Document:

Exhibit
10.1

 

EMPLOYMENT
AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”)
dated as of September 15, 2006 between Investment Technology Group, Inc., a
Delaware corporation (the “Company”), and
Robert C. Gasser (the “Executive”).

The parties hereto agree as follows:

ARTICLE
1

DEFINITIONS

SECTION 1.01. 
Definitions.  For purposes of this Agreement, the following
terms have the meanings set forth below:

“Board” mean the Board of Directors of the
Company.

“Cause” means 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 crime involving the personal
enrichment of the Executive at the expense of the Company, or any felony;
(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 violation of any material provision of the Company’s
code of conduct.  For purposes of this
definition, no act or failure to act, on the part of the Executive, shall be
considered “ willful” unless it is done, or omitted to be done, by the
Executive in bad faith or without reasonable belief that his action or omission
was in the best interests of the Company, or the Executive is grossly
negligent.

“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 thirty-five percent
(35%) 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 (A) 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 fifty
percent (50%) 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
(B) any such transaction which would result in a Related Party beneficially
owning more than fifty percent (50%)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 result
in a Related Party owning or acquiring more than fifty percent (50%) 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” means the
Internal Revenue Code of 1986, as amended.

“Confidential Information”
means information that is not generally known to the public and that was or is used, developed or obtained by the Company or its
Subsidiaries in connection with their business and which constitutes trade
secrets or information which the Company has made reasonable efforts to protect.  It shall not include information
(i) required to be disclosed by court or administrative order;
(ii) lawfully obtainable from other sources or which is in the public
domain through no fault of the Executive; or (iii) the disclosure of which
is consented to in writing by the Company.

“Good Reason” means as follows:

(a)           Prior
to a Change in Control, “Good Reason” means, without the Executive’s written consent,
(i) the material diminution of the Executive’s duties, responsibilities,
powers or authorities, including the assignment of any duties and responsibilities
inconsistent with his position as President and Chief Executive Officer;
(ii) the removal of the Executive from his office as Chief Executive
Officer; (iii) the failure to obtain a written assumption of the employment
agreement by any person acquiring all or substantially all of the assets of the
Company, whether effected by purchase of shares, purchase of assets, merger or
otherwise, prior to such acquisition; (iv) a 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 executive officers of the Company generally, (v)
written notice to Executive from the Company to stop the automatic renewal of
the Employment Period pursuant to Section 2.01 hereof, (vi) breach by the Company
of its material obligations under the terms of this Agreement, or
(vii) relocation of the Executive’s principal place of business to a
location more than fifty (50) miles from its current location;

 

 2
 

 

 

provided, however, that for
any of the foregoing to constitute Good Reason, the Executive must provide
written notification of his intention to resign within sixty (60) days after
the Executive knows or has reason to know of the occurrence of any such event,
and, except in the case of (ii) and (v) above for which no opportunity to cure
need be given, the Company shall have had thirty (30) business days from the
date of receipt of such notice to effect a cure of the condition constituting
Good Reason and shall have failed to do so. In the event of a cure of such
event by the Company, such event shall no longer constitute Good Reason.

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

(i)            (A)
the removal of the Executive from his office as Chief Executive Officer, or (B)
a material reduction of the Executive’s primary functional authorities, duties,
or responsibilities as President and Chief Executive 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 President and
Chief Executive 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; 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 fifty
(50) miles from the location of the Executive’s principal job location or
office immediately prior to the Change in Control;

(iii)          a
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; provided, however, that a reduction in the
Executive’s Target Annual Compensation (as defined in the Company’s standard
Change in Control Agreement) in excess of ten percent (10%) shall constitute
Good Reason;

(iv)          the
failure of the Company to continue in effect, or the failure to continue the
Executive’s participation on substantially the same basis 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; provided, however, that a reduction in the
Executive’s Target Annual Compensation (as defined in the Company’s standard
Change in Control Agreement) in excess of ten percent (10%) shall constitute
Good Reason; and

(v)           the
failure of the Company to obtain the assumption of the obligations contained
herein by any successor;

(vi)          breach
by the Company of its material obligations under the terms of this Agreement;

(vii)         written
notice to Executive from the Company to stop the automatic renewal of the
Employment Period pursuant to Section 2.01 hereof; or

 

 3
 

 

 

(viii)        the
Executive’s submission of a notice of resignation during the thirty (30) day
period immediately following the six month anniversary of a Change in Control
for any reason or no reason;

provided, however, that for
any of the foregoing (i) through (vii) to constitute Good Reason, the Executive
must provide written notification of his intention to resign within sixty (60)
days after the Executive knows or has reason to know of the occurrence of any
such event, and, except in the case of (i)(A) and (vii) above for which no
opportunity to cure need be given, the Company shall have had fifteen (15)
business days from the date of receipt of such notice to effect a cure of the
condition constituting Good Reason and shall have failed to do so. In the event
of a cure of such event by the Company, such event shall no longer constitute
Good Reason.

“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.

“Permanent Disability” means those circumstances under which the Executive is determined
to be eligible to receive disability benefits under the Company’s long-term
disability plan or program, or, in the absence of such a plan or program, “Disability” will be as defined in Section 22 of the
Code.

