Document:

Exhibit 10.5.3

 

AMENDED AND RESTATED

INVESTMENT TECHNOLOGY GROUP, INC.

DIRECTORS’ EQUITY SUBPLAN

 

1.           Introduction.

 

The
Investment Technology Group, Inc. Directors’ Equity Subplan (the “Subplan”)
was originally implemented by Investment Technology Group, Inc. (the “Company”)
under the Investment Technology Group, Inc. Amended and Restated 1994
Stock Option and Long-term Incentive Plan (the “1994 Plan”) and was merged with
and into the Investment Technology Group, Inc. 2007 Omnibus Equity
Compensation Plan (the “2007 Plan”) effective as of May 8, 2007, the terms
of which are incorporated herein by reference, and is now amended and restated
as set forth herein, effective February 7, 2008 (the “Effective Date”).  Effective as of May 8, 2007, the Subplan
continued in effect according to the terms set forth herein as a subplan under
the 2007 Plan.  The purpose of the
Subplan is to promote ownership by non-employee directors of a greater
proprietary interest in the Company, thereby aligning such non-employee directors’
interests more closely with the interests of stockholders of the Company, and
to assist the Company in attracting and retaining highly qualified persons to
serve as non-employee directors.  The
Subplan is amended and restated herein, effective for Options or Stock Units
granted on or after the Effective Date. 
Options or Stock Units granted prior to the Effective Date shall be
governed by the Subplan as in effect prior to this amendment and restatement.

 

2.           Definitions.

 

Capitalized
terms used in the Subplan but not defined herein shall have the same meanings
as defined in the 2007 Plan.  In addition
to such terms and the terms defined in Section 1 hereof, the following
terms used in the Subplan shall have the meaning set forth below.

 

(a)          “Director” means a
member of the Board who is not employed by the Company or any of its
subsidiaries.

 

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

 

(c)          “Effective Date”
means the date this Subplan, as amended and restated herein, is approved by the
Company’s stockholders.

 

3.           Administration.

 

The
Subplan shall be administered by the Committee. 
The Committee shall have full authority to construe and interpret the
Subplan, and any action of the Committee with respect to the Subplan shall be
final, conclusive, and binding on all persons.

 

 

4.           Options.

 

(a)          Initial Options.  An Option to purchase a number of shares of
Company Stock having a Fair Market Value on the date of grant, based on the
Black-Scholes option pricing model (or such other model utilized by the Company
in valuing Company equity awards in accordance with U.S. Generally Accepted
Accounting Principles), equal to $100,000 will be granted under the Subplan to
each person who is first elected or appointed to serve as a Director of
the Company after the Effective Date, such grants to be effective on the date
of such first election or appointment. 
For purposes of this Subplan, all determinations of Fair Market Value of
Options using the Black-Scholes option pricing model will be based on the full
five year Option term, the volatility assumption for the Company Stock used in
the Company’s annual report on Form 10-K for the prior year, and the grant
date risk-free interest rate.

 

(b)         Annual Options.  An Option to purchase a number of shares of
Company Stock having a Fair Market Value on the date of grant, based on the
Black-Scholes option pricing model (or such other model utilized by the Company
in valuing Company equity awards in accordance with U.S. Generally Accepted
Accounting Principles), equal to $36,000 will be granted, on the forty fifth
(45th) day following each of the Company’s annual meetings of stockholders at
which Directors (or a class of Directors if the Company then has a classified
Board of Directors) are elected or reelected by the Company’s stockholders, to
each Director in office on the date of grant; provided, however,
that no such grant will be made to a person first elected or appointed to serve
as a Director of the Company at such annual meeting of stockholders.

 

(c)          Exercise Price.  The exercise price per share of Company Stock
purchasable under an Option will be equal to 100% of the Fair Market Value of a
share of Company Stock on the date of grant of the Option.

