Exhibit 10.1

—, 2013

 

—

at the address

in the Schedule

 

     Re: Employment Agreement

Dear —:

This letter agreement (“Agreement”) sets forth the terms of your employment with
KCG Holdings, Inc., a Delaware corporation (the “Company”) and its affiliates
(together, the “Group”).

1.        Terms Schedule

Some of the terms of your employment are in the attached schedule (your
“Schedule”), which is part of this Agreement.

2.        Term of Your Employment

Your employment under this Agreement will begin on the date stated in your
Schedule and is scheduled to end as stated in your Schedule (your “Scheduled
Term”).

3.        Your Position, Performance and Other Activities

(a)        Position. You will be employed in the position stated in your
Schedule.

(b)        Authority, Responsibilities, and Reporting. Your authority,
responsibilities and reporting relationships will correspond to your position
and will include any particular authority, responsibilities and reporting
relationships stated in your Schedule or that, consistent with your position,
the Chief Executive Officer of the Company or the Board of Directors of the
Company (the “Board”) may assign to you from time to time.

(c)        Performance. You will devote substantially all of your business time
and attention to the Group and will use good faith efforts to discharge your
responsibilities under this Agreement to the best of your ability. During your
employment, you will not engage in any other business activity that conflicts
with your duties and obligations to the Group.

4.        Your Compensation

(a)        Salary. You will receive an annual base salary (your “Salary”). The
starting amount of your Salary is in your Schedule. The Company will review your
Salary consistent with its general practice for senior executives and may
increase it at any time for any reason. However, your Salary may not be
decreased at any time (including after any increase) other than as part of an
across-the-board salary reduction that applies in the same manner to all senior
executives, and any increase in your Salary will not reduce or limit any other
obligation to you under this Agreement. Your Salary will be paid in accordance
with the Company’s normal practices for senior executives. The term Salary as
used in this Agreement shall refer to your Salary as it may be increased from
time to time.

 

1

--------------------------------------------------------------------------------

 

—   - 2 -

(b)        Annual Incentive. Commencing with the 2013 fiscal year, you will be
eligible to receive an annual incentive (your “Annual Incentive”) for each
fiscal year of the Company ending during your employment. The amount of your
Annual Incentive will be determined by the Company in accordance with your
Schedule. A portion of your Annual Incentive will be paid in cash and the
remaining portion will be settled in equity-based awards over the Company’s
common stock (your “Annual Incentive Equity”), as determined by the Company in
accordance with your Schedule. The vesting schedule and any other features of
your Annual Incentive Equity will be determined by the Company in accordance
with your Schedule. Except as provided in this Agreement, your Annual Incentive
Equity will be subject to the terms of the Company equity plan under which it is
granted and to the terms of any applicable award agreements. Your Annual
Incentive will be paid or granted, as applicable, within two and one-half months
after the end of the fiscal year to which it relates. Your Annual Incentive will
be subject to the terms of the Company annual incentive plan under which it is
awarded, any Group clawback or recoupment policy in effect from time to time
that is triggered by the Company’s filing of restated financial statements with
the Securities and Exchange Commission (a “Group Recoupment Policy”), and any
other clawback or recoupment to the extent required by applicable law. You
expressly agree to comply with any Group Recoupment Policy in all regards.

(c)        Performance Awards. In addition to your Salary and Annual Incentive,
within 3 business days of the release of the Company’s earnings for the second
quarter of 2013, you will be granted equity-based awards over the Company’s
common stock (your “Performance Awards”) in accordance with your Schedule;
provided, that you will forfeit the Performance Awards unless you execute the
Agreement within 30 days of it being approved by the Board and executed on
behalf of the Company. The number and form of Performance Awards you will
receive is in your Schedule. The applicable terms of your Performance Awards,
such as exercise price, expiration date and vesting schedule, are stated in your
Schedule. Your Performance Awards also will have any other features stated in
your Schedule. Except as provided in this Agreement, your Performance Awards
will be subject to the terms of the Company equity plan under which they are
granted and to the terms of the applicable award agreements.

5.        Your Benefits

(a)        Employee Benefit Plans. During your employment, you will be entitled
to participate in each of the Group’s employee benefit and welfare plans,
including plans providing retirement benefits or medical, dental,
hospitalization, life or disability insurance, or fringe benefits on a basis
that is at least as favorable as that provided to other senior executives of the
Company. For purposes of determining eligibility to participate in, and vesting
under, any employee benefit or welfare plan, you will be credited fully for your
service with any member of the “controlled group of corporations” of which GETCO
Holding Company, LLC (“GETCO”) was a member, or if applicable, with any member
of the “controlled group of corporations” of which Knight Capital Group, Inc.
(“Knight”) was a member (in each case, other than with respect to any newly
adopted plan of the Group for which past service credit is not granted to
employees generally). Your service need not be counted or credited for purposes
of benefit accrual under any defined benefit retirement plan, any Knight
employee benefit and welfare plans that provide retiree welfare benefits or any
Knight employee benefit and welfare plans that are frozen or provide
grandfathered benefits, or to the extent such recognition would

 

2

--------------------------------------------------------------------------------

 

—   - 3 -

result in the duplication of benefits for the same period of service. In
addition, the Group will waive any preexisting conditions, waiting periods and
actively at-work requirements under any employee benefit or welfare plan and
will cause them to honor, for purposes of any deductible, co-insurance or
maximum out-of-pocket expenses provisions, any expenses incurred by you or your
beneficiaries during the portion of the fiscal year before the date you commence
participation in any such plan, to the extent such expenses were credited under
any similar plans of GETCO, or if applicable, Knight.

(b)        Vacation. You will be entitled to paid annual vacation on a basis
that is at least as favorable as that provided to other senior executives of the
Company.

