Exhibit
10.7


 


INVESTMENT
TECHNOLOGY GROUP, INC.


NONQUALIFIED STOCK OPTION GRANT AGREEMENT


FOR NON-EMPLOYEE DIRECTORS


 


THIS GRANT AGREEMENT, dated as of                    (the
“Date of Grant”), is entered into by and between Investment Technology
Group, Inc. (the “Company”), a Delaware corporation, and                    ,
a member of the Board of Directors of the Company (the “Director”).


 


WHEREAS, the Director has been awarded the following
Grant under the Amended and Restated Investment Technology Group, Inc.
Directors’ Equity Subplan (the “Subplan”), a subplan of the Investment
Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “2007 Plan”);


 


WHEREAS, capitalized terms used herein and not
defined herein shall have the meanings set forth in the Subplan and in the 2007
Plan. In the event of any conflict between this Grant Agreement, the Subplan
and the 2007 Plan, the Subplan and the 2007 Plan shall control; and


 


WHEREAS, the Director is not employed by the Company,
a Subsidiary of the Company or a parent of the Company and is not otherwise
ineligible to participate in the Subplan.


 


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.                                       Grant
of the Option. Subject to the terms and conditions set forth in this Grant
Agreement, the Subplan and the 2007 Plan, the Director is hereby awarded a
nonqualified stock option to purchase           shares
of Company Stock for an Exercise Price of $           per
share (the “Option”). This Option is intended to be a nonqualified stock
option and shall not be treated as an incentive stock option under the
provisions of the Code.


 


2.                                       Grant
Subject to Plan Provisions. This Option is
awarded pursuant to the Subplan and the 2007 Plan, the terms of which are
incorporated herein by reference, and in all respects shall be interpreted in
accordance with the Subplan and the 2007 Plan. This Option is subject to
interpretations, regulations and determinations concerning the Subplan and the
2007 Plan established from time to time by the Committee in accordance with the
provisions of the Subplan and the 2007 Plan, including, but not limited to,
provisions pertaining to (a) the registration, qualification or listing of the
shares issued under the 2007 Plan, (b) changes in capitalization, (c)
requirements of applicable law and (d) all other provisions of the Subplan and
the 2007 Plan. The Committee has the authority to interpret and construe this Grant
Agreement pursuant to the terms of the Subplan and the 2007 Plan, and its
decisions are conclusive as to any questions arising hereunder.


 

















 


3.                                       Vesting of
the Option.


 


(a)                                  Subject to
the terms and conditions of this Grant Agreement, the Subplan and the 2007 Plan,
this Option shall vest and become exercisable in three approximately equal
annual installments, beginning on the first anniversary of the Date of Grant if
the Director is serving as a Non-Employee Director or is deemed to be serving
as a Non-Employee Director in accordance with Section 7 below, as of each
applicable vesting date; provided, however, that the Option shall
vest and become immediately exercisable in full (i) immediately prior to the
effectiveness of a Change in Control if the Director is serving as a Non-Employee
Director or is deemed to be serving as a Non-Employee Director in accordance
with Section 7 below, as of such date or (ii) in the event that the Director
ceases to serve as a Non-Employee Director due to the Director’s death or Disability
(as defined below). In the event the Director ceases to serve as a Non-Employee
Director for any other reason not described or provided for herein, any portion
of the Option that has not yet vested shall immediately be forfeited.


 


“Disability” shall have the meaning
ascribed to such term in Section 22(e)(3) of the Code.


 


(b)                                 The vesting
of the Option shall be cumulative, but shall not exceed 100% of the shares of
Company Stock subject to the Option. If the foregoing vesting schedule would
produce fractional shares, the number of shares for which the Option vests
shall be rounded down to the nearest whole share.


 


(c)                                  Unless
otherwise provided by the Committee, all amounts receivable in connection with
any adjustments to the Company Stock under Section 5(d) of the 2007 Plan, as
incorporated within the Subplan, shall be subject to the vesting schedule in
this Section 3.


 


4.                                       Term. The
Option (to the extent not earlier exercised or forfeited in accordance with
Section 3(a) above) shall expire at 5:00 p.m., Eastern time, on the fifth
anniversary of the Date of Grant; provided, however, if the Director
ceases to serve as a Non-Employee Director prior to such date (except as
provided in Section 7 below), the Option shall expire as follows: (a) if the Director
ceases to serve as a Non-Employee Director due to the Director’s death, Disability
or retirement at or after age 65, the date 12 months after such cessation of
service, but in no event later than the fifth anniversary of the Date of Grant;
and (b) if the Director ceases to serve as a Non-Employee Director for any
reason other than due to the Director’s death, Disability or retirement at or
after age 65, the date sixty (60) days after such cessation of service, but in
no event later than the fifth anniversary of the Date of Grant.


 


5.                                       Method of
Exercise. The Director may exercise the Option, in whole or in part, at
such time as the Option is exercisable and prior to its expiration by giving
written notice of exercise of the Option to the Secretary of the Company. Such
written notice shall be deemed to have been received either when delivered
personally to the office of the Secretary or at 11:58 p.m. on the date of any
U.S. Postal Service postmark on the notice, whichever is earlier. Such notice
shall be irrevocable and must be accompanied by the payment of the Exercise
Price as provided in Section 6 below. Upon the exercise of the Option, the
Company shall transfer or


 


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shall cause to be issued a certificate or
certificates for the Company Stock being purchased as promptly as practicable.


