Document:

Exhibit 10.16

 

VIRTU FINANCIAL, INC.

2015 MANAGEMENT INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT, including the exhibit[s] hereto (the “Agreement”), is entered into as of [                    ], 2015 (the “Date of Grant”), by and between Virtu Financial, Inc., a Delaware corporation (the “Company”), and [                ] (the “Participant”).

 

WHEREAS, the Company has adopted the Virtu Financial, Inc. 2015 Management Incentive Plan (the “Plan”), pursuant to which Restricted Stock Units (“RSUs”) may be granted; and

 

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has determined that it is in the best interests of the Company and its stockholders to grant the RSUs provided for herein to the Participant subject to the terms set forth herein.

 

NOW, THEREFORE, for and in consideration of the premises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:

 

1.                                      Grant of Restricted Stock Units.

 

(a)                                 Grant. The Company hereby grants to the Participant a total of [          ] RSUs, on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.  The RSUs shall vest in accordance with Section 2.  The RSUs shall be credited to a separate book-entry account maintained for the Participant on the books of the Company.

 

(b)                                 Incorporation by Reference. The provisions of the Plan are incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.  Any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan.  The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Participant and his legal representative in respect of any questions arising under the Plan or this Agreement.  The Participant acknowledges that he has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.

 

2.                                      Vesting; Settlement.

 

(a)                                 Except as may otherwise be provided herein, subject to the Participant’s continued employment or service with the Company or an Affiliate, the RSUs shall vest in equal installments on each of the first [three (3)](1) anniversaries of the Date of Grant (each such date, a “Vesting Date”).  Any fractional RSUs resulting from the application of the vesting schedule shall be aggregated and the RSUs resulting from such aggregation shall vest on the final Vesting Date.  Upon vesting, the RSUs shall no longer be subject to the transfer restrictions pursuant to Section [12] of the Plan or cancellation pursuant to Section 4 hereof.

 

(1)    Note to Draft:  It is currently contemplated that the annual RSU awards will vest over 3 years, and the vesting schedule for any other RSU awards will be determined on a case by case basis

 

 

(b)                                 Each RSU shall be settled within 10 days following the Vesting Date in shares of Class A Common Stock, or cash, as determined by the Committee in its sole discretion.

 

3.                                      Dividend Equivalents.  In the event of any issuance of a cash dividend on the shares of Class A Common Stock (a “Dividend”), the Participant shall be credited, as of the payment date for such Dividend, with an additional number of RSUs (each, an “Additional RSU”) equal to the quotient obtained by dividing (a) the product of (i) the number of RSUs granted pursuant to this Agreement and outstanding as of the record date for such Dividend multiplied by (ii) the amount of the Dividend per share, divided by (b) the Fair Market Value per share on the payment date for such Dividend, such quotient to be rounded to the nearest hundredth.  Once credited, each Additional RSU shall be treated as an RSU granted hereunder and shall be subject to all terms and conditions set forth in this Agreement and the Plan.

 

4.                                      Termination of Employment.

 

[For VV/DC:

 

(a)                                 If the Participant’s employment with the Company and its Affiliates is terminated (A) by the Company or its Affiliate without Cause, (B) by the Participant for Good Reason (as defined in the Participant’s employment agreement with the Company or the Affiliate as in effect on the date of such termination), (C) due to the Participant’s death or (D) by the Company or its Affiliate due to Disability, then all unvested RSUs shall become immediately vested as of the effective date of such termination.

 

(b)                                 If the Participant’s employment with the Company and its Affiliates terminates for any reason other than as set forth in Section 4(a) hereof, all unvested RSUs shall be cancelled immediately and the Participant shall not be entitled to receive any payments with respect thereto.]

 

[For all other Participants:

 

If the Participant’s employment with the Company and its Affiliates terminates for any reason, all unvested RSUs shall be cancelled immediately and the Participant shall not be entitled to receive any payments with respect thereto.]

 

5.                                      Rights as a Stockholder.  The Participant shall not be deemed for any purpose to be the owner of any shares of Class A Common Stock underlying the RSUs unless, until and to the extent that (i) the Company shall have issued and delivered to the Participant the shares of Class A Common Stock underlying the RSUs and (ii) the Participant’s name shall have been entered as a stockholder of record with respect to such shares of Class A Common Stock on the books of the Company.  The Company shall cause the actions described in clauses (i) and (ii) of the preceding sentence to occur promptly following settlement as contemplated by this Agreement, subject to compliance with applicable laws.