 “Related
Party” means (i) a Subsidiary of the Company; (ii) an
employee or group of employees of the Company or any Subsidiary of the Company;
(iii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any majority-owned Subsidiary of the Company; or (iv) 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 (i) if a corporation, fifty percent (50%) 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 (ii) if a partnership, limited liability company,
association or other business entity, fifty percent (50%) 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 percent (50%) or more ownership interest in a partnership, limited
liability company, association or other business entity if such Person or Persons
are allocated fifty percent (50%) or more of partnership, limited liability
company, association or other business entity gains or losses or control the
managing director or member or general partner of such partnership, limited
liability company, association or other business entity.

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

 

 4
 

 

 

ARTICLE
2

EMPLOYMENT

SECTION 2.01. 
Employment.  The Company shall employ the
Executive, and the Executive shall accept employment with the Company, upon the
terms and conditions set forth in this Agreement for the period beginning on
October 4, 2006 (the “Start Date”)
and ending as provided in Section 5.01 (the “Employment
Period”); provided that the Employment Period shall automatically be extended for periods of
one-year unless either party gives written notice to the other party at least
90 days prior to the end of the Employment Period or at least 90 days prior to
the end of any one-year renewal period that the Employment Period shall not be
further extended.

ARTICLE
3

POSITION
AND DUTIES

SECTION 3.01. 
Position and Duties.  During the Employment Period, the
Executive shall serve as Chief Executive Officer and President of the Company
and shall have all duties, authority and responsibilities normally incident to
such position.  In such capacity, the
Executive shall report to the Board and shall have such responsibilities,
powers and duties as may from time to time be prescribed by the Board; provided
that such responsibilities, powers and duties are substantially consistent
with those customarily assigned to individuals serving in such position at
comparable companies.  During the
Employment Period the Executive shall devote substantially all of his working
time and efforts to the business and affairs of the Company and its
Subsidiaries.  The Executive shall not
directly or indirectly render any services of a business, commercial or
professional nature to any other person or for-profit organization not related
to the business of the Company or its Subsidiaries, whether for compensation or
otherwise, without prior written consent of the Board, such consent not to be
unreasonably withheld; provided
that the foregoing shall not be construed as preventing the Executive from
serving on civic, educational, philanthropic or charitable boards or
committees, maintaining his personal investments, or, serving with the prior
written consent of the Board, in its sole discretion, on corporate boards.

SECTION 3.02.  Board Seat.  On the Start Date, the Company shall cause
the Executive to be elected to the Board, and the Executive will serve as a
member of the Board.  Thereafter, the
Company shall use its best efforts to cause the Executive to be nominated and
reelected to the Board.

SECTION 3.03.  Executive Representations. The Executive
hereby represents and warrants to the Company that he is not subject or a party
to any employment agreement, non-competition covenant, non-disclosure
agreement or other agreement, covenant, understanding or restriction of any
nature whatsoever which would prohibit the Executive from executing this
Agreement and performing fully his duties and responsibilities hereunder, or
which would in any manner, directly or indirectly, limit or affect the duties and
responsibilities which may now or in the future be assigned to the Executive by
the Company.  Further, the Company
expects the Executive not to, and the Executive hereby acknowledges and agrees
that he will not, use any proprietary or confidential information of any prior
employer in the performance of his duties for the Company.

 

 5
 

 

 

ARTICLE
4

BASE
SALARY, BONUS AND BENEFITS

SECTION 4.01. 
Base Salary.  During the Employment Period, the
Executive’s base salary will be $750,000 per annum (the “Base Salary”); provided that for the
period from the Start Date through December 31, 2006, the Executive shall be
paid an aggregate of $250,000.  The Executive’s Base Salary shall be reviewed
periodically for increase, but not decrease, by the Compensation Committee of
the Board (the “Committee”) pursuant to the Committee’s normal performance
review policies for senior level executives; provided that no provision
of this Agreement shall prohibit a reduction in the Executive’s Base Salary as
part of an across the board reduction in the base salaries of executive
officers generally, so long as such reduction applies on substantially the same
percentage basis to all executive officers of the Company generally.  The
Base Salary will be payable in accordance with the normal payroll practices of
the Company.

SECTION 4.02. 
Bonuses.  In addition to the Base Salary,
during the Employment Period, the Executive shall be eligible to receive bonus
payments as follows: (a) For the period from the Start Date through December
31, 2006, the Executive shall receive a guaranteed bonus of $520,000; (b) For
the 2007 calendar year, the Executive shall be eligible to receive a
performance bonus of up to a maximum of $1,575,000 based upon attainment of
performance objectives to be established by the Committee in accordance with Exhibit
B hereto; (c) For the 2008 calendar year, the Executive shall be eligible
to receive a performance bonus based upon attainment of performance objectives
to be established by the Committee in accordance with Exhibit B hereto
with $1,575,000 payable at target,  and
(d) For each calendar year during the Employment Period after the 2008 calendar
year, the Executive shall be eligible to receive a performance bonus based upon
attainment of performance objectives to be established by the Committee with
the amount payable at target set by the Committee based upon
Company-appropriate market competitive pay practices.  The foregoing performance bonus amounts shall
be subject to and paid in accordance with the Company’s Amended and Restated
Pay-for-Performance Incentive Plan, as may be further amended, or under any
replacement or successor plan and the requirements (if any) to qualify as “performance-based”
compensation under section 162(m) of the Code. In addition, the Executive shall
be eligible to receive such other performance-based, discretionary or other
bonuses as the Committee may determine, in its sole and absolute
discretion.  The Executive’s guaranteed
bonus hereunder will be paid not later than December 31, 2006.  Performance bonuses, if any, shall be paid
not later than March 15 of the calendar following the calendar year for which
the performance bonus is earned.

