Document:

Exhibit 10.1

 

 

 

 

 

 

 

 

 

AMENDED
AND RESTATED

OPERATING
AGREEMENT OF

IBG LLC

 

Dated as
of May 3, 2007

 

 

 

 

 

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.

  	
  ORGANIZATION

  	
  1

  
	
  Section 1.1

  	
  Formation

  	
  1

  
	
  Section 1.2

  	
  Company Name

  	
  1

  
	
  Section 1.3

  	
  Purpose

  	
  1

  
	
  Section 1.4

  	
  Principal Place
  of Business

  	
  1

  
	
  Section 1.5

  	
  Term

  	
  1

  
	
  Section 1.6

  	
  Filings; Agent
  for Service of Process

  	
  2

  
	
  Section 1.7

  	
  Definitions

  	
  2

  
	
  ARTICLE II.

  	
  CAPITAL

  	
  6

  
	
  Section 2.1

  	
  Initial Capital

  	
  6

  
	
  Section 2.2

  	
  Other Matters

  	
  6

  
	
  ARTICLE III.

  	
  ALLOCATIONS

  	
  6

  
	
  Section 3.1

  	
  Profits and
  Losses

  	
  6

  
	
  Section 3.2

  	
  Other Allocation
  Rules

  	
  6

  
	
  Section 3.3

  	
  Allocations of Taxable
  Income or Loss

  	
  7

  
	
  ARTICLE IV.

  	
  DISTRIBUTIONS

  	
  7

  
	
  Section 4.1

  	
  Net Cash Flow

  	
  7

  
	
  Section 4.2

  	
  Tax Priority
  Distributions

  	
  7

  
	
  Section 4.3

  	
  Manner of
  Distributions

  	
  7

  
	
  ARTICLE V.

  	
  MANAGEMENT

  	
  8

  
	
  Section 5.1

  	
  Authority of the
  Managing Member

  	
  8

  
	
  Section 5.2

  	
  Right to Rely
  upon Managing Member

  	
  9

  
	
  Section 5.3

  	
  Restrictions on
  Authority of Managing Member

  	
  10

  
	
  Section 5.4

  	
  Duties and
  Obligations of the Managing Member

  	
  10

  
	
  Section 5.5

  	
  Compensation and
  Expenses

  	
  11

  
	
  Section 5.6

  	
  Signatures;
  Power of Attorney

  	
  11

  
	
  ARTICLE VI.

  	
  RECORDS AND ACCOUNTING

  	
  11

  
	
  Section 6.1

  	
  Records and
  Accounting

  	
  11

  
	
  Section 6.2

  	
  Tax Information

  	
  12

  
	
  Section 6.3

  	
  Tax Returns

  	
  12

  

 

 i
 

 

	
  Section 6.4

  	
  Accounting
  Decisions

  	
  12

  
	
  Section 6.5

  	
  Tax Elections

  	
  12

  
	
  Section 6.6

  	
  Fiscal Year

  	
  12

  
	
  Section 6.7

  	
  Tax Matters

  	
  12

  
	
  ARTICLE VII.

  	
  AMENDMENTS; MEETINGS; VOTING

  	
  12

  
	
  Section 7.1

  	
  Amendment

  	
  12

  
	
  Section 7.2

  	
  Amendment to
  Articles of Organization

  	
  12

  
	
  Section 7.3

  	
  Meetings of
  Members

  	
  13

  
	
  Section 7.4

  	
  Proxy of Member

  	
  13

  
	
  Section 7.5

  	
  Consent or
  Voting

  	
  13

  
	
  ARTICLE VIII.

  	
  PROVISIONS RELATING TO MEMBERS

  	
  13

  
	
  Section 8.1

  	
  Investment
  Representation

  	
  13

  
	
  Section 8.2

  	
  Restrictions on
  Member’s Transfer of an Interest

  	
  13

  
	
  Section 8.3

  	
  Documentation
  Regarding Interests

  	
  14

  
	
  Section 8.4

  	
  Interests and
  Shares

  	
  14

  
	
  ARTICLE IX.

  	
  MANAGING MEMBER

  	
  14

  
	
  Section 9.1

  	
  Appointment of
  Managing Member

  	
  14

  
	
  Section 9.2

  	
  Permitted
  Transfers

  	
  14

  
	
  Section 9.3

  	
  Resignation of
  Managing Member

  	
  14

  
	
  Section 9.4

  	
  Successor
  Managing Member

  	
  15

  
	
  Section 9.5

  	
  Rights of
  Resigned Managing Member

  	
  15

  
	
  ARTICLE X.

  	
  ADMISSION AND WITHDRAWAL OF MEMBERS

  	
  15

  
	
  Section 10.1

  	
  Admission

  	
  15

  
	
  Section 10.2

  	
  Withdrawal and
  Dissociation

  	
  15

  
	
  ARTICLE XI.

  	
  DISSOLUTION AND LIQUIDATION

  	
  15

  
	
  Section 11.1

  	
  Dissolution

  	
  15

  
	
  Section 11.2

  	
  Winding-Up of
  Affairs

  	
  16

  
	
  Section 11.3

  	
  Liquidating
  Distributions

  	
  16

  
	
  ARTICLE XII.

  	
  MISCELLANEOUS

  	
  17

  
	
  Section 12.1

  	
  Notices

  	
  17

  

 

 ii
 

 

	
  Section 12.2

  	
  Binding Effect

  	
  17

  
	
  Section 12.3

  	
  Construction

  	
  17

  
	
  Section 12.4

  	
  Headings

  	
  17

  
	
  Section 12.5

  	
  Severability

  	
  18

  
	
  Section 12.6

  	
  Incorporation by
  Reference

  	
  18

  
	
  Section 12.7

  	
  Further Action

  	
  18

  
	
  Section 12.8

  	
  No Other
  Beneficiaries

  	
  18

  
	
  Section 12.9

  	
  Variation of
  Pronouns

  	
  18

  
	
  Section 12.10

  	
  Governing Law

  	
  18

  
	
  Section 12.11

  	
  Waiver of Action
  for Partition

  	
  18

  
	
  Section 12.12

  	
  Counterpart
  Execution

  	
  18

  
	
  Section 12.13

  	
  Sole and
  Absolute Discretion

  	
  18

  
	
  Section 12.14

  	
  Non-Arbitrability

  	
  18

  

 

 iii

 

AMENDED
AND RESTATED OPERATING AGREEMENT OF IBG LLC

This AMENDED AND RESTATED
OPERATING AGREEMENT of IBG LLC (formerly known as Interactive Brokers Group
LLC) (the “Company”) is entered into and shall be effective as of the
commencement of business on the 3rd day of May, 2007, by and among IBG Holdings
LLC, a Delaware limited liability company (“IBG Holdings”), and Interactive
Brokers Group, Inc., a Delaware corporation (“IBGI”), pursuant to the
provisions of the Act, on the terms and conditions set forth hereinafter.

WHEREAS, the Company was
originally established as The Timber Hill Group LLC, and changed its name to
Interactive Brokers Group LLC on February 15, 2001 and to IBG LLC on November
20, 2006; and

WHEREAS, as a condition
of the sale of Interests in the Company to IBGI and the admission of IBGI to
the Company as the Managing Member, IBG Holdings and IBGI have agreed to
restate the Operating Agreement of the Company as hereinafter set forth.

NOW, THEREFORE, IBGI and
IBG Holdings, as the holders of all of the Interests in the Company, do hereby
amend and restate the Operating Agreement of the Company in its entirety as
follows:

ARTICLE I.

ORGANIZATION

Section 1.1             Formation.  The Company was established as a limited
liability company and is and shall be governed by the provisions of the Act, as
hereinafter defined, and upon the terms and conditions set forth in this
Agreement.

Section 1.2             Company Name.  The name of the Company is IBG LLC, and all
business of the Company shall be conducted in such name.

Section 1.3             Purpose.  The purpose of the Company is any lawful act
or activity for which limited liability companies may be formed under Sections
34-100 to 34-242, inclusive, of the Act.

Section 1.4             Principal Place of Business.  The principal place of business of the
Company shall be at such place as the Managing Member may designate.  The Managing Member may change the principal
place of business of the Company to any other place upon fifteen (15) days
notice to the other Members.

Section 1.5             Term.  The term of the Company commenced upon the
filing of the Articles of Organization as described in Section 1.6(a) and shall
continue until the winding up 

 1
 

 

and liquidation of the
Company, and the completion of its business following a dissolution event, as
provided in Article XII hereof.

Section 1.6             Filings; Agent for Service of
Process.

(a)           The Articles of Organization of the
Company were filed as required by and in conformance with Section 34-121 of the
Act (the “Articles of Organization”) on July 1, 1996.  The Managing Member shall further cause to be
executed, filed and recorded and shall cause to be published, if required by
law, such other certificates or other instruments as may be necessary or
desirable under the laws of any state in which the Company does business.

(b)           The address to which the Secretary of
State shall send service of process is c/o Bergman, Horowitz & Reynolds,
P.C., 157 Church Street, 19th Floor, New Haven, Connecticut 06510.

(c)           Upon the dissolution and following
the wind-up and liquidation of the Company, the Managing Member shall promptly
execute and cause to be filed Articles of Dissolution in accordance with the
Act and the laws of any other states or jurisdictions in which the Company may
have filed Articles or certificates.

Section 1.7             Definitions.  Capitalized words and phrases used in this
Agreement have the following meanings:

“Act”
means the Connecticut Limited Liability Company Act as set forth in Title 34,
Chapter 613, Sections 34-100 to 34-242, inclusive, of the Connecticut General
Statutes, as amended from time to time (or any corresponding provisions of
succeeding law).

“Agreement”
or “Operating Agreement” means this Amended
and Restated Operating Agreement of IBG LLC, as amended from time to time.  Words such as “herein,” “hereinafter,” “hereof,”
“hereto,” and “hereunder” refer to this Agreement as a whole, unless the
context otherwise requires.

