a Participant may not be more than ten percent of the Participant’s Earnings for each payroll period; provided, however, that the Administrator may specify a higher or lower maximum rate, subject to Section 8(c) hereof.  The Participant may specify, on the enrollment form, whether payroll or other authorized form of contributions shall be a percentage of Earnings or a fixed monetary amount.  The foregoing and any election of a Participant notwithstanding, a Participant’s rate of payroll or other authorized form of contributions will be adjusted downward by the Company at any time or from time to time as necessary to ensure that the limit on the amount of Stock purchased with respect to an Offering Period set forth in Section 6(c) is not exceeded.  A Participant may elect to increase, decrease, or discontinue payroll or other authorized forms of contributions for future Offering Periods by submitting a new enrollment form on or prior to the Enrollment Date for the Offering Period; any election to increase or decrease payroll deductions shall be effective as soon as practicable following the start date of that Offering Period.  A Participant may not elect to increase or decrease payroll or other forms of permitted contributions during an Offering Period, except that a Participant’s payroll or other forms of permitted contributions will be automatically

 

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discontinued upon the submission of an election to withdraw payroll or other forms of permitted contributions prior to a Purchase Date, as specified in Section 5(g).

 

(e)                                  Contributing in Other Currency.  Payroll deductions or other authorized forms of contribution collected in a currency other than U.S. Dollars shall be converted into U.S. Dollars on the last day of the Offering Period in which collected, with such conversion to be based on an exchange rate determined by the Administrator in its sole discretion.

 

(f)                                   Holding of Payroll and Other Contributions.  All payroll and other contributions by a Participant under the Plan will be received and held by the Company (and/or a Subsidiary) until the end of the Offering Period, and will represent unfunded obligations of the Company (or such Subsidiary) unless otherwise required by local law.  Except to the extent required by local law, such amounts are not required to be segregated and may be used by the Company (or the Subsidiary) for any corporate purpose.

 

(g)                                  Withdrawal of Payroll and Other Contributions; Refund of Payroll and Other Contributions Upon Termination of Employment.  A Participant may elect to withdraw all (but not less than all) of his or her payroll and other contributions for a given Offering Period by submitting a notice of withdrawal (in accordance with the procedures prescribed by the Administrator (which may include accessing the Custodian’s website and withdrawing electronically)) not later than the close of business the business day prior to the Purchase Date for such Offering Period.  In addition, if the Participant ceases to be employed by the Company and its Subsidiaries prior to the Purchase Date, his or her payroll and other contributions for that Offering Period shall be refunded.  In either case, the Company shall promptly pay to the Participant (or his or her estate, in the event of death) the amount of such payroll and other contributions.  No further payroll or other contributions shall be made by the Participant in that Offering Period.

 

(h)                                 Refund of Unused Payroll and Other Contributions.  If any of a Participant’s payroll or other permitted contributions are not applied to the purchase of shares on the Purchase Date (for example, if the number of shares purchased is limited under Section 6(c)), the portion of such payroll and other contributions not applied to the purchase of shares shall be promptly refunded to the Participant.

 

(i)                                     No Interest Payable on Contributions.  No amounts of interest will be credited or payable by the Company (or a Subsidiary) on payroll or other contributions pending investment in Stock, or upon withdrawal, refund upon termination, or refund of any unused portion, or in any other circumstance under the Plan.

 

6.                                      Purchases of Stock.

 

(a)                                 Purchase Rights.  Enrollment in the Plan for any Offering Period by a Participant will constitute a grant by the Company, on the start date of such Offering Period, of a Purchase Right to such Participant for such Offering Period.  Each Purchase Right will be subject to the terms set forth in this Section 6.

 

(b)                                 Purchase Price.  The purchase price at which each share of Stock will be purchased under a Purchase Right will equal 85% of the lesser of (i) Fair Market Value of a

 

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share of Stock on the first trading day in the Offering Period and (ii) Fair Market Value of a share of Stock on the last trading day in the Offering Period.

