Exhibit 10.39


 


Execution Copy


 


The material marked by asterisks within brackets ([**]) on pages 1
and 5 of this document has been omitted pursuant to a request for confidential
treatment from the Commission in accordance with 17 C.F.R. § 240.24b-2.


 


CONFIDENTIAL


 


December 17,
2008


 


VIA HAND DELIVERY


 


Anthony J. Huck


[**]


 


Dear Tony:


 


This letter will confirm the agreement (the “Agreement”) that has been
reached by and between you and Investment Technology Group, Inc. (“ITG” or
the “Company”) in connection with your separation from service with ITG.


 


1.             Separation
from Service.


 


(a)           Effective the close of business December 15,
2008 (the “Separation Date”), upon mutual agreement between you and the
Company, you voluntarily resigned from all positions with the Company and its
subsidiaries, including your positions as Managing Director and a member of the
applicable boards of directors of the Company’s subsidiaries on which you
served and any committee(s) thereof. 
You agree promptly to execute any documents necessary to effectuate such
resignations.


 


(b)           On the Separation Date, you received
a final paycheck which included a payment for all unpaid compensation you have
earned through the Separation Date, less any applicable deductions and
withholdings.  If you are a participant
in the Investment Technology Group, Inc. 401(k) Plan, you will cease
to participate in that plan as of the Separation Date.  A contribution to the 401(k) plan (based
on the historical amount you have elected to contribute to such plan) will be
deducted from your final paycheck.  Specific information concerning
the distribution of your 401(k) Plan account will be forwarded to you
separately.  Except as set forth herein,
you are not entitled to any additional compensation, bonuses, payments, benefits,
damages, attorneys’ fees or costs of any kind from ITG and the Releasees (as defined in Paragraph 3
below).


 


2.             Separation
Payments and Benefits. 
Subject to your execution and non-revocation of this Agreement and in
consideration for your agreement to be bound by the


 

















 


promises set forth in
Paragraph 4 of this Agreement, in addition to the amounts described in
Paragraph 1 above:


 


(a)           The Company will pay you, in nine (9) monthly
installments, the aggregate amount of Two Million One Hundred Eight Thousand
Dollars ($2,108,000).  The first of the
nine (9) installments will be made within thirty (30) business days of the
Separation Date (subject in all respects to your execution and non-revocation
of this Agreement as described above), with subsequent payments on each monthly
anniversary of the first payment date.


 


(b)           The Company will pay to you within
thirty (30) business days of the Separation Date (subject in all respects to
your execution and non-revocation of this Agreement as described above), in one
lump sum, Seven Hundred Sixty-Five Thousand Dollars ($765,000) in satisfaction
of any remaining bonus payments that you may claim are owed to you in respect
of 2008.  This 2008 bonus payment is in
addition to the amount payable pursuant to Paragraph 1(b) above; provided
that there are no amounts due under Paragraph 1(b) above with respect to
your 2008 bonus.


 


(c)           If you timely elect to continue group health coverage under COBRA, the
Company will provide you with continued coverage under the Company’s health
insurance program for the twelve (12) month period following the Separation
Date at the Company’s sole cost and expense (subject in all respects to your
execution and non-revocation of this Agreement as described above); provided,
however, that this continued coverage will cease when you commence
full-time employment at another firm.  The COBRA health care continuation coverage
period under section 4980B of the Internal Revenue Code of 1986, as amended
(the “Code”)
will run concurrently with the foregoing period of continued coverage.


 


(d)           All outstanding stock options you
hold as of the Separation Date that are not already vested and exercisable as
of the Separation Date will automatically terminate as of the Separation
Date.  Outstanding stock options that you
hold that are already vested as of the Separation Date are hereby amended to
remain exercisable until the end of the applicable option term (August 1,
2010) pursuant to the terms of the applicable stock option grant agreement
evidencing such outstanding vested stock options.  All outstanding restricted stock units that
have not yet become vested as of the Separation Date shall be forfeited.  In addition, all stock unit awards granted to
you under the Company’s Amended and Restated Stock Unit Award Program Subplan
(the “SUA Program”) that are not already vested as of the Separation Date will
be forfeited.  Shares subject to stock
unit awards granted to you under the SUA Program that are already vested as of the
Separation Date will be issued to you in accordance with the terms of the SUA
Program.  The foregoing treatment of your
equity incentive awards is subject in all respects to your execution and
non-revocation of this Agreement as described above.