 

(d)         Option Term.  Each Option will expire five years after the
date of grant; provided, however, that if the Participant ceases
to serve as a Director of the Company prior to five years after the date of
grant, the Option will expire as follows (except as otherwise provided in Section 4(f)):
(i) if the Participant ceases to serve as a Director of the Company due to
the Participant’s death, Disability, or retirement at or after age 65, twelve
months after such cessation of service, but in no event later than five years
after the date of grant; and (ii) if the Participant ceases to serve as a
Director of the Company for any reason other than due to the Participant’s
death, Disability, or retirement at or after age 65, at the date sixty (60)
days after such cessation of service, but in no event later than five years
after the date of grant.

 

(e)          Exercisability.  Each Option will vest and become exercisable
in three equal annual installments, beginning on the first anniversary of the
date of grant and continuing on the following two anniversaries and will
thereafter remain exercisable until the Option expires; provided, however,
that each Option will vest and become immediately exercisable in full upon a
Change in Control.  In the event the
Participant ceases to serve as a Director of the Company by reason of the
Participant’s death or Disability, the Option shall become vested and
exercisable in full at the time of such termination.  In the event the Participant ceases to serve
as a Director of the Company for any other reason (except as otherwise provided
in Section 4(f) below) any portion of the Option that has not yet
vested shall be forfeited.

 

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(f)          Continued Service
as an Employee.  If a Participant
ceases serving as a Director and, immediately thereafter, he or she is employed
by the Company or any subsidiary, then, solely for purposes of Sections 4(d) and
(e) and Sections 5(d) and (e) of the Subplan, such Participant
will not be deemed to have ceased service as a Director at that time, and his
or her continued employment by the Company or any subsidiary will be deemed to
be continued service as a Director; provided, however, that such former
Director will not be eligible for additional grants of Options or Stock Units
under the Subplan.

 

(g)         Method of Exercise.
A Participant (or other person entitled to exercise an Option) may exercise an
Option, in whole or in part, at such time as it is exercisable and prior to its
expiration by giving written notice of exercise to the Company specifying the
Option to be exercised and the number of shares of Company Stock to be
purchased, and paying in full the exercise price as provided in the 2007 Plan.

 

(h)         Nontransferability.  Options shall not be assignable or
transferable by a Participant except by will or the laws of descent and
distribution (or pursuant to a beneficiary designation authorized by the
Committee), and during the Participant’s lifetime, such Options and rights
shall be exercisable only by such the Participant or the Participant’s duly
appointed guardian or legal representative. 
The foregoing notwithstanding, the Committee may provide that Options
(or rights or interests therein), may be transferable, including permitting
transfers to a Participant’s immediate family members (i.e., spouse,
children, grandchildren, or siblings as well as the Participant), to a trust
for the benefits of such immediate family members, and to the partnerships in
which such family members are the only parties, or other transfers deemed by
the Committee to be not inconsistent with the purposes of the 2007 Plan.

 

5.           Stock Units.

 

(a)          Initial Stock
Units.  A number of Stock Units
having a value, as determined below on the date of grant, equal to $100,000
will be granted under the Subplan to each person who is first elected or
appointed to serve as a Director of the Company after the Effective Date, such
grants to be effective not later than the thirtieth day following the date of
such first election or appointment.  For
purposes of this Subplan, all determinations of value of Stock Units shall be
made by treating the value of a Stock Unit as equal to the Fair Market Value of
a share of Company Stock on the date of grant.

 

(b)         Annual Stock Units.  A number of Stock Units having a value, as
determined above on the date of grant, equal to $36,000 will be granted on the
forty fifth (45th) day following each of the Company’s annual meetings of
stockholders at which Directors (or a class of Directors if the Company then
has a classified Board of Directors) are elected or reelected by the Company’s
stockholders, to each Director in office on the date of grant; provided,
however, that no such grant will be made to a person first elected or
appointed to serve as a Director of the Company at such annual meeting of
stockholders.

 

(c)          Vesting of Award.  The Stock Units will become vested in three
equal annual installments, commencing on the first anniversary of the date of
grant and continuing thereafter on the
second and third anniversaries thereof; provided, however,
that the Stock Units will become immediately vested in full upon a Change in
Control.  Unless otherwise provided

 

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by the Committee, all amounts
receivable in connection with any adjustments to the Stock Units under Section 5(d) of
the 2007 Plan shall be subject to the vesting schedule in this Section 5(c).