“Capital
Contribution” means, with respect to any Member, the amount of money
and the initial Gross Asset Value of any property (other than money)
contributed to the Company with respect to the Interest in the Company held by
such Member pursuant to the terms of this Agreement.

“Code”
means the Internal Revenue Code of 1986, as amended from time to time (or any
corresponding provisions of succeeding law).

“Company”
means IBG LLC, a Connecticut limited liability company.

“Depreciation”
means, for each fiscal year or other period, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such year or other period, except that if the Gross
Asset Value of an asset differs from its 

 

 2
 

 

adjusted basis for
federal income tax purposes at the beginning of such year or other period,
Depreciation shall be an amount which bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization or other
cost recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Managing Member.

“Exchange
Agreement” means that certain Exchange Agreement, dated as of May 3,
2007, by and among IBGI, the Company, IBG Holdings and the former members of
the Company, pursuant to which, among other things provided therein, (i) the
former members of the Company contributed their interests in the Company to IBG
Holdings in exchange for interests therein, (ii) IBG Holdings sold to IBGI a
portion of IBG Holdings’ interests in the Company, (iii) the IBG Holdings
members were granted certain rights to have their interests redeemed by IBG Holdings;
(iv) IBG Holdings was granted certain rights to redeem the interests of the IBG
Holdings members; and (v) IBGI agreed to undertake public offerings of IBGI
Common Stock and to purchase interests in the Company from IBG Holdings from
time to time as specified therein.

“Gross Asset
Value” means, with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:

(i)            The initial Gross Asset Value of any
asset contributed by a Member to the Company shall be the gross fair market
value of such asset, as determined by the Company;

(ii)           The Gross Asset Values of all Company
assets shall be adjusted to equal their respective gross fair market values, as
determined by the Managing Member, as of the following times:  (a) the acquisition of an additional Interest
in the Company by any new or existing Member in exchange for more than a de
minimis Capital Contribution; (b) the distribution by the Company to a Member
of more than a de minimis amount of Property as consideration for the
redemption of an Interest in the Company; (c) the liquidation of the Company
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (d)  any other circumstance when the Managing Member, in its
discretion, determines that a revaluation of the Property of the Company is
necessary to properly reflect the economic relationship of the Members to one
another and the Company;

(iii)          The Gross Asset Value of any Company
asset distributed to any Member shall be the gross fair market value of such
asset on the date of distribution; and

(iv)          The Gross Asset Values of Company
assets shall be increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into account
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this clause (iv) to the
extent the Managing 

 

 3
 

 

Member determines that an
adjustment pursuant to clause (ii) above is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this clause (iv).

If the Gross Asset Value of an asset has been
determined or adjusted pursuant to clause (i), clause (ii) or clause (iv) of
this definition, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Profits and Losses.

“IBGI Common
Stock” means Class A common stock, par value $0.01 per share, of
IBGI.

“Interest”
means an ownership interest in the Company by a Member, including any and all
benefits to which the holder of such an Interest may be entitled as provided in
this Agreement, together with all obligations of such Member to comply with the
terms and provisions of this Agreement.

“Liquidator”
means the Managing Member or its successor or, if none, such other Person
selected by a vote of the Members to conduct the winding-up of the Company and
distribution of its assets following dissolution of the Company.

“Managing
Member” means IBGI or a successor Managing Member appointed in
accordance herewith.

“Member”
means IBG Holdings and IBGI or any other Person who has become a Member
pursuant to the terms of this Agreement and who has not ceased to be a
Member.  “Members” means all such
Members.

“Net Cash
Flow” means the gross cash proceeds from Company operations and from
sales or refinancings attributable to Company assets less the portion thereof
used to pay or establish reserves for all Company expenses, debt payments,
capital improvements, replacements and contingencies, all as reasonably
determined by the Managing Member.  Net
Cash Flow shall not be reduced by depreciation, amortization, cost recovery
deductions or similar allowances, but shall be increased by any reductions of
reserves previously established.

“Person”
means any individual, partnership, corporation, trust or other entity.

“Profits”
and “Losses” means, for each fiscal year or
other period, an amount equal to the Company’s taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:

 4
 

 

(v)           Any income of the Company that is
exempt from federal income tax and not otherwise taken into account in
computing Profits or Losses shall be added to such taxable income or loss;

(vi)          Any expenditures of the Company
described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses, shall be
subtracted from such taxable income or loss;

(vii)         In the event the Gross Asset Value of
any Company asset is adjusted, the amount of such adjustment shall be taken
into account as if gain or loss from the disposition of such asset for purposes
of computing Profits or Losses;

(viii)        Gain or loss resulting from any
disposition of Property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value; and

(ix)           In lieu of the depreciation,
amortization, and other cost recovery deductions taken into account in
computing such taxable income or loss, there shall be taken into account
Depreciation for such fiscal year or other period.

“Property”
means all real and personal property acquired by the Company and any
improvements thereto, and shall include both tangible and intangible property.

“Regulations”
means the Income Tax Regulations promulgated under the Code, as such
Regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

“Shares”
means the units into which the Interests are divided and by reference to which
votes of the Members are determined and allocations of Profits and Losses and
distributions of Net Cash Flow are made. 
Shares are fungible, and each Share shall have the same economic rights
and exercise the same voting power as each other Share.

“Tax Priority”
with respect to a holder of Shares means, with respect to each year, an amount
equal to the sum of (i) the product of (A) the highest combined federal, state
and local income tax rate, taking into account the federal deduction for state
and local taxes, for individuals resident in New York City and (B) the amount
of allocations of taxable income (exclusive of net capital gain) to the Shares
of such holder with respect to such year and (ii) the product of (A) the
highest combined federal, state and local income tax rate, taking into account
the federal deduction for state and local taxes, on long term capital gains for
individuals resident in New York City and (B) the amount of allocations of net
capital gain to the Shares of such holder with respect to such year; provided
that the rates used to compute the Tax Priority shall be no less than the
actual combined federal, state and local income tax rates applicable to the
allocable shares of income and net capital gain of the Managing Member.

 5
 

 

“Transfer”
means, as a noun, any voluntary or involuntary transfer, sale, pledge,
hypothecation, or other disposition and, as a verb, voluntarily or
involuntarily to transfer, sell, assign, mortgage, give, create a security
interest in or lien on, encumber, place in trust (voting or otherwise), pledge,
hypothecate, or otherwise dispose of.

ARTICLE II.

CAPITAL

Section 2.1             Initial Capital.  The names, addresses, Capital Contributions
and number of Shares of each of the Members, including any changes thereto from
time to time, shall be maintained in the records of the Company and shall be
made available to any Member upon request.

Section 2.2             Other Matters.

(a)           Except as otherwise provided in this
Agreement, no Member shall demand or receive a return of its Capital
Contributions or its entitlements with respect to its Shares, at any time, or
withdraw from the Company without the consent of the Managing Member.

(b)           No Member shall be liable for the
debts, liabilities, contracts or any other obligations of the Company by reason
of this Agreement.  Except as otherwise
provided by this Agreement any other agreements among the Members or applicable
state law, no Member shall be required to make any additional Capital
Contributions to the Company or lend any funds to the Company; and no Member
shall have any personal liability for the repayment of any Capital
Contributions of any other Member.

ARTICLE III.

ALLOCATIONS

Section 3.1             Profits and Losses.  Profits and Losses of the Company, and each
item thereof, shall be allocated among the Members in accordance with the
number of Shares held by each.

Section 3.2             Other Allocation Rules.

(a)           It is the intention of the Members
that all allocations provided in this Agreement be made in accordance with Code
Section 704(b), and Regulation Section 1.704-1; and, notwithstanding anything
to the contrary contained herein, the Managing Member may provide for the
allocation of any item or items, for tax purposes or otherwise, including the
allocation of any item or items to the Members as may be necessary to be
consistent therewith.

(b)           In the event of a change in ownership
of Shares and for purposes of determining the Profits, Losses or any other
items allocable to any period, Profits, Losses and 

 6
 

 

any such other items shall
be determined on a daily, monthly or other basis, as determined by the Managing
Member using any permissible method under Code Section 706 and the Regulations
thereunder.

Section 3.3             Allocations of Taxable Income or
Loss.

(a)           Items of income, deduction, gain and
loss that are recognized by the Company for federal income tax purposes shall
be allocated among the Members consistent with the allocations of such items
under Sections 3.1 and 3.2.  To the
extent appreciation or depreciation in asset values is reflected in capital
accounts prior to recognition for tax purposes, allocations shall be made in
accordance with the principles and provisions of Section 704(c) of the Code.

(b)           All items of federal income tax
credit and items of tax credit recapture shall be allocated among the Members
in accordance with the Members’ interests in the Company as of the time the tax
credit or credit recapture arises, as provided in Regulation Section
1.704-1(b)(4)(ii).

(c)           Allocations pursuant to this Section
3.3 are solely for purposes of federal, state and local taxes.  As such, they shall not affect or in any way
be taken into account in computing a Member’s capital account or share of
Profits or Losses or of distributions pursuant to any provision of this
Agreement.

ARTICLE IV.

DISTRIBUTIONS

Section 4.1             Net Cash Flow.  Except as provided in Section 4.2, Net Cash
Flow, as determined by the Managing Member, shall be distributed among the
Members at such times as the Managing Member determines, in its sole
discretion.

Section 4.2             Tax Priority Distributions.  Subject to the availability of Net Cash Flow,
the Managing Member shall distribute to the Members on an annual basis with
respect to each year amounts equal to no less than the Tax Priority with
respect to their Shares for such year, such distributions to occur within 105
days following the end of such year or by such earlier date as may be necessary
to enable the Managing Member to pay on a timely basis all applicable federal,
state and local income taxes for such year.

