Exhibit
10.40





 


December 21,
2009


 


Steven
R. Vigliotti


 


Dear
Steven,


 


I
am pleased to offer you the position of Managing Director and Chief Financial
Officer of Investment Technology Group, Inc. (“ITG”
or the “Company”), in accordance with the terms stated in this letter
agreement (the “Letter Agreement”).  The exercise of your responsibilities
will take place in the New York office located at 380 Madison Ave, NY, NY, will
be subject to the review and approval of both the CEO and the Board of
Directors of ITG, and will at all times be in conformity with ITG’s compliance
and regulatory procedures.


 


1.   (a)                            Your base salary will be a
semi-monthly rate of $20,833.33 ($500,000 annualized), less applicable
withholdings, to be paid to you in equal installments on approximately the 15th and the last day of each month as determined
by the Company in accordance with its payroll practices.


 


(b)                     Contingent
upon your performance and the performance of the Company, you will receive an
annual bonus pursuant to the Company’s Amended and Restated Pay-for-Performance
Incentive Plan, if applicable, and any such other plan or program that from
time-to-time may be adopted by the Company. A portion of such annual
bonus, consistent with the portion allocated to other executive officers, may
be awarded in Stock Units (“Stock Award”), which will have terms consistent
with ITG’s 2007 Omnibus Equity Compensation Plan (“Equity Plan”).  The Stock Award will have
the same structure and be subject to the same vesting schedule as those awarded
to other executive officers.


 


All
cash and equity bonuses will be paid or granted to you in accordance with the
Company’s practice related to bonus payments to the Company’s other executive
officers.  This generally occurs within
90 days of the end of the Company’s fiscal year. For 2010, you will have an initial total bonus target of $1,000,000.
In no event will you be eligible for, and
you shall not earn or 


 

















 


receive, any bonus if you are not employed by ITG on the
date such bonuses are paid.


 


Notwithstanding the foregoing, the bonuses you will
receive with respect to fiscal year 2010 shall not be lower than $750,000 (the “2010
Minimum”), a portion of which may be a Stock Award. In the event you are
terminated by ITG without Cause, or you terminate your employment with ITG for
Good Reason prior to the payment date of such bonus, you would still be
entitled to such payment in cash on or before the date such bonus would
otherwise have been paid, which will occur no later than 90 days after December 31,
2010.


 


For all purposes of this Letter Agreement, the terms “Cause,”
and “Good Reason” shall have the meanings set forth in Exhibit A attached
hereto.


 


(c)                      You will also receive a Stock Award with a value of $500,000 (the “Sign
on Award”) based upon the fair market value of ITG stock on your first day of
employment.  This grant will be
memorialized in a separate Stock Unit Grant Agreement and will vest in full on
the third anniversary of your first day of employment. This agreement is
subject to your continued employment with ITG through such date, and will have
terms consistent with ITG’s Equity Plan.  However, should your employment
with ITG be terminated by ITG without Cause or by you for Good Reason, prior to
the vesting of the Sign on Award, ITG will pay you, within 60 days of your last
day of employment with ITG, an amount equivalent to the then current market
value of the Sign on Award. This payment would be subject to you signing ITG’s
standard separation and release agreement, which both parties hereto agree to
execute within 30 days of the termination of your employment with the Company.


 


(d)                     You shall be eligible to receive additional equity awards as and when
equity awards are granted to executive officers generally, with the amount and
terms of such awards determined on the same bases as awards granted to
executive officers generally, including any matching Stock Awards granted under
the EDA Program, if applicable.


 


2.               Your employment
is contingent upon:


 


(a)                      your acceptance and acknowledgement of all applicable Company policies
and agreements to the extent delivered to you in writing;


 


(b)                     your
execution of the Employee Agreement With Respect To Non-Solicitation and
Confidential and Proprietary Information, a copy of which is attached hereto;


 


(c)                      your execution of the Change in Control Agreement which is attached
hereto;


 


(d)                     your
providing proper documentation demonstrating your eligibility to work in the
United States;


 


(e)                      your successful completion of a background check (including, but not limited
to, current and prior employment dates and compensation) and satisfactory
completion of a drug test.  The background check and drug test must be 


 

















 


successfully completed prior to your start date. 
We will provide you with the appropriate release and authorization forms from
time to time for your review and signature; and


 


(f)                        you successfully obtaining and/or transferring to ITG (or to any
affiliates to which you may be assigned) any and all required regulatory
approvals and registrations needed in the performance of your position.


 


3.               Either you or
ITG may terminate your employment at any time, with or without Cause, for any
reason or for no reason upon 90 days written notice.  ITG agrees to provide you with termination
benefits similar to those made available to other terminated executive officers
in the event you are terminated by ITG without Cause.


 


4.               You will be
entitled to participate in the same benefit programs provided to all full-time
executive officers of ITG in accordance with the plans’ terms and you will be
entitled to up to five (5) weeks of paid vacation annually.


 


5.               ITG shall
reimburse you for all reasonable expenses incurred in the course of performing
your duties, consistent with ITG’s policies in effect from time to time with
respect to travel, entertainment and other business expenses, subject to ITG’s
requirements with respect to reporting and documentation of expenses.


 


6.               As an applicant
for employment, you may be fingerprinted in accordance with SEC Rule 17f-2.


 


7.               Except as required
under your existing consulting agreement with NYSE Technologies, Inc.
dated August 26, 2009 and as amended thereafter, you will be expected to
devote your full working time and attention and all of your efforts, skills,
and abilities to performing your duties in the sole interest of ITG.  In performing your duties, you will be
expected to comply with all applicable laws and all policies and procedures of
ITG.  By signing this Letter Agreement,
you confirm that you are not subject to, and you will not be in violation or
breach of, any agreement or restriction that in any way prohibits you from
joining our Company or performing your work with us.  You also agree that you will not disclose to
ITG any confidential information of any third party.