 


6.                                       Payment of Exercise
Price. The Exercise Price of the shares of Company Stock purchased by the
Director upon exercise of the Option (the “Option Shares”) shall be paid
in full to the Company at the time of such exercise in cash (including by
check), by the surrender of Company Stock (including the surrender of Option
Shares), by payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board, or by such other method as the
Committee may approve; provided, however, that Company Stock held
for less than six months may be surrendered in payment or partial payment of
the Exercise Price only with the approval of the Committee.


 


7.                                       Continued
Service as an Employee. If the Director ceases to serve as a Non-Employee
Director and, immediately thereafter, the Director is employed by the Employer,
then, solely for the purposes of Sections 3 and 4 above, the Director shall not
be deemed to have ceased to serve as a Non-Employee Director at that time, and
his or her continued employment by the Employer shall be deemed to be continued
service as a Non-Employee Director. If the Director becomes employed by the Employer,
the transfer of Option Shares as described in Section 13 below shall be subject
to applicable federal (including FICA), state and local tax withholding
requirements pursuant to Section 14 of the 2007 Plan.


 


8.                                       Nontransferability.
Neither the Director nor any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
hypothecate or convey the Option, which Option is, and all rights under this Grant
Agreement are, expressly declared to be unassignable and nontransferable, other
than by will or under the laws of descent and distribution (or pursuant to a
beneficiary designation authorized by the Committee).


 


9.                                       No Right to
Company Assets. Neither the Director nor any other person shall acquire by
reason of the Option or the Option Shares any right in or title to any assets,
funds or property of the Company whatsoever including, without limiting the
generality of the foregoing, any specific funds or assets which the Company, in
its sole discretion, may set aside in anticipation of a liability. No trust
shall be created in connection with or by the granting of the Option or the
purchase of any Option Shares, and any benefits which become payable hereunder
shall be paid from the general assets of the Company. The Director shall have
only a contractual right to the amounts, if any, payable pursuant to this Grant
Agreement, unsecured by any asset of the Company or any of its affiliates.


 


10.                                 Limitations. Nothing
herein shall limit the Company’s right to issue Company Stock, or stock options
or other rights to purchase Company Stock subject to vesting, expiration and
other terms and conditions deemed appropriate by the Company and its affiliates.
Nothing expressed or implied herein is intended or shall be construed to confer
upon or give to any Person, other than the parties hereto, any right, remedy or
claim under or by reason of this Grant Agreement or of any term, covenant or condition
hereof.


 


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11.                                 Expenses of
Issuance of Option Shares. The issuance of stock certificates hereunder
shall be without charge to the Director. The Company shall pay, and indemnify
the Director 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 the Option
Shares.


 


12.                                 Terms are Binding.
The terms of this Grant Agreement shall be binding upon the executors,
administrators, heirs, successors, transferees and assignees of the Director
and the Company.


 


13.                                 Compliance with Law.
The exercise of the Option and the obligations of the Company to issue or
transfer Option Shares hereunder shall be subject to the terms, conditions and
restrictions as set forth in the governing instruments of the Company, Company
policies, applicable federal and state securities laws or any other applicable
laws or regulations, and approvals by any governmental or regulatory agency as
may be required. In no event shall the Director be permitted to exercise the
Option if the issuance of Option Shares at that time would violate any law or
regulation. By signing this Grant Agreement, the Director agrees not to sell
any Option Shares at a time when applicable laws or the Company policies
prohibit a sale.


 


14.                                 References. References
herein to rights and obligations of the Director shall apply, where
appropriate, to the Director’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 Grant Agreement.


 


15.                                 Notices. Any
notice required or permitted to be given under this Grant 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:


 


If to the
Company:


 


Investment
Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention: General Counsel


 


If to the
Director:


 


At the
Director’s most recent address shown on the Company’s corporate records, or at
any other address at which the Director may specify in a notice delivered to
the Company in the manner set forth herein.


 


16.                                 Costs. In any
action at law or in equity to enforce any of the provisions or rights under
this Grant Agreement, including any arbitration proceedings to enforce such
provisions or rights, the unsuccessful party to such litigation or arbitration,
as determined by the


 


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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.


 


17.                                 Further Assurances.
The Director agrees to perform all acts and execute and deliver any documents
that may be reasonably necessary to carry out the provisions of this Grant
Agreement, including but not limited to all acts and documents related to
compliance with federal and/or state securities laws.


 


18.                                 Counterparts. For
convenience, this Grant 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.


 


19.                                 Governing Law. This
Grant Agreement shall be construed and enforced in accordance with Section 6(h)
of the Subplan.


 


20.                                 Entire Agreement.
This Grant Agreement, together with the Subplan and the 2007 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
Option other than as set forth herein or therein, all prior agreements,
promises, representations and understandings relative thereto being herein
merged.


 


21.                                 Amendment; Waiver.
This Grant 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 the same. No waiver by any party of the
breach of any term or provision contained in this Grant 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 Grant Agreement.


 


22.                                 Severability. Any
provision of this Grant 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 Grant Agreement as of the date first above
written.


 


 


	
   

  	
  INVESTMENT TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name: Robert C. Gasser

  
	
   

  	
  Title: CEO and President

  



 


 


I hereby
accept the Option described in this Grant Agreement, and I agree to be bound by
the terms of the Subplan, the 2007 Plan and this Grant Agreement. I hereby
acknowledge that a copy of the Plan and the Plan prospectus have been delivered
to me. I hereby further agree that all the decisions and determinations of the
Committee shall be final and binding.


 


	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of the Director]

  



 


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