Section 4.3             Manner of Distributions.  Each distribution to the Members shall be
made to the holders of the Shares as reflected in registry of Shares of the
Company on the record date for the distribution and in proportion to the number
of Shares held by each Member.

 7
 

 

ARTICLE V.

MANAGEMENT

Section 5.1             Authority of the Managing Member.  Subject to the provisions of Section 5.3, the
Managing Member shall manage the business of the Company and shall have all of
the rights and powers which may be possessed by managing members under the Act
including, without limitation, the right and power to:

(a)           acquire by purchase, lease or
otherwise any real or personal property which may be necessary, convenient, or
incidental to the accomplishment of the purposes of the Company;

(b)           deal in any Company assets, whether
real property or personal property;

(c)           operate, maintain, finance, improve,
construct, own, grant options with respect to, sell, convey, assign, mortgage
and lease any real estate and any personal property necessary, convenient, or
incidental to the accomplishment of the purposes of the Company;

(d)           execute any and all agreements,
contracts, documents, certifications, and instruments necessary or convenient
in connection with the management, maintenance and operation of Property, or in
connection with managing the affairs of the Company, including executing
amendments to the Agreement and the Articles of Organization in accordance with
the terms of the Agreement pursuant to any power of attorney granted by the
Members to the Managing Member;

(e)           borrow money and issue evidences of
indebtedness necessary, convenient or incidental to the accomplishment of the
purposes of the Company, and secure the same by mortgage, pledge, or other lien
on any Property;

(f)            execute, in furtherance of any or
all of the purposes of the Company, any deed, lease, mortgage, deed of trust,
mortgage note, promissory note, bill of sale, contract or other instrument
purporting to convey or encumber any or all of the Property;

(g)           prepay in whole or in part,
refinance, recast increase, modify or extend any liabilities affecting the
Property and in connection therewith execute any extensions or renewals of
encumbrances on any or all of the Property;

(h)           care for and distribute funds to the Members
by way of cash, income, return of capital or otherwise, all in accordance with
the provisions of this Agreement; and perform all matters in furtherance of the
objectives of the Company or this Agreement

(i)            appoint officers and agents of the
Company and delegate to such Persons authority granted to the Managing Member
hereunder;

 8
 

 

(j)            contract on behalf of the Company
for the employment and services of employees and/or independent contractors,
such as lawyers, accountants, and Members, and delegate to such Persons the
duty to manage or supervise any of the assets or operations of the Company, and
enter into agreements with respect to their activities on behalf of the
Company;

(k)           engage in any kind of activity and
perform and carry out contracts of any kind (including contracts of insurance
covering risks to Property and Managing Member’s liability) necessary or
incidental to, or in connection with, the accomplishment of the purposes of the
Company, as may be lawfully carried on or performed by a limited liability
company under the laws of each state in which the Company is then formed or
qualified;

(l)            vote securities held by the Company;

(m)          make any and all elections for
federal, state and local tax purposes including, without limitation, any election,
if permitted by applicable law:  (i) to
adjust the basis of Property pursuant to Code Sections 754, 734(b), and 743(b),
or comparable provisions of state or local law, in connection with transfers of
Interests and Company distributions; (ii) to extend the statute of limitations
for assessment of tax deficiencies against the Members with respect to
adjustments to the Company’s federal, state, or local’ tax returns; and (iii)
to represent the Company and the Members before taxing authorities or courts of
competent jurisdiction in tax matters affecting the Company and the Members in
their capacities as Members and to execute any agreements or other documents
relating to or affecting such tax matters, including agreements or other
documents that bind the Members with respect to such tax matters or otherwise
affect the rights of the Company or the Members;

(n)           take, or refrain from taking, all
actions, not expressly proscribed or limited by this Agreement as may be
necessary or appropriate to accomplish the purposes of the Company;

(o)           institute, prosecute, defend, settle,
compromise, and dismiss lawsuits or other judicial or administrative
proceedings brought on or in behalf of, or against the Company or the Members
in connection with activities arising out of, connected with, or incidental to
this Agreement, and to engage counsel or others in connection therewith; and

(p)           acquire and enter into any contract
of insurance which the Managing Member reasonably deems necessary and proper
for the protection of the Company, for the conservation of any asset of the
Company, or for any purpose beneficial to the Company.

Section 5.2             Right to Rely upon Managing
Member.  Any Person dealing with the
Company may rely (without duty of further inquiry) upon a certificate signed by
the Managing Member as to:

(a)           the identity of the Managing Member
or any other Member;

 9
 

 

(b)           the existence or nonexistence of any
fact or facts which constitute a condition precedent to acts by the Managing
Member or which are in any other manner germane to the affairs of the Company;

(c)           the Members who are authorized to
execute and deliver any instrument or document of the Company; or

(d)           any act or failure to act by the
Company or any other matter whatsoever involving the Company or any Member.

Section 5.3             Restrictions on Authority of
Managing Member.  Except with the
prior written consent of all of the Members, the Managing Member shall not have
the authority to:

(a)           do any act in contravention of this
Agreement;

(b)           knowingly perform any act that would
subject any Member to personal liability for debts or obligations of the
Company in any jurisdiction;

(c)           engage in any activity which
substantially changes the nature of the Company’s business;

(d)           sell all or a substantial portion of
the Property of the Company;

(e)           merge or consolidate the Company with
or into another entity;

(f)            convert the Company, by whatever
means, into a corporation or another form of business entity; or

(g)           dissolve or liquidate the Company.

Section 5.4             Duties and Obligations of the
Managing Member.  The Managing Member
shall:

(a)           take all actions which may be
necessary or appropriate (i) for the continuation of the Company’s valid
existence as a limited liability company under the laws of the State of
Connecticut (and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Members or to enable the
Company to conduct the business in which it is engaged) and (ii) for the
accomplishment of the Company’s purposes, including the acquisition,
development maintenance, preservation and operation of Property in accordance
with the provisions of this Agreement and applicable laws and regulations;

(b)           devote to the Company such time as
may be necessary for the proper performance of all duties hereunder in the
discretion of the Managing Member;

 10

 

(c)           be under a fiduciary duty to conduct
the affairs of the Company in the best interests of the Company and of the
Members, including the safekeeping and use of all of the Property and the use
thereof for the exclusive benefit of the Company;

(d)           use its reasonable efforts to cause
the Company to be formed, reformed, qualified or registered under assumed or
fictitious name statutes or similar laws in any state or country in which the
Company owns property or transacts business if such formation, reformation,
qualification or registration is necessary in order to protect the limited
liability of the Members or to permit the Company lawfully to own property or
transact business; and

(e)           manage and control the affairs of the
Company and in doing so use its reasonable efforts to carry out the purpose of
the Company for the benefit of all of the Members and in exercising its powers,
recognize its fiduciary responsibility to the Company.

Section 5.5             Compensation and Expenses.

(a)           No Member shall receive any salary,
fee or draw for services rendered to or on behalf of the Company, except as the
Managing Member shall determine.

(b)           The Managing Member may charge the
Company for expenses reasonably incurred in connection with the Company’s
business and operations.  For avoidance
of doubt, the Members acknowledge that IBGI has been formed to provide access
by the Company to the capital markets and IBG Holdings has been formed to
assure a continuity in management of the Company during the transition to
public ownership through IBGI.  The
Members acknowledge and agree that the expenses of operation and maintenance of
IBGI and IBG Holdings shall be borne by the Company as an expense of operations
pursuant hereto.

Section 5.6             Signatures; Power of Attorney.  Subject to the limitations imposed by Section
5.1, the signature of the Managing Member shall be necessary and sufficient to
convey title to any real property owned by the Company or to execute any
promissory notes, trust deeds, mortgages or other instruments of hypothecation.  All of the Members agree that a copy of
appropriate provisions of this Agreement may be shown to the appropriate
parties in order to confirm the same, and further agree that the signature of
the Managing Member shall be sufficient to execute any documents necessary to
effectuate this or any other provision of this Agreement.  All of the Members do hereby appoint the
Managing Member as their attorney-in-fact for the execution of any or all of
the documents described herein.

ARTICLE VI.

RECORDS AND ACCOUNTING

Section 6.1             Records and Accounting.  Proper and complete records and books of
account of the business of the Company shall be maintained at the Company’s
principal place of business.  All books
and records of the Company shall be kept in accordance with Generally Accepted
Accounting Principles in the United States (U.S. “GAAP”).

 11
 

 

Section 6.2             Tax Information.  Prior to the day on which the Company’s tax
return for such fiscal year is filed, the Managing Member shall cause to be
delivered to each Person who was a Member at any time during such fiscal year
all information necessary for the preparation of such Member’s federal income
tax return, including a statement showing such Member’s distributive share of
the Company’s income, gains, losses, deductions, credits and tax preferences
for the taxable year of the Company ending within or with its taxable year for
federal income tax purposes, and the amount of any distribution made to or for
the account of such Member pursuant to this Agreement; provided, however, that
within ninety (90) days after the end of each fiscal year, the Managing Member
shall cause to be delivered to each such Person an estimate of all such
information.

Section 6.3             Tax Returns.  The Managing Member shall cause all required
federal and state and local information returns for the Company to be prepared
and timely filed with the appropriate authorities.

Section 6.4             Accounting Decisions.  All decisions as to accounting principles
used for financial reporting and tax accounting purposes shall be made by the
Managing Member on a basis that is acceptable to the Company’s accountants
notwithstanding any other provisions to the contrary contained in this
Agreement.

Section 6.5             Tax Elections.  The Managing Member may, from time to time,
make the tax elections it deems necessary, in its sole discretion to carry out
the business of the Company or the purposes of this Agreement.  However, the Managing Member shall cause the
Company to elect, pursuant to Code Section 754 of the Code, to adjust the basis
of Company property upon the transfer of an Interest or distribution of
property as provided by the Code.

Section 6.6             Fiscal Year.  The fiscal year of the Company shall be the
calendar year.