 

(d)         Termination of
Service; Forfeiture of Unvested Share Units.  In the event the Participant ceases to serve
as a Director of the Company by reason of the Participant’s death or
Disability, the Stock Units shall become vested in full at the time of such
termination.  In the event the
Participant ceases to serve as a Director of the Company for any other reason
(except as otherwise provided in Section 4(f) above) any portion of
the Stock Units that have not yet vested shall be forfeited.

 

(e)          Distribution of
Shares.  The Company shall distribute to the Participant (or his
or her heirs in the event of the Participant’s death) at the time of vesting of
the Stock Units, a number of shares of Company Stock equal to the number of
Stock Units then held by the Participant that became vested at such time; provided,
however, that the Participant may elect that the distribution of the
shares of Company Stock subject to a Stock Unit be deferred until the time the
Participant ceases to be a Director of the Company for any reason (except as
otherwise provided in Section 4(f)), such election to be made in writing
prior to January 1 of the calendar year in which the Stock Units are
granted to the Participant. 
Notwithstanding the immediately preceding sentence, in the case of Stock
Units granted under Section 5(a) hereof, a deferral election may be
made within 30 days of the date the Director is first elected or appointed to
serve as a Director of the Company.  The
deferred Stock Units shall be distributed in shares of Company Stock within 30
days of the date of termination of the Director’s service on the Board.  In the case of the death of a Director, the
Director’s deferred Stock Units shall be distributed in shares of Company Stock
within 60 days after the date of the Director’s death to the Director’s estate
as beneficiary, unless the Director has requested a different distribution by
written notice to the Committee.

 

(f)          Rights and
Restrictions.  The Stock Units shall not be transferable, other
than pursuant to will or the laws of descent and distribution.  Prior to vesting of the Stock Units and
delivery of the shares of Company Stock to the Participant, the Participant
shall not have any rights or privileges of a stockholder as to the shares of
Company Stock subject to the Stock Units. 
Specifically, the Participant shall not have the right to receive
dividends or the right to vote such shares of Company Stock prior to vesting of
the Stock Units and delivery of the shares of Company Stock.

 

6.           General.

 

(a)          Compliance with
Legal and Trading Requirements.  The
Subplan shall be subject to all applicable laws, rules and regulations,
including, but not limited to, federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency as
may be required.

 

(b)         Amendment.  The Board may amend, alter, suspend,
discontinue, or terminate the Subplan without the consent of stockholders of
the Company or individual Directors; provided, however, that,
without the consent of an affected Director, no amendment, alteration,
suspension, discontinuation, or termination of the Subplan may impair or, in
any

 

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other manner, adversely affect
the rights of such Director to outstanding Options or Stock Units granted
hereunder.

 

(c)          Unfunded Status of
Awards.  Section 5 of this
Subplan is intended to constitute an “unfunded” plan of deferred
compensation.  With respect to any
payments not yet made to a Director, nothing contained in the Subplan shall
give any such Director any rights that are greater than those of a general
creditor of the Company; provided, however, that the Company may
authorize the creation of trusts or make other arrangements to meet the Company’s
obligations under the Subplan to deliver cash, or other property pursuant to
any award, which trusts or other arrangements shall be consistent with the “unfunded”
status of the Subplan unless the Company otherwise determines with the consent
of each affected Director.

 

(d)         Nonexclusivity of
the Subplan.  The adoption of the
Subplan by the Board shall not be construed as creating any limitations on the
power of the Board to adopt such other compensation arrangements as it may deem
desirable, including, without limitation, the granting of Options and other
awards otherwise than under the Subplan, and such arrangements may be either
applicable generally or only in specific cases.

