Exhibit 10.3.3


 


STOCK OPTION AGREEMENT


 


THIS STOCK OPTION
AGREEMENT (the “Agreement”) is entered into as
of     , 2003, between INVESTMENT TECHNOLOGY GROUP,
INC., a Delaware corporation (the “Company”)
and                                ,
an employee of the Company (“Employee”).


 


WHEREAS, the Company has
determined that it is in the interest of the Company to provide the Employee
with an option to purchase the common stock of the Company:


 


NOW THEREFORE, the
parties agree as follows:


 


1.1.  The Company has granted to
the Employee a nonqualified stock option (the “Option”) to
purchase               shares
of the Company’s Common Stock (the “Common Stock”), for a price per share equal
to $           per share (the
“Option Price”).  The date of grant of
the Option
is             ,
2003 (“Grant Date”).  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 Internal Revenue Code of
1986, as amended.


 


1.2.  The Option is granted under
Section 6.1 of the Company’s 1994 Stock Option and Long-Term Incentive
Plan, as amended (the “Plan”).  All of
the terms and conditions of the Plan are hereby incorporated by reference in
this Agreement as though fully set forth herein.  Terms defined in the Plan but not in this Agreement shall have
the meanings set forth in the Plan.  To
the extent of any conflict between the provisions of this Agreement and those
of the Plan, the provisions of the Plan shall govern.  Employee acknowledges receipt of a copy of the Plan, accepts the
Option subject to the terms and conditions set forth in the Plan and this
Agreement, and consents to and agrees to comply with such terms and conditions.


 


1.3.  This Option is granted for
no consideration other than the services of Employee and Employee’s agreements
set forth herein.


 


1.4.  The grant of the Option is
exempt from the provisions of Section 16(b) of the Securities Exchange Act
of 1934 (the “Exchange Act”) pursuant to the provisions of Rule l6b-3, all of
the requirements of which have been satisfied.


 


2.1.  Except as otherwise
provided herein, a percentage between 0% and 100% of the Option will vest and
become exercisable on January 1, 2006 
provided the Employee has remained continuously employed by the Company
or any Subsidiary (as defined below) through such date, based on the amount of
the Company’s “Cumulative Three Year Pre-Tax Operating Income” (as defined
below) determined in accordance with the following schedule:


 

















 


	
  Vesting
  Thresholds  - Cumulative Three Year

  Pre-Tax Operating Income

  	
   

  	
  Percentage of Options that

  Vest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than $

  	
   

  	
  0

  	
  %

  
	
  $

  	
   

  	
  25

  	
  %

  
	
  $

  	
   

  	
  50

  	
  %

  
	
  $

  	
   

  	
  75

  	
  %

  
	
  $

  	
   

  	
  100

  	
  %

  



 


In the event the amount of Cumulative Three Year
Pre-Tax Operating Income is between two of the thresholds set forth in the schedule above,
the percentage of the Option that will vest and become exercisable will be
determined by multiplying (A) 25% by (B) a fraction, the numerator of which is
the excess of the actual Cumulative Three Year Pre-Tax Operating Income over
the next lowest vesting threshold and the denominator of which is the excess of
the next higher vesting threshold over the next lower vesting threshold and
adding the product to the percentage corresponding to the next lowest vesting
threshold .


 


To the extent the Option does not vest and become
exercisable on January 1, 2006 , the Option will be forfeited.  Except as set forth below in this
Section 2.1, in the event of termination of Employee’s employment with the
Company or any Subsidiary for any reason prior to January 1, 2006 , the
Option shall be forfeited. 
Notwithstanding any other provision of this Agreement to the contrary,
(i) in the event of a Change of Control (as defined in Section 3.2
below) prior to January 1, 2006 , 50% of the Option will become vested and
exercisable at the time of such Change of Control and the remaining 50% of the
Option will vest (if at all) and become exercisable on January 1,
2006  in accordance with the vesting
thresholds outlined in this Section 2.1, provided in each case that the Employee’s
employment with the Company or any Subsidiary has not terminated prior to such
time; provided, however, that if, following a Change of Control,
the Employee’s employment with the Company or any Subsidiary terminates due to
his disability or death or due to termination by the Company not for Cause (as
defined below), any unvested portion of the Option shall become vested and
exercisable upon such termination of employment.