Section 6.7             Tax Matters.  The Managing member shall act for the Company
as “tax matters partner” for purposes of Section 6231(a)(7) of the Code.

ARTICLE VII.

AMENDMENTS; MEETINGS; VOTING

Section 7.1             Amendment.  Except as otherwise required by law or as
provided elsewhere in this Agreement, this Agreement may be amended in any
respect only with the unanimous consent of the Members.

Section 7.2             Amendment to Articles of
Organization.  In the event this
Agreement shall be amended pursuant to this Article VII, the Managing Member
shall amend the Articles of Organization to reflect such change if the Managing
Member deems such amendment to be necessary.

 12
 

 

Section 7.3             Meetings of Members.  Meetings for purposes of voting shall be
called by the Managing Member who shall be required to give written notice
thereof to all Members entitled to vote at such meeting no less than ten (10)
days and no more than thirty (30) days prior to the date of such meeting.  Any such notice shall state briefly the
purpose of the meeting, which shall be held at a reasonable time and at the principal
office of the Company or such other location as shall be stated in the notice.

Section 7.4             Proxy of Member.  Each Member may authorize any Person or
Persons to act for it by proxy on all matters in which a Member is entitled to
participate, including waiving notice of any meeting or voting or participating
at a meeting.  Every proxy must be signed
by the Member or its attorney-in-fact. 
Every proxy shall be revocable at the pleasure of the Member executing
it.

Section 7.5             Consent or Voting.

(a)           All voting shall be based on the
Shares outstanding and not the number of Members.

(b)           In the event that the consent or vote
of the Members shall be required for any action hereunder and no specific
proportion is stated herein, the affirmative vote of the Members holding more
than fifty percent (50%) of the total number of Shares outstanding shall be
required for such action.  Where a
consent or vote of a specified percentage of Members or Interests is required,
the affirmative vote of Members holding at least such specified percentage of
the total number of Shares outstanding shall be required.

ARTICLE VIII.

PROVISIONS RELATING TO MEMBERS

Section 8.1             Investment Representation.  Each Member represents and warrants that (a)
its Interest is acquired for investment and not with a view to the resale or
other distribution thereof, (b) it is understood that none of the Interests
have been registered under the Securities Act of 1933 or any similar
legislation in any other country or jurisdiction, and that there may be no
market for any Interest, and (c) the Interest is obtained without the benefit
of any representation, warranty, or other assurance with respect to the
financial condition or prospects of the Company or its Members or other
representatives thereof.

Section 8.2             Restrictions on Member’s
Transfer of an Interest.

(a)           Except as provided in paragraph (b)
of this Section 8.2, no Member may Transfer all or any portion of its Shares or
any rights or entitlements deriving from its Interest in the Company at any
time or howsoever acquired without the written consent of the remaining
Members, which consent may be denied for any reason whatsoever.

 13
 

 

(b)           Shares may be Transferred from time
to time by IBG Holdings to IBGI in exchange for the proceeds of the sale by
IBGI of IBGI Common Stock pursuant to and in accordance with the Exchange
Agreement.

Section 8.3             Documentation Regarding
Interests.  The Members’ Interests
shall be documented and recorded by an entry on the Company’s books and shall
not be certificated or otherwise documented except as may be determined by the
Managing Member.  If any Transfer of a
Member’s Interest is permitted pursuant to the terms of this Agreement, such
Transfer shall after receipt by the Managing Member of all required
documentation thereof be made by a proper entry on the books of the
Company.  Any Transfer which is required
pursuant to the terms of the Exchange Agreement may be effected by the Managing
Member without further action by the Transferring Member.

Section 8.4             Interests and Shares.  Upon the date of this Agreement, the number
of Shares into which the Interests are divided corresponds to the sum of the
number of shares of IBGI Common Stock outstanding and common shares
(representing membership interests) of IBG Holdings outstanding.  It is the intent of the Members that this
relationship remain constant throughout the term of the Company.  It is anticipated that from time to time and
without regard to the Exchange Agreement, IBGI may issue additional shares of
IBGI Common Stock under incentive plans for employees (including IBGI’s 2007
Stock Incentive Plan), in exchange for capital or in other arrangements that
benefit the Company.  In any such case,
it is the intention of the Members that a corresponding number of Shares shall
be issued to IBGI in exchange for the consideration received by it for its
issuance of additional shares of IBGI Common Stock.  If any shares of IBGI Common Stock are issued
subject to restrictions resulting in forfeiture to IBGI or are otherwise
redeemed by IBGI, a corresponding number of Shares of the Company shall be
surrendered to the Company by IBGI for cancellation.  Similarly, if any common shares of IBG
Holdings are forfeited to IBG Holdings and as a result thereof are no longer
outstanding, a corresponding number of Shares of the Company shall be
surrendered to the Company by IBG Holdings for cancellation.  These and other adjustments to the number of
Shares outstanding may be made from time to time as necessary to properly
reflect the relative Interests of the Members.

ARTICLE IX.

MANAGING MEMBER

Section 9.1             Appointment of Managing Member.  By the Members’ execution of this Agreement,
IBGI is appointed as Managing Member.

Section 9.2             Permitted Transfers.  A Managing Member may transfer all or any
portion of its Interest to any Person only with the consent of the remaining
Members.

Section 9.3             Resignation of Managing Member.  Upon ninety (90) days prior written notice,
any Managing Member may resign.  In the
event of the resignation of a Managing Member, a successor Managing Member
shall be appointed as provided in Section 9.4 below.

 14
 

 

Section 9.4             Successor Managing Member.  If the Managing Member ceases to act as
Managing Member, the successor Managing Member shall be selected by the
majority vote of the Members.  The
successor Managing Member shall become a Managing Member upon its written
acceptance of the appointment and written agreement to be bound as a Managing
Member under the terms of this Agreement. 
In the event a successor Managing Member is designated and accepts the
designation, the successor Managing Member shall assume all the duties and
obligations of the predecessor Managing Member set forth in this Agreement

Section 9.5             Rights of Resigned Managing
Member.

(a)           The resignation of a Managing Member
shall not affect its right to reimbursement for expenses incurred.

(b)           A resigned Managing Member (which
term, for purposes of this section, shall include its successors and assigns)
shall continue to have the rights and obligations of a Member with respect to
its continuing Interest, if any.

ARTICLE X.

ADMISSION AND WITHDRAWAL OF MEMBERS

Section 10.1           Admission.  No Person, other than an existing Member,
shall acquire an Interest directly from the Company or otherwise be admitted as
a Member of the Company except with the consent of the Managing Member and an
approving vote of the remaining Members. 
Any Person to be admitted as a Member shall execute such documents and
instruments, including an agreement to be bound by the terms of this Agreement,
and shall satisfy such other conditions as the Managing Member shall require.

Section 10.2           Withdrawal and Dissociation.  No Member shall be permitted to withdraw from
the Company without the consent of the Managing Member and an approving vote of
the remaining Members.  Anything in
Section 34-180 of the Act to the contrary notwithstanding, except as expressly
provided herein, no Member shall be entitled to receive any distribution of
money or other property prior to the dissolution and liquidation of the Company.

ARTICLE XI.

DISSOLUTION AND LIQUIDATION

Section 11.1           Dissolution.  The Company shall continue until the
occurrence of any one or more of the following events:

(a)           such time that the Managing Member,
with an approving vote of the remaining Members, determines to dissolve the
Company; or

 15
 

 

(b)           upon the bankruptcy, resignation,
dissolution, or withdrawal of the Managing Member, or upon the occurrence of
any event which, under the provisions of the Act, would cause a dissolution; provided,
however, that upon such an occurrence, no dissolution shall occur if the
Members, by a majority vote, elect to continue the business of the Company and
appoint a successor Managing Member in accordance with Section 9.4.

No Member has the right, on account of any dissolution
of the type described in this Section 11.1, to have the Company’s assets
applied to discharge its liabilities or to have the value of its Interest
ascertained or paid for.

Section 11.2           Winding-Up of Affairs.  Upon the dissolution of the Company in accordance
with the provisions of this Agreement, the Company shall immediately commence
winding up its affairs and shall file a notice of dissolution or
cancellation.  The winding-up of the
affairs of the Company and the distribution of its assets shall be conducted
exclusively by the Liquidator, who is hereby authorized to do all acts
authorized by law for these purposes. 
Without limiting the generality of the foregoing, the Liquidator, in
carrying out such winding-up and distribution, shall have full power and
authority to sell all or any of the Company assets or to distribute the same in
kind to the Members.  Any assets
distributed in kind shall be subject to all operating agreements or other
agreements relating thereto which shall survive the termination of the
Company.  Following the winding-up of the
Company, the proceeds from liquidation of Company assets shall be applied and
distributed as set forth in Section 11.3.

Section 11.3           Liquidating Distributions.

(a)           Following dissolution of the Company
and incident to the winding-up of the Company’s affairs, all debts and
liabilities of the Company shall be discharged in the order of priority
provided by law.  The fair market value
of the respective remaining assets of the Company shall then be determined; with
the fair market value of any assets other than cash being determined by an
independent appraiser selected by the Liquidator with the approval of a
majority vote of the Members.  Thereupon,
the assets of the Company shall be distributed to the Members in proportion to
the number of Shares held by each Member in relation to the aggregate number of
outstanding Shares.  For purposes of such
allocation only, it shall be assumed that the assets of the Company other than cash
had been sold for an amount equal to their fair market value as determined
above, and that the income, gain or loss from such sale had been allocated in
accordance with Article III.  Each Member
shall receive its share of the assets in cash or in kind, and the proportion of
such share that is received in cash may vary from Member to Member, all as the
Liquidator may decide.  Except as
provided below, if such distributions are insufficient to return to any Member
the full amount of its Capital Contributions, such Member shall have no
recourse against the Company or any other Member.