 

(c)                                  Number of Shares Purchased.  The number of shares of Stock that will be purchased upon exercise of a Participant’s Purchase Right for an Offering Period will equal the number of shares (including fractional shares) that can be purchased at the purchase price specified in Section 6(b) with the aggregate amount of the Participant’s payroll and other permitted contributions during the Offering Period; provided, however, that the number of shares of Stock subject to a Participant’s Purchase Right and purchasable in any Offering Period will not exceed the number derived by dividing $12,500 by 100% of the Fair Market Value of one share of Stock determined as of the first day in the Offering Period.  The number of shares of Stock subject to a Purchase Right shall also be subject to the limitations set forth in 6(e).

 

(d)                                 Automatic Exercise and Purchase.  The Purchase Right will be automatically exercised on the Purchase Date for the Offering Period.  At or as promptly as practicable after the Purchase Date for an Offering Period, the aggregate amount of the Participant’s payroll and other permitted contributions for the Offering Period will be applied by the Company to the purchase of shares of Stock, in accordance with the terms of the Plan.  Thereupon, the Company will deliver the shares of Stock purchased to the Custodian for deposit into the Participant’s Account.  Payment for Stock purchased upon exercise of a Purchase Right will be made only through payroll or other authorized form of contributions in accordance with Section 5; no optional payments will be permitted.

 

(e)                                  Accrual Limitations.

 

(i)                                     No Participant shall be entitled to accrue rights to acquire Stock pursuant to any Purchase Right outstanding under the Plan if and to the extent such accrual, when aggregated with (A) rights to purchase Stock accrued under any other purchase right granted under the Plan and (B) similar rights accrued under other employee stock purchase plans (within the meaning of Section 423 of the Code) of the Company or any parent or Subsidiary, would otherwise permit such Participant to purchase more than $25,000 worth of stock of the Company or any parent or Subsidiary (determined on the basis of the Fair Market Value of such stock on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding.

 

(ii)                                  For purposes of applying such accrual limitations, the following provisions shall be in effect:

 

(1)                                 The right to acquire Stock under each outstanding Purchase Right shall accrue on the Purchase Date in effect for the Offering Period for which such right is granted.

 

(2)                                 No right to acquire Stock under any outstanding Purchase Right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Stock under one (1) or more other purchase rights at a rate equal to $25,000 worth of Stock (determined on the basis of the Fair Market Value of such stock on the date or dates of grant) for each calendar year such rights were at any time outstanding.

 

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(f)                                   If by reason of such accrual limitations, any Purchase Right of a Participant does not accrue for a particular Offering Period, then the payroll deductions and other contributions which the Participant made during that Offering Period with respect to such Purchase Right shall be refunded.

 

7.                                      Restrictions on Sale; Restrictions on Transfer from Account; Withdrawal or Transfer of Shares, and Account Distribution Upon Termination.

 

(a)                                 Restrictions on Sale.  Notwithstanding anything to the contrary in the Plan or any policy of the Company, shares of Stock acquired under the Plan may not be sold or otherwise be disposed of for a period of six (6) months following the Purchase Date on which those shares were purchased.  Shares of Stock acquired under the Plan must be held in the Participant’s Account during such restriction period and may be subject to further transfer restrictions as set forth in Section 7(b).  The foregoing restriction shall not apply in the event of Participant’s death to the transfer of shares to the Participant’s estate or to the subsequent sale of the shares by the estate.

 

(b)                                 Transfer Restrictions.  The Administrator may provide that, following the lapse of the restrictions under Section 7(a) and except as otherwise provided below, the shares of Stock acquired under the Plan may not be transferred (either electronically or in certificate form) from the Participant’s Account until the end of the two (2)-year period measured from the start date of the Offering Period in which the shares were purchased.  Such limitation shall apply both to transfers to different accounts with the Custodian and to transfers to other brokerage firms.  Any shares held in the Account following the expiration of such two (2)-year period may thereafter be transferred (either electronically or in certificate form) to other accounts or to other brokerage firms.