(c)        Business Expenses. You will be reimbursed for all reasonable business
and entertainment expenses incurred by you in performing your responsibilities
under this Agreement that are submitted in accordance with the Group’s policy.

(d)        Indemnification; Advancement of Expenses. To the extent permitted by
law and the Company’s bylaws, the Company will indemnify you against any actual
or threatened action, suit or proceeding against you, whether civil, criminal,
administrative or investigative, arising by reason of your status as a director,
officer, employee and/or agent of the Group during your employment. In addition,
to the extent permitted by law, the Company will advance or reimburse any
expenses, including reasonable attorney’s fees, you incur in investigating and
defending any actual or threatened action, suit or proceeding for which you may
be entitled to indemnification under this Section 5(d). However, you agree to
repay any expenses paid or reimbursed by the Company to the extent it is
ultimately determined that you are not legally entitled to be indemnified by the
Company. If the Company’s ability to make any payment contemplated by this
Section 5(d) depends on an investigation or determination by the board of
directors of any member of the Group, at your request the Company will use its
best efforts to cause the investigation to be made (at the Company’s expense)
and to have the relevant board reach a determination in good faith as soon as
reasonably possible.

(e)        Additional Benefits. During your employment, you will be provided any
additional benefits stated in your Schedule.

6.        Termination of Your Employment

(a)        No Reason Required. Neither you nor the Company is under any
obligation to continue your employment beyond your Scheduled Term. In addition,
you or the Company may terminate your employment early at any time for any
reason, or for no reason, subject to compliance with this Section 6.

(b)        Related Definitions.

(1)        “Cause” means, subject to the provisions of your Schedule, a finding
by the Board of any of the following:

(A)        Your continued and willful failure to perform substantially your
responsibilities to the Group under this Agreement, after demand for substantial
performance has been given by the Board that specifically identifies how you
have not substantially performed your responsibilities.

 

3

--------------------------------------------------------------------------------

 

—   - 4 -

Cause does not, however, include failure resulting from your incapacity due to
mental or physical illness or injury or from any permitted leave required by
law.

(B)        You engage in illegal conduct, gross misconduct, or gross neglect,
that in any case causes material financial or reputational harm to either the
Group or the Company.

(C)        Your conviction of, or plea of guilty or nolo contendere to, a
felony, other than any felony with respect to which your involvement is limited
to your position with the Group, you had no direct involvement and you had no
actual knowledge of the actions underlying the felony until after they were
taken.

(D)        Your material breach of Sections 3(c), 7, 8(c), 8(d), 8(e) or 8(f).
However, to the extent the breach is curable, the Company must give you notice
and a reasonable opportunity to cure.

(E)        Your expulsion, or subjection to an order permanently or temporarily
(more than 90 days) enjoining you, from the securities, investment management or
investment banking business or your disqualification or bar from acting in the
capacity contemplated by this Agreement by the Securities and Exchange
Commission, the Financial Industry Regulatory Authority (the “FINRA”), any
national securities exchange or any self-regulatory agency or governmental
authority, in each case after you have exhausted all appeals or have admitted to
such finding by consent, unless such expulsion, permanent injunction,
disqualification or bar is due to your engagement in conduct with the recorded
authorization of the Board or in good faith, reasonable reliance on the advice
of the Company’s counsel.

(F)        Your habitual abuse of narcotics or alcohol.

(G)        Your fraud or material dishonesty in connection with the business of
the Group.

(H)        Your willful misappropriation of any of the Group’s funds or
property.

The Company may place you on paid leave for up to 60 consecutive days while it
is determining whether there is a basis to terminate your employment for Cause.
This leave will not constitute Good Reason.

(2)        “Good Reason” means, without your written consent, a material breach
by the Company of this Agreement or any other material financial obligation to
you or the occurrence of any other event or condition set forth in your Schedule
as constituting Good Reason. You must provide written notice to the Company of
the existence of any event or condition that constitutes Good Reason within 90
days of its existence. Upon receipt of such notice, the Company shall have a
period of 30 days during which it may remedy such event or condition that
constitutes Good Reason (the “Cure Period”). Notwithstanding

 

4

--------------------------------------------------------------------------------

 

—   - 5 -

any other provision herein, your termination of employment shall not constitute
a termination with Good Reason unless such termination occurs within 60 days
following the last day of the Cure Period.

(3)        “Disability” has the same meaning as that contained in the Group’s
long-term disability policy that triggers eligibility for benefits.

(4)        “Change in Control” shall have the meaning set forth in the Company’s
Amended and Restated Equity Incentive Plan, as assumed by the Company on July 1,
2013.

(c)        With Good Reason or Without Cause.    If, during your Scheduled Term,
the Company terminates your employment without Cause or you terminate your
employment with Good Reason:

(1)         The Company will, within 30 days of the end of your employment, pay
the following as of the end of your employment: (A) your unpaid Salary; (B) your
Salary for any accrued but unused vacation; and (C) reimbursement of any
business expenses submitted in accordance with the Group’s policy (together,
your “Accrued Compensation”).

(2)         The Company will pay your Earned Annual Incentive at the time such
Earned Annual Incentive would otherwise have been paid had your employment not
ended; provided, however, that it will be paid all in cash. Your “Earned Annual
Incentive” means any earned but unpaid Annual Incentive for the fiscal year
ending immediately before the end of your employment and, to the extent it has
not been determined before the end of your employment, determined based on
actual performance consistent with this Agreement and the Company annual
incentive plan under which it was awarded.

(3)         The Company will pay your Accrued Annual Incentive at the time such
Accrued Annual Incentive would otherwise have been paid had your employment not
ended; provided, however, that it will be paid all in cash. Your “Accrued Annual
Incentive” means the Annual Incentive for the year of your termination based on
the actual performance of the Company consistent with this Agreement and the
Company annual incentive plan under which it was awarded and prorated for the
number of days you worked for the Company during such year.