 


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3.             General
Release of All Claims.


 


(a)           Except as provided
in (f) below, you, on behalf of yourself, your spouse, children, estate,
successors and assigns, release and give up any and all claims you may have
against ITG and the Releasees (as defined below), jointly and individually, of
whatever kind whatsoever to the maximum extent provided by law, including but
not limited to, claims arising out of your employment or the termination of
your employment with the Company.  This
includes all claims based on anything that has occurred from the beginning of
time to the date of your signing of this Agreement, regardless of whether you
know of the claim or of your right to make a claim.  This release includes, but is not limited to,
any claims under: the Age Discrimination in Employment Act, 29 U.S.C. Section 621,
et seq., the Older Workers’ Benefits Protection Act, the Rehabilitation Act of
1973, the Worker Adjustment and Retraining Notification Act, 42 U.S.C. Section 1981,
Title VII of the Civil Rights Act of 1964, the Sarbanes-Oxley Act of 2002, the
Family and Medical Leave Act, the Equal Pay Act, the Employee Retirement Income
Security Act of 1974 (“ERISA”) (including, but not limited to, claims for
breach of fiduciary duty under ERISA), the Americans With Disabilities Act, the
New York Executive Law, the New York Labor Law, and all amendments to those
laws; any claims under any other federal, state, or local employment
discrimination law, and any claim under any other federal, state or local law
dealing with employment or benefits, or concerning any other matter whatsoever;
any claim under any agreement, whether express or implied; and any public
policy, contract, tort or other common law claim.


 


(b)           The Company releases
and gives up any and all claims it may have against you or your executors,
administrators, successors or assigns of whatever kind whatsoever to the
maximum extent provided by law, including but not limited to, claims arising
out of your employment with the Company or the termination thereof.  This includes all claims based on anything
that has occurred from the beginning of time to the date the Company signs this
Agreement, regardless of whether the Company knows of the claim or of its right
to make a claim; provided that the claims released by the Company will not
include any claims arising from your willful misconduct, misrepresentation or
fraud or any act or omission by you constituting criminal conduct or a
violation of the rules and/or regulations of any regulatory agency or
self-regulatory organization.  This
release includes, but is not limited to, any claim under any agreement, whether
express or implied and any public policy, contract, tort or other common law
claim.


 


(c)           You agree that your
employment and contractual relationship, if any, with ITG and the Releasees is
severed as of the Separation Date and that none of ITG and the Releasees have
any obligation to reemploy you.


 


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(d)           You represent and
warrant that you have received and reviewed your final paycheck and you hereby
acknowledge and agree that you have received all amounts due from the Company
through the Separation Date including, but not limited to, the following: (i) all
compensation earned, (ii) payment for all accrued but unused paid vacation
time, and (iii) reimbursement for all reasonable and necessary business,
travel and entertainment expenses incurred on behalf of the Company.


 


(e)           For purposes of this
Agreement, the term “ITG and the Releasees” includes ITG and its past, present
and future direct and indirect parents, subsidiaries, affiliates, divisions,
predecessors, successors, and assigns, and their respective current and former
officers, directors, shareholders, representatives, agents and employees, in
their official and individual capacities, jointly and individually.


 


(f)            The only claims
that you are not waiving and releasing under this Agreement are claims you may
have for: (i) unemployment, state disability, worker’s compensation,
and/or paid family leave insurance benefits pursuant to the terms of applicable
state law; (ii) continuation of existing participation in ITG-sponsored
group health insurance program under the federal law known as “COBRA” and/or
under an applicable state law counterpart(s); (iii) any benefits
entitlements that are vested as of your Separation Date pursuant to the terms
of an ITG-sponsored benefit plan; (iv) any claim not waivable by law; (v) any
claim you may have to receive any amounts payable to you under this Agreement
or any other claim to enforce your rights under this Agreement; (vi) any
claim you may have to indemnification as an officer, director or employee of
the Company and its subsidiaries pursuant to the articles of incorporation or
by-laws (or other governing instruments) of the Company and its subsidiaries
and (vii) any claim or right that may arise after the date you execute
this Agreement.