(b)           The proceeds of liquidation and any
unliquidated assets of the Company shall be distributed as provided in Section
11.3(a).  Any reserves established by the
Liquidator in the course of such distribution shall be held for so long as the
Liquidator shall deem necessary in a special account maintained by the
Liquidator for the purpose of paying contingent or unforeseen liabilities or
obligations.  At the time the Liquidator
determines that there is no longer 

 16
 

 

a need for the reserve,
it shall be distributed in the order of priority established in Section
11.3(a).  The distribution of the reserve
shall commence where the initial distribution of the assets of the Company
ended.  For purposes of this Section
11.3, expenses of dissolution and liquidation shall be treated as debts and
obligations of the Company.

ARTICLE XII.

MISCELLANEOUS

Section 12.1           Notices.  All notices, consents, approvals, requests,
demands or other communications (“notices”) which any of the parties to this
Agreement may desire to be required to give hereunder, shall be in writing and
shall be deemed properly given if (i) hand delivered, (ii) sent by private or
public mail carrier which provides evidence of delivery, (iii) sent by United
States, certified or registered mail, postage prepaid, return receipt
requested, (iv) sent by facsimile transmission or (v) sent by electronic mail,
in each case addressed as follows:

(a)           to the Company, or the Managing
Member, at the principal place of business of the Company or to such other
addresses as may be designated by the Managing Member by notice to all Members
pursuant to the terms of this Section; and

(b)           to Members at the address set forth
on the signature page hereto or to such other addresses as may be designated by
the respective Members by notice to the Company from time to time.

Any distribution
made, or notice given, to a Member at its last known address as shown on the
records of the Company shall be considered effective three (3) days after
deposit in any post office or branch post office, regularly maintained by the
United States government and shall completely satisfy the obligations of the
Company hereunder in respect of such distribution or notice.  Any notice to be given by any Member may be given
by counsel or attorney-in-fact for that Member.

Section 12.2           Binding Effect.  Unless otherwise provided herein, every
covenant, term, and provision of this Agreement shall be binding upon and inure
to the benefit of the Members and their respective heirs, legatees, legal
representatives, successors, transferees, and assigns, and shall inure to the
benefit of the Company, its successors and assigns.

Section 12.3           Construction.  Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against the Company or any Member.

Section 12.4           Headings.  Section and other headings contained in this
Agreement are for reference purposes only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision hereof.

 17
 

 

Section 12.5           Severability.  Every provision of this Agreement is intended
to be severable.  If any term or
provision hereof is illegal or invalid for any reason whatsoever, such legality
or invalidity shall not affect the validity or legality of the remainder of
this Agreement.

Section 12.6           Incorporation by Reference.  Every exhibit, schedule, and other appendix
attached to this Agreement and referred to herein is hereby incorporated in
this Agreement by reference.

Section 12.7           Further Action.  Each Member, upon the request of the Managing
Member, agrees to perform all further acts and execute, acknowledge, and
deliver any documents which may be reasonably necessary, appropriate, or
desirable to carry out the provisions of this Agreement.

Section 12.8           No Other Beneficiaries.  The rights and obligations of the Members
under this Agreement are for the exclusive benefit of the Members, and no
creditor or other party having dealings with the Company shall have any right
or claim hereunder.

Section 12.9           Variation of Pronouns.  All pronouns and any variations thereof shall
be deemed to refer to masculine, feminine, or neuter, singular or plural, as
the identity of Member or Members may require.

Section 12.10         Governing Law.  The laws of the State of Connecticut shall
govern the validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the Members.  In the event this Agreement is in conflict
with any other agreement among any of the parties hereto, the provisions of
this Agreement shall prevail.

Section 12.11         Waiver of Action for Partition.  Each of the Members irrevocably waives any
right that it may have to maintain any action for partition with respect to any
of the Property of the Company.

Section 12.12         Counterpart Execution.  This Agreement may be executed in any number
of counterparts with the same effect as if all of the Members had signed the
same document.  All counterparts shall be
construed together and shall constitute one agreement.

Section 12.13         Sole and Absolute Discretion.  Except as otherwise provided in this
Agreement, all actions which the Managing Member may take and all
determinations which the Managing Member may make pursuant to this Agreement
may be taken and made at the sole and absolute discretion of the Managing
Member.  In the event there shall be more
than one Managing Member, all such actions and determinations shall be taken
and made by the unanimous vote of all Managing Members.

Section 12.14         Non-Arbitrability.  Notwithstanding any other provision of this
Agreement or any rules or regulations of any regulatory body, no controversy,
claim, or breach arising out of or relating to this Agreement shall be submitted
for settlement to a panel of arbitrators, and the 

 

 18
 

 

Members agree that any
such disputes shall be determined only by a court having jurisdiction thereof
in accordance with this Agreement.

[Signatures appear
on the following page.]

 19

 

IN WITNESS WHEREOF, the
parties have entered into this Agreement as of the date and year first above
set forth.

	
  

  	
   

  	
  IBG HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One Pickwick Plaza 

  
	
   

  	
   

  	
  Greenwich, CT 06830 

  
	
   

  	
   

  	
  Facsimile No.: (203) 618-5934

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas
  Peterffy

  
	
   

  	
   

  	
   

  	
  Name: Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Title: Managing Member

  

 

	
  

  	
   

  	
  INTERACTIVE BROKERS GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One Pickwick Plaza

  
	
   

  	
   

  	
  Greenwich, CT 06830

  
	
   

  	
   

  	
  Facsimile No.: (203) 618-5934

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas
  Peterffy

  
	
   

  	
   

  	
   

  	
  Name: Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Title: Chairman, Chief Executive 

  
	
   

  	
   

  	
   

  	
  Officer and PresidentExhibit 10.2

EXCHANGE AGREEMENT

by and among

INTERACTIVE BROKERS GROUP, INC.,

IBG HOLDINGS LLC,

IBG LLC

and

MEMBERS OF IBG LLC

Dated as of May 3, 2007

 

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  PAGE

  
	
  ARTICLE I   DEFINITIONS

  	
   

  	
  1

  
	
  SECTION 1.1. 

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.2. 

  	
   

  	
  General

  	
   

  	
  4

  
	
  SECTION 1.3. 

  	
   

  	
  References to Time

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II   REPRESENTATION AND WARRANTIES

  	
   

  	
  5

  
	
  SECTION 2.1. 

  	
   

  	
  Representations and Warranties of IBG LLC Members

  	
   

  	
  5

  
	
  SECTION 2.2. 

  	
   

  	
  Representations and Warranties of IBG LLC, IBGI and
  IBG Holdings

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III   CONTRIBUTION AND INITIAL
  PURCHASE

  	
   

  	
  6

  
	
  SECTION 3.1. 

  	
   

  	
  Contribution

  	
   

  	
  6

  
	
  SECTION 3.2. 

  	
   

  	
  Initial Purchase

  	
   

  	
  6

  
	
  SECTION 3.3. 

  	
   

  	
  Effect of Contribution and Initial Purchase

  	
   

  	
  7

  
	
  SECTION 3.4. 

  	
   

  	
  Class B Common Stock

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV   PURCHASES AND REDEMPTIONS

  	
   

  	
  7

  
	
  SECTION 4.1. 

  	
   

  	
  Elective Redemptions

  	
   

  	
  7

  
	
  SECTION 4.2. 

  	
   

  	
  Mandatory Redemptions

  	
   

  	
  8

  
	
  SECTION 4.3. 

  	
   

  	
  Purchases and Redemptions Generally

  	
   

  	
  9

  
	
  SECTION 4.4. 

  	
   

  	
  IBG Holdings Shares

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V   RELATIONSHIP AMONG THE PARTIES

  	
   

  	
  10

  
	
  SECTION 5.1. 

  	
   

  	
  Parity of IBG Holdings Shares and Shares of Common
  Stock

  	
   

  	
  10

  
	
  SECTION 5.2. 

  	
   

  	
  IBG LLC Further Assurances

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI   MISCELLANEOUS

  	
   

  	
  11

  
	
  SECTION 6.1. 

  	
   

  	
  Entire Agreement

  	
   

  	
  11

  
	
  SECTION 6.2. 

  	
   

  	
  Expenses

  	
   

  	
  11

  
	
  SECTION 6.3. 

  	
   

  	
  Notices

  	
   

  	
  11

  
	
  SECTION 6.4. 

  	
   

  	
  Amendment, Modification or Waiver

  	
   

  	
  12

  
	
  SECTION 6.5. 

  	
   

  	
  Successors and Assigns; No Third Party Beneficiaries

  	
   

  	
  12

  
	
  SECTION 6.6. 

  	
   

  	
  Counterparts

  	
   

  	
  12

  
	
  SECTION 6.7. 

  	
   

  	
  Negotiation

  	
   

  	
  12

  
	
  SECTION 6.8. 

  	
   

  	
  Specific Performance

  	
   

  	
  13

  
	
  SECTION 6.9. 

  	
   

  	
  Governing Law

  	
   

  	
  13

  
	
  SECTION 6.10.

  	
   

  	
  Jurisdiction

  	
   

  	
  13

  
	
  SECTION 6.11.

  	
   

  	
  Interpretation

  	
   

  	
  13

  
	
  SECTION 6.12.

  	
   

  	
  Severability

  	
   

  	
  13

  

 

 i

 

EXCHANGE AGREEMENT

 

This EXCHANGE
AGREEMENT (this “Agreement”), dated as of May 3, 2007, by and among
Interactive Brokers Group, Inc., a Delaware corporation (“IBGI”), IBG
Holdings LLC, a Delaware limited liability company (“IBG Holdings”), IBG
LLC, a Connecticut limited liability company (formerly known as Interactive
Brokers Group LLC, “IBG LLC”), and the members of IBG LLC party hereto
(the “IBG LLC Members,” and together with IBGI, IBG Holdings and IBG
LLC, the “Parties” and each a “Party”).