 

(e)          Adjustments.  The adjustment provisions in Section 5(d) of
the 2007 Plan are incorporated herein by reference and shall apply in the case
of Options and Stock Units granted hereunder; provided, however,
that no adjustment shall be made pursuant thereto that causes any Option to be treated
as deferred compensation pursuant to section 409A of the Code.

 

(f)          No Right to Remain
on the Board.  Neither the Subplan
nor the crediting of awards under the Subplan shall be deemed to give any
individual a right to remain a director of the Company or create any obligation
on the part of the Board to nominate any Director for reelection by the
stockholders of the Company.

 

(g)         Application of Section 409A
of the Code.  It is intended that
this Subplan and awards issued hereunder will comply with section 409A of the
Code (and any regulations and guidelines issued thereunder) to the extent the
awards are subject thereto, and this Subplan and such awards shall be
interpreted on a basis consistent with such intent.  In no event shall a Participant, directly or
indirectly, designate the calendar year of payment.  This Subplan and any award agreements issued
thereunder may be amended in any respect deemed by the Board or the Committee
to be necessary in order to preserve compliance with section 409A of the Code.

 

(h)         Governing Law.  The validity, construction, and effect of the
Subplan shall be determined in accordance with the laws of the State of New
York, without giving effect to principles of conflict of laws.

 

(i)           Titles and
Headings.  The titles and headings of
the Sections in the Subplan are for convenience of reference only.  In the event of any conflict, the text of the
Subplan, rather than such titles or headings, shall control.

 

(j)           Effective Date.  This Subplan, as amended and restated herein
shall become effective as of the Effective Date.

 

5

 

	
  Amended
  and restated by the Committee effective:

  	
   

  	
  May 8,
  2007

  
	
  Amended
  and restated by the Committee effective:

  	
   

  	
  February 7,
  2008

  

 

6Exhibit 10.10.1

 

CHANGE IN CONTROL AGREEMENT

 

Agreement, made this       
day of                       ,
2007, by and between Investment Technology Group, Inc., a Delaware
corporation (the “Company”), and                         
(the “Executive”).

 

WHEREAS, the Executive is a key employee of
the Company; and

 

WHEREAS, the Board of Directors of the
Company (the “Board”) considers the maintenance of a sound management to be
essential to protecting and enhancing the best interests of the Company and its
stockholders and recognizes that the possibility of a change in control raises
uncertainty and questions among key employees and may result in the departure
or distraction of such key employees to the detriment of the Company and its
stockholders; and

 

WHEREAS, the Board wishes to assure that it
will have the continued dedication of the Executive and the availability of his
or her advice and counsel, notwithstanding the possibility, threat or
occurrence of a bid to take over control of the Company, and to induce the Executive
to remain in the employ of the Company; and

 

WHEREAS, the Executive is willing to continue
to serve the Company taking into account the provisions of this Agreement;

 

NOW, THEREFORE, in consideration of the
foregoing, and the respective covenants and agreements of the parties herein
contained, the parties agree as follows:

 

1.          Operation and Term of Agreement.  This Agreement shall commence on the date set
forth above and shall terminate on the second anniversary of such date unless
this Agreement is extended, as set forth below; provided, however,
that after a Change in Control of the Company during the term of this
Agreement, this Agreement shall remain in effect until all of the obligations
of the parties hereunder are satisfied and the Protection Period has expired.  The term of this Agreement shall be extended
automatically at the end of the initial term and the end of any extended term
for an additional period of two years unless either party shall provide written
notice to the other of its intention not to so extend, such notice to be given
not less than one year prior to the end of the initial term or any extension
thereof, as the case may be. 
Notwithstanding the foregoing, prior to a Change in Control this
Agreement shall immediately terminate upon termination of the Executive’s
employment, except in the case of such termination under circumstances set
forth in the last paragraph of Section 3 below.

 

2.          Definitions.  For purposes of this Agreement, the following
terms have the meanings set forth below:

 

 

“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), 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.

