Exhibit 10.2

 

July 20, 2017

 

Steffen Parratt

KCG Holdings, Inc.
300 Vesey Street
New York, New York, 10282

 

Re:                 Separation Agreement

 

Dear Steffen,

 

This letter agreement (this “Agreement”) sets forth the terms of your departure
from KCG Holdings, Inc. (collectively with its subsidiaries and affiliates, the
“Company”), which shall be contingent and effective on the Closing Date, as that
term is defined in the Agreement and Plan of Merger, dated as of April 20, 2017,
by and among Virtu Financial, Inc. (“Virtu”), Orchestra Merger Sub, Inc. and KCG
Holdings, Inc. (as may be amended from time to time, the “Merger Agreement”). 
This Agreement shall only become effective upon the occurrence of the Closing
(as defined in the Merger Agreement) and no party hereto shall have any
obligations hereunder unless and until the Closing occurs.  If the Merger
Agreement is terminated prior to the occurrence of the Closing, then this
Agreement shall be void ab initio and be of no force and effect.

 

Virtu will, or will cause the Company to, provide you with certain severance
entitlements in exchange for your executing, delivering and performing all of
the terms, conditions and obligations applicable to you under this Agreement. 
You acknowledge and agree that the payments and benefits being provided to you
herein are in exchange for your promises, representations, releases, agreements
and obligations contained herein and are valuable and sufficient consideration. 
Now, therefore, you and the Company agree as follows:

 

1.                                      Separation Date.  Your employment with
the Company will terminate as of the Closing Date (the “Separation Date”).  For
purposes of your employment agreement with the Company, dated and executed by
you on January 2, 2015 (your “Employment Agreement”), your termination of
employment is a termination by the Company without Cause pursuant to
Section 6(c) thereof.  Upon the Separation Date, you will be deemed to have
relinquished and resigned from any and all titles, positions and appointments
with the Company (whether as an officer, manager, director, partner or
otherwise).  You agree to promptly execute such documents as may be reasonably
requested by the Company to evidence your separation from employment and
cessation of service on the Separation Date.

 

2.                                      Your Employment Agreement.  Except as
otherwise set forth in this Agreement, the terms and conditions of your
Employment Agreement shall survive and continue to remain in full force and
effect.  Unless otherwise defined in this Agreement, terms are used with the
same meaning as your Employment Agreement.

 

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3.                                      Separation Entitlements.  In accordance
with Section 6(c) of your Employment Agreement, you will be entitled to the
following:

 

A.  Accrued Salary and Vacation.  The Company will pay you your Accrued
Compensation within 30 days of the Separation Date, subject to standard payroll
deductions and withholdings.

 

B.  Non-Compete/Non-Solicit Payment.  The Company will pay you the
Non-Compete/Non-Solicit Payment in the amount of $500,000.  This amount will be
paid to you in a lump sum as soon as administratively practicable following the
date the Release becomes effective (but in no event later than the second
regularly scheduled Company payroll date thereafter) to the extent it complies
with the exceptions in Treas. Reg. Sections 1.409A-1(b)(4) (“short-term
deferrals”) and (b)(9) (“separation pay plans,” including the exception under
subparagraph (iii)), with any remaining amounts payable in approximately equal
installments over the remainder of the period commencing on the Separation Date
and ending six months thereafter, per the Company’s normal payroll practice.

 

C.  COBRA.  Subject to your timely election of continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Company will pay, on your behalf, the full amount of your COBRA premiums
over the one-year period following your Separation Date (the “Benefits
Continuation Period”) in full satisfaction of any amounts that would otherwise
be payable under Section 6(c)(4) of your Employment Agreement.  The Benefits
Continuation Period shall be concurrent with and applied toward any coverage
period required under COBRA.

 

4.                                      2017 Bonus.  The Company will pay you
the 2017 Bonus in the amount of $1,500,000.  The 2017 Bonus will be paid in a
cash lump sum as soon as administratively practicable following the date the
Release becomes effective (but in no event later than the second regularly
scheduled Company payroll date thereafter).  You acknowledge that payment of the
2017 Bonus will be in full satisfaction of any amounts that would otherwise be
payable under Section 6(c)(3) of your Employment Agreement.