SECTION 4.03. 
Equity Awards.

(a)           Contemporaneously
with the Executive’s Start Date, the Executive shall be granted 31,250 restricted
stock units (“RSUs”), which number of RSUs represents 6,250 RSUs for the period
October 4, 2006 through December 31, 2006 and 25,000 RSUs for the 2007 calendar
year.  The foregoing RSUs shall vest in
three equal annual installments commencing on the first anniversary of the date
of grant; provided that the performance objective established by the
Committee in accordance with Exhibit B hereof is satisfied.  The RSUs shall be subject in all respects to
terms of the Restricted Share Agreement by and between the Company and the
Executive to be dated as of the Start Date and in substantially the form pro-

 

 6
 

 

 

vided to the Executive as of the date hereof and Company’s 1994 Stock
Option and Long-Term Incentive Plan, as amended and restated.

(b)           Contemporaneously
with the Executive’s Start Date, the Executive shall be granted a nonqualified
stock option to purchase a number of shares of the Company’s common stock equal
to a Black Scholes value for the option of $1,156,000, which represents
$231,000 for the period October 4, 2006 through December 31, 2006 and $925,000
for the 2007 calendar year.  The
foregoing option shall become exercisable in three equal annual installments
commencing on the first anniversary of the date of grant and shall be subject
in all respects to the terms of the Stock Option Agreement by and between the
Company and the Executive to be dated as of the Start Date and in substantially
the form provided to the Executive as of the date hereof and the Company’s 1994
Stock Option and Long-Term Incentive Plan, as amended and restated.

(c)           As
soon as reasonably practicable following the beginning of the 2008 calendar
year, the Executive shall receive an additional grant of RSUs representing a
number of shares of the Company’s common stock equal to $925,000 and an
additional nonqualified stock option grant representing a number of shares of
the Company’s common stock equal to a Black Scholes value for the option of
$925,000, in each case based on the current stock price of a share of Company
common stock on the date of grant.  The
foregoing RSU grant shall vest according to performance objectives established
by the Committee in a manner similar to the performance objectives established
with respect to the RSUs described in Section 4.03(a) above and in accordance
with the requirements of section 162(m) of the Code relating to the “performance-based”
compensation (if any) and shall be subject to terms of the agreement pursuant
to which it is granted (which shall reflect the provisions hereof) and the
Company’s 1994 Stock Option and Long-Term Incentive Plan, as amended and
restated.  The foregoing nonqualified
stock option grant shall vest and become exercisable, as applicable, in equal annual
installments over the three-year period commencing on the first anniversary of
the date of grant and shall be subject in all respects to terms of the
agreement pursuant to which it is granted (which agreement shall reflect the
provisions hereof) and the Company’s 1994 Stock Option and Long-Term Incentive
Plan, as amended and restated, or under any replacement or successor plan.

(d)           For
calendar years during the Employment Period following the 2008 calendar year,
the Executive shall be eligible to receive equity awards as and when equity
awards are granted to senior officers generally, with the amount and terms of
such awards determined on the same bases as awards granted to senior officers
generally.

(e)           All
equity awards granted to the Executive shall be subject in all respects to the
Company’s Net Share Retention Program.

SECTION 4.04. 
Benefits.  The Executive shall be eligible
for the following benefits during the Employment Period:

(a)           participation
in such retirement, medical, life insurance and disability insurance coverages
and fringe benefit plans and programs as are, or may during the Employment Period
be, made available generally for other senior executive officers of the
Company, subject

 

 7
 

 

 

in all respects to the terms of the applicable plans and programs, as
in effect from time to time;

(b)           participation
in the Company’s Stock Unit Award Plan, pursuant to which the Executive may
elect to defer a part of his Base Salary and bonus compensation, subject in all
respect to the terms of the plan; and

(c)           up
to a maximum of five (5) weeks of paid vacation annually during the Employment
Period, in accordance with the Company’s vacation policy.

SECTION 4.05. 
Expenses.  The Company shall reimburse the
Executive for all reasonable expenses incurred by him in the course of
performing his duties under this Agreement which are consistent with the
Company’s policies in effect from time to time with respect to travel,
entertainment and other business expenses (“Reimbursable
Expenses”), subject to
the Company’s requirements with respect to reporting and documentation of expenses.

ARTICLE
5

TERM
AND TERMINATION

SECTION 5.01. 
Term.  Subject to the renewal provisions of Section
2.01, the Employment Period will terminate on December 31, 2009; provided
that (a) the Employment Period shall terminate prior to such date upon
the Executive’s death, and (b) the Employment Period may be terminated by
either party at any time pursuant to this Article 5.

