Exhibit 10.2

INVESTMENT TECHNOLOGY GROUP, INC.

RESTRICTED SHARE AGREEMENT

THIS AGREEMENT, dated as of October 4, 2006 between Investment Technology Group,
Inc. (the “Company”), a Delaware corporation, and Robert C. Gasser (the
“Employee”).

WHEREAS, the parties have entered into an Employment Agreement (the “Employment
Agreement”) and Employee has this date commenced employment with the Company.

WHEREAS, pursuant to the Employment Agreement, the Employee is entitled to
receive a Restricted Share Award with respect to 31,250 shares of the Company’s
common stock (the “Common Stock”).

WHEREAS, the Company desires to grant this Restricted Share Award under the
Company’s 1994 Stock Option and Long-Term Incentive Plan, as Amended and
Restated (the “Plan”) in order to satisfy its obligation under the Employment
Agreement, subject to stockholder approval of the performance goals set for the
award.

WHEREAS, the Employee agrees that this Restricted Share Award satisfies the
Company’s obligation under the Employment Agreement.

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.             AWARD OF SHARES.  PURSUANT TO THE PROVISIONS OF THE PLAN, THE
TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE, THE EMPLOYEE IS HEREBY
AWARDED 31,250 RESTRICTED SHARES (THE “AWARD”), WHICH NUMBER REPRESENTS 6,250
RESTRICTED SHARES FOR THE PERIOD OCTOBER 4, 2006 THROUGH DECEMBER 31, 2006 AND
25,000 RESTRICTED SHARES FOR THE 2007 CALENDAR YEAR, SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, THE PLAN AND APPROVAL BY THE COMPANY’S
STOCKHOLDERS OF THE PERFORMANCE GOALS SET FOR THE AWARD.  THE COMPANY SHALL
SUBMIT THE PLAN AND THE PERFORMANCE GOALS SET FOR THE AWARD TO THE COMPANY’S
STOCKHOLDERS FOR APPROVAL AT THE NEXT ANNUAL MEETING OF THE COMPANY’S
STOCKHOLDERS FOLLOWING THE DATE OF THIS AGREEMENT.  THE AWARD IS GRANTED AS OF
OCTOBER 4, 2006 (THE “DATE OF GRANT”).  CAPITALIZED TERMS USED HEREIN AND NOT
DEFINED SHALL HAVE THE MEANINGS SET FORTH IN THE PLAN.  EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, IN THE EVENT OF ANY CONFLICT BETWEEN THIS AGREEMENT
AND THE PLAN, THE PLAN SHALL CONTROL.

2.             TERMS AND CONDITIONS.  IT IS UNDERSTOOD AND AGREED THAT THE AWARD
OF RESTRICTED SHARES EVIDENCED HEREBY IS SUBJECT TO THE FOLLOWING TERMS AND
CONDITIONS:

(A)           VESTING AND PAYMENT OF AWARD.  SUBJECT TO SECTIONS 2(B) AND 2(C)
BELOW AND THE OTHER TERMS AND CONDITIONS OF THIS AGREEMENT, THE RESTRICTED
SHARES SHALL VEST AND

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be paid on the dates set forth on Exhibit A, provided the performance goal set
forth on Exhibit A has been achieved and the Employee has not incurred a
Termination of Service as of the date the goal is achieved.  On the date the
Restricted Shares vest, the Employee shall be paid one share of Common Stock for
each Restricted Share that vests.

(B)           TERMINATION PRIOR TO A CHANGE IN CONTROL.  NOTWITHSTANDING SECTION
2(A) ABOVE, IN THE EVENT THE EMPLOYEE INCURS A TERMINATION OF SERVICE FOR GOOD
REASON (AS DEFINED IN THE EMPLOYMENT AGREEMENT) OR NOT FOR CAUSE (AS DEFINED IN
THE EMPLOYMENT AGREEMENT) PRIOR TO A CHANGE IN CONTROL (AS DEFINED IN THE
EMPLOYMENT AGREEMENT), THE RESTRICTED SHARES SHALL CONTINUE TO VEST AND BE PAID
(AS IF THE PERFORMANCE GOAL SET FORTH IN EXHIBIT A HAS BEEN ACHIEVED) AS IF
EMPLOYEE REMAINED EMPLOYED BY THE COMPANY THROUGH THE FIRST ANNIVERSARY OF THE
DATE OF HIS TERMINATION OF SERVICE; PROVIDED THAT THE EMPLOYEE EXECUTES (AND
DOES NOT REVOKE) A RELEASE (AS DEFINED IN THE EMPLOYMENT AGREEMENT).