 

5.                                      Escrow Account.  Not later than two
business days prior to the Closing Date, the Company and Virtu shall establish
an escrow account maintained by Citibank to hold the funds for certain payments
to be made to you following the Separation Date (the “Escrow Account”).  Upon
Closing, KCG shall fund the Escrow Account with an amount equal to the sum of
the Non-Compete/Non-Solicit Payment and 2017 Bonus.  Such amounts will be held
in the Escrow Account until disbursed to you through the Company’s payroll
system in accordance with Paragraph 6.

 

6.                                      General Release.  Your eligibility for
the Non-Compete/Non-Solicit Payment and the COBRA payments under Paragraphs
3(B) and 3(C), respectively, and your eligibility for payment of the 2017 Bonus
under Paragraph 4, shall be contingent on your execution (and non-revocation) of
a release of claims in favor of the Company, Virtu and its subsidiaries and
affiliates (the “Release”).  The Release is attached as Exhibit A and must be
executed by you no earlier than the Separation Date and become effective in
accordance with its terms and not be revoked by you by the 55th day following
the Separation Date.  The first payment of any amounts owed to you will include
payments that, but for this Paragraph 6 would have been made to you in
accordance with the Company’s normal payroll practices over the period
commencing on the Separation Date and ending on the first administratively
practicable Company payroll date following the date the Release becomes
effective.

 

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7.                                      Equity Awards.  You acknowledge that the
equity awards granted to you under the KCG Amended and Restated Equity Incentive
Plan and outstanding as of immediately prior to the Closing will be treated in
accordance with the terms of the Merger Agreement.  For the avoidance of doubt,
your equity awards granted to you will remain subject to the provisions
regarding Recapture and Adjustment set forth in Section 13.4 of the KGC Amended
and Restated Equity Incentive Plan; provided that the recapture events triggered
by termination for Cause and violation of a non-compete agreement, as set forth
in clauses (a) and (b) of the first paragraph thereunder, respectively, shall no
longer apply.

 

8.                                      Waiver.  The Company and Virtu
acknowledge and agree that the Non-Competition covenants set forth in
Section 8(c) of your Employment Agreement will be null and void as of your
Separation Date and will not be enforced against you following the Separation
Date.

 

9.                                      No Other Payments.  You agree that the
payments and benefits set forth under Paragraphs 3 and 4 are in full
satisfaction of your rights to payments and benefits under Section 6(c) of your
Employment Agreement and, except with respect thereto, you have not earned and
will not receive any additional compensation, severance or benefits after the
Separation Date.  For the avoidance of doubt, nothing in this Paragraph 9 will
nullify or otherwise impair your right to bring an Excluded Claim (as defined in
the Release) in the future.

 

10.                               Ongoing Covenants.  You agree to comply with
the Non-Solicitation, Non-Disparagement and Proprietary Information covenants
set forth in Sections 8(d), 8(e), 8(f) and 7 of your Employment Agreement and
you acknowledge that in accordance with Section 7 of your Employment Agreement,
you will return all Proprietary Information to the Company by no later than the
Separation Date; provided, however, that you shall be entitled to retain, and
use appropriately (e.g., not in connection with violating obligations owed by
you to the Company in accordance with this Paragraph 10 or otherwise) any
documents and information relating to your personal entitlements or obligations
and your personal rolodex (including electronic equivalents).

 

11.                               Indemnification.  The Company and Virtu
acknowledge and agree that to the extent permitted by law and the Company’s
bylaws, following the Separation Date, the Company will continue to indemnify
you and advance expenses in accordance with Section 5(d) of your Employment
Agreement, and, if applicable, the Merger Agreement.

 

12.                               Future Cooperation.  In accordance with
Section 9 of your Employment Agreement, you agree that upon the Company and/or
Virtu’s reasonable request following your Separation Date, you will use
reasonable efforts to assist and cooperate with the Company in connection with
the defense or prosecution of any claim that may be made against or by the
Company arising out of events occurring during your employment, or in connection
with any ongoing or future investigation or dispute or claim of any kind
involving the Company.  You will be entitled to prompt reimbursement for
reasonable out-of-pocket expenses (including travel expenses) incurred in
connection with providing such assistance.