(4)         The Company will pay your premiums for continued health coverage
under “COBRA” during the one-year period following your termination (the
“Benefits Continuation Period”); provided and to the extent that you are
eligible for and timely and properly elect to receive such COBRA coverage;
provided further, that in the event you cease COBRA coverage, the Company shall
not be obligated to pay you any future installments of the Health Payment (as
defined below); provided further, that if the Company’s making payments under
this Section 6(c)(4) would violate the nondiscrimination rules applicable to
non-grandfathered plans, or result in the imposition of penalties under the
Patient Protection and Affordable Care Act of 2010 (“PPACA”) and related
regulations and guidance promulgated thereunder, the parties agree to reform
this provision in

 

5

--------------------------------------------------------------------------------

 

—   - 6 -

such manner as is necessary to comply with the PPACA. The Company shall pay you
in advance an amount equal to three times the monthly premium amount payable by
you for such COBRA coverage (the “Health Payment”), no later than the first date
of the month following your date of termination and on the first business day of
each of the third, sixth and ninth months thereafter. The Benefits Continuation
Period shall be concurrent with and applied toward any coverage period required
under COBRA.

(5)         Subject to Section 6(h)(2), your Annual Incentive Equity will
continue to vest on the vesting dates specified in the applicable award
agreement (as if your employment had continued).

(6)         You will be provided any additional benefits, and be subject to any
additional terms, stated in your Schedule.

(d)         For Cause.    If the Company terminates your employment for Cause:
(1) the Company will pay your Accrued Compensation; (2) you will forfeit your
Earned Annual Incentive; (3) you will forfeit your Accrued Annual Incentive;
(4) you will forfeit any unvested Performance Awards (and any unexercised
Performance Awards in the form of options and stock appreciation rights (whether
vested or unvested)); and (5) you will forfeit any unvested Annual Incentive
Equity.

(e)         Without Good Reason.    If, during your Scheduled Term, you
terminate your employment without Good Reason: (1) the Company will pay your
Accrued Compensation; (2) you will forfeit your Earned Annual Incentive; (3) you
will forfeit your Accrued Annual Incentive; (4) you will forfeit any unvested
Performance Awards; and (5) you will be provided any additional benefits, and be
subject to any additional terms, stated in your Schedule.

(f)         For Your Disability or Death.    If, during your Scheduled Term,
your employment terminates as a result of your death or Disability: (1) the
Company will pay your Accrued Compensation; (2) the Company will pay your Earned
Annual Incentive; (3) the Company will pay your Accrued Annual Incentive;
(4) your Performance Awards will vest and become immediately payable and, to the
extent your Performance Awards are in the form of options or stock appreciation
rights, become immediately exercisable and remain exercisable until they expire
(as if your employment had continued); and (5) your Annual Incentive Equity will
vest and become immediately payable.

(g)         Other Termination Benefits.    You will be provided any other
benefits, and be subject to any additional terms, stated in your Schedule.

(h)         Conditions.

  (1)         Notwithstanding anything contained in this Agreement to the
contrary, the Company will not be required to make the payments and provide the
benefits stated in this Section 6 (other than the Accrued Compensation) unless
you execute and deliver to the Company the Release of Claims in the form
attached hereto as Attachment A (the “Release”). For the avoidance of doubt, the
parties acknowledge that your right to elect COBRA coverage is not subject to
your execution of a Release. The Release shall be provided to you no later than
two days after your termination, and must be executed by you and become

 

6

--------------------------------------------------------------------------------

 

—   - 7 -

effective and not be revoked by you by the 55th day following your termination
(the period following your termination until the Release becomes effective being
the “Release Period”). Any payments or benefits in this Section 6 (other than
the Accrued Compensation) that would have been paid or provided to you during
the Release Period shall be paid or provided on the next regularly scheduled
Company payroll date following the Release Period.

  (2)         The Company will not be required to make the payments and provide
the benefits stated in Section 6(c), (e) or (g) (other than the Accrued
Compensation, the Earned Annual Incentive, the Accrued Annual Incentive and the
Health Payments) unless you comply with Section 8(c) until the end of the
“Non-Competition Period” and Section 8(d) until the end of the “Non-Solicitation
Period,” in each case, as stated in your Schedule. If you fail to comply with
Section 8(c) until the end of your Non-Competition Period or Section 8(d) until
the end of your Non-Solicitation Period, other than any isolated, insubstantial
and inadvertent failure that is not in bad faith, you will:

    (A)         forfeit all Performance Awards that have not vested at the time
of determination (and any Performance Awards in the form of options and stock
appreciation rights that have not been exercised at the time of determination
(whether vested or unvested)) and all Annual Incentive Equity that have not
vested at the time of determination; and

    (B)         pay to the Group the amount of all gain to you from the end of
your employment through the time of determination from (A) the vesting and/or
exercise of any Performance Awards, and (B) the vesting of any Annual Incentive
Equity.

    (3)      To determine the amount you owe under Section 6(h)(2)(B):

    (A)     The value of the Company’s common stock on any date will be
calculated using the average closing price of the Company’s common stock for the
20 full trading days ending on that date.

    (B)         Gain on the exercise of Performance Awards in the form of
options or stock appreciation rights will be based on the value of the Company’s
common stock on the date of exercise.

    (C)         Gain on the vesting of any Performance Awards and Annual
Incentive Equity will be based on the value of the Company’s common stock on the
date of vesting.

  (4)      You will pay the Group under Section 6(h)(2) within 5 days of notice
by the Company, and the date of notice will be the date of determination for
purposes of this Section. You will pay the Group in cash. However, you may
choose to deliver Company common stock (valued in accordance with
Section 6(h)(3)) in partial or full satisfaction of your obligation. Your
obligations under Section 6(h)(2) are full recourse obligations. The Company
will have the right to offset your obligations under Section 6(h)(2) against any
amounts otherwise owed to you by any member of the Group, including under this
Agreement.