SECTION 5.02. 
Termination for Good Reason or
Without Cause Prior to a Change in Control. 
If the Employment Period shall be terminated prior to a
Change in Control (a) by the Executive for Good Reason or (b) by the
Company not for Cause, in either case subject to the Executive’s execution and
non-revocation of a Release (as defined below), the Executive shall be provided
solely:

(i) an amount equal to the Executive’s Base
Salary payable through the Date of Termination,

(ii) the amount of the Executive’s Base
Salary at the rate in effect on the Date of Termination (before any reduction
thereof giving rise to Good Reason) plus an amount equal to the average annual
bonus paid or payable to Executive under Section 4.02 hereof with respect to
the three calendar years preceding the calendar year in which the Date of
Termination occurs.  If the number of
calendar years during which the Executive has been employed by the Company
prior to the calendar year of the Date of Termination is less than three, then
the foregoing average shall be based on the annual bonuses paid or payable to
the Executive for the actual number of calendar years during which the
Executive was employed by the Company preceding the calendar year of
termination.  In addition, for purposes
of the foregoing calculation only, the Executive’s bonus with respect to the
2006 calendar year shall be deemed to be $1,575,000,

(iii) a pro rated portion of the bonus for
the calendar year in which the Executive’s Date of Termination occurs,
determined by multiplying the full year bonus that would otherwise have

 

 8
 

 

 

been payable to the Executive based upon the achievement of applicable
performance objectives by a fraction, the numerator of which is the number of
days during which Executive was employed by the Company in the year of his
termination and the denominator of which is 365,

(iv) all outstanding options held by the Executive
that are vested as of the Date of Termination shall remain exercisable by the
Executive until the earlier of the first anniversary of the Date of Termination
or the expiration of the option term in accordance with the terms of the
Company’s 1994 Stock Option and Long-Term Incentive Plan, as amended and
restated, or under any replacement or successor plan,

(v) as to all outstanding equity awards held
by the Executive as of the Date of Termination that are not vested, the
Executive shall continue to vest in those equity awards as if he had remained
employed by the Company through the first anniversary of the Date of
Termination and any performance objectives applicable to such awards were
deemed satisfied as of the Date of Termination and any outstanding options that
vest during the one-year period following the Date of Termination shall remain
exercisable until the earlier of one-year period following the applicable
vesting date or the expiration of the option term,

(vi) continued medical coverage at the level
in effect at the Date of Termination (or generally comparable coverage) for
himself and, where applicable, his spouse and dependents, on the same terms as
such coverage is available to employees generally, as the same may be changed
from time to time for employees generally, as if Executive had continued in
employment, until the end of the one (1) year period following the Date of
Termination.  The COBRA health care
continuation coverage period under section 4980B of the Code, or any
replacement or successor provision of United States tax law, shall run
concurrently with the period of continued coverage following the Date of
Termination, and

(vii) the Executive’s entitlements under any
other benefit plan or program, including but not limited to, accrued, unused
vacation, shall be as determined thereunder, except that severance benefits
shall not be payable under any other plan or program.  In addition, promptly following any such
termination, the Executive shall also be reimbursed all Reimbursable Expenses
incurred by the Executive prior to such termination.

Amounts described in clauses (i) and (ii)
above will be payable in accordance with the Company’s normal payroll practices
and the amount described in clause (iii) above will be payable in a single lump
sum when bonuses otherwise paid to other executives for the then current
year.  Amounts due to the Executive under
this Section 5.02 shall be paid as soon as reasonably practicable following the
Executive’s execution and non-revocation of a written release, substantially in
the form attached hereto as Exhibit A (with such modifications at the
time of the Executive’s termination as the Company’s General Counsel deems
necessary or appropriate to comply with applicable law or regulation), of any
and all claims against the Company and all related parties with respect to all
matters arising out of the Executive’s employment by the Company, or the
termination thereof (other than claims for any entitlements under the terms of
this Agreement, under any plans or programs of the Company under which the
Executive has accrued and is due a benefit, or as otherwise contemplated by Exhibit
A) (the “Release”), or if a six-month delay is required to comply with Code
section 409A, on the first business day following such delay period.

 

 9
 

 

 

In the event the Executive fails to execute,
or revokes the Release, no amounts shall be payable under this Section 5.02 and
the Executive shall be entitled to receive solely the Base Salary through the
Date of Termination and reimbursement of all Reimbursable Expenses incurred by
the Executive prior to such termination; provided that the Executive’s
entitlements under any other benefit plan or program, including but not limited
to, accrued, unused vacation, shall be as determined thereunder, except that
severance benefits shall not be payable under any plan or program.

SECTION 5.03. 
Termination for Good Reason or
Without Cause On or After a Change in Control.  If the Employment Period shall be terminated
on or after a Change in Control (a) by the Executive for Good Reason or
(b) by the Company not for Cause, in either case subject to the Executive’s
execution and non-revocation of a Release, the Executive shall be provided
solely:

(i) an amount equal to the Executive’s Base
Salary payable through the Date of Termination,

(ii) the amount of the Executive’s Base
Salary at the rate in effect on the Date of Termination (before any reduction
thereof giving rise to Good Reason) plus an amount equal to the average annual
bonus paid or payable to Executive under Section 4.02 hereof with respect to
the three calendar years preceding the calendar year in which the Date of
Termination occurs.  If the number of
calendar years during which the Executive has been employed by the Company
prior to the calendar year of the Date of Termination is less than three, then
the foregoing average shall be based on the annual bonuses paid or payable to
the Executive for the actual number of calendar years during which the
Executive was employed by the Company preceding the calendar year of
termination.  In addition, for purposes
of the foregoing calculation only, the Executive’s bonus with respect to the
2006 calendar year shall be deemed to be $1,575,000,

(iii) a pro rated portion of the bonus for
the calendar year in which the Executive’s Date of Termination occurs,
determined by multiplying the full year bonus that would otherwise have been
payable to the Executive based upon the achievement of applicable performance
objectives by a fraction, the numerator of which is the number of days during
which Executive was employed by the Company in the year of his termination and
the denominator of which is 365,