 

13.                               Whistleblowing Policy.  Nothing in any code,
agreement, manual or in any other policies, procedures or agreements of the
Company shall prohibit or restrict you or your counsel from providing
information in connection with: (1) any disclosure of information required by
law or legal process; (2) reporting possible violations of federal or state law
or regulation to any governmental agency, commission or entity, including but
not limited to, the Department of Justice, the Commodities Futures Trading
Commission, the Securities and

 

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Exchange Commission, the Department of Labor, the Congress, any state Attorney
General, self-regulatory organization and any agency Inspector General
(collectively “Government Agencies”); (3) filing a charge or complaint with
Government Agencies; (4) making disclosures that are protected under the
whistleblower provisions of federal or state law or regulation (collectively the
“Whistleblower Statutes”) or (5) from initiating communications directly with,
responding to any inquiry from, volunteering information to, testifying or
otherwise participating in or assisting in any inquiry, investigation or
proceeding brought by Government Agencies in connection with (1) through (4). 
For the avoidance of doubt, you are not required to advise or seek permission
from the Company before engaging in any activity set forth in (1) through (5) of
this Paragraph 13.  Further, the Company does not in any manner limit your right
to receive an award from Government Agencies for information provided to
Government Agencies or pursuant to the Whistleblower Statutes.

 

14.                               General.  This Agreement constitutes the
complete, final and exclusive embodiment of the entire agreement between you and
the Company with regard to this subject matter.  This Agreement is entered into
without reliance on any promise or representation, written or oral, other than
those expressly contained herein, and it supersedes any other such promises,
warranties or representations.  This Agreement may not be modified or amended
except in a writing signed by both you and a duly authorized officer of the
Company.  This Agreement will bind the heirs, personal representatives,
successors and assigns of both you and the Company (including, for avoidance of
doubt, Virtu), and inure to the benefit of both you and the Company, each of our
respective heirs, successors and assigns.  If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the
provision in question will be modified by the court so as to be rendered
enforceable to the fullest extent permitted by law, consistent with the intent
of the parties.  This Agreement will be deemed to have been entered into and
will be construed and enforced in accordance with the laws of the State of New
York.  The Company may withhold from any amounts payable under this Agreement
such Federal, state and local and non-U.S. taxes as may be required to be
withheld pursuant to any applicable law or regulation. This Agreement may be
executed in counterparts, which shall be deemed to be part of one original, and
facsimile and electronic image signatures shall be equivalent to original
signatures.

 

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[signature page follows]

 

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The parties have duly executed this Agreement as of the date set forth above.

 

 

 

 

KCG Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Thomas Merritt

 

 

 

Thomas Merritt

 

 

 

Deputy General Counsel and Interim Chief Human Resources Officer

 

 

 

 

 

 

 

 

 

 

Virtu Financial, Inc.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Douglas A. Cifu

 

 

 

Douglas A. Cifu

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

Accepted:

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Steffen Parratt

 

 

 

 

Steffen Parratt

 

 

 

 

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Exhibit A

General Release of Claims

 