 

7

--------------------------------------------------------------------------------

 

—   - 8 -

  (i)         End of Scheduled Term.    For the avoidance of doubt, if your
employment with the Company continues after the end of your Scheduled Term, the
provisions of Section 3 through this Section 6 will cease to apply and you will
continue as an at-will employee of the Company. The remaining provisions of this
Agreement will continue in accordance with their terms.

7.         Proprietary Information

  (a)         Definition. “Proprietary Information” means confidential or
proprietary information, knowledge or data concerning the Group’s businesses,
strategies, operations, financial affairs, organizational matters, personnel
matters, budgets, business plans, marketing plans, studies, policies,
procedures, products, ideas, processes, software systems, trade secrets and
technical know-how. However, Proprietary Information does not include
information (1) that was or becomes generally available to you on a
non-confidential basis, if the source of this information was not reasonably
known to you to be bound by a duty of confidentiality, (2) that was or becomes
generally available to the public, other than as a result of a disclosure by
you, directly or indirectly, that is not authorized by the Company or (3) that
you can establish was independently developed by you without reference to any
Proprietary Information.

  (b)         Use and Disclosure. You will obtain or create Proprietary
Information in the course of your involvement in the Group’s activities and may
already have Proprietary Information. You agree that the Proprietary Information
is the exclusive property of the Group, and that, during your employment, you
will use and disclose Proprietary Information only for the Group’s benefit and
in accordance with any restrictions placed on its use or disclosure by the
Group. After your employment, you will not use or disclose any Proprietary
Information. In addition, nothing in this Agreement will operate to weaken or
waive any rights the Group may have under statutory or common law to the
protection of trade secrets, confidential business information and other
confidential information.

  (c)         Return of Proprietary Information. When your employment
terminates, you agree to return to the Group all Proprietary Information,
including all notes, mailing lists and computer files that contain any
Proprietary Information. However, notwithstanding anything to the contrary, you
will be permitted to retain copies of documents relating to your personal
entitlements, benefits, obligations and tax liabilities. You agree to do
anything reasonably requested by the Group in furtherance of perfecting the
Group’s possession of, and title to, any Proprietary Information that was at any
time in your possession.

  (d)         Limitations. Nothing in this Agreement prohibits you from
providing truthful testimony concerning the Group to governmental, regulatory or
self-regulatory authorities, or from disclosing Proprietary Information (1) to
the extent necessary to comply with any law, subpoena or other professional or
governmental order; provided, however, that you have first provided the Group
with the opportunity to defend the necessity of such disclosure, (2) in any
arbitration or proceeding to the extent necessary to defend or enforce your
rights under this Agreement or (3) in confidence to an attorney or other
professional for the purpose of obtaining professional advice. Also the parties
(and their respective employees, representatives and agents) may disclose to any
and all

 

8

--------------------------------------------------------------------------------

 

—   - 9 -

persons, without any limitation of any kind, the tax treatment and tax structure
of this Agreement and all materials of any kind (including opinions and other
tax analysis) that are provided to either party related to such tax treatment
and structure.

8.         Ongoing Restrictions on Your Activities

(a)         General Effect.    This Section 8 applies during your employment and
for some time after your employment ends. This Section uses the following
defined terms:

(1)         “Competitive Enterprise” means any business enterprise that either
(A) engages in the business of providing a Conflicting Product or Service or
Conflicting Intellectual Property anywhere in the United States, Europe or Asia
or (B) holds a 5% or greater equity, voting or profit participation interest in
any enterprise that engages in such a competitive activity.

(2)         “Conflicting Product or Service or Conflicting Intellectual
Property” means a product, service and/or intellectual property (or related
service) that is the same or similar in function or purpose to a Group product,
service or intellectual property (or related service) sold, used, provided to,
performed for or employed by the Group, such that it would replace, modify or
compete with: (A) a product and/or service the Group provides to, or performs
for, its customers or is used, provided to or performed for Group internal
purposes; (B) intellectual property (or related service) developed, used,
provided to or performed for the Group in its activities (including, but not
limited to, trading strategies, models, algorithms, trading hardware and
software) or as part of its IT design or infrastructure; or (C) a product,
service or intellectual property (or related service) that is under development
or planning by the Group but not yet provided to or performed for customers or
used, provided to or performed for internal purposes and regarding which you
were provided Proprietary Information in the course of your employment.

(3)         “Solicit” means any direct or indirect communication of any kind,
regardless of who initiates it, that in any way invites, advises, encourages or
requests any person to take or refrain from taking any action.

(b)         Your Importance to the Group and the Effect of this Section 8. You
acknowledge that:

(1)        In the course of your involvement in the Group’s activities, you will
have access to Proprietary Information and the Group’s client base and will
profit from the goodwill associated with the Group. On the other hand, in view
of your access to Proprietary Information and your importance to the Group, if
you compete with the Group for some time after your employment, the Group will
likely suffer significant harm. This Agreement provides you with substantial
additional benefits over your prior arrangements with GETCO, or if applicable,
Knight. In return for the benefits you will receive from the Group and to induce
the Company to enter into this Agreement, and in light of the potential harm you
could cause the Group, you agree to the provisions of this Section 8. The
Company would not have entered into this Agreement if you did not agree to this
Section 8.

 

9

--------------------------------------------------------------------------------

 

—   - 10 -

(2)        This Section 8 limits your ability to earn a livelihood in a
Competitive Enterprise. You acknowledge, however, that complying with this
Section 8 will not result in severe economic hardship for you or your family.