(C)           CHANGE IN CONTROL; DEATH OR DISABILITY.  NOTWITHSTANDING SECTION
2(A) ABOVE, THE RESTRICTED SHARES SHALL BECOME IMMEDIATELY VESTED (AS IF THE
PERFORMANCE GOAL SET FORTH IN EXHIBIT A HAS BEEN ACHIEVED) AND PAYABLE IN FULL
UPON (I) A CHANGE IN CONTROL, OR (II) THE EMPLOYEE’S TERMINATION OF SERVICE DUE
TO DEATH OR PERMANENT DISABILITY (AS DEFINED IN THE EMPLOYMENT AGREEMENT).

(D)           TERMINATION OF SERVICE; FORFEITURE OF UNVESTED AWARD.  EXCEPT AS
OTHERWISE PROVIDED IN THIS SECTION 2, IN THE EVENT OF TERMINATION OF SERVICE OF
THE EMPLOYEE PRIOR TO THE DATE THE AWARD OTHERWISE BECOMES VESTED, THE AWARD
SHALL IMMEDIATELY BE FORFEITED BY THE EMPLOYEE AND BECOME THE PROPERTY OF THE
COMPANY.

(E)           CERTIFICATES.  UPON THE VESTING AND PAYMENT OF RESTRICTED SHARES
PURSUANT TO SECTION 2 HEREOF AND THE SATISFACTION OF ANY WITHHOLDING TAX
LIABILITY PURSUANT TO SECTION 5 HEREOF, THE CERTIFICATES EVIDENCING SUCH COMMON
STOCK SHALL BE DELIVERED TO THE EMPLOYEE OR OTHER EVIDENCE OF ISSUANCE OF COMMON
STOCK SHALL BE PROVIDED TO THE EMPLOYEE.

(F)            RIGHTS OF A STOCKHOLDER.  PRIOR TO THE TIME A RESTRICTED SHARE IS
VESTED AND PAID HEREUNDER, THE EMPLOYEE SHALL HAVE NO RIGHT TO TRANSFER, PLEDGE,
HYPOTHECATE OR OTHERWISE ENCUMBER SUCH RESTRICTED SHARE, NOR SHALL THE EMPLOYEE
SHALL HAVE ANY OTHER RIGHTS OF A STOCKHOLDER, INCLUDING, BUT NOT LIMITED TO, THE
RIGHT TO VOTE AND TO RECEIVE DIVIDENDS (SUBJECT TO SECTION 2(A) HEREOF) AT THE
TIME PAID ON SUCH RESTRICTED SHARES.  DIVIDENDS DECLARED AND PAID PRIOR TO THE
TIME A RESTRICTED SHARE VESTS AND IS PAID SHALL ACCUMULATE AND BE REINVESTED IN
ADDITIONAL RESTRICTED SHARES THAT VEST AND ARE PAID ACCORDING TO THE SAME
SCHEDULE AS THE RESTRICTED SHARES TO WHICH THEY RELATE.

(G)           NO RIGHT TO CONTINUED EMPLOYMENT.  THIS AWARD SHALL NOT CONFER
UPON THE EMPLOYEE ANY RIGHT WITH RESPECT TO CONTINUANCE OF EMPLOYMENT BY THE
COMPANY NOR SHALL THIS AWARD INTERFERE WITH THE RIGHT OF THE COMPANY TO
TERMINATE THE EMPLOYEE’S EMPLOYMENT AT ANY TIME.

(H)           TERMINATION OF SERVICE.  “TERMINATION OF SERVICE” MEANS THE
TERMINATION OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY AND ITS SUBSIDIARIES. 
AN EMPLOYEE EMPLOYED BY A SUBSIDIARY OF THE COMPANY SHALL ALSO BE DEEMED TO
INCUR A

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Termination of Service if the subsidiary of the Company ceases to be such a
subsidiary and the Employee does not immediately thereafter become an employee
of the Company or another subsidiary of the Company.  Temporary absences from
employment because of illness, vacation or leave of absence and transfers among
the Company and its subsidiaries shall not be considered a Termination of
Service.