(iv) to the extent not fully vested as of the
Date of Termination, all outstanding equity awards held by the Executive as of
the Date of Termination shall become fully vested and exercisable in accordance
with the terms of the Company’s 1994 Stock Option and Long-Term Incentive Plan,
as amended and restated, or under any replacement or successor plan,

(v) continued medical coverage at the level
in effect at the Date of Termination (or generally comparable coverage) for
himself and, where applicable, his spouse and dependents, on the same terms as
such coverage is available to employees generally, as the same may be changed
from time to time for employees generally, as if Executive had continued in
employment, until the earlier of (A) the end of the two-year period following
the Date of Termination (B) the date on which the Executive is eligible to
receive medical coverage under a plan of a subsequent employer.  The Executive shall notify the Company within
five (5) business days of the date the Executive is eligible to receive medical
coverage under the plan of a subsequent employer. The COBRA health care
continuation coverage period under section 4980B of the Code, or any
replacement or successor

 

 10
 

 

 

provision of United States tax law, shall run concurrently with the
period of continued coverage following the Date of Termination, and

(vi) the Executive’s entitlements under any
other benefit plan or program, including but not limited to, accrued, unused
vacation, shall be as determined thereunder, except that severance benefits
shall not be payable under any other plan or program.  In addition, promptly following any such termination,
the Executive shall also be reimbursed all Reimbursable Expenses incurred by
the Executive prior to such termination.

Amounts described in clauses (i), (ii) and
(iii) above will be paid in a single lump sum as soon as reasonably practicable following the Executive’s
execution and nonrevocation of a Release, or if a six-month delay is required
to comply with Code section 409A, on the first business day following such
delay period.

In the event the Executive fails to execute,
or revokes the Release, no amounts shall be payable under this Section 5.03 and
the Executive shall be entitled to receive solely the Base Salary through the
Date of Termination and reimbursement of all Reimbursable Expenses incurred by
the Executive prior to such termination; provided that the Executive’s
entitlements under any other benefit plan or program, including but not limited
to, accrued, unused vacation, shall be as determined thereunder, except that
severance benefits shall not be payable under any plan or program.

SECTION 5.04. 
Termination Due to Death or
Disability, Termination for Cause or Resignation Other Than Good Reason.  If the Employment Period shall be
terminated (a) due to death or Permanent Disability of the Executive,
(b) by the Company for Cause, or (c) as a result of the Executive’s
resignation or leaving of his employment, other than for Good Reason, the Executive shall be entitled to receive
solely the Base Salary through the Date of Termination and reimbursement of all
Reimbursable Expenses incurred by the Executive prior to such termination; provided
that in the event the Employment Period is terminated due to death or
Permanent Disability of the Executive, the Executive all outstanding equity
awards held by the Executive as of the Date of Termination shall become fully
vested and exercisable in accordance with the terms of the Company’s 1994 Stock
Option and Long-Term Incentive Plan, as amended and restated.  The Executive’s entitlements under any other
benefit plan or program, including but not limited to, accrued, unused
vacation, shall be as determined thereunder, except that severance benefits
shall not be payable under any plan or program.

SECTION 5.05. 
Notice of Termination.  Any termination by the Company for Permanent
Disability or Cause or without Cause or by the Executive with or without Good
Reason shall be communicated by written Notice of Termination to the other
party hereto.  For purposes of this
Agreement, a “Notice of Termination”
shall mean a notice which 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 employment
under the provision indicated.

SECTION 5.06.  Date of Termination. 
“Date of Termination” shall mean (a) if the Employment
Period is terminated as a result of a Permanent Disability, five (5) days after
a Notice

 

 11
 

 

 

of Termination is given, (b) if the Employment Period is
terminated for any other reason, the latest of the date of receipt of the
Notice of Termination, or the end of any applicable correction period.

SECTION 5.07. 
No Duty to Mitigate.  Except as expressly provided to
the contrary therein, the Executive shall have no duty to seek new employment
or other duty to mitigate following a termination of employment as described in
Section 5.02 or 5.03 above, as applicable, and no compensation or benefits
described in Section 5.02 or 5.03 shall be subject to reduction or offset on
account of any subsequent compensation received by the Executive.

ARTICLE
6

CONFIDENTIAL
INFORMATION

SECTION 6.01. 
Nondisclosure and Nonuse of
Confidential Information.  The
Executive will not disclose or use at any time during or after the Employment
Period any Confidential Information of which the Executive is or becomes aware,
whether or not such information is developed by him, except to the extent he
reasonably believes that such disclosure or use is directly related to and
appropriate in connection with the Executive’s performance of duties assigned
to the Executive pursuant to this Agreement. 
Under all circumstances and at all times, the Executive will take all
appropriate steps to safeguard Confidential Information in his possession and
to protect it against disclosure, misuse, espionage, loss and theft.

ARTICLE
7

INTELLECTUAL
PROPERTY

SECTION 7.01. 
Ownership of Intellectual Property.  In the event that the Executive as part of
his activities on behalf of the Company generates, authors or contributes to
any invention, design, new development, device, product, method of process
(whether or not patentable or reduced to practice or comprising Confidential
Information), any copyrightable work (whether or not comprising Confidential
Information) or any other form of Confidential Information relating directly or
indirectly to the business of the Company as now or hereinafter conducted
(collectively, “Intellectual Property”),
the Executive acknowledges that such Intellectual Property is the sole and
exclusive property of the Company and hereby assigns all right title and
interest in and to such Intellectual Property to the Company.  Any copyrightable work prepared in whole or
in part by the Executive during the Employment Period will be deemed “a work
made for hire” under Section 201(b) of the Copyright Act of 1976, as
amended, and the Company will own all of the rights comprised in the copyright
therein.  The Executive will promptly and
fully disclose all Intellectual Property and will cooperate with the Company to
protect the Company’s interests in and rights to such Intellectual Property
(including providing reasonable assistance in securing patent protection and
copyright registrations and executing all documents as reasonably requested by
the Company, whether such requests occur prior to or after termination of
Executive’s employment hereunder).