(c)        Non-Competition. Except as stated in your Schedule, from the date
hereof until the end of your Non-Competition Period, you will not directly or
indirectly:

(1)        hold a 5% or greater equity, voting or profit participation interest
in a Competitive Enterprise; or

(2)        associate (including as a director, officer, employee, partner,
consultant, agent or advisor) with a Competitive Enterprise and in connection
with your association engage, or directly or indirectly manage or supervise
personnel engaged, in any activity:

  (A)        that is substantially related to any activity that you were engaged
in,

  (B)        that is substantially related to any activity for which you had
direct or indirect managerial or supervisory responsibility, or

  (C)        that calls for the application of specialized knowledge or skills
substantially related to those used by you in your activities;

in each case, for the Group at any time during the year before the end of your
employment (or, if earlier, the year before the date of determination).

(d)        Non-Solicitation of Group Employees.  From the date hereof until the
end of your Non-Solicitation Period, you will not attempt to Solicit anyone who
is then an employee of the Group (or who was an employee of the Group within the
prior six months (other than any such employees who were terminated without
cause by the Group)) to resign from the Group or to apply for or accept
employment with any Competitive Enterprise.

(e)        Notice to New Employers; Response from Company.  Before you accept
employment with any other person or entity while any of Section 8(c) or (d) is
in effect, you will provide the prospective employer with written notice of the
provisions of this Section 8. You will also deliver a copy of such notice to the
Group before you commence such employment. The Company will respond, as soon as
reasonably practicable, to any request you have regarding a determination as to
whether any contemplated action by you would constitute a breach of this
Section 8.

(f)        No Public Statements or Disparagement.  You agree that you will not
make any public statement regarding your employment or the termination of your
employment (for whatever reason) that are not agreed to by the Group. You agree
that you will not make any public statement that would libel, slander or
disparage any member of the Group or any of their respective past or present
officers, directors, employees or agents. This Section 8(f) is subject to
Section 7(d).

 

10

--------------------------------------------------------------------------------

 

—   - 11 -

9.        Future Cooperation

You agree that upon the Company’s reasonable request following your termination
of employment, 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 Group 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 Group, including any proceeding before any
arbitral, administrative, regulatory, self-regulatory, judicial, legislative, or
other body or agency. You will be entitled to prompt reimbursement for
reasonable out-of-pocket expenses (including travel expenses) incurred in
connection with providing such assistance.

10.      Key Man Insurance

While you are employed by the Company, the Company may at any time effect
insurance on your life and/or health in such amounts and in such form as the
Company may in its sole discretion decide. Except as provided under the
applicable terms of a policy or other arrangement, you will not have any
interest in such insurance, but shall, if the Company requests, submit to such
medical examinations, supply such information and execute such documents as may
be required in connection with, or so as to enable the Company to effect, such
insurance.

11.      Sections 280G and 409A of the Code

 

  (a) Contingent Cutback.

(1)        If the aggregate of all amounts and benefits due to you (or your
beneficiaries), under this Agreement or any other plan, program, agreement or
arrangement of the Group (or any payments, benefits or entitlements by or on
behalf of any person or entity that effectuates a related transaction)
(collectively, “Change in Control Benefits”), would cause you to have “parachute
payments” as such term is defined in and under Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), and would result in the
imposition of excise taxes pursuant to Section 4999 of the Code (the “Parachute
Tax”), the Company will reduce such payments and benefits so that the Parachute
Value of all Change in Control Benefits, in the aggregate, equals the Safe
Harbor Amount minus $1,000.00, but only if, by reason of such reduction, the Net
After-Tax Benefit shall exceed the Net After-Tax Benefit if such reduction were
not made (the “Required Reduction”). The determinations with respect to this
Section 11(a)(1) shall be made by an independent public accounting firm (the
“Auditor”) paid by the Company. The Auditor shall be a nationally-recognized
United States public accounting firm chosen, and paid for, by the Company and
approved by you (which approval shall not be unreasonably withheld or delayed).
Notwithstanding any provision to the contrary in this Agreement or in any other
applicable agreement or plan, any reduction in payments required under this
Section 11(a)(1) shall be implemented as follows: first, by reducing any
payments to be made to you under Sections 6(c)(4) and 6(c)(5); second, by
reducing any other cash payments to be made to you; third, by cancelling any
outstanding equity-based compensation awards that are subject to performance
vesting (“Performance-Based Equity”) for which the performance goals have not
been met as of the event giving rise to the Change in Control Benefit; and
fourth, by cancelling the acceleration of vesting of (i) any of your outstanding

 

11

--------------------------------------------------------------------------------

 

—   - 12 -

Performance-Based Equity for which the performance goals were met as of the
event giving rise to the Change in Control Benefit, and (ii) any of your
outstanding equity awards not subject to performance vesting. In the case of the
reductions to be made pursuant to each of the above mentioned clauses, the
payment and/or benefit amounts to be reduced, and the acceleration of vesting to
be cancelled, shall be reduced or cancelled in the inverse order of their
originally scheduled dates of payment or vesting, as applicable, and shall be so
reduced (x) only to the extent that the payment and/or benefit otherwise to be
paid, or the vesting of the award that otherwise would be accelerated, would be
treated as a “parachute payment” within the meaning section 280G(b)(2)(A) of the
Code, and (y) only to the extent necessary to achieve the Required Reduction.