Consistent with Paragraph 6 of the separation agreement dated July 20, 2017,
(the “Separation Agreement”) between me, KCG Holdings, Inc. (collectively with
its subsidiaries and affiliates, the “Company”) and Virtu Financial, Inc., and
in consideration for and as a condition of my receipt of certain payments set
forth in the Separation Agreement, as applicable, I, for myself, my attorneys,
heirs, executors, administrators, successors, and assigns, do hereby fully and
forever release and discharge the Company, Virtu Financial, Inc., GETCO Holding
Company, LLC (“GETCO”), Knight Capital Group, LLC (“Knight”) and their
respective current and former parents and affiliated companies, as well as its
and their successors, assigns, and current and former members, managers,
stockholders, directors, officers, partners, agents, employees, attorneys, and
administrators, from all lawsuits, causes of action, claims, demands and
entitlements of any nature whatsoever, whether known, unknown, or unforeseen,
which I have or may have against any of them arising out of or in connection
with: (1) my employment with the Company and GETCO, or if applicable, Knight,
(2) my separation from employment with the Company, (3) the Employment Agreement
and/or any other agreement between me and the Company (except for obligations in
such agreements that survive my separation from employment, as stated in the
Separation Agreement), or (4) any event, fact, transaction, or matter occurring
or existing on or before the date of my signing of this General Release;
provided, however, that I am not releasing any claims for indemnification,
claims for payment in respect of equity interests in the Company in accordance
with the Merger Agreement, claims for benefits and reimbursements in accordance
with the terms of the Company’s benefit plans and arrangements, claims that
arise under, or are preserved by, the Separation Agreement, or claims that may
not be released as a matter of law (collectively, the “Excluded Claims”). I
agree not to file or otherwise institute any claim, demand or lawsuit seeking
damages or other relief and not to otherwise assert any claims or demands that
are lawfully released herein. I further hereby irrevocably and unconditionally
waive any and all rights to recover any relief or damages concerning the
lawsuits, claims, demands, or actions that are lawfully released herein. I
represent and warrant that I have not previously filed or joined in any such
lawsuits, claims, demands, or actions against any of the persons or entities
released herein and that I will indemnify and hold them harmless from all
liabilities, claims, demands, costs, expenses and/or attorneys’ fees incurred by
them as a result of any such lawsuits, claims, demands, or actions.

 

This General Release specifically includes, but is not limited to, all released
claims (as described above) with respect to breach of contract, employment
discrimination (including any alleged violation of any federal, state or local
statute or ordinance, any claims coming within the scope of Title VII of the
Civil Rights Act, the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act, the Equal Pay Act, the Worker Adjustment and Retraining
Notification Act, the Americans with Disabilities Act, and the Family and
Medical Leave Act, all as amended, or any other applicable federal, state, or
local law), claims under the Employee Retirement Income Security Act, as
amended, claims under the Fair Labor Standards Act, as amended (or any other
applicable federal, state or local statute relating to payment of wages), claims
concerning recruitment, hiring, termination, salary rate, severance pay, equity,
stock options, benefits due, sick leave, life insurance, libel, slander,
defamation, intentional or negligent misrepresentation and/or infliction of
emotional distress, together with any and all tort or other claims which might
have been asserted by me or on my behalf in any lawsuit, charge of
discrimination, demand, or claim against any of the persons or entities released
herein.

 

I acknowledge that I received the Older Workers Benefit Protection Act
Disclosure at the same time I received this General Release.

 

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I agree and understand that I am specifically releasing all claims under the Age
Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq., a federal
statute that prohibits employers from discriminating against employees who are
age 40 or over. I acknowledge that:

 

(1)                                 I have read and understand this General
Release and sign it voluntarily and without coercion;

 

(2)                                 I have been given an opportunity of
forty-five (45) days to consider this General Release;

 

(3)                                 I have been encouraged by the Company to
discuss fully the terms of this General Release with legal counsel of my own
choosing; and

 

(4)                                 for a period of seven (7) days following my
signing of this General Release, I shall have the right to revoke the waiver of
claims arising under the Age Discrimination in Employment Act.

 

If I elect to revoke this General Release within this seven-day period, I must
inform the Company by delivering a written notice of revocation to the Company,
c/o the General Counsel, no later than 11:59 p.m. on the seventh calendar day
after I sign this General Release. I understand that, if I elect to exercise
this revocation right, this General Release shall be voided in its entirety at
the election of the Company and the Company shall be relieved of all obligations
to provide the payments set forth in the Separation Agreement that are subject
to my executing, and not revoking, this General Release. I further understand
that such payments will not begin to be provided unless and until the revocation
period expires without my exercising the revocation right. I may, if I wish,
elect to sign this General Release prior to the expiration of the 45-day
consideration period, and I agree that if I elect to do so, my election is made
freely and voluntarily and after having an opportunity to consult counsel.

 

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[signature page follows]

 

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AGREED:

 

 

/s/ Steffen Parratt

 

Steffen Parratt

 

 

Date: July 20, 2017

 

[Signature page to Steffen Parratt General Release]

 

A-3

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