 

“Change in Control”
means and shall be deemed to have occurred:

 

(i)      if
any person (within the meaning of the Securities Exchange Act of 1934, as
amended (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 35%
percent or more of the total voting power of all the then-outstanding Voting
Securities; or

 

(ii)     if
the individuals who, as of the date hereof, 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 date hereof or whose recommendation, election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the members of the Board; or

 

(iii)    upon
consummation of a merger, consolidation, recapitalization or reorganization of
the Company, reverse split of any class of Voting Securities, or an acquisition
of securities or assets by the Company 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

 

(iv)    upon
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets, other than any such transaction which would 

 

2

 

result in a
Related Party owning or acquiring more than 50 percent of the assets owned by
the Company immediately prior to the transaction; or

 

(v)     if
the stockholders of the Company approve a plan of complete liquidation of the
Company.

 

“Code” shall
mean the Internal Revenue Code of 1986, as amended.

 

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

 

“Good Reason”
means, without the Executive’s express written consent, the occurrence after a
Change in Control of the Company of any one or more of the following:

 

(i)            a material reduction
of the Executive’s primary functional authorities, duties, or responsibilities
as an executive and/or officer of the Company from those in effect immediately
prior to the Change in Control or the assignment of duties to the Executive inconsistent
with those of an executive 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; provided, however,
that any reduction in authorities, duties or responsibilities resulting merely
from the acquisition of the Company and its existence as a subsidiary or division
of another entity shall not be sufficient to constitute Good Reason;

 

(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
immediately prior to the Change in Control;

 

(iii)          a material reduction by
the Company of the Executive’s base salary in effect on the date hereof, 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 prior to the Change in
Control, unless such failure applies to all plan participants generally;

 

(v)           the failure of the
Company to obtain the assumption of the obligations contained in this Agreement
by any successor as contemplated in Section 9(c) hereof; and

 

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

 

3

 

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.  A termination of
employment by the Executive within a Protection Period shall be for Good Reason
if one of the occurrences specified above shall have occurred, notwithstanding
that the Executive may have other reasons for terminating employment, including
employment by another employer which the Executive desires to accept.

 

For purposes of this Agreement, it shall be a
material breach of this Agreement by the Company if the Company decreases the
Executive’s Target Annual Compensation by more than ten percent (10%).

 

“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, an estate, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.

 

“Protection Period”
shall be the period beginning on the date of a Change in Control and ending on
the date that is eighteen (18) months after the date on which the Change in
Control occurs.

 

“Related Party”
means (a) a Subsidiary of the Company; (b) an employee or group of
employees of the Company or any Subsidiary of the Company; (c) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any majority-owned Subsidiary of the Company; 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.

 

“Subsidiary” or “Subsidiaries” means,
with respect to any Person, any corporation, partnership, limited liability
company, association or other business entity of which (a) if a corporation,
fifty (50) percent or more of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or combination thereof; or (b) if a
partnership, limited liability company, association or other business entity,
fifty (50) percent or more of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes of this
definition, a Person or Persons will be deemed to have a fifty (50) percent or
more ownership interest in a partnership, limited liability company,
association or other business entity if such Person or Persons are allocated
fifty (50) percent or more of partnership, limited liability company,
association or other business entity gains or losses or control the managing 

 

4

 

director or member or general partner of such
partnership, limited liability company, association or other business entity.

 

“Target Annual Compensation”
shall mean the sum of the Executive’s base salary and target annual cash
incentives as in effect immediately prior to the Change in Control.

 

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

 

3.          Benefits Upon Termination Within
Protection Period.  If, within a
Protection Period, the Executive’s employment by the Company shall be
terminated (a) by the Company not for Cause and not due to the Executive’s
death or Disability, or (b) by the Executive for Good Reason, the
Executive shall be entitled to the benefits provided for below:

 

(i)      the
Company shall pay to the Executive, through the date of the Executive’s
termination of employment, base salary at the rate then in effect, together
with base salary in lieu of vacation accrued to the date on which his
employment terminates, in accordance with the standard payroll practices of the
Company;

 