 


For purposes hereof, (i) “Cumulative Three Year Pre-Tax Operating
Income” shall mean the Company’s “Pre-Tax Operating Income” for the period
beginning January 1, 2003 through December 31, 2005, and (ii)
“Pre-Tax Operating Income” means the consolidated pre-tax income of the Company
and its subsidiaries, computed in accordance with generally accepted accounting
principles, (A) prior to reduction for income taxes and (B) excluding one time
gains, nonrecurring restructuring charges and non-cash charges (including
impairment of good will).  The
determination of “Cumulative Three Year Pre-Tax Operating Income” shall be made
by the Committee in good faith, which determination shall be binding on the
Employee.


 


For purposes hereof “Cause” shall be deemed to exist where Employee:
(i) commits any act of fraud, willful misconduct or dishonesty in
connection with their employment; (ii) fails, refuses or neglects to
timely perform any material duty or job responsibility and such failure,
refusal or neglect is not cured after appropriate warning; (iii) commits a
material violation of any law, rule, regulation or by-law of any governmental
authority (state, federal or foreign), any securities exchange or association
or other regulatory or


 


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self-regulatory
body or agency applicable to Company or any of its subsidiaries or affiliates
or any general written policy or directive of Company or any of its
subsidiaries or affiliates; (v) commits a crime involving dishonesty,
fraud or unethical business conduct, or a felony; or (vii) is expelled or suspended,
or is subject to an order temporarily or permanently enjoining Employee from an
area of activity which constitutes a significant portion of Employee’s
activities by the Securities and Exchange Commission, the National Association
of Securities Dealers Regulation, Inc., any national securities exchange or any
self-regulatory agency or governmental authority, state, foreign or federal.


 


For purposes hereof a “Subsidiary” shall mean any
corporation or other organization, whether incorporated or unincorporated,
(i) of which the Company or any other Subsidiary of the Company is a
general partner (excluding partnerships, the general partnership interests of
which held by the Company any Subsidiary do not have a majority of the voting
interests in such partnership), or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by the Company or by any one or more
of its Subsidiaries.


 


2.2.  The Option (to the extent
not earlier exercised or forfeited) will expire at 5:00 p.m., Eastern time, on
the earliest of (i) the fifth anniversary of the Grant Date, (ii) if Employee’s
employment with the Company (including all subsidiaries) terminates by reason
of death or disability, one year following such termination of employment, or
(iii) if Employee’s employment with the Company (including all subsidiaries)
terminates for any other reason, 60 days after the date of such termination.


 


3.1.  To the extent the Option
is exercisable under the provisions of Sections 2.1 and 2.2 hereof, the Option
may be exercised by giving written notice of exercise of the Option to the
Secretary of the Company, and it 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 (the “Exercise Date”).  Such
notice shall be irrevocable and must be accompanied by the payment of the
purchase price as provided in Section 4 below.  Upon the exercise of the Option, the Company will transfer or
will cause to be issued a certificate or certificates for the Common Stock
being purchased as promptly as practicable.


 


3.2.  “Change of Control” means
and shall be deemed to have occurred if:


 


(a)                                  any
person (within the meaning of the Exchange Act), other than the Company or a
Related Party, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of Voting Securities representing
30% percent or more of the total voting power of all the then-outstanding
Voting Securities; or


 


(b)                                 the
individuals who, as of the Grant Date, constitute the Board, together with
those who first become directors subsequent to such date and whose
recommendation, election or nomination for election to the Board was approved
by a vote of at least a majority of the directors then still in office who
either were directors as of the Grant Date or whose recommendation,


 


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election or nomination
for election was previously so approved, cease for any reason to constitute a
majority of the members of the Board; or


 


(c)                                  the
stockholders of the Company approve a merger, consolidation, recapitalization
or reorganization of the Company or one of its subsidiaries, reverse split of
any class of Voting Securities, or an acquisition of securities or assets by
the Company or one of its subsidiaries, or consummation of any such transaction
if stockholder approval is not obtained, other than (i) any such transaction in
which the holders of outstanding Voting Securities immediately prior to the
transaction receive (or retain), with respect to such Voting Securities, voting
securities of the surviving or transferee entity representing more than 50
percent of the total voting power outstanding immediately after such
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction, or
(ii) any such transaction which would result in a Related Party beneficially
owning more than 50 percent of the voting securities of the surviving or
transferee entity outstanding immediately after such transaction; or


 


(d)                                 the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets other than any such transaction which
would result in a Related Party owning or acquiring more than 50 percent of the
assets owned by the Company immediately prior to the transaction.