(2)        It is possible that after the determinations and selections made
pursuant to Section 11(a)(1) you will receive Change in Control Benefits that
are, in the aggregate, either more or less than the limitations provided in
Section 11(a)(1) above (hereafter referred to as an “Excess Payment” or
“Underpayment”, respectively). If it is established, pursuant to a final
determination of a court or an Internal Revenue Service proceeding that has been
finally and conclusively resolved, that an Excess Payment has been made, then
you shall refund the Excess Payment to the Company promptly on demand, together
with an additional payment in an amount equal to the product obtained by
multiplying the Excess Payment times the applicable annual federal rate (as
determined in and under Section 1274 (d) of the Code), or such higher rate as is
necessary to ensure that the Change in Control Benefits are less than the Safe
Harbor Amount, times a fraction whose numerator is the number of days elapsed
from the date of your receipt of such Excess Payment through the date of such
refund and whose denominator is 365. In the event that it is determined (x) by
arbitration under Section 14 below, (y) by a court of competent jurisdiction, or
(z) by the Auditor upon request by you or the Company, that an Underpayment has
occurred, the Company shall pay an amount equal to the Underpayment to you
within 10 days of such determination together with an additional payment in an
amount equal to the product obtained by multiplying the Underpayment times the
applicable annual federal rate (as determined in and under Section 1274(d) of
the Code) times a fraction whose numerator is the number of days elapsed from
the date of the Underpayment through the date of such payment and whose
denominator is 365.

(3)        All determinations made by the Auditor under Section 11(a)(1) shall
be binding upon the Company and you and shall be made as soon as reasonably
practicable following the event giving rise to the Change in Control Benefits,
or such later date on which a Change in Control Benefit has been paid or a
request under clause (z) of Section 11(a)(2) has been made.

(4)        Definitions.  The following terms shall have the following meanings
for purposes of this Section 11(a).

(A)        “Net After-Tax Benefit” means the present value (as determined in
accordance with Section 280G(d)(4) of the Code) of the Change in Control
Benefits net of all taxes imposed on you with respect thereto under Sections 1
and 4999 of the Code and under applicable state and local laws, determined by
applying the highest marginal rate under Section 1 of the Code and under

 

12

--------------------------------------------------------------------------------

 

—   - 13 -

state and local laws which applied to your taxable income for the immediately
preceding taxable year, or such other rate(s) as you certify as likely to apply
to you in the relevant tax year(s).

(B)        “Parachute Value” of a Change in Control Benefit shall mean the
present value as of the date of the change of control for purposes of
Section 280G of the Code of the portion of such Change in Control Benefit that
constitutes a “parachute payment” under Section 280G(b)(2) of the Code and its
implementing regulations, as determined by the Auditor for purposes of
determining whether and to what extent the Parachute Tax will apply to such
Change in Control Benefit.

(C)        The “Safe Harbor Amount” means 2.99 times your “base amount,” within
the meaning of Section 280G(b)(3) of the Code and its implementing regulations.

  (b)        This Agreement is intended to comply with Section 409A of the Code
(“Section 409A”) to the extent it is subject thereto, and the Agreement shall be
interpreted on a basis consistent with such intent. If and to the extent that
any payment or benefit under this Agreement, or any plan, award agreement or
arrangement of the Group, constitutes “non-qualified deferred compensation”
subject to Section 409A, such payments and benefits may only be made or
satisfied under this Agreement upon an event and in a manner permitted by
Section 409A. Each payment of compensation under this Agreement shall be treated
as a separate payment of compensation for purposes of Section 409A to the extent
Section 409A is relevant to such payments. The Health Payments are intended to
qualify for the exception from deferred compensation as a medical benefit
provided in accordance with the requirements of Treas. Reg.
§1.409A-1(b)(9)(v)(B).

  (c)        Notwithstanding anything in this Agreement to the contrary, if you
are considered a “specified employee” for purposes of Section 409A, (1) if
payment of any amounts under this Agreement is required to be delayed for a
period of six months after separation from service pursuant to Section 409A,
payment of such amounts shall be delayed as required by Section 409A, and the
accumulated amounts and interest on such amounts (calculated based on the
Applicable Federal Rate in effect on the date of termination) shall, subject to
Section 6(h), be paid in a lump sum payment within fifteen days after the end of
the six-month period and (2) in the event any Annual Incentive Equity or other
equity-based awards held by you that vest upon termination of your employment
constitute “non-qualified deferred compensation” subject to Section 409A, the
delivery of shares or cash (as applicable) in settlement of such awards shall be
made on the earliest permissible payment date (including the date that is six
months after separation from service pursuant to Section 409A) or event under
Section 409A on which the shares or cash would otherwise be delivered or paid.
If you die during the postponement period prior to the payment of any amounts or
benefits or delivery of shares, the amounts and entitlements delayed on account
of Section 409A shall be paid or provided to the personal representative of your
estate within 60 days after the date of your death.

  (d)        All payments to be made upon a termination of employment under this
Agreement may only be made upon a “separation from service” under Section 409A.
In

 

13

--------------------------------------------------------------------------------

 

—   - 14 -

no event may you, directly or indirectly, designate the calendar year of a
payment. Any payments and/or equity-based awards which constitute “non-qualified
deferred compensation” subject to Section 409A which are payable upon a Change
in Control shall only be paid upon transactions or events which give rise to a
“change in ownership or effective control” or a change in the “ownership of a
substantial portion of the assets” of the Company under Section 409A, and in the
event such transactions or events do not give rise to a “change in ownership or
effective control” or a change in the “ownership of a substantial portion of the
assets” of the Company, such amounts shall become vested and nonforfeitable but
shall be distributed on the otherwise applicable distribution date or event. All
reimbursements and in-kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of Section 409A (or an exemption
therefrom), including, where applicable, the requirement that (1) any
reimbursement is for expenses incurred during your lifetime (or during a shorter
period of time specified in this Agreement); (2) the amount of expenses eligible
for reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year; (3) the reimbursement of an eligible
expense will be made no later than the last day of the calendar year following
the year in which the expense is incurred; and (4) the right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit.
The Company may offset any of your payment obligations under Section 6(h)(2)
against any “non-qualified deferred compensation” subject to Section 409A of the
Code only to the extent it would not cause such “non-qualified deferred
compensation” to violate Section 409A of the Code.