 

The foregoing procedures in this Section 7(b) shall not in any way limit when the Participant may sell his or her shares.  Those procedures are designed solely to assure that any sale of shares following the lapse of the restrictions under Section 7(a) but prior to the satisfaction of the specified two (2)-year period is made through the Account.  In addition, following the lapse of the restrictions under Section 7(a), the Participant may request a stock certificate or share transfer from his or her Account prior to the satisfaction of the specified two (2)-year period under this Section 7(b) should the Participant wish to make a gift of any shares held in that account.  However, shares may not be transferred (either electronically or in certificate form) from the Account for use as collateral for a loan during the specified two (2)-year under this Section 7(b).

 

The foregoing procedures shall apply to all shares purchased by each Participant, whether or not that Participant continues in Employee status.

 

(c)                                  Stock Withdrawals and Transfers.  Following the expiration of the restriction period under Section 7(a) and any restriction period imposed under Section 7(b), a Participant may elect to withdraw shares of Stock from his or her Account or to transfer such shares from his or her Account to an account of the Participant maintained with a broker-dealer or financial institution, in accordance with the procedures established by the Custodian.  Unless otherwise determined by the Administrator, only whole shares shall be issued or transferred and

 

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the Participant shall receive cash in lieu of fractional shares based on the Fair Market Value of a share of Stock on the date of withdrawal or transfer.  Other provisions of this Plan notwithstanding, if the Participant is then an Employee of the Company or its Subsidiaries, transfers will be made only to a broker-dealer or financial institution through which Employees are then permitted to sell Stock under the Company’s policies governing employee trading in Company securities.  Withdrawals and transfers will be subject to any fees imposed in accordance with Section 8(a) hereof.

 

(d)                                 Distribution of Account Upon Termination.  Upon termination of employment of a Participant and subject to Section 7(a) and Section 7(b), the Custodian will continue to maintain the Participant’s Account until the earlier of such time as the Participant withdraws or transfers all Stock in the Account or one year after the Participant ceases to be employed by the Company and its Subsidiaries.  At the expiration of such one year period (or longer restriction period under Section 7(a) or Section 7(b)), the assets in Participant’s Account shall be withdrawn or transferred as elected by the Participant or, in the absence of such election, as determined by the Administrator.  If a Participant dies while assets remain credited to his or her Account, all amounts payable to the Participant will be paid to his or her estate as promptly as practicable.

 

8.                                      General.

 

(a)                                 Costs.  Costs and expenses incurred in the administration of the Plan and maintenance of Accounts will be paid by the Company, including annual fees of the Custodian.  The Participant shall be solely responsible for any fees, costs and commissions imposed by the Custodian for the withdrawal, transfer or sale of Stock acquired under the Plan and for other services unrelated to the purchase of Stock under the Plan.

 

(b)                                 Statements to Participants.  The Custodian will reflect payroll (or other authorized forms of) contributions, purchases, dividends and distributions and any reinvestment thereof, withdrawals and transfers of shares of Stock and other Plan transactions by appropriate adjustments to the Participant’s Account.  The Custodian will, not less frequently than semi-annually, provide or cause to be provided a written statement to the Participant showing the transactions in his or her Account and the date thereof, the number of shares of Stock purchased, the aggregate purchase price paid, the purchase price per share, the brokerage fees and commissions paid (if any), the total shares of Stock held for the Participant’s Account (computed to at least three decimal places), and other information provided by the Custodian.

 

(c)                                  Compliance with Section 423.  It is the intent of the Company that this Plan comply in all respects with applicable requirements of Section 423 of the Code and regulations thereunder with respect to Offerings designated by the Administrator to be Offerings under Section 423 of the Code.  Accordingly, if any provision of this Plan with respect to such designated Offerings does not comply with such requirements, such provision will be construed or deemed amended to the extent necessary to conform to such requirements.

 

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9.                                      General Provisions.