RECITALS

WHEREAS, IBGI
intends to consummate an initial public offering (the “IPO”) of shares
of its Class A common stock, par value $0.01 per share (the “Common Stock”);

WHEREAS, in
connection with the IPO, the IBG LLC Members desire to contribute their
membership interests in IBG LLC to IBG Holdings in exchange for IBG Holdings
membership interests pursuant to the terms of this Agreement;

WHEREAS, in
connection with the IPO, IBG Holdings desires to sell certain of its membership
interests in IBG LLC to IBGI upon consummation of the IPO for an aggregate
consideration consisting of: (a) the net proceeds from the IPO, and (b) an
amount equal to certain tax benefits to be realized by IBGI over time, in
accordance with the Tax Receivable Agreement (as defined below);

WHEREAS, IBGI
believes that it is in its best interest to increase its ownership of
membership interests of IBG LLC over time and agrees to purchase from IBG
Holdings from time to time using the proceeds of periodic offerings of shares
of Common Stock, and IBG Holdings agrees to sell to IBGI, membership interests
in IBG LLC, commencing one year after consummation of the IPO; and

WHEREAS, IBG
LLC agrees to effect such transfers of its membership interests and to take
such actions as are otherwise necessary to facilitate the foregoing, including
when mutually agreed to redeem IBG LLC membership interests held by IBG
Holdings in lieu of a direct sale of such membership interests to IBGI.

NOW,
THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, the Parties hereby agree as follows:

ARTICLE
I

DEFINITIONS

SECTION 1.1.  Definitions.  As used in this Agreement, the following
terms shall have the meanings set forth below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

 

“Agreement”
has the meaning assigned to such term in the preamble to this Agreement, and
includes any amendments or modifications to this Agreement after the date
hereof.

“Closing
Date” means the date hereof.

“Common
Stock” has the meaning set forth in the recitals.

“Contribution”
has the meaning set forth in Section 3.1.

“Electing
Member” has the meaning set forth in Section 4.1(b)(ii).

“Elective
Redemption” has the meaning set forth in Section 4.1(a).

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, together with
the rules and regulations promulgated thereunder.

“General
Redemption Date” has the meaning assigned to such term in Section 4.1(a).

“Governmental
Authority” means any national, local or foreign (including U.S. federal,
state or local) or supranational (including European Union) governmental,
judicial, administrative or regulatory (including self-regulatory) agency,
commission, department, board, bureau, entity or authority of competent
jurisdiction.

“IBG
Holdings Members” has the meaning assigned to the term “Members” in the IBG
Holdings Operating Agreement.

“IBG
Holdings Operating Agreement” means the Limited Liability Company Agreement
of IBG Holdings LLC, dated as of May 3, 2007, entered into by and among the
signatories thereto, as same may be amended from time to time.

“IBG
Holdings Series A Shares” has the meaning assigned to the term “Series A
Shares” in the IBG Holdings Operating Agreement.

“IBG
Holdings Series B Shares” has the meaning assigned to the term “Series B
Shares” in the IBG Holdings Operating Agreement.

“IBG
Holdings Series C Shares” has the meaning assigned to the term “Series C
Shares” in the IBG Holdings Operating Agreement.

“IBG
Holdings Shares” has the meaning assigned to the term “Common Shares” in
the IBG Holdings Operating Agreement.

“IBGI Board”
means the board of directors of IBGI.

“IBG LLC
Members” has the meaning set forth in the recitals.

“IBG LLC
Operating Agreement” means the Amended and Restated Operating Agreement of
IBG LLC, dated as of May 3, 2007, entered into by and between IBG Holdings LLC
and Interactive Brokers Group, Inc., as same may be amended from time to time.

 2
 

 

“IBG LLC
Shares” has the meaning assigned to the term “Shares” in the IBG LLC
Operating Agreement.

“Incumbent
IBGI Board” means the members of the IBGI Board who were members of the
IBGI Board immediately after the consummation of the IPO; provided,
however,
that any individual becoming a director subsequent to the consummation of the
IPO whose election, or nomination for election by IBGI’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent IBGI Board shall be considered as though such individual were a
member of the Incumbent IBGI Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the IBGI Board.

“Initial
Purchase” has the meaning assigned to such term in Section 3.2.

“IPO”
has the meaning assigned to such term in the recitals.

“IPO Date”
means the date of the closing of the IPO.

“IPO
Effective Date” means the date of effectiveness of the Registration
Statement.

“Mandatory
Redemption” has the meaning assigned to such term in Section 4.2(a).

“Mandatory
Redemption Notice” has the meaning assigned to such term in Section
4.2(b)(ii).

“Party”
or “Parties” has the meaning assigned to such term in the preamble to
this Agreement.

“Public
Offering” means an underwritten or best efforts public offering pursuant to
an effective registration statement under the Securities Act, other than
pursuant to a registration statement on Forms S-4 or S-8 or any similar or
successor form.

“Public
Offering Redemption Price” has the meaning ascribed to such term in Section
4.1(b)(iii).

“Redemption
Request” has the meaning set forth in Section 4.1(b)(ii)(B).

“Registration
Statement” means, as applicable, the registration statement on Form S-1 of
IBGI under the Securities Act relating to the Common Stock to be issued in the
IPO, as amended or supplemented from time to time.

“SEC”
means the Securities and Exchange Commission.

“Securities
Act” means the Securities Act of 1933, as amended, together with the rules
and regulations promulgated thereunder.

 3
 

 

“Stock
Price” means, as of any particular date, the volume weighted average
closing price of a share of Common Stock for the thirty (30) most recent
trading days on the primary national securities exchange on which the Common
Stock is traded, as reported by Bloomberg L.P. or, if Bloomberg L.P. is not
available, as determined by another reputable third-party information source
selected by IBGI.

“Tax
Receivable Agreement” means the Tax Receivable Agreement to be entered into
by and between IBGI and IBG Holdings, substantially in the form of Exhibit A
hereto, with such changes as may be determined by the parties thereto.

SECTION 1.2.  General.  Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the
masculine gender shall include the feminine and neuter genders and vice versa,
and references to any agreement, document or instrument shall be deemed to
refer to such agreement, document or instrument as amended, supplemented or
modified from time to time. When used herein:

(a)           the word “or” is not exclusive;

(b)           the words “including,” “includes,” “included”
and “include” are deemed to be followed by the words “without limitation”;

(c)           the terms “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision;

(d)           the word “person” means any
individual, corporation, limited liability company, trust, joint venture,
association, company, partnership or other legal entity or a Governmental Authority;
and

(e)           all section, paragraph or clause
references not attributed to a particular document shall be references to such
parts of this Agreement, and all exhibit, annex and schedule references not
attributed to a particular document shall be references to such exhibits,
annexes and schedules to this Agreement.

SECTION 1.3.  References to Time.  All references in this Agreement to times of
day shall be to Greenwich, Connecticut time.

ARTICLE II

REPRESENTATION AND WARRANTIES

SECTION
2.1.  Representations and Warranties
of IBG LLC Members.

(a)           Each IBG LLC Member severally
represents and warrants to each of IBG LLC, IBG Holdings and IBGI, as of the
date hereof, that (i) this Agreement constitutes the legal, valid and binding
obligation of such IBG LLC Member, enforceable against such IBG LLC Member in
accordance with its terms (subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles);
(ii) neither the execution and delivery of this 

 4
 

Agreement by such IBG LLC Member nor the consummation
of the transactions contemplated herein conflicts with or results in a breach
of any of the terms, conditions or provisions of any agreement or instrument to
which such IBG LLC Member is a party or by which the material assets of such
IBG LLC Member are bound, or constitutes a default under any of the foregoing,
or violates any law or regulation; (iii) there are no actions, suits or proceedings
pending, or, to the knowledge of such IBG LLC Member, threatened against or
affecting such IBG LLC Member or such IBG LLC Member’s assets in any court or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality which, if adversely
determined, would impair the ability of such IBG LLC Member to perform this
Agreement; (iv) the performance of this Agreement will not violate any order,
writ, injunction, decree or demand of any court or federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality to which such IBG LLC Member is subject; and (v) no statement,
representation or warranty made by such IBG LLC Member in this Agreement, nor
any information provided by such IBG LLC Member for inclusion in a registration
statement filed by IBGI, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements, representations or warranties contained herein or
information provided therein not misleading; and

(b)           Each IBG LLC Member severally
represents and warrants to each of IBG LLC, IBG Holdings and IBGI, as of the
date hereof, that such IBG LLC Member has good, valid and marketable title to
the IBG LLC membership interests to be contributed to IBG Holdings pursuant to
Section 3.1 hereof, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind, other than pursuant to this
Agreement, the IBG LLC Operating Agreement or the IBG Holdings Operating
Agreement.

Each IBG LLC
Member shall promptly notify IBG LLC, IBG Holdings and IBGI of any breaches of
such representations or covenants.

SECTION 2.2.  Representations and Warranties of IBG LLC,
IBGI and IBG Holdings.

(a)           Each of IBG LLC, IBGI and IBG
Holdings represents that it has the requisite corporate or other power and
authority and has taken all corporate or other action necessary in order to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated by this Agreement; and

(b)           Each of IBG LLC, IBGI and IBG
Holdings represents that this Agreement has been duly executed and delivered by
it and constitutes a valid and binding agreement of it enforceable in
accordance with the terms thereof (assuming the due execution and delivery
thereof by the other Parties).