 

 12

 

ARTICLE 8

DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT

SECTION 8.01.  Delivery of Materials upon Termination of
Employment.  As requested by
the Company, from time to time and upon the termination of the Executive’s
employment with the Company for any reason, the Executive will promptly deliver
to the Company all copies and embodiments, in whatever form or medium, of all
Confidential Information or Intellectual Property in the Executive’s possession
or within his control (including written records, notes, photographs, manuals,
notebooks, documentation, program listings, flow charts, magnetic media, disks,
diskettes, tapes and all other materials containing any Confidential
Information or Intellectual Property) irrespective of the location or form of
such material and, if requested by the Company, will provide the Company with
written confirmation that to the best of his knowledge all such materials have
been delivered to the Company.  This
provision shall not prevent the Executive from retaining his personal property,
including his personal information contained on any electronic device.

ARTICLE 9

NONCOMPETITION AND NONSOLICITATION

SECTION 9.01.  Noncompetition.  The Executive hereby acknowledges that during
his employment with the Company, the Executive has and will become familiar
with trade secrets and other Confidential Information concerning the Company,
its Subsidiaries and their respective predecessors, and that the Executive’s
services have been and will be of special, unique and extraordinary value to
the Company.  In addition, the Executive
hereby agrees that at any time during the Employment Period, and for a period
of one year after the Date of Termination (such one-year period referred to as
the “Noncompetition Period”), the
Executive will not, directly or indirectly, own, manage, control, participate
in, consult with, render services for, or in any manner engage in, any business
competing with the businesses of the Company or its Subsidiaries as such
businesses exist or are in process or are being demonstrably planned as of the
Date of Termination , within any geographical area in which, as of the Date of
Termination, the Company or its Subsidiaries engage or demonstrably plan to
engage in such businesses.  It will not
be considered a violation of this Section 9.01 for the Executive to be a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as the Executive has no active
participation in the business of such corporation.

SECTION 9.02.  Nonsolicitation. 
The Executive hereby agrees that (a) during the
Employment Period and for a period of one year after the Date of Termination
(such one-year period referred to as the “Nonsolicitation
Period”) the Executive will not, directly or indirectly through
another entity, induce or attempt to induce any employee of the Company or its
Subsidiaries to leave the employ of the Company or its Subsidiaries, or in any
way interfere with the relationship between the Company or its Subsidiaries and
any employee thereof or otherwise employ or receive the services of an
individual who was an employee of the Company or its Subsidiaries at any time
during such Nonsolicitation Period, except any such individual whose employment
has been terminated by the Company and (b) during the Nonsolicitation
Period, the Executive will not induce or attempt to

 13
 

 

 

induce any
customer, supplier, client, broker, licensee or other business relation of the
Company or its Subsidiaries to cease doing business with the Company or its
Subsidiaries.

SECTION 9.03.  Enforcement.  If, at the enforcement of Sections 9.01 or
9.02, a court holds that the duration or scope restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the maximum
duration or scope reasonable under such circumstances will be substituted for
the stated duration or scope and that the court will be permitted to revise the
restrictions contained in this Section 9 to cover the maximum duration and
scope permitted by law.

ARTICLE 10

EQUITABLE RELIEF

SECTION 10.01.  Equitable Relief. 
The Executive acknowledges that (a) the covenants
contained herein are reasonable, (b) the Executive’s services are unique,
and (c) a breach or threatened breach by him of any of his covenants and
agreements with the Company contained in Sections 6.01, 7.01, 8.01, 9.01 or
9.02 could cause irreparable harm to the Company for which it would have no
adequate remedy at law.  Accordingly, and
in addition to any remedies which the Company may have at law, in the event of
an actual or threatened breach by the Executive of his covenants and agreements
contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02, the Company shall have
the absolute right to apply to any court of competent jurisdiction for such
injunctive or other equitable relief as such court may deem necessary or
appropriate in the circumstances.

ARTICLE 11

INDEMNIFICATION

SECTION 11.01.  General Indemnification.  The Company agrees that if the Executive is
made a party, or is threatened to be made a party, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (each, a “Proceeding”), by reason of the fact that he
is or was a director, officer or employee of the Company or is or was serving
at the request of the Company as a director, officer, member, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is the Executive’s alleged action in an official
capacity while serving as a director, officer, member, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent permitted or authorized by applicable law and the Company’s certificate
of incorporation or bylaws, against all cost, expense, liability and loss
(including, without limitation, attorney’s fees, judgments, damages,
settlements, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by the Executive in
connection therewith (collectively, the “Expenses”),
and such indemnification shall continue as to the Executive even if he has
ceased to be a director, member, employee or agent of the Company or other
entity and shall inure to the benefit of the Executive’s heirs, estate,
executors and administrators.