 

6.                                      Compliance with Legal Requirements.

 

(a)                                 Generally. The granting and settlement of the RSUs, and any other obligations of the Company under this Agreement, shall be subject to all applicable U.S. federal, state and local laws, rules and regulations, all applicable non-U.S. laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Participant agrees to take all steps the Committee or the Company determines are reasonably necessary to comply with all applicable provisions of U.S. federal and state securities law and non-U.S. securities law in exercising his rights under this Agreement.

 

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(b)                                 Tax Withholding. Vesting and settlement of the RSUs shall be subject to the Participant satisfying any applicable U.S. federal, state and local tax withholding obligations and non-U.S. tax withholding obligations.  The Company shall have the right and is hereby authorized to withhold from any amounts payable to the Participant in connection with the RSUs or otherwise the amount of any required withholding taxes in respect of the RSUs, their settlement or any payment or transfer of the RSUs or under the Plan and to take any such other action as the Committee or the Company deem necessary to satisfy all obligations for the payment of such withholding taxes.  The Participant may elect to satisfy, and the Company may require the Participant to satisfy, in whole or in part, the tax obligations by withholding shares of Class A Common Stock that would otherwise be deliverable to the Participant upon settlement of the RSUs with a Fair Market Value equal to such withholding liability.

 

7.                                      Clawback.  Notwithstanding anything to the contrary contained herein, the Committee may cancel the RSU award if the Participant, without the consent of the Company, has engaged in or engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate while employed by or providing services to the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, or violates a non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with the Company or any Affiliate, as determined by the Committee.  In such event, the Participant will forfeit any compensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer of the RSUs, or the sale of shares of Class A Common Stock acquired in respect of the RSUs, and must promptly repay such amounts to the Company.  If the Participant receives any amount in excess of what the Participant should have received under the terms of the RSUs for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), all as determined by the Committee, then the Participant shall be required to promptly repay any such excess amount to the Company.  To the extent required by applicable law and/or the rules and regulations of NASDAQ or any other securities exchange or inter-dealer quotation system on which the Class A Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, the RSUs shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into this Agreement).

 

8.                                      Restrictive Covenants.

 

(a)                                 [The Participant shall be subject to the confidentiality and restrictive covenants set forth on Exhibit A attached hereto.](2)  [The Participant acknowledges and agrees that the Participant remains bound by the confidentiality and restrictive covenant provisions set forth [in Sections 9.04 and 12.11 of the Second Amended and Restated Limited Liability Company Agreement of Virtu Financial, LLC, dated as of [DATE]][and/or][in Sections 9.04 and 12.11 of the Amended and Restated Limited Liability Company Agreement of Virtu Employee Holdco, LLC, dated as of [DATE]] [and/or] [in Sections 9.04 and 12.11 of the Amended and Restated Limited Liability Company Agreement of Virtu East MIP LLC, dated as of [DATE]] (or any successor provisions) as a “Member” thereof.]

 

(b)                                 In the event that the Participant violates any of the restrictive covenants referred to in this Section 8, in addition to any other remedy which may be available at law or in equity, the RSUs shall be automatically forfeited effective as of the date on which such violation first occurs.  The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and the Participant shall not assert that they shall prevent) the Company from bringing

 

(2)         Note to Draft:  Include for participants who either do not hold any pre-IPO equity or will not execute the Equity Retention/Lock-Up Agreement.

 

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one or more actions in any applicable jurisdiction to recover damages as a result of the Participant’s breach of such restrictive covenants.

 

9.                                      Miscellaneous.

 

(a)                                 Transferability. The RSUs may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered (a “Transfer”) by the Participant other than by will or by the laws of descent and distribution, pursuant to a qualified domestic relations order or as otherwise permitted under Section [15(b)] of the Plan.  Any attempted Transfer of the RSUs contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the RSUs, shall be null and void and without effect.

 

(b)                                 Waiver. Any right of the Company contained in this Agreement may be waived in writing by the Committee. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.