ARTICLE
III

CONTRIBUTION
AND INITIAL PURCHASE

SECTION 3.1.  Contribution.  On the IPO Effective Date, the IBG LLC
Members shall contribute their IBG LLC membership interests to IBG Holdings in
exchange for IBG Holdings

 5
 

Shares (the “Contribution”); provided that the
Contribution with respect to the IBG LLC membership interests held by Thomas
Peterffy individually shall not occur until immediately after giving effect to
the Initial Purchase described in Section 3.2 below.  Upon completion of the Contribution, IBG
Holdings shall issue to each IBG LLC Member IBG Holdings Shares in the series and
in the numbers set forth in such IBG LLC Member’s Contribution Notice and admit
such IBG LLC Member as an IBG Holdings Member pursuant to the IBG Holdings
Operating Agreement.  Upon the completion
of the Contribution, IBG LLC shall admit IBG Holdings as a member pursuant to
the IBG LLC Operating Agreement, and the books and records of IBG LLC shall be
updated to reflect the Contribution.

SECTION 3.2.  Initial Purchase.  On the IPO Effective Date, after giving
effect to the Contribution, IBG Holdings shall sell 40,000,000 IBG LLC Shares
to IBGI (the “Initial Purchase”) for an aggregate consideration
consisting of: (a) the sum of $1,177,892,000, such amount to be paid out of the
net proceeds of the IPO, and (b) an amount equal to the tax benefits to be
realized by IBGI over time, in accordance with the Tax Receivable Agreement, in
connection with the Initial Purchase. 
IBGI shall pay the cash consideration set forth in clause (a) above on
the IPO Date by wire transfer of immediately available funds to an account
designated in writing by IBG Holdings. 
Upon completion of the Initial Purchase, the Contribution with respect
to the IBG LLC membership interests held by Thomas Peterffy individually shall
be consummated, IBG LLC shall admit IBGI as its sole managing member pursuant
to the IBG LLC Operating Agreement, and the books and records of IBG LLC shall
be updated to reflect the Initial Purchase.

SECTION 3.3.  Effect of Contribution and Initial
Purchase.  On the IPO Effective Date,
in connection with the Contribution and the Initial Purchase, (a) IBGI and IBG
Holdings shall enter into the IBG LLC Operating Agreement, (b) IBG LLC shall
admit IBGI as its sole managing member pursuant to the IBG LLC Operating
Agreement, (c) IBG LLC shall admit IBG Holdings as a member pursuant to the IBG
LLC Operating Agreement, (d) IBG LLC shall have only two members (IBGI, which
will be its sole managing member, and IBG Holdings), and (e) the books and
records of IBG LLC shall be updated to reflect the Contribution and the Initial
Purchase.

SECTION 3.4.  Class B Common Stock.  On the IPO Effective Date, IBG LLC shall
transfer to IBG Holdings the 100 shares of Class B Common Stock, par value
$0.01 per share, of IBGI then held by IBG LLC, which shares represent all of
the authorized, issued and outstanding shares of such Class B Common Stock.

ARTICLE IV

PURCHASES AND REDEMPTIONS

SECTION 4.1.  Elective Redemptions.

(a)           Elective Redemptions. Each IBG
Holdings Member shall be entitled to cause the redemption of such IBG Holdings
Member’s IBG Holdings Shares (or portion thereof) so redeemable in accordance
with the following schedule and the procedures set forth in this Article IV:
(i) 10.0% of such IBG Holdings Member’s IBG Holdings Shares on the IPO Date, 
(ii) an

 6

additional 12.5% of such IBG Holdings Member’s IBG
Holdings Shares on each of the first seven anniversaries of the IPO Date, and
(iii) the remaining portion of such IBG Holdings Member’s IBG Holdings Shares
on the eighth anniversary of the IPO Date; provided that, a holder of IBG
Holdings Series C Shares may cause the redemption of its IBG Holdings Series C
Shares (x) only subsequent to the redemption of all of such holder’s IBG
Holdings Series B Shares and (y) only if such holder remains in compliance with
the covenants set forth in Sections 8.7 and 8.8 of the IBG Holdings Operating
Agreement.  Each redemption subsequent to
the IPO Date (an “Elective Redemption”) shall occur: (i) on or about the date
that is the first anniversary of the IPO Date and on or about each subsequent
anniversary date thereof (each such anniversary date, a “General Redemption
Date”), or (ii) if not on or about a General Redemption Date, with the
prior written consent of the managing member of IBG Holdings; provided
that, an IBG Holdings Member must be in compliance with all applicable
covenants and obligations under the IBG Holdings Operating Agreement in order
to remain entitled to cause an Elective Redemption.

(b)           Procedures.

(i)            Subject to clause (ii) below, each
Elective Redemption of IBG Holdings Shares shall be effected in accordance with
the IBG Holdings Operating Agreement.

(ii)           Except as otherwise provided in this
clause (ii), each IBG Holdings Member who shall be entitled to cause the
redemption of such IBG Holdings Member’s IBG Holdings Shares (or portion
thereof) so redeemable in accordance with Section 4.1(a) hereto (an “Electing
Member”) shall prepare and deliver to IBG Holdings and IBGI, for IBG LLC as
its managing member and for itself, a written request in the form attached
hereto as Exhibit C signed by such Electing Member (A) stating the
number of IBG Holdings Shares that such Electing Member desires to have
redeemed and (B) certifying that such Electing Member is entitled to cause the
redemption of the IBG Holdings Shares specified by such Electing Member and
that such Electing Member is the beneficial owner of such IBG Holdings Shares
(each such request, a “Redemption Request”).  A properly completed Redemption Request must
be delivered to IBG Holdings and IBGI not less than 60 days or more than 90
days prior to the General Redemption Date on which such Electing Member desires
to effect the Elective Redemptions in accordance with this Section 4.1.  Once delivered, a Redemption Request shall be
irrevocable.

(iii)          Upon receipt of all Redemption
Requests relating to a given General Redemption Date, unless otherwise
determined by IBGI, IBG LLC and IBG Holdings that the redemption of IBG
Holdings Shares will be funded as provided in Section 4.3(c), IBGI shall use
its commercially reasonable efforts to consummate a Public Offering of a number
of shares of Common Stock (adjusted per Section 5.1) approximately equal to the
aggregate number of IBG Holdings Shares specified in such Redemption Requests.  Upon consummation of such Public Offering,
IBGI shall purchase from IBG Holdings and IBG Holdings shall sell to IBGI that
number of IBG LLC Shares equal to the aggregate number of IBG Holdings Shares
specified in such Redemption Requests at a purchase price per share equal to
the offering price per share of Common Stock in such Public Offering minus any
applicable underwriting discounts or placement agency fees (the “Public
Offering Redemption Price”).  IBG LLC
shall bear the costs of the Public 

 

 

 7
 

Offering other than (i)
underwriting discounts or placement agency fees, which effectively shall be
borne by the IBG Holdings Members making such Redemption Requests and (ii)
legal fees and expenses of the selling IBG Holdings Members.

SECTION
4.2.  Mandatory Redemptions.

(a)           Mandatory Redemptions. IBG
Holdings (with the prior approval of the IBGI Board) shall be entitled to cause
one or more redemptions (each such redemption, a “Mandatory Redemption”) with
respect to all or some IBG Holdings Shares, in IBG Holdings’ discretion, at any
time following the first anniversary of the IPO Date. A Mandatory Redemption
shall occur with respect to IBG Holdings Shares without any action required on
the part of the IBG Holdings Member holding such IBG Holdings Shares.

(b)           Procedures.

(i)            Each Mandatory Redemption of IBG
Holdings Shares shall be effected in accordance with the IBG Holdings Operating
Agreement.

(ii)           In the event of a Mandatory
Redemption pursuant to Section 4.2(a), IBG Holdings shall provide written
notice (each such notice, a “Mandatory Redemption Notice”) to each of
IBGI and IBG LLC of such election, which notice shall state (A) whether the
Mandatory Redemption shall apply to all or some of the IBG Holdings Shares and,
if it shall apply only to some thereof, to which IBG Holdings Shares such
Mandatory Redemption shall apply, and (B) the anticipated date on which the
Mandatory Redemption shall be consummated.

(iii)          Upon receipt of a Mandatory Redemption
Notice, unless otherwise determined by IBGI, IBG LLC and IBG Holdings that the
redemption of IBG Holdings Shares will be funded as provided in Section 4.3(c),
IBGI shall use its commercially reasonable efforts to consummate a Public
Offering of a number of shares of Common Stock (adjusted per Section 5.1)
approximately equal to the number of IBG Holdings Shares specified in such
Mandatory Redemption Notice.  Upon
consummation of such Public Offering, IBGI shall purchase from IBG Holdings and
IBG Holdings shall sell to IBGI that number of IBG LLC Shares equal to the
aggregate number of IBG Holdings Shares specified in such Mandatory Redemption
Notice at a purchase price for share equal to the Public Offering Redemption
Price.

(iv)          In the event of any Mandatory
Redemption, IBG Holdings shall use its reasonable best efforts to deliver
notice thereof to the applicable IBG Holdings Members not less than 20 days
prior to the effective date of such Mandatory Redemption.

Notwithstanding anything to the contrary set forth
herein, any failure to provide such notice for any reason shall not affect the
validity or enforceability of any Mandatory Redemption.

SECTION 4.3.  Purchases and Redemptions Generally.

(a)           Public Offerings of Shares of
Common Stock.  Notwithstanding
anything to the contrary set forth herein, (i) IBGI shall not be obligated to
effect any purchase of IBG LLC 

 

 8
 

Shares unless and until IBGI
has consummated a Public Offering of a number of shares of Common Stock
(adjusted per Section 5.1) approximately equal to the aggregate number of IBG
Holdings Shares specified in Redemption Requests or a Mandatory Redemption
Notice, as applicable, and (ii) unless otherwise determined by IBGI, IBG
LLC and IBG Holdings that the redemption of IBG Holdings Shares will be funded
as provided in Section 4.3(c), IBG
Holdings shall not be obligated to effect any redemption of IBG Holdings Shares
unless and until IBG Holdings has received from IBGI the cash consideration for
the purchase of the applicable IBG LLC Shares. 
IBGI’s commercially reasonable efforts to consummate a Public
Offering shall include without limitation providing, and causing its
subsidiaries to provide, necessary and appropriate road show support for such
Public Offering.