SECTION 11.02.  Advances of Expenses.  Expenses incurred by the Executive in
connection with any Proceeding shall be paid by the Company in advance within
thirty (30) days after receipt of written request by the Executive specifying
the Expenses for which the Executive

 14
 

 

 

seeks an
advancement, provided that the Executive has delivered to the Company a
written, signed undertaking to reimburse the Company for Expenses if it is
finally determined by a court of competent jurisdiction that the Executive is
not entitled under this Agreement to indemnification with respect to such
Expenses.

SECTION 11.03.  Notice of Claim.  The Executive shall give to the Company
notice of any claim made against the Executive for which indemnification will
or could be sought under this Agreement, but the Executive’s failure to give
such notice shall not relieve the Company of any liability the Company may have
to the Executive except to the extent that the Company is prejudiced
thereby.  In addition, the Executive
shall give the Company such information and cooperation as it may reasonably
require and as shall be within the Executive’s power and at such time and
places as are convenient for the Executive.

SECTION 11.04.  Defense of Claim.  With respect to any Proceeding as to which
the Executive notifies the Company of the commencement thereof:

              (a)           the Company shall be entitled to participate therein at
its own expense; and

              (b)           except as otherwise provided below, to the extent that it
may wish, the Company will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to the Executive.  The Executive also shall have the right to
employ the Executive’s own counsel in such action, suit or proceeding if the
Executive reasonably concludes that failure to do so would involve a conflict
of interest between the Company and the Executive, and under such circumstances
the fees and expenses of such counsel shall be at the expense of the Company,
subject to the provisions herein; and

              (c)           the Company shall not be liable to indemnify the Executive
under this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. 
The Company shall not settle any action or claim in any manner that
would not include a full and unconditional release of the Executive without the
Executive’s prior written consent. 
Neither the Company nor the Executive will unreasonably withhold or
delay their consent to any proposed settlement.

SECTION 11.05.  Non-exclusivity.  The Executive’s rights conferred in this
Article 11 shall not be exclusive of any other right the Executive may have or
hereafter may acquire under any statute, provision of the declaration of trust
or certificate of incorporation or by-laws of the Company or any subsidiary, or
any agreement, vote of shareholders or disinterested directors or trustees or
otherwise.

SECTION 11.06.  Insurance. 
The Company agrees to continue and maintain a directors’ and officers’
liability insurance policy covering the Executive to the extent the Company
provides such coverage for its other executive officers.

 15
 

 

 

ARTICLE 12

EXCISE TAX

SECTION 12.01.  Application of 280G. 
In the event that it shall be determined that any payment or
distribution in the nature of compensation (within the meaning of section
280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (a “Payment”), would constitute an “excess parachute
payment” within the meaning of section 280G of the Code, the aggregate present
value of the Payments under the Agreement shall be reduced (but not below zero)
to the Reduced Amount (defined below), provided that the reduction shall be
made only if the Accounting Firm (described below) determines that the
reduction will provide the Executive with a greater net after-tax benefit than
would no reduction.  The “Reduced
Amount” shall be an amount expressed in present value which maximizes the
aggregate present value of Payments under this Agreement without causing any
Payment under this Agreement to be subject to the Excise Tax (defined below),
determined in accordance with section 280G(d)(4) of the Code.  The term “Excise Tax” means the excise
tax imposed under section 4999 of the Code, together with any interest or
penalties imposed with respect to such excise tax.  Unless the Executive shall have elected
another method of reduction by written notice to the Company prior to the
Change in Control, the Company shall reduce the Payments under this Agreement
by first reducing Payments that are not payable in cash and then by reducing
cash Payments.  Only amounts payable
under this Agreement shall be reduced pursuant to this Section 12.01.

All determinations to be made under this Article 12
shall be made by an independent certified public accounting firm selected by
the Company immediately prior to the Change in Control (the “Accounting Firm”),
which shall provide its determinations and any supporting calculations both to
the Company and the Executive within 10 days of the Change in Control.  Any such determination by the Accounting Firm
shall be binding upon the Company and the Executive.  All of the fees and expenses of the
Accounting Firm in performing the determinations referred to in this Section
shall be borne solely by the Company.

ARTICLE 13

MISCELLANEOUS

SECTION
13.01.  Dispute
Resolution.  In the event of
any dispute under the provisions of this 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 the Executive 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 

 16
 

 

 

authority to modify any provision of this Agreement
or to award a remedy for a dispute involving this Agreement other than a
benefit specifically provided under or by virtue of the Agreement.  If the Executive prevails on any material
issue which is the subject of such arbitration or lawsuit, the Company shall be
responsible for all of the fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration
(including the Company’s and Executive’s reasonable attorneys’ fees and
expenses).  Otherwise, each party shall
be responsible for its own expenses relating to the conduct of the arbitration
(including reasonable attorneys’ fees and expenses) and shall share the fees of
the American Arbitration Association.

SECTION 13.02.  Legal Fees.  The Company shall promptly pay up to $15,000
of the Executive’s legal fees incurred in negotiating this Agreement and other
documents relating to the Executive’s employment and equity grants as
contemplated hereunder.

SECTION 13.03.  Remedies Cumulative; No Waiver.  No remedy
conferred upon a party by this Agreement is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be
in addition to any other remedy given under this Agreement or now or hereafter
existing at law or in equity.  Except as
otherwise expressly provided herein, including but not limited to Section 1.01 “Good
Reason,” no delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed
as a waiver thereof, and any such right, remedy or power may be exercised by
such party from time to time and as often as may be deemed expedient or
necessary by such party in its sole discretion.