(I)            ADJUSTMENTS.  IF ANY EVENT DESCRIBED IN SECTION 5.5 OF THE PLAN
OCCURS, THE COMMITTEE SHALL BE REQUIRED TO MAKE APPROPRIATE ADJUSTMENT IN
ACCORDANCE WITH THE TERMS OF SECTION 5.5

3.             TRANSFER OF COMMON STOCK.  THE COMMON STOCK TO BE PAID HEREUNDER,
OR ANY INTEREST THEREIN, MAY BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED,
ENCUMBERED, OR TRANSFERRED OR DISPOSED OF IN ANY OTHER MANNER, IN WHOLE OR IN
PART, ONLY IN COMPLIANCE WITH THE TERMS, CONDITIONS AND RESTRICTIONS AS SET
FORTH IN THE GOVERNING INSTRUMENTS OF THE COMPANY, APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE LAWS OR REGULATIONS AND THE TERMS AND
CONDITIONS HEREOF.

4.             EXPENSES OF ISSUANCE OF COMMON 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 COMMON STOCK.

5.             WITHHOLDING.  NO LATER THAN THE DATE OF VESTING AND PAYMENT OF
THE AWARD GRANTED HEREUNDER, THE EMPLOYEE SHALL PAY TO THE COMPANY 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 SUCH TIME
WITH RESPECT TO SUCH AWARD AND THE COMPANY 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 AT SUCH TIME.  THE EMPLOYEE MAY ELECT TO HAVE THE COMPANY
WITHHOLD COMMON STOCK OR ANY DIVIDEND EQUIVALENTS TO PAY ANY APPLICABLE
WITHHOLDING TAXES RESULTING FROM THE AWARD, IN ACCORDANCE WITH ANY RULES OR
REGULATIONS OF THE COMMITTEE THEN IN EFFECT.

6.             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
AGREEMENT.

7.             NOTICES.  ANY NOTICE REQUIRED OR PERMITTED TO BE GIVEN UNDER THIS
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:

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If to the Company:

Investment Technology Group, Inc.
380 Madison Avenue
New York, NY 10017
Attn.: General Counsel

If to the Employee:

At the Employee’s most recent address shown on the Company’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.

8.             COSTS.  IN ANY ACTION AT LAW OR IN EQUITY TO ENFORCE ANY OF THE
PROVISIONS OR RIGHTS UNDER THIS 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.

9.             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 AGREEMENT, INCLUDING BUT NOT LIMITED TO ALL ACTS AND
DOCUMENTS RELATED TO COMPLIANCE WITH FEDERAL AND/OR STATE SECURITIES LAWS.

10.           COUNTERPARTS.  FOR CONVENIENCE, THIS 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.

11.           GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH SECTION 10 OF THE PLAN.

12.           ENTIRE AGREEMENT.  THIS 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
AWARD OTHER THAN AS SET FORTH HEREIN OR THEREIN, ALL PRIOR AGREEMENTS, PROMISES,
REPRESENTATIONS AND UNDERSTANDINGS RELATIVE THERETO BEING HEREIN MERGED.

13.           AMENDMENT; WAIVER.  THIS 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

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the same.  No waiver by any party of the breach of any term or provision
contained in this 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 Agreement.

14.           SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT THAT IS PROHIBITED
OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION, BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT
INVALIDATING THE REMAINING PROVISIONS HEREOF, AND ANY SUCH PROHIBITION OR
UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR RENDER
UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION.

[SIGNATURE PAGE FOLLOWS]

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

Investment Technology Group, Inc.

 

 

 

 

 

By:

/s/ Raymond L. Killian, Jr.

 

 

Name:

Raymond L. Killian, Jr.

 

Title:

Chairman

 

 

 

 

 

Employee

 

 

 

 

 

/s/ Robert C. Gasser

 

 

Robert C. Gasser

 

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Exhibit A

Performance Objectives and Vesting and Payment Schedule for the Restricted Share
Award

If the Company’s pre-tax operating income (excluding one-time gains,
non-recurring charges, and certain non-cash charges such as impairment of
goodwill) for the period October 1, 2006 through September 30, 2007 equals or
exceeds $     million, the Award shall be earned, subject to vesting and payment
as follows:

Vesting and Payment Date

 

Percentage of Award that Shall Vest

 

October 31, 2007

 

33 1/3%

 

October 4, 2008

 

33 1/3%

 

October 4, 2009

 

33 1/3%

 

 

provided, however, that if the performance objective is not achieved during the
first four calendar quarters ending on September 30, 2007, the award shall not
be “earned” and no shares shall vest and payment shall not be made with respect
to the first vesting and payment date (and any subsequent vesting and payment
date) until the last day of the month following the calendar quarter as of which
the Company achieves aggregate pre-tax operating income (excluding one-time
gains, non-recurring charges, and certain non-cash charges such as impairment of
goodwill) of $     million for the preceding four consecutive calendar
quarters.  If the Company does not achieve this goal by September 30, 2009, the
Award shall be forfeited.

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