12.        Effect on Other Agreements

  (a)        Prior Employment Agreements and Severance Rights.  After the term
of your employment starts, this Agreement will supersede any earlier employment
agreement and any earlier severance or similar rights you may have with GETCO or
any of GETCO’s affiliates, or if applicable, Knight or any of Knight’s
affiliates.

  (b)        Entire Agreement; No Conflicts.  This Agreement is the entire
agreement between you and the Company with respect to the relationship
contemplated by this Agreement. In entering into this Agreement, no party has
relied on or made any representation, warranty, inducement, promise or
understanding that is not in this Agreement. You represent and warrant to the
Company that your performance of your duties will not conflict with or result in
a violation or breach of, or constitute a default under, any contract, agreement
or understanding to which you are or were a party or of which you are aware and
that there are no restrictions, covenants, agreements or limitations on your
right or ability to enter into and perform the terms of this Agreement. The
Company represents and warrants to you that: (1) it is fully authorized by
action of any person whose action is required to enter into this Agreement and
to perform the Company’s obligations under it; (2) the execution, delivery and
performance of this Agreement by the Company does not violate any applicable
law, regulation, order, judgment or decree or any agreement, arrangement, plan
or corporate governance document to which it is a party or by which it is bound;
and (3) upon the execution and delivery of this Agreement by the parties hereto,
this Agreement shall be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors’ rights generally.

 

14

--------------------------------------------------------------------------------

 

—   - 15 -

13.        Successors

  (a)        Payments on Your Death or Incapacity.  If you die and any amounts
become payable under this Agreement, we will pay those amounts to your estate,
designated beneficiaries or other legal representative. Upon your death or a
judicial determination of your incapacity, references to you shall be deemed,
where appropriate, to be references to your beneficiaries, estate or other legal
representative(s).

  (b)        Assignment by You.  You may not assign this Agreement without the
Company’s consent; provided, however, that you will be entitled, to the extent
permitted under applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit under this Agreement
following your death by giving the Company written notice thereto. Also, except
as required by law, your right to receive payments or benefits under this
Agreement may not be subject to execution, attachment, levy or similar process.
Any attempt to effect any of the preceding in violation of this Section 13(b),
whether voluntary or involuntary, will be void.

  (c)        Assumption by Any Surviving Company. Before the effectiveness of
any Change in Control, the Company will cause (1) the surviving company to
unconditionally assume this Agreement in writing and (2) a copy of the
assumption to be provided to you. After the Change in Control, the surviving
company will be treated for all purposes as the Company under this Agreement.

14.        Disputes

  (a)        Mandatory Arbitration.  Subject to the provisions of this
Section 14, any dispute involving your employment or this Agreement will be
finally settled by binding arbitration in the County of New York administered by
the American Arbitration Association, the FINRA, JAMS/Endispute, or any other
similar association mutually agreed to by the Company and you. The award of the
arbitrators shall be final and binding and judgment upon the award may be
entered in any court having jurisdiction thereof. This procedure shall be the
exclusive means of settling any disputes that may arise under this Agreement.
All fees and expenses of the arbitrators and all other expenses of the
arbitration, except for attorneys’ fees and witness expenses, shall be borne by
the Company if you prevail. Each party shall bear its own witness expenses and
attorneys’ fees; provided that if you prevail on any material issue (as
determined by the arbitrators), the Company shall reimburse you for attorney’s
fees incurred in connection with such claim.

  (b)        Limitation on Damages.  You and the Group agree that there will be
no punitive damages payable as a result of any dispute involving your employment
or this Agreement and agree not to request punitive damages.

  (c)        Injunctions and Enforcement of Arbitration Awards. You or the Group
may bring an action or special proceeding in a state or federal court of
competent jurisdiction sitting in the County of New York to enforce any
arbitration award under Section 14(a). Also, the Group may bring such an action
or proceeding, in addition to its rights under Section 14(a) and whether or not
an arbitration proceeding has been or is ever initiated, to temporarily,
preliminarily or permanently enforce any part of Sections 7 and 8. You agree
that (1) your violating any part of Sections 7 and 8 would cause damage to the
Group that cannot be measured or repaired, (2) the Group therefore is entitled
to an injunction,

 

15

--------------------------------------------------------------------------------

 

—   - 16 -

restraining order or other equitable relief restraining any actual or threatened
violation of those Sections, (3) no bond will need to be posted for the Group to
receive such an injunction, order or other relief, and (4) no proof will be
required that monetary damages for violations of those Sections would be
difficult to calculate and that remedies at law would be inadequate.

  (d)        Waiver of Jury Trial.  To the extent permitted by law, you and the
Group waive any and all rights to a jury trial with respect to any dispute
involving your employment or this Agreement.

  (e)        Governing Law.  This Agreement will be governed by and construed in
accordance with the law of the State of New York applicable to contracts made
and to be performed entirely within that State except as to equity-based awards
under any stockholder-approved stock plan, where the governing law provisions
contained in such plans shall control.

15.        General Provisions

  (a)        Construction. References (A) to Sections are to sections of this
Agreement unless otherwise stated; (B) to any contract (including this
Agreement) are to the contract as amended, modified, supplemented or replaced
from time to time; (C) to any statute, rule or regulation are to the statute,
rule or regulation as amended, modified, supplemented or replaced from time to
time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any statute, rule or
regulation include any successor to the section; (D) to any governmental
authority include any successor to the governmental authority; (E) to any plan
include any programs, practices and policies; (F) to any entity include any
corporation, limited liability company, partnership, association, business trust
and similar organization and include any governmental authority; and (G) to any
affiliate of any entity are to any person or other entity directly or indirectly
controlling, controlled by or under common control with the first entity.