(ii)     the
Company shall pay to the Executive an amount in cash equal to the Executive’s
target annual bonus for the year that includes the date of the Executive’s termination
of employment, pro rated for the number of full and partial months during the
bonus year prior to such termination of employment, and such payment shall be
made in a lump sum within 10 business days after the date of such termination
of employment;

 

(iii)    the
Company shall pay to the Executive an amount in cash equal to         
times the sum of (A) the Executive’s annual base salary in effect
immediately prior to the date of the Executive’s termination of employment or
the date of the Change in Control (whichever is higher), and (B) the
average of the Executive’s annual bonuses for the three years immediately
preceding the Executive’s termination of employment (or such shorter period
during which the Executive has been employed by the Company and eligible to
receive annual bonuses, or if the Executive was not employed by the Company and
eligible to receive an annual bonus in any prior year, the Executive’s target
annual bonus for the year including the date of Executive’s termination of employment);
and such payment shall be made in a lump sum within 10 business days after the
date of such termination of employment;

 

(iv)    the
Company shall continue to cover the Executive and his or her dependents under,
or provide the Executive and his or her dependents with insurance coverage no
less favorable than, the Company’s health, dental and vision plans or programs
(as in effect on the day immediately preceding the Protection Period or, at the
option of the Executive, on the date of termination of his or her employment)
for a period equal to the 

 

5

 

lesser of (x)         
years following the date of termination or (y) until the Executive is provided
by another employer with benefits substantially comparable to the benefits provided
by such plans or programs.  The Executive
shall promptly inform the Company in writing when he or she obtains other employment
and shall provide a written description to the Company of the health, dental and vision plans and programs
provided to the Executive by such employer; and

 

(v)     the
Company shall pay to the Executive an amount in cash equal to the premium cost
that the Company would have paid to maintain disability and life insurance
coverage for the Executive and his or her dependents, as applicable, under the
Company’s disability and life insurance plans or programs (in each case, as in
effect on the day immediately preceding the Protection Period or, at the option
of the Executive, on the date of termination of his or her employment) had the
Executive remained employed by the Company for a period equal to the lesser of (x)         
years following the date of termination or (y) until the Executive is
provided by another employer with benefits substantially comparable to the
benefits provided by such disability and/or life insurance plans or programs;
and such payments shall be made on the first payroll date of each month
commencing with the first month following the Executive’s termination of employment
and each month thereafter until fully paid in accordance with this subparagraph
(v).  The
Executive shall promptly inform the Company in writing when he or she obtains
other employment and shall provide a written description to the Company of the
disability and life insurance plans and programs provided to the Executive by
such employer.

 

Anything in this Agreement to
the contrary notwithstanding, the Executive shall be entitled to the benefits
described in this Section 3, if the Executive’s employment with the
Company is terminated by the Company (other than for Cause) within six months
prior to the date on which a Change in Control occurs, and it is reasonably
demonstrated that such termination (i) was at the request of a third party
who has taken steps reasonably calculated or intended to effect a Change in
Control or (ii) otherwise arose in connection with or anticipation of a
Change in Control.  In such event, amounts
will be payable hereunder only following the Change in Control.  For the avoidance of doubt, the Executive
shall not be entitled to the benefits provided in Section 3 hereof upon
any termination of his or her employment with the Company (a) because of his
or her death, (b) because of his or her Disability, (c) by the
Company for Cause, or (d) by the Executive other than for Good Reason.

 

4.          Notice of Termination.  Any termination of the Executive’s employment
by the Company for Cause or by the Executive for Good Reason shall be
communicated by written notice of termination to the other party.  Such notice of termination shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment for Cause or Good Reason,
as the case may be.

 

6

 

5.          Nonexclusivity of Rights.  Except as expressly set forth herein, this Agreement
shall not prevent or limit the Executive’s continuing or future participation
in any benefit, bonus, incentive or other plans, practices, policies or
programs provided by the Company or any of its subsidiaries and for which the
Executive may qualify, nor shall it limit or otherwise affect such rights as
the Executive may have under any stock option, other equity-based compensation
or other agreements with the Company or any of its subsidiaries; provided,
however, that, in the event benefits are paid to the Executive under Section 3
hereof, the Executive shall not also be entitled to severance benefits
otherwise payable under any other severance plan or policy of the Company or a
Subsidiary, or under any employment agreement or employment letter agreement
between Executive and the Company or a Subsidiary.  Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, practice, policy
or program (other than severance benefits) of the Company or any of its subsidiaries
at or subsequent to the date of termination of the Executive’s employment shall
be payable in accordance with such plan, practice, policy or program.

