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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