This excerpt taken from the ITG DEF 14A filed Mar 15, 2005.
Robert J. Russel2004 Compensation and Severance Arrangements
Mr. Russel's 2004 compensation package was set as base cash compensation of $600,000 per annum (of which $415,000 was paid in 2004), and an incentive bonus equal to a percentage of ITG's pre-tax income. In 2004, Mr. Russel was also granted 85,000 performance-based stock options that by their original terms vest (in whole or in part) only if our three-year cumulative pre-tax income from 2004-2006 meets or exceeds certain performance targets. The division of Mr. Russel's 2004 compensation among base salary, a performance-based bonus and performance-based stock option grants was intended to provide total cash compensation and long-term incentive compensation to a degree similar to comparable companies reviewed by the compensation committee in 2004.
Mr. Russel resigned from ITG on September 9, 2004. In connection with his resignation, we entered into a separation agreement with Mr. Russel pursuant to which we agreed to make a severance payment to Mr. Russel of $1,200,000 and a payment in satisfaction of all remaining 2004 bonus payments of $200,000, each to be paid over a twelve (12) month period ending December 2005. In exchange, Mr. Russel provided a release of claims against our subsidiaries, our affiliates and us and agreed to certain non-competition and non-solicitation restrictions that extend until September 9, 2005. Normal payroll and other tax deductions are taken from each payment. During this twelve (12) month period, Mr. Russel is eligible to continue participating in our health insurance program on the same terms as our current senior executives; provided however, that this eligibility will cease if he commences full-time employment. In addition, Mr. Russel was eligible to participate in and receive reimbursements under our Healthcare Flexible Spending Account Plan for qualified medical expenses incurred on or prior to December 31, 2004.
On September 9, 2004, Mr. Russel owned the following ITG stock options:
Under the separation agreement, Mr. Russel received certain benefits with respect to stock options previously awarded to him as follows: Stock options granted Mr. Russel on December 31, 2001 and July 1, 2002 that were not already vested and exercisable on September 9, 2004 became vested and exercisable on December 8, 2004 and remained exercisable through February 5, 2005, after which all unexercised options were forfeited. Stock options granted to Mr. Russel on December 31, 2001 and July 1, 2002 that were already vested as of September 9, 2004 remained exercisable until February 5, 2005, after which all unexercised options were forfeited. Mr. Russel did not exercise any options between December 8, 2004 and February 8, 2005; therefore they were all forfeited. The 24,565 options granted to Mr. Russel on November 3, 1997 were already vested as of September 9, 2004 and we have extended the expiration date of these options until November 2, 2007. In addition, 60,000 of the 120,000 performance-based options granted to Mr. Russel in May 2003 became fully vested on December 8, 2004 and we have extended the expiration date of these options until December 31, 2007; the remaining 60,000 of such performance-based options granted to Mr. Russel in 2003 were forfeited upon his resignation. Similarly, 42,500 of the 85,000 performance-based options granted to Mr. Russel in May 2004 became fully vested on December 8, 2004 and we have extended the expiration date of these options until December 31, 2008; the remaining 42,500 of such performance-based options were forfeited.
Also pursuant to the separation agreement, 4,323 previously unvested stock units granted to Mr. Russel under the 1998 Amended and Restated Stock Unit Award Program were vested on December 8, 2004 and shares subject to these units will be issued to Mr. Russel in accordance with the terms of the Stock Unit Award Program.