 


4.             Continuing Obligations Following Your Separation
from Service.


 


(a)           You agree, upon
reasonable notice from the Company, to provide truthful and reasonable
cooperation, including but not limited to your appearance at interviews with
the Company’s counsel, (i) in connection with the defense of any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
demands and causes of action of any nature whatsoever, which are asserted by
any person or entity concerning or related to any matter that arises out of or
concerns events or occurrences during your employment with the Company, and (ii) concerning
requests for information about the business of the Company or your involvement
or participation therein.  The Company
will reimburse you for reasonable and necessary travel and other expenses which
you may incur at the specific request of the Company and as approved by the
Company in accordance with its policies and procedures established from time to
time.


 


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(b)           By signing below,
you represent and warrant that you have returned and/or agree to immediately
return to the Company any and all original and duplicate copies of all files,
calendars, books, records, notes, manuals, computer disks, diskettes and any
other magnetic and other media materials and any and all Company property and
equipment, including, but not limited to, computers and modems you have in your
possession or under your control belonging to ITG or the Releasees and
containing confidential or proprietary information concerning ITG or the
Releasees or their customers or operations. 
You have also returned your Company keys, credit cards, etc., to the
Company.  By signing this Agreement, you
confirm that you have not retained in your possession or under your control any
of the documents or materials described in this section.


 


(c)           You agree
that for a period of three (3) months following the Separation Date, you
will be on garden leave and will not in any manner, directly or indirectly,
engage or participate in, any business, entity or endeavor other than civic or
charitable activities.  For
the period beginning on the first day of the fourth (4th) month following your
Separation Date through the nine (9) month anniversary of the Separation
Date, you will not in any manner, directly or indirectly, engage, participate
or be interested in any business, entity or endeavor with [**].  You will be deemed to be directly or
indirectly engaged or participating in, a business, entity or endeavor with
[**] if you are a principal, agent, stockholder (or other proprietary or
financial interest holder), director, officer, employee, salesperson, sales
representative, broker, partner, individual proprietor, lender, consultant or
otherwise.


 


(d)           You
agree that you will not, for a period of one (1) year following the
Separation Date, directly or indirectly: 
(i) solicit or canvas the trade or patronage of, or sell to (A) any
former or existing clients of ITG for which you directly or indirectly provided
services or for which you had significant responsibility as an employee of ITG
during the two (2) years prior to your Separation Date, or (B) any
person or entity that becomes a client of ITG during the one (1) year
period following your Separation Date and for which you participated in a
proposal to provide services during the two (2) years prior to your
Separation Date; or (ii) induce or attempt to influence any employee,
contractor or consultant of ITG to terminate his employment or relationship
with ITG or solicit for employment any persons who were employees, contractors
or consultants of ITG at any time during your employment with ITG.


 


(e)           You agree that you
will not, at any time hereafter, make, or cause to be made, any statement,
observation or opinion, in each case, of a public nature, that disparages,
impugns or in any way reflects adversely upon the business, good will or
reputation of the Company or any Releasees. 
The restriction in the preceding sentence will include, but not be
limited to, your agreement that you will not, without the prior consent of the
Company, initiate any contacts with, nor respond to any inquiries from, the
media concerning the Company, your employment with 


 


5

















 


the Company and/or your separation from service with the Company.  The Company will not, at any time hereafter,
issue or authorize any public statement, observation or opinion that
disparages, impugns or in any way reflects adversely upon your reputation.  The provisions of this Paragraph 4(e) will
not impair either party’s right to provide truthful testimony or other
information as required by law or regulatory requirement.


 


(f)            You agree that you
have certain confidentiality and other obligations under the terms of that
certain Employee Agreement with respect to Confidential and Proprietary
Information and Non-Solicitation dated December 1, 1995 which are hereby
incorporated by reference and made part of this Agreement, and that such
obligations survive your termination of employment even if you do not sign or
if you revoke this Agreement.