 

(a)                                 Compliance With Legal and Other Requirements.  The Plan, the granting and exercising of Purchase Rights hereunder, and the other obligations of the Company and the Custodian under the Plan will be subject to all applicable federal, state, local and foreign laws, rules, and regulations, and to such approvals by any regulatory or governmental agency as may be required.  The Company may, in its discretion, postpone the issuance or delivery of Stock upon exercise of Purchase Rights until completion of such registration or qualification of such Stock or other required action under any federal, state, local or foreign law, rule, or regulation, listing or other required action with respect to any automated quotation system or stock exchange upon which the Stock or other Company securities are designated or listed, or compliance with any other contractual obligation of the Company, as the Company may consider appropriate, and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules, and regulations, designation or listing requirements, or other contractual obligations.

 

(b)                                 Limits on Encumbering Rights.  No right or interest of a Participant under the Plan, including any Purchase Right, may be pledged, encumbered, or hypothecated to or in favor of any party, subject to any lien, obligation, or liability of such Participant, or otherwise assigned, transferred, or disposed of except pursuant to the laws of descent or distribution, and any right of a Participant under the Plan will be exercisable during the Participant’s lifetime only by the Participant.

 

(c)                                  No Right to Continued Employment.  Neither the Plan nor any action taken hereunder, including the grant of a Purchase Right, 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 any Employee’s employment at any time.

 

(d)                                 Taxes.  The purchase of Stock will be subject to withholding of all applicable income tax, employment tax, payroll tax, social security tax, social insurance, contributions, payment on account obligations or other payments required to be withheld, collected or accounted for in connection with purchase of Stock under the Plan (“Taxes”).  The Company or any Subsidiary is authorized to withhold from any payment to be made to a Participant, including any payroll and other payments not related to the Plan, amounts of Taxes due in connection with any transaction under the Plan, and a Participant’s enrollment in the Plan will be deemed to constitute his or her consent to such withholding.  The Company may require a Participant to remit to the Company (or a Subsidiary) the amount of such Taxes and may take such other action as may be necessary in the opinion of the Company or any Subsidiary to satisfy withholding obligations for the payment of Taxes.  In addition, the Administrator reserves the right to require Participants to advise the Company of sales and other dispositions of Stock acquired under the Plan in order to permit the Company to comply with tax laws and to claim any tax deductions to which the Company may be entitled with respect to the Plan.

 

(e)                                  Changes to the Plan.  The Board shall have the exclusive authority to increase the total number of shares of Stock available for issuance under the Plan and to

 

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terminate the Plan at any time.  The Administrator may amend or alter the Plan (other than to increase the total number of shares of Stock available for issuance under the Plan) at any time; provided, however,  that any such action will be subject to the approval of the Company’s stockholders if such stockholder approval is required by any federal or state law or regulation or the rules of any automated quotation system or stock exchange on which the Stock may then be quoted or listed, or if such stockholder approval is necessary in order for the Plan to continue to meet the requirements of Section 423 of the Code.  Upon termination of the Plan, the Board may elect to terminate all outstanding Purchase Rights at such time as the Board may designate; if such termination results in termination of any Purchase Right prior to its exercise, all of a Participant’s payroll contributions not invested in Stock will be returned to the Participant (without interest) as promptly as practicable.

 

(f)                                   No Rights to Participate; No Stockholder Rights.  No Participant or Employee will have any claim to participate in the Plan with respect to Offering Periods that have not commenced, and the Company will have no obligation to continue the Plan.  No Purchase Right will confer on any Participant any of the rights of a stockholder of the Company unless and until Stock is duly issued or transferred to the Custodian and credited to the Participant’s Account.

 

(g)                                  Fractional Shares.  Unless otherwise determined by the Administrator, purchases of Stock under the Plan executed by the Custodian may result in the crediting of fractional shares of Stock to the Participant’s Stock Account.  Such fractional shares will be computed to at least three decimal places.  Fractional shares will not, however, be issued by the Company, and certificates representing fractional shares will not be delivered to Participants under any circumstances.  If at any time fractional shares will not be credited to Participants’ Accounts, the Administrator shall determine whether a Participant’s payroll and other contributions remaining after the purchase of the greatest possible number of whole shares on a given Purchase Date will be refunded or will be retained and applied to purchases in the next Offering Period.