(b)           Restriction on Participation in
Public Offerings by IBG Holdings Members. Unless otherwise permitted by the
managing member of IBG Holdings and the IBGI Board, no IBG Holdings Member may
acquire shares of Common Stock in connection with any Public Offering described
in Section 4.3(a).

(c)           Alternative Financing of
Redemptions.

(i)            At the option of, and upon mutual
agreement of, IBGI, IBG Holdings and IBG LLC, in lieu of, or in addition to,
consummating one or more Public Offerings as set forth in this Article IV,
redemptions of IBG Holdings Shares may be effected using cash on hand at IBG
LLC and corresponding redemptions by IBG LLC of its interests held by IBG
Holdings.  In such cases, the redemption
price per IBG Holdings Share and IBG LLC Share shall be the Stock Price of the
Common Stock as of the date of redemption.

(ii)           In the event a redemption of IBG
Holdings Shares is financed using a combination of a Public Offering and cash
on hand at IBG LLC, (A) IBG Holdings shall apply the proceeds from sales of IBG
LLC Shares to IBGI in conjunction with a Public Offering as follows: (x) first,
to redeem any IBG Holdings Series A Shares scheduled for redemption, (y)
second, to the extent there are remaining proceeds, to redeem any IBG Holdings
Series B Shares scheduled for redemption, and (z) third, to the extent there
are remaining proceeds, to redeem any IBG Holdings Series C Shares scheduled
for redemption, and (B) IBG Holdings shall apply the proceeds from redemptions
of IBG LLC Shares by IBG LLC from cash on hand at IBG LLC as follows: (x)
first, to redeem any IBG Holdings Series C Shares scheduled for redemption, (y)
second, to the extent there are remaining proceeds, to redeem any IBG Holdings
Series B Shares scheduled for redemption, and (z) third, to the extent there
are remaining proceeds, to redeem any IBG Holdings Series A Shares scheduled
for redemption.

(d)           Set-Off.  In the event an IBG Holdings Member becomes
liable to IBGI or any of its Affiliates for any reason, IBGI (or its
Affiliates, as applicable) may set-off such liabilities against any Purchase
consideration otherwise payable to IBG Holdings under Article IV of this
Agreement.

SECTION 4.4.  IBG Holdings Shares.  The IBG Holdings Shares, which shall be
issued by IBG Holdings on the IPO Effective Date pursuant to Section 3.1
hereof, are subject to certain 

 

 9
 

restrictions and other terms and conditions as set
forth in the IBG Holdings Operating Agreement.

ARTICLE
V

RELATIONSHIP
AMONG THE PARTIES

SECTION 5.1.  Parity of IBG Holdings Shares and Shares
of Common Stock.  It is the intention
of each of IBGI, IBG Holdings and IBG LLC that, unless otherwise determined by
the IBGI Board, the number of IBG LLC Shares outstanding shall at all times
equal the number of outstanding shares of Common Stock plus the number of IBG
Holdings Shares outstanding (such that the number of IBG LLC Shares and IBG
Holdings Shares would be proportionately adjusted as necessary in the event of
any issuance or repurchase by IBGI of shares of Common Stock), and each of
IBGI, IBG Holdings and IBG LLC agrees to cooperate to effect the intent of this
sentence.  In the event that IBGI shall:
(i) subdivide the outstanding shares of Common Stock into a greater number of
shares; (ii) combine the outstanding shares of Common Stock into a smaller
number of shares; (iii) pay a dividend or make a distribution on shares of
Common Stock in the form of shares of Common Stock; (iv) make a distribution on
shares of Common Stock in shares of its share capital other than Common Stock;
or (v) issue by reclassification of the outstanding shares of Common Stock any
shares of its share capital, then the number of IBG LLC Shares and IBG Holdings
Shares would be proportionately adjusted to the extent necessary to preserve
the economic rights of IBGI and IBG Holdings in IBG LLC, with such adjustment
to be determined in good faith by the IBGI Board in consultation with IBG Holdings.

SECTION 5.2.  IBG LLC Further Assurances.  IBG LLC agrees to effect transfers of its IBG
LLC Shares and to take such actions as are otherwise necessary to facilitate
the transactions contemplated by this Agreement.

ARTICLE
VI

MISCELLANEOUS

SECTION 6.1.  Entire Agreement.  This Agreement and the Schedules hereto shall
constitute the entire agreement among the Parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.

SECTION 6.2.  Expenses.

(a)           Except as expressly set forth in this
Agreement, all third party fees, costs and expenses paid or incurred in
connection with the transactions contemplated by this Agreement will be paid by
the Party incurring such fees, costs or expenses.

(b)           With respect to the IPO, IBG LLC
shall pay all third party costs, fees and expenses relating to the IPO, all of
the reimbursable expenses of the placement agent pursuant to the placement
agency agreement, and all of the costs of producing and filing the applicable
Registration Statement and printing, mailing and otherwise distributing the
prospectus contained in such Registration Statement.

 

 10
 

(c)           Subsequent to the IPO, IBG LLC shall
reimburse IBGI for all reasonable third party costs, fees and expenses incurred
by IBGI in the ordinary course of business, including all costs associated with
all reports and other filings with the SEC.

SECTION 6.3.  Notices.  All notices, consents, waivers and other
communications required or permitted by this Agreement shall be in writing and
shall be deemed given to a Party when (a) delivered to the appropriate address
by hand or by nationally recognized overnight courier service (costs prepaid);
(b) sent by facsimile with confirmation of transmission by the transmitting
equipment; or (c) received or rejected by the addressee, if sent by certified
mail, return receipt requested, in each case to the following addresses and
facsimile numbers and marked to the attention of the person (by name or title)
designated below (or to such other address, facsimile number or person as a
Party may designate by notice to the other Parties):

If to IBG LLC:

IBG LLC

One Pickwick Plaza

Greenwich, Connecticut  06830

Attention: Thomas Peterffy, Managing Member

Fax: (203) 618-5934

If to IBGI:

Interactive Brokers
Group, Inc.

One Pickwick Plaza

Greenwich, Connecticut  06830

Attention: Thomas Peterffy, Chairman, Chief Executive Officer and President

Fax: (203) 618-5934

If to IBG Holdings:

IBG Holdings LLC

One Pickwick Plaza

Greenwich, Connecticut  06830

Attention: Thomas Peterffy, Managing Member

Fax: (203) 618-5934

If to Members of IBG LLC:

To the addresses set
forth on the books and records of IBG LLC.

SECTION 6.4.  Amendment, Modification or Waiver.  This Agreement may be amended, modified,
waived or supplemented, in whole or in part, only by a written agreement signed
by IBGI, IBG LLC and IBG Holdings. No failure or delay on the part of any Party
in the exercise of any right hereunder shall impair such right or be construed
to be a waiver of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor shall any single or partial exercise of any
such right preclude other or further exercise thereof or of any other right.  The 

 

 11
 

waiver by such Parties of any breach of this Agreement
shall not be construed as a waiver of any subsequent breach.

SECTION 6.5.  Successors and Assigns; No Third Party
Beneficiaries.

(a)           This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the Parties
and their successors and permitted assigns, but neither this Agreement nor any
of the rights, interests and obligations hereunder shall be assigned or
otherwise transferred, in whole or in part, by any Party without the prior written
consent of each of the Parties.

(b)           This Agreement is solely for the
benefit of the Parties and is not intended to confer upon any other persons any
rights or remedies hereunder.

SECTION 6.6.  Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

SECTION 6.7.  Negotiation.  In the event of any dispute or disagreement
between any of the Parties arising out of or in connection with this Agreement
(including with respect to the interpretation or performance of any provision
hereof), the dispute or disagreement, upon written request of a Party, as
applicable, shall be referred to representatives of the Parties involved in
such dispute for decision.  Such
applicable representatives of the Parties shall promptly meet in a good faith
effort to resolve the dispute or disagreement or determine a means to resolve
the dispute or disagreement. If such representatives do not agree upon a
decision within 30 days after reference of the matter to them, the Parties
shall be free to exercise all rights and remedies available to them under this
Agreement.

SECTION 6.8.  Specific Performance.  The Parties acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which they may be entitled by law
or equity.

SECTION 6.9.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (other than the
laws regarding choice of laws and conflicts of laws that would apply the
substantive laws of any other jurisdiction) as to all matters, including
matters of validity, construction, effect, performance and remedies.

SECTION 6.10.  Jurisdiction.  Each of the Parties agrees that all actions
or proceedings arising out of or in connection with this Agreement, or for
recognition and enforcement of any judgment arising out of or in connection
with this Agreement, shall be tried and determined exclusively in the state or
federal courts in the State of Connecticut,  and each of the Parties hereby
irrevocably submits with regard to any such action or proceeding for itself and
in respect to its property, generally and unconditionally, to the exclusive
jurisdiction of the aforesaid courts. Each of the Parties hereby expressly
waives any right it may have to assert, and agrees 

 

 12
 

not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any such action or proceeding: (a) any claim that
it is not subject to personal jurisdiction in the aforesaid courts for any
reason; (b) that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts; and (c) that
(i) any of the aforesaid courts is an inconvenient or inappropriate forum for
such action or proceeding, (ii) venue is not proper in any of the aforesaid
courts and (iii) this Agreement  or the
subject matter hereof may not be enforced in or by any of the aforesaid courts.

SECTION 6.11.  Interpretation.  The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement.

SECTION 6.12.  Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any applicable
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.

 13

IN WITNESS WHEREOF, the Parties have caused this
Agreement to be duly executed as of the date first above written.

	
  

  	
   

  	
  INTERACTIVE BROKERS GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman, Chief Executive Officer and

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IBG HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IBG LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Thomas Peterffy

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Signatures of the Members of IBG LLC]

  

 

 

 

 

 

 

Signature Page to
Exchange Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]