 


(g)           You acknowledge and
agree that the restrictions and agreements contained in Paragraphs 4(a) through
4(f), in view of the nature of the business in which ITG and the Releasees are
engaged, are reasonable, necessary and in the Company’s best interests in order
to protect the legitimate interests of ITG and the Releasees, and that any
violation thereof shall be deemed to be a material breach of this agreement and
that the Company shall be entitled to pursue any and all remedies available to
it in a court of competent jurisdiction including, but not limited to
application for temporary, preliminary, and permanent injunctive relief as well
as damages, an equitable accounting of all earnings, profits and other benefits
arising from such violation.  In the
event the Company brings an action to redress a violation of Paragraphs 4(a) through
4(f), the prevailing party in any claims in such action shall be entitled to
recover all of its reasonable attorneys’ fees and costs incurred in connection
therewith.  If the Company prevails in
any claims in such action, you will be liable for the return of the separation
payments and benefits and for the return of any profits realized in connection
with your exercising or receiving payment with respect to any of the equity
incentive awards that were amended as set forth in Paragraph 2.


 


5.             No
Admissions.  The Company
and you agree that nothing contained in this Agreement is an admission by the
Company or you of any wrongdoing, liability, unlawful conduct or breach of any
duty or obligation.


 


6.             Confidentiality.  You agree that you have kept, and will keep,
the existence and terms of this Agreement confidential, and will not disclose
them to anyone except your attorneys, financial advisors and immediate family
members, whom you will advise of this confidentiality provision.  No other disclosure will be permitted
except:  (a) pursuant to an action
to enforce the terms of this Agreement, in which case it will be introduced
under seal to the court, (b) in response to a request by any governmental
or regulatory agency, (c) as may be required by any state or federal law
or regulation, or (d) in response to compulsory process of law.  The parties


 


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further agree that
nothing in this Agreement will prohibit or restrict you from providing
information to, testifying or otherwise assisting in any investigation or
proceeding brought by, any federal, state or local regulatory agency, law
enforcement agency, legislative body, or self-regulatory organization.


 


7.             Governing
Law.  This Agreement will
be construed under the laws of the State of New York.


 


8.             Entire Agreement.  This
Agreement cancels, supersedes and replaces any and all prior agreements
(written, oral or implied-in-fact or in law) between you and the Company
regarding all of the subjects covered by this Agreement except as otherwise
specifically proivded in this Agreement. 
This Agreement is the full, complete and exclusive agreement between you
and the Company regarding the subjects covered by this Agreement, and neither
you nor the Company is relying on any representation or promise that is not
expressly stated in this Agreement.  This
Agreement may not be changed unless the changes are in writing and signed by
each of the parties.


 


9.             Severability.  With the exception of Paragraph 3, if any
provision of this Agreement or the application thereof is held invalid, the
invalidity will not affect other provisions or applications, and to this end
the provisions of this Agreement are declared to be severable.  In the event Paragraph 3 is held
unenforceable by any court having competent jursidiction over this Agreement in
connection with any action initiated or otherwise prosecuted by you, the
Company’s obligations under Paragraph 2 will be null and void, and you will be
liable for the return of the separation payments and benefits and for the
return of any profits realized in connection with your exercising or receiving
payment with respect to any of the equity incentive awards that were amended as
set forth in Paragraph 2.


 


10.           Review and Revocation
Period.  You understand
and acknowledge that, under the Older Workers Benefit Protection Act, you have
at least twenty-one (21) days to consider signing this Agreement.  Please note that you may not sign this Agreement prior to the
Separation Date.  This Agreement, should
you choose to accept it, must be signed during the period beginning on the
Separation Date and ending on December 23, 2008.  This deadline will be extended to the next business day should it fall
on a Saturday, Sunday or holiday recognized by the U.S. Postal Service.  You further understand and acknowledge
that you will have seven (7) days following the date of your execution of
this Agreement within which to revoke this Agreement (this deadline will be extended to the next business day should it fall
on a Saturday, Sunday or holiday recognized by the U.S. Postal Service.),
and that this Agreement will not become effective or enforceable until that
seven (7) day revocation period has expired.  In the event you seek to revoke this
Agreement, you must provide the Company with written


 


7

















 


notice no later than the
close of business on the seventh (7th) day following your execution of this
Agreement.  Any notice of revocation will
be sent to P. Mats Goebels, Managing Director, General Counsel, Investment
Technology Group, Inc., 380 Madison Avenue, 4th Floor, New York, NY,
10017.  You are hereby advised to consult
with an attorney of your choice prior to executing this Agreement.