 

(h)                                 Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval will be construed as creating any limitations on the power of the Board to adopt such other compensatory arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases.

 

(i)                                     Governing Law.  The Plan and all related documents shall be governed by, and construed in accordance with, the laws of the State of New York (except to the extent the Delaware General Corporation Law and provisions of federal law may be applicable), without reference to principles of conflict of laws.  If any provision hereof shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of the Plan shall continue to be fully effective.

 

(j)                                    Effective Date.  The Plan was originally effective February 1, 1998, and previously amended and restated effective on May 12, 2009, August 18, 2009 and June 11, 2013.  The Plan as amended and restated herein is effective as of August 11, 2015.

 

10Exhibit 10.31

 

INVESTMENT TECHNOLOGY GROUP, INC.
 STOCK UNIT GRANT AGREEMENT

 

THIS GRANT AGREEMENT, dated as of October 19, 2015 (the “Date of Grant”), is entered into by and between Investment Technology Group, Inc. (the “Company”), a Delaware corporation, and R. Jarrett Lilien, currently an employee of the Company (the “Employee”).

 

WHEREAS, the parties entered into a Letter Agreement on October 16, 2015 (the “Letter Agreement”), which provides for an award in the form of restricted stock units, to remain outstanding and vest subject to the Employee continuing to serve as (i) the Interim Chief Executive and President of the Company until such time as the new Chief Executive and President of the Company commences employment with the Company (the “Term End Date”) and (ii) thereafter, as a member of the Board (the “Award”).

 

WHEREAS, in accordance with the terms of the Letter Agreement, the Employee has been awarded the following Grant under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”).

 

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 Employee is hereby awarded 65,747 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.  The terms of the of the Plan are incorporated herein by reference to this Grant Agreement, and in all respects, the Stock Grant Unit shall be interpreted in accordance with, and subject to the terms of, the Plan.  The Plan and the Plan prospectus are available on ITG Exchange; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal.  This Stock Unit Grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) the registration, qualification or listing of the shares issued under the Plan, (ii) changes in capitalization, (iii) requirements of applicable law and (iv) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder. Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.

 

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

 

 

4.                                      Vesting of the Stock Unit Grant.

 

(a)                      Subject to Section 5 below and the other terms and conditions of this Grant Agreement and the Plan, this Stock Unit Grant shall become vested, and all restrictions on the Stock Unit Grant shall lapse, in three equal installments on each of the first, second and third anniversaries of the Date of Grant (each such anniversary of the Date of Grant, an “Anniversary”) so long as the Employee (i) continuously fulfills the Employee’s duties as Interim Chief Executive Officer and President of the Company through the Term End Date and does not otherwise voluntarily resign from such employment and (ii) thereafter continuously serves as a member of the Board from the Date of Grant through each applicable Anniversary and does not voluntarily resign from such Board service (such complete vesting schedule as described in clauses (i) and (ii) herein, the “Vesting Schedule”); provided, however, that the Stock Unit Grant shall become immediately vested in full and settle (x) upon a Change in Control if, as of the date of the Change in Control, the Employee has not experienced a prior Termination of Service (as defined below) or (y) upon the Employee’s Termination of Service due to death or Permanent Disability (as defined below).  For purposes of this Agreement, the term “Permanent Disability” shall have the meaning ascribed to such term in Section 22(e)(3) of the Code.

 

(b)                      Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the Plan shall be subject to the Vesting Schedule.

 

5.                                      Termination of Service; SOX Clawback.

 

(a)                                    In the event of the Employee’s Termination of Service for any reason other than due to the Employee’s voluntarily resignation as provided in Section 4(a) above, prior to the date the Stock Unit Grant otherwise becomes vested in accordance with Section 4(a) above, the Stock Unit Grant shall immediately be forfeited by the Employee.