 


“Related Party” means (a) a Subsidiary ; (b) an
employee or group of employees of the Company or any Subsidiary ; (c) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any Subsidiary ; or (d) a corporation owned directly or indirectly
by the stockholders of the Company in substantially the same proportion as
their ownership of Voting Securities.


 


“Voting Securities or Security” means any securities
of the Company which carry the right to vote generally in the election of
directors.


 


4.1.  The purchase price of
Common Stock purchased by the Employee 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) or by the surrender of Common Stock of the Company or
a combination thereof, in accordance with Section 9.3 of the Plan,
provided that Common Stock held for less than six months may be surrendered
only with the approval of the Committee.


 


5.1.  The number and kind of
shares purchasable upon exercise of the Option, and other terms of the Option,
may be appropriately adjusted, in the discretion of the Committee, in
accordance with Section 5.5 of the Plan, in order to prevent dilution or enlargement
of the rights of the Employee.


 


6.1.  The Employee represents
and warrants that the Employee is acquiring the Option for his/her own account
and not with a view to distribution of this Option or the Option Shares.  As a condition to the exercise of the
Option, and in the event that the Option Shares have not yet been registered
under the Securities Act of 1933, as amended (the “Act”) at the time


 


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they are
issued, the Company may require the Employee to make any representation and/or
warranty to the Company as may, in the judgment of counsel to the Company, be
required under any applicable law or regulation, including but not limited to a
representation and warranty that the Option Shares are being acquired only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is
required under the Act or any other applicable law, regulation or rule of any
governmental agency.


 


7.1.  Neither the Employee nor
any other person shall have any right to commute, sell, assign, transfer,
pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or
convey the Option or any amounts payable pursuant to the provisions of this
Agreement, which Option and amounts are, and all rights under this Agreement
are, expressly declared to be unassignable and nontransferable, other than by
will or under the laws of descent and distribution.  No part of the Option or such amounts payable shall be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by the Employee or any other person, nor be
transferable by operation of law in the event of the Employee’s or any other
person’s bankruptcy or insolvency.


 


8.1.  Neither the Employee 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 Employee shall have only a contractual right to the amounts,
if any, payable pursuant to this Agreement, unsecured by any asset of the
Company or any of its affiliates.


 


9.1.  Nothing herein will limit
the Company’s right to issue Common Stock, or options or other rights to
purchase Common Stock, to its employees, subject to vesting, expiration and
other terms and conditions deemed appropriate by the Company and its
affiliates.


 


10.1.  The Employee authorizes
the Company to withhold, in accordance with any applicable law, from any
compensation payable to him/her any taxes required to be withheld by federal,
state or local law upon the issuance of Option Shares or the payment of money
pursuant to the exercise of the Option. 
The Employee may elect to have the Company withhold Option Shares to pay
any applicable withholding taxes resulting from the exercise of the Option, in
accordance with any rules or regulations of the Committee then in effect.


 


11.1.  Shares issued pursuant to
exercise of the Options shall be shares of Common Stock, the issuance of which
is registered under the Act.


 


12.1.  The terms of this
Agreement shall be binding upon the executors, administrators, heirs,
successors, transferees and assignees of the Employee and the Company.


 


13.1.  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,


 


5

















 


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.


 


14.1.  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.


 


15.1.  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.


 


16.1.  This Agreement shall be
construed and enforced in accordance with Section 10 of the Plan.


 


17.1.  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 Option other than as set forth herein or
therein, all prior agreements, promises, representations and understandings
relative thereto being herein merged.


 


18.1.  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 Agreement or of any term, covenant or condition hereof.


 


19.1.  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 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.


 


20.1.  Any notice to be given
hereunder shall be in writing and delivered personally or sent by registered or
certified mail, postage prepaid, and, if to the Company, addressed to it at 380
Madison Avenue, New York, New York 10017, Attn: General Counsel, and, if to the
Employee, addressed to him/her at the address set forth in his/her offer
letter, or to such other address of such party as that party may designate by
written notice to the other.


 


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21.1.  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.


 


22.1.  Neither this Agreement
nor any action taken hereunder shall be construed as giving Employee the right
to be retained in the employ of the Company (or any of its subsidiaries) nor
shall it interfere in any way with the right of the Company (or any of its subsidiaries)
to terminate Employee’s employment at any time.


 


IN WITNESS WHEREOF, the
parties hereto have executed this Stock Option Agreement as of the date first
above written.


 


 


	
   

  	
  INVESTMENT
  TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Robert J. Russel,

  
	
   

  	
   

  	
  Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 


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