 


YOU
UNDERSTAND THAT THIS AGREEMENT RELEASES ANY AND ALL CLAIMS AND RIGHTS YOU MAY HAVE
AGAINST THE COMPANY AND ALL OF THE OTHER RELEASEES AS SET FORTH ABOVE, AND THAT
BY SIGNING THIS AGREEMENT, YOU ACKNOWLEDGE AND AFFIRM THAT:  (1) YOU ARE COMPETENT; (2) YOU WERE
AFFORDED A REASONABLE TIME PERIOD OF TWENTY-ONE (21) DAYS TO REVIEW AND
CONSIDER THIS AGREEMENT AND HAVE BEEN ADVISED TO DO SO WITH AN ATTORNEY OF YOUR
CHOICE; (3) YOU HAVE READ AND UNDERSTAND AND ACCEPT THIS AGREEMENT AS
FULLY AND FINALLY RESOLVING, WAIVING AND RELEASING ANY AND ALL CLAIMS AND
RIGHTS WHICH YOU MAY HAVE AGAINST THE COMPANY AND THE OTHER RELEASEES AS
SET FORTH ABOVE; (4) NO PROMISES OR INDUCEMENTS HAVE BEEN MADE TO YOU
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT; AND (5) YOU HAVE
SIGNED THIS AGREEMENT FREELY, KNOWINGLY AND VOLUNTARILY, INTENDING TO BE
LEGALLY BOUND BY ITS TERMS.


 


11.           Application of Section 409A
of the Internal Revenue Code.


 


(a)           This Agreement will be interpreted to
avoid any penalty sanctions under section 409A of the Code.  If any payment or benefit cannot be provided
or made at the time specified herein without you incurring sanctions under
section 409A of the Code, then such benefit or payment will be provided in full
at the earliest time thereafter when such sanctions will not be imposed.  For purposes of section 409A of the Code, all
payments to be made upon your termination of employment under this Agreement
may only be made upon your “separation from service” within the meaning of such
term under section 409A of the Code, each payment made under this Agreement
will be treated as a separate payment and the right to a series of installment
payments under this Agreement will be treated as a right to a series of
separate payments.  In no event will you,
directly or indirectly, designate the calendar year of payment.


 


(b)           All reimbursements and in-kind
benefits provided under this Agreement will be made or provided in accordance
with the requirements of section 409A of the Code, including, where applicable,
the requirement that (i) any reimbursement will be for expenses incurred
during your lifetime (or during a shorter period of time specified in this
Agreement), (ii) 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, (iii) the reimbursement of an eligible expense will be made
on or before the last day of the calendar year following the year in which the
expense is incurred, and 


 


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(iv) the
right to reimbursement or in kind benefits is not subject to liquidation or exchange
for another benefit.


 


(c)           Notwithstanding any provision of this
Agreement to the contrary, if, at the time of your “separation from service”
with the Company, the Company has securities which are publicly traded on an
established securities market and you are a “specified employee” (within the
meaning of such term under section 409A of the Code) and it is necessary to
postpone the commencement of any compensation payments or benefits otherwise
payable pursuant to this Agreement as a result of your “separation from service”
to prevent any accelerated or additional tax under section 409A of the Code,
then the Company will postpone the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or benefits
ultimately paid or provided to you) that are not otherwise paid within the
short-term deferral and separation pay plan exceptions under section 409A of
the Code, until the first payroll date that occurs after the date that is six
months following your “separation of service” with the Company.  If any payments are postponed due to such
requirements, such postponed a mounts will be paid in a lump sum to you on the
first payroll date that occurs after the date that is six (6) months
following your “separation of service” with the Company.  If you die during the postponement period
prior to the payment of postponed amount, the amounts withheld on account of
section 409A of the Code will be paid to the personal representative of your estate
within sixty (60) days after the date of your death.


 


[SIGNATURE PAGE FOLLOWS]


 


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Very
truly yours,


 


 


INVESTMENT
TECHNOLOGY GROUP, INC.


 


	
  By:

  	
  /s/ Robert C. Gasser

  	
   

  
	
   

  	
  Robert C. Gasser

  	
   

  



 


 


AGREED TO AND
ACCEPTED BY:


 


 


	
  /s/
  Anthony J. Huck

  	
   

  
	
  Anthony J. Huck

  	
   

  



 


 


Dated:  December 18, 2008


 


10