SECTION 13.04.  Consent to Amendments.  The provisions of this Agreement
may be amended or waived only by a written agreement executed and delivered by
the Company and the Executive.  No other
course of dealing between the parties to this Agreement or any delay in
exercising any rights hereunder will operate as a waiver of any rights of any
such parties.

SECTION 13.05.  Successors and Assigns.  All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not; provided that the Executive
may not assign his rights or delegate his obligations under this Agreement
without the written consent of the Company and the Company may assign this
Agreement only to a successor to all or substantially all of its assets.

SECTION 13.06.  Severability.  Whenever
possible, each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.

SECTION 13.07.  Counterparts.  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.

SECTION 13.08.  Descriptive Headings. 
The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.

 17
 

 

 

SECTION 13.09.  Notices.  All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement will be in writing and will be
deemed to have been given when delivered personally to the recipient, two (2)
business days after the date when sent to the recipient by reputable express
courier service (charges prepaid) or four (4) business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid.  Such
notices, demands and other communications will be sent to the Executive and to
the Company at the addresses set forth below,

	
  

  	
   

  	
  If to the Executive:

  	
   

  	
  To the last address delivered to the Company by the
  Executive in the manner set forth herein.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If to the Company:

  	
   

  	
  Investment Technology Group, Inc. 

  
	
   

  	
   

  	
   

  	
   

  	
  380 Madison Avenue

  
	
   

  	
   

  	
   

  	
   

  	
  New York, New York 10017

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: General Counsel

  

 

or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to
the sending party.

SECTION 13.10.  Withholding.  The
Company may withhold from any amounts payable under this Agreement such
federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation. 
The Executive shall bear all expense of, and be solely responsible for,
all federal, state, local and foreign taxes due with respect to any payment
received under this Agreement.

SECTION 13.11.  No Third Party Beneficiary.  This Agreement will not confer any
rights or remedies upon any person other than the Company, the Executive and
their respective heirs, executors, successors and assigns.

SECTION 13.12.  Entire Agreement. 
This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes any prior
understandings, agreements or representations by or among the parties, written
or oral, that may have related in any way to the subject matter hereof.

SECTION 13.13.  Section 409A.  This
Agreement is intended to comply with section 409A of the Code and its
corresponding regulations and guidance, to the extent applicable.  Notwithstanding anything in the agreement to
the contrary, payments may only be made under the Agreement upon an event and
in a manner permitted by section 409A of the Code, to the extent
applicable.  To the extent that any
payment under this Agreement is deemed to be deferred compensation subject to
the requirements of section 409A of the Code, the Company and the Executive
shall amend this Agreement so that such payments will be made in accordance
with the requirements of section 409A of the Code.

 18
 

 

 

SECTION 13.14.  Construction.  The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rule of strict construction will
be applied against any party.  Any
reference to any federal, state, local or foreign statute or law will be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise.  The use of
the word “including” in this
Agreement means “including without limitation” and is intended by the parties
to be by way of example rather than limitation.

SECTION
13.15.  Survival.  Article 5,
Sections 6.01, 7.01, 8.01 and Articles 9, 10, 11, 12 and 13 will survive
and continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period, and the Agreement shall otherwise remain
in full force to the extent necessary to enforce any rights and obligations
arising hereunder during the Employment Period.

SECTION
13.16.  GOVERNING
LAW.  ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE
GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.

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

	
  

  	
  INVESTMENT
  TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/
  Raymond L. Killian, Jr.

  
	
   

  	
  Printed Name: Raymond
  L. Killian, Jr.

  
	
   

  	
  Title: Chairman,
  President & CEO

  
	
   

  	
  Date: September
  15, 2006

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Robert C. Gasser

  
	
   

  	
  Robert C. Gasser

  
	
   

  	
  Date: September
  15, 2006

  

 

 

 19Exhibit 10.2

AMENDMENT TO

RAYMOND L. KILLIAN, JR. EMPLOYMENT AGREEMENT

This AMENDMENT is made and entered into as of
September 15, 2006, by and between Investment Technology Group, Inc. (the “Company”)
and Raymond L. Killian, Jr. (the “Executive”).

WHEREAS, the Company and the Executive previously
entered into an employment agreement dated as of December 16, 2004 (the “Employment
Agreement”); and

WHEREAS, the parties now wish to amend the Employment
Agreement to reflect that, effective October 4, 2006, the Executive’s position
with the Company shall change from Chief Executive Officer and President to
Chairman; and

WHEREAS, the parties also wish to acknowledge and
agree that this change in position will not trigger the Executive’s right to
any severance benefits under the Employment Agreement.

NOW, THEREFORE, the parties mutually acknowledge and agree that the
Employment Agreement is hereby amended as follows:

1.             Effective October 4, 2006, the
Executive’s position with the Company shall change from Chief Executive Officer
and President to Chairman.

2.             This change in position will not
trigger the Executive’s right to any severance benefits under Section 5.02 of
the Employment Agreement.

IN WITNESS WHEREOF,
the Company and the Executive have caused this Amendment to be executed as of
the day and year first set forth above.

	
  

  	
   

  	
  INVESTMENT TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ P. Mats Goebels

  
	
   

  	
   

  	
   

  	
  P. Mats Goebels

  
	
   

  	
   

  	
   

  	
  Managing Director, General Counsel & Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Raymond L. Killian, Jr.

  
	
   

  	
   

  	
   

  	
  Raymond J. Killian, Jr.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]