  (1)        The various headings in this Agreement are for convenience of
reference only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Agreement.

  (2)        Unless the context requires otherwise, (A) words describing the
singular number include the plural and vice versa, (B) words denoting any gender
include all genders and (C) the words “include”, “includes” and “including” will
be deemed to be followed by the words “without limitation.”

  (3)        It is your and the Group’s intention that this Agreement not be
construed more strictly with regard to you or the Group.

  (b)        Withholding.  You and the Group will treat all payments to you
under this Agreement as compensation for services. Accordingly, the Group may
withhold from any payment any taxes that are required to be withheld under any
law, rule or regulation.

 

16

--------------------------------------------------------------------------------

 

—   - 17 -

  (c)        Severability.  If any provision of this Agreement is found by any
court of competent jurisdiction (or legally empowered agency) to be illegal,
invalid or unenforceable for any reason, then (1) the provision will be amended
automatically to the minimum extent necessary to cure the illegality or
invalidity and permit enforcement and (2) the remainder of this Agreement will
not be affected. In particular, if any provision of Section 8 is so found to
violate law or be unenforceable because it applies for longer than a maximum
permitted period or to greater than a maximum permitted area, it will be
automatically amended to apply for the maximum permitted period and maximum
permitted area.

  (d)        Survival.  The end of your employment or of this Agreement (or
breach of this Agreement by you or the Company) shall have no effect on the
continuing operation of Sections 7, 8, 9, 13(a), 13(b) and 14. Accordingly, and
without limitation, the restrictions of Section 8 will apply to any termination
of your employment, even if such termination occurs after the expiration of your
Scheduled Term.

  (e)        Notices.  All notices, requests, demands and other communications
under this Agreement must be in writing and will be deemed given (1) on the
business day sent, when delivered by hand or facsimile transmission (with
confirmation) during normal business hours, (2) on the business day after the
business day sent, if delivered by a nationally recognized overnight courier or
(3) on the third business day after the business day sent if delivered by
registered or certified mail, return receipt requested, in each case to the
following address or number (or to such other addresses or numbers as may be
specified by notice that conforms to this Section 15(e)):

If to you, to the address stated in your Schedule.

If to the Company or any other member of the Group, to:

KCG Holdings, Inc.

545 Washington Boulevard

Jersey City, New Jersey 07310

Attention: General Counsel

Telephone: (201) 222-9400

with a copy to:

Sullivan & Cromwell

125 Broad Street

New York, New York 10004

Attention:    Marc Trevino

Facsimile:    (212) 558-3588

Telephone:  (212) 558-4000

  (f)        Consideration.  You and the Company acknowledge the receipt and
sufficiency of the consideration to this Agreement and intend this Agreement to
be legally binding.

  (g)        Amendments and Waivers.  Any provision of this Agreement may be
amended or waived but only if the amendment or waiver is in a writing that
expressly

 

17

--------------------------------------------------------------------------------

 

—   - 18 -

refers to the provision of this Agreement that is being amended or waived, and
that is signed, in the case of an amendment, by you and the Company or, in the
case of a waiver, by the party that would have benefited from the provision
waived. Except as this Agreement otherwise provides, no failure or delay by you
or the Company to exercise any right or remedy under this Agreement will operate
as a waiver, and no partial exercise of any right or remedy will preclude any
further exercise. In the event of any inconsistency between any provision of
this Agreement and any provision of any applicable Company equity plan or award
agreement, the provisions of this Agreement will control to the extent more
favorable to you.

  (h)        Third Party Beneficiaries.  Subject to Section 13, this Agreement
will be binding on, inure to the benefit of and be enforceable by the parties
and their respective heirs, personal representatives, successors and assigns.
This Agreement does not confer any rights, remedies, obligations or liabilities
to any entity or person other than you and the Company and your and the
Company’s permitted successors and assigns, although (1) this Agreement will
inure to the benefit of the Company and (2) Section 13(a) will inure to the
benefit of the most recent persons named in a notice under Section 13(b).

  (i)        No Other Restrictions; No Offset.  There shall be no contractual,
or similar, restrictions on your right to terminate your employment with the
Group, or on your post-employment activities, except as expressly set forth in
this Agreement. You have no obligation to seek other employment or otherwise
mitigate the Company’s obligations under this Agreement, and the Company will
not offset or reduce your entitlements under this Agreement for subsequent
employment.

  (j)        Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one agreement, and shall become a
binding agreement when one or more counterparts have been signed by each party
and delivered to the other party. Delivery of an executed counterpart by
facsimile or “pdf” shall be sufficient.

 

18

--------------------------------------------------------------------------------

Very truly yours, KCG HOLDINGS, INC. By:       Name:   John McCarthy   Title:  
General Counsel and Secretary

Agreed to and Accepted on •, 2013:

 

By:       •

 

[Signature Page to Employment Agreement]

 

19

--------------------------------------------------------------------------------

ATTACHMENT A

Form of General Release of Claims

Consistent with Section 6(h) of the letter agreement dated •, 2013 (the
“Employment Agreement”) between me and KCG Holdings, Inc. (“Company”), and in
consideration for and as a condition of my receipt of certain payments set forth
in the Employment Agreement, as applicable, I, for myself, my attorneys, heirs,
executors, administrators, successors, and assigns, do hereby fully and forever
release and discharge the Company, GETCO Holding Company, LLC (“GETCO”), Knight
Capital Group, Inc. (“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), 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 arising from my ownership of equity interests in the
Company, claims for benefits and reimbursements in accordance with the terms of
the Company’s benefit plans and arrangements, or claims that may not be released
as a matter of law. 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.

 

20

--------------------------------------------------------------------------------

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 twenty-one (21) 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 Section 6 of the Employment 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 21-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.

 

AGREED:    —

Date:

 

21