 


8.               You are
required to maintain all licenses and registrations necessary to perform your
job duties during the course of your employment with ITG.


 


9.               ITG
agrees to continue and maintain a directors’ and officers’ liability insurance
policy covering you to the extent ITG provides such coverage for its other
executive officers.


 


10.         ITG
agrees to indemnify you to the fullest extent permitted or authorized by
applicable law and the Company’s certificate of incorporation or bylaws, as in
effect from time to time.


 


11.         Your expected employment date with ITG is February 1, 2010.  This offer will expire
on December 31, 2009.


 


12.         In the
event of any dispute under the provisions of this Letter Agreement, other than
a dispute in which the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute, controversy or
claim 


 

















 


                        settled
by arbitration in New York, New York in accordance with the National Rules for
the Resolution of Employment Disputes then in effect of the American
Arbitration Association, before an arbitrator agreed to by both parties. 
If the parties cannot agree upon the choice of arbitrator, the Company and you
will each choose an arbitrator.  The two arbitrators will then select a
third arbitrator who will serve as the actual arbitrator for the dispute,
controversy or claim.  Any award entered by the arbitrators shall be
final, binding and nonappealable and judgment may be entered thereon by either
party in accordance with applicable law in any court of competent
jurisdiction.  This arbitration provision shall be specifically
enforceable.  The arbitrators shall have no authority to modify any
provision of this Letter Agreement or to award a remedy for a dispute involving
this Letter Agreement other than a benefit specifically provided under or by
virtue of the Agreement.


 


13.         Section 409A.


 


This
Letter Agreement shall be interpreted to avoid any penalty sanctions under
section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions on you or the
Company under section 409A of the Code, then such benefit or payment shall be
provided in full at the earliest time thereafter when such sanctions will not
be imposed.  This Letter Agreement, and
all policies and documents referenced herein, contain all of the terms of the
proposed relationship between you and ITG, and this Letter Agreement may only
be subsequently modified by an instrument in writing, signed by both you and an
authorized officer of ITG.


 


We
hope that you are as excited as we are to bring high technology products to the
financial services markets.  Your experience and skills will be an asset
to us, and we look forward to having you on our team.  We, therefore, hope
that you will indicate your acceptance of our offer by signing a copy of this
Letter Agreement and returning it to Peter Goldstein in the Human Resources
Department at 380 Madison Avenue, NY, NY 10017.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert Gasser

  
	
   

  	
  Robert
  Gasser

  
	
   

  	
  President
  and CEO

  



 

















 


	
  Agreed
  to and Accepted By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Steven R. Vigliotti

  	
   

  
	
  Steven
  R. Vigliotti

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  December 21, 2009

  	
   

  



 

















 


Exhibit A


 


For purposes of this
exhibit, “Executive” shall mean Steven R. Vigliotti.


 


“Cause” shall mean the
occurrence of any one or more of the following: (i) the Executive’s
willful failure to substantially perform his duties with the Company (other
than any such failure resulting from the Executive’s Disability (as defined in Section 22(e)(3) of
the U.S. Internal Revenue Code of 1986, as amended)), after a written demand
for substantial performance is delivered to the Executive that specifically
identifies the manner in which the Company believes that the Executive has not substantially
performed his duties, and the Executive has failed to remedy the situation
within fifteen (15) business days of such written notice from the Company; (ii) gross
negligence in the performance of the Executive’s duties which results in
material financial harm to the Company; (iii) the Executive’s conviction
of, or plea of guilty or nolo contendere, to any felony or any other crime
involving the personal enrichment of the Executive at the expense of the
Company; (iv) the Executive’s willful engagement in conduct that is demonstrably
and materially injurious to the Company, monetarily or otherwise; or (v) the
Executive’s willful material violation of any provision of the Company’s code
of conduct.


 


“Good Reason” means, without
the Executive’s express written consent, the occurrence of any one or more of
the following:


 


(i)                                     a material reduction of the
Executive’s primary functional authorities, duties, or responsibilities as
Chief Financial Officer of the Company or the assignment of duties to the Executive
inconsistent with those of Chief Financial Officer of the Company (other than
an insubstantial and inadvertent reduction or assignment that is remedied by
the Company promptly after receipt of notice thereof given by the Executive),
or the Executive no longer reporting directly to the Company’s CEO;


 


(ii)                                  the Company’s requiring the
Executive to be based at a location in excess of thirty five (35) miles from
the location of the Executive’s principal job location or office;


 


(iii)                               a material reduction by the
Company of the Executive’s base salary in effect on the Effective Date, or as
the same shall be increased from time to time, unless such reduction applies on
substantially the same percentage basis to all employees of the Company generally;


 


(iv)                              a material reduction in the
Executive’s participation in any of the Company’s annual incentive compensation
plans in which the Executive participates, unless such failure applies to all
plan participants generally;


 

















 


(v)                                 if the Company provides
written notice that the Change in Control Agreement will not be extended prior
to the vesting of your Sign on Award; and


 


(vi)                              a material breach of this
Agreement by the Company;


 


provided, however,
that for any of the foregoing to constitute Good Reason, the Executive must
provide written notification of his intention to resign within 30 days after
the Executive knows or has reason to know of the occurrence of any such event,
and the Company shall have 30 business days from the date of receipt of such
notice to effect a cure of the condition constituting Good Reason, and, upon
cure thereof by the Company, such event shall no longer constitute Good Reason.