 

6.          Full-Settlement; Legal Expenses.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action which the Company may have against the Executive
or others.  In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, and no amount payable hereunder shall be subject
to reduction or offset on account of any subsequent compensation, other than as
provided in Sections 3(iv) and 3(v). 
The Company agrees to pay, upon written demand therefore by the
Executive, all legal fees and expenses which the Executive may reasonably incur
as a result of any dispute or contest by or with the Company or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement (including as a result of any contest by the Executive about
the amount of any payment hereunder) if the Executive prevails on any material
claim or defense in the dispute or contest. 
The Company will provide such payment or reimbursement, as applicable,
within 60 days of the Company’s receipt of the Executive’s demand, but not
later than December 31 of the year in which the Executive is determined to
have prevailed on any material claim or defense in the dispute or contest.  In any such action brought by the Executive
for damages or to enforce any provisions of this Agreement, the Executive shall
be entitled to seek both legal and equitable relief and remedies, including,
without limitation, specific performance of the Company’s obligations
hereunder, in his or her sole discretion.

 

7.          Excise Tax.

 

(a)           Anything in this Agreement to the
contrary notwithstanding, if it shall be determined that any payment,
distribution or benefit provided (including, without limitation, the
acceleration of any payment, distribution or benefit and the acceleration of
vesting of any equity-based or other compensation) to the Executive or for his
or her benefit (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise) would be 

 

7

 

subject, in whole or in part, to the excise
tax imposed by Section 4999 of  the
Code (the “Excise Tax”), then the amounts payable to the Executive under this
Agreement shall be reduced (by the minimum possible amount) until no amount
payable to the Executive is subject to the Excise Tax; provided, however,
that no such reduction shall be made if the net after-tax benefit (after taking
into account federal, state, local or other income, employment, self-employment
and excise taxes) to which the Executive would otherwise be entitled without
such reduction would be greater than the net after-tax benefit (after taking
into account federal, state, local or other income, employment, self-employment
and excise taxes) to the Executive resulting from the receipt of such payments
with such reduction.  If, as a result of
subsequent events or conditions, it is determined that payments have been
reduced by more than the minimum amount required under this Section 7,
then an additional payment shall be made to the Executive in an amount equal to
the excess reduction within 60 days of the date on which the amount of the
excess reduction is determined but not later than December 31 of the year
in which the excess reduction is determined.

 

(b)           All determinations
required to be made under this Section 7, including whether a payment
would result in an Excise Tax, shall be made by a nationally recognized accounting
firm selected by the Company (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and the Executive as
requested by the Company or the Executive. 
All fees and expenses of the Accounting Firm shall be borne solely by
the Company and shall be paid by the Company. 
Except as set forth in the last sentence of Section 7(a) hereof,
all determinations made by the Accounting Firm under this Section 7 shall
be final and binding upon the Company and the Executive.

 

8.          Confidential Information.  The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its subsidiaries, and their
respective businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company or any of its Subsidiaries and which
has not become public knowledge (other than by acts of the Executive or his or
her representatives in violation of this Agreement).  After the date of termination of the Executive’s
employment with the Company, the Executive shall not, except as required to be
disclosed by court or administrative order or with the prior written consent of
the Company, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it.  In no event shall an asserted violation of
the provisions of this Section 8 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.

 

9.          Successors.

 

(a)           This Agreement is
personal to the Executive and without the prior written consent of the Company
shall not be assignable by the Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable 

 

8

 

by the
Executive’s heirs, executors, administrators, legal representatives or
successor(s) in interest.

 

(b)           This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns.