 

(b)                                    For purposes of this Agreement, the term “Termination of Service” means the Employee ceases to be employed by the Employer or ceasing to serve on the Board, as applicable.  If the Employee is employed by a Subsidiary of the Company, the Employee shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and the Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of absence and transfers among Employers shall not be considered a Termination of Service.

 

6.                                      Distribution of Shares.  The Company shall distribute to the Employee (or the Employee’s heirs in the event of the Employee’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 Employee that became vested at such time, subject to reduction for withholding of shares pursuant to Section 9 below, if applicable.

 

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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 Employee, the Employee 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 Employee shall not have the right to receive dividends or the right to vote such shares of Company Stock, nor shall the Employee 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 Employee shall not have any interest in any fund or specific assets of the Employer by reason of this Stock Unit Grant or the Account established for the Employee.

 

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.                                      Withholding.  To the extent applicable, at the time of distribution pursuant to Section 6 above, and in accordance with any rules or regulations of the Committee then in effect, the Employer shall withhold, through an automatic share withholding procedure, Company Stock with a Fair Market Value (measured as of the vesting date) equal to the amount of the federal, state or local taxes of any kind required by law to be withheld with respect to the distributions.  To the extent not withheld, the Employee shall pay to the Employer or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at any time with respect to the Stock Unit Grant and the Employer shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.

 

10.                               Expenses of Issuance of Company Stock.  The issuance of stock certificates hereunder shall be without charge to the Employee.  The Company shall pay, and indemnify the Employee 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.

 

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

 

12.                               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 Employee agrees not to sell any Company Stock at a time when applicable laws or the Company policies prohibit a sale.

 

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13.                               References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’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.

 

14.                               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.
 One Liberty Plaza

165 Broadway

New York, NY 10006

Attention: General Counsel

 

If to the Employee:

 

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

 

15.                               No Right to Continued Employment.  This Stock Unit Grant shall not confer upon the Employee any right to continue in the employ of the Employer nor shall this Stock Unit Grant interfere with the right of the Employer to terminate the Employee’s employment at any time.

 

16.                               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.  In no event shall the Employee, directly or indirectly, designate the calendar year in which the shares underlying the Stock Unit Grant will be distributed.  If the Stock Unit Grant or any portion thereof is subject to Section 409A of the Code and if the Employee is a Key Employee (as defined in the Plan), then upon separation from service any distribution under the Stock Unit Grant shall be administered so that any distribution with respect to such Grant shall be postponed for six months following the date of the Employee’s separation from service, if required by Section 409A of the Code.  If a distribution is delayed pursuant to Section 409A of the Code, the distribution shall be paid within 30 days after the end of the six-month period.  If the Employee dies during such six-month period, any postponed amounts shall be paid within 90 days of the Employee’s death.  This Grant Agreement may be amended without the consent of the Employee in any respect deemed by the Committee to be necessary in order to preserve compliance with Section 409A of the Code.

 

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17.                               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.

 

18.                               Further Assurances.  The Employee 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 applicable federal and/or state securities laws.

 

19.                               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.

 

20.                               Governing Law.  This Grant Agreement shall be construed and enforced in accordance with Section 19(h) of the Plan.

 

21.                               Entire Agreement.  This Grant Agreement, together with the 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.

 

22.                               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.

 

23.                               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.

 

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24.                               Recoupment Policy.  The Employee hereby agrees that the Employee will be subject to any compensation clawback or recoupment policies that may be applicable to the Employee as an employee of the Company or any of its affiliates, as in effect from time to time and as approved by the Board or the Committee, whether or not approved before or after the Date of Grant.

 

[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:
    	
/s/   Peter A. Goldstein
    
	
 
    	
Name:   Peter A. Goldstein
    
	
 
    	
Title:   Managing Director and Head of Human Resources
    

 

I hereby accept the Stock Unit Grant described in this Grant Agreement, and I agree to be bound by the terms of the Plan and this Grant Agreement.  I hereby further agree that all the decisions and determinations of the Committee shall be final and binding.

 

	
 
    	
/s/ R. Jarrett Lilien
    	
 
    
	
 
    	
R. Jarrett Lilien
    	
 
    

 

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