 

(c)           The Company will
require any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place.  As used
in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.

 

10.        Miscellaneous.

 

(a)           This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without reference to principles of conflict of laws thereof.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

 

(b)           All notices and
other communications hereunder shall be in writing and shall be deemed to have
been given when delivered personally to the recipient, two business days after
the date when sent to the recipient by reputable express courier service
(charges prepaid) or four business days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid.  Such notices and other communications
will be sent to the Executive and to the Company at the addresses set forth
below.

 

If to the Executive:

[Name]

[Address]

 

If to the Company:

Investment Technology Group, Inc.

380 Madison Avenue

New York, NY 10017

Attention: 
General Counsel

 

9

 

or to such other address as
either party shall have furnished to the other in writing in accordance
herewith.

 

(c)           The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.

 

(d)           The Company may
withhold from any amounts payable under this Agreement such Federal, state or
local taxes as shall be required to be withheld pursuant to any applicable law
or regulation.

 

(e)           The Executive’s
failure to insist upon strict compliance with any provision hereof shall not be
deemed to be a waiver of such provision or any other provision thereof.

 

(f)            This Agreement
contains the entire understanding of the Company and the Executive with respect
to the subject matter hereof but, except as specifically provided in Section 5
hereof does not supersede or override the provisions of any stock option,
employee benefit or other plan, program, policy or practice in which Executive
is a participant or under which the Executive is a beneficiary.

 

(g)           This Agreement may
be executed simultaneously in two or more counterparts, any one of which need
not contain the signatures of more than one party, but all of which
counterparts taken together will constitute one and the same agreement.

 

11.        Section 409A.

 

(a)           This Agreement shall 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 incurring sanctions on Executive
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.  For purposes of section 409A of
the Code, all payments to be made upon a termination of employment under this
Agreement may only be made upon a “separation from service” under section 409A
of the Code, each payment made under this Agreement shall be treated as a
separate payment and the right to a series of installment payments under this
Agreement shall be treated as a right to a series of separate payments.  In no event shall Executive, directly or
indirectly, designate the calendar year of payment.  All reimbursements and in-kind benefits
provided under this Agreement shall be made or provided in accordance with the
requirements of section 409A of the Code, including, where applicable, the
requirement that (i) any reimbursement shall be for expenses incurred
during Executive’s 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 

 

10

 

following the year in which the expense is
incurred, and (iv) the right to reimbursement or in kind benefits is not
subject to liquidation or exchange for another benefit.

 

(b)           Notwithstanding any provision of this
Agreement to the contrary, if, at the time of Executive’s termination of
employment with the Company, the Company has securities which are publicly
traded on an established securities market and Executive is a “specified employee”
(as defined in section 409A of the Code) and it is necessary to postpone the
commencement of any severance payments otherwise payable pursuant to this
Agreement as a result of such termination of employment 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 Executive) that are not otherwise paid within the short-term deferral exception
under section 409A of the Code and are in excess of the lesser of (i) two
times Executive’s then annual compensation or (ii) two times the limit on
compensation then set forth in section 401(a)(17) of the Code, until the first
payroll date that occurs after the date that is six months following Executive’s
“separation of service” with the Company (as defined under code Section 409A
of the Code).  If any payments are postponed
due to such requirements, such postponed amounts will be paid in a lump sum to
the Executive on the first payroll date that occurs after the date that is six
months following the Executive’s “separation of service” with the Company.  If the Executive dies during the postponement
period prior to the payment of postponed amount, the amounts withheld on
account of section 409A of the Code shall be paid to the personal representative
of Executive’s estate within 60 days after the date of Executive’s death.  The Company shall consult with the Executive
in good faith regarding the implementation of the provisions of this paragraph.

 

[Next Page is Signature Page]

 

11

 

IN WITNESS WHEREOF, the Executive has
hereunto set his hand and, pursuant to the authorization from its Board, the
Company has caused these presents to be executed as of the day and year first
above written.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INVESTMENT TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Robert C. Gasser

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  

 

12

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