 

(c)                                  Section 409A. The RSUs are intended to be exempt from, or compliant with, Section 409A of the Code. Notwithstanding the foregoing or any provision of the Plan or this Agreement, if any provision of the Plan or this Agreement contravenes Section 409A of the Code or could cause the Participant to incur any tax, interest or penalties under Section 409A of the Code, the Committee may, in its sole discretion and without the Participant’s consent, modify such provision to (i) comply with, or avoid being subject to, Section 409A of the Code, or to avoid the incurrence of taxes, interest and penalties under Section 409A of the Code, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A of the Code. This Section 9(c) does not create an obligation on the part of the Company to modify the Plan or this Agreement and does not guarantee that the RSUs will not be subject to interest and penalties under Section 409A.

 

(d)                                 General Assets. All amounts credited in respect of the RSUs to the book-entry account under this Agreement shall continue for all purposes to be part of the general assets of the Company.  The Participant’s interest in such account shall make the Participant only a general, unsecured creditor of the Company.

 

(e)                                  Notices. Any notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax, pdf/email or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three business days after mailing but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, to the attention of the General Counsel at the Company’s principal executive office.

 

(f)                                   Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.

 

(g)                                  No Rights to Employment or Service. Nothing contained in this Agreement shall be construed as giving the Participant any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the rights of the

 

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Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Participant at any time for any reason whatsoever.

 

(h)                                 Fractional Shares. In lieu of issuing a fraction of a share of Class A Common Stock resulting from adjustment of the RSUs pursuant to Section [12] of the Plan or otherwise, the Company shall be entitled to pay to the Participant an amount in cash equal to the Fair Market Value of such fractional share.

 

(i)                                     Beneficiary. The Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation.

 

(j)                                    Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and of the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.

 

(k)                                 Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent under Section [12 or 14] of the Plan.

 

(l)                                     Governing Law and Venue. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of Delaware.

 

(i)                                     Dispute Resolution; Consent to Jurisdiction. All disputes between or among any Persons arising out of or in any way connected with the Plan, this Agreement or the RSUs shall be solely and finally settled by the Committee, acting in good faith, the determination of which shall be final.   Any matters not covered by the preceding sentence shall be solely and finally settled in accordance with the Plan, and the Participant and the Company consent to the personal jurisdiction of the United States Federal and state courts sitting in Wilmington, Delaware as the exclusive jurisdiction with respect to matters arising out of or related to the enforcement of the Committee’s determinations and resolution of matters, if any, related to the Plan or this Agreement not required to be resolved by the Committee.  Each such Person hereby irrevocably consents to the service of process of any of the aforementioned courts in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the last known address of such Person, such service to become effective ten (10) days after such mailing.

 

(ii)                                  Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or the transactions contemplated (whether based on contract, tort or any other theory).  Each party hereto (A) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this section.

 

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(m)                             Headings; Gender. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.  Masculine pronouns and other words of masculine gender shall refer to both men and women as appropriate.

 

(n)                                 Counterparts. This Agreement may be executed in one or more counterparts (including via facsimile and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

 

(o)                                 Electronic Signature and Delivery. This Agreement may be accepted by return signature or by electronic confirmation.  By accepting this Agreement, the Participant consents to the electronic delivery of prospectuses, annual reports and other information required to be delivered by U.S. Securities and Exchange Commission rules (which consent may be revoked in writing by the Participant at any time upon three business days’ notice to the Company, in which case subsequent prospectuses, annual reports and other information will be delivered in hard copy to the Participant).

 

(p)                                 Electronic Participation in Plan. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

[Remainder of page intentionally blank]

 

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IN WITNESS WHEREOF, this Agreement has been executed by the Company and the Participant as of the day first written above.

 

	
 
    	
VIRTU   FINANCIAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[PARTICIPANT]
    

 

[Signature Page to [                          ]RSU Award Agreement]

 

 

 

Exhibit A(3)

 

1.              Confidentiality.

 

a.              The Participant shall, and shall direct his or her Affiliates and their respective directors, officers, members, stockholders, partners, employees, attorneys, accountants, consultants, trustees and other advisors (the “Participant Parties”) who have access to Confidential Information to, keep confidential and not disclose any Confidential Information to any Person, other than a Participant Party who agrees to keep such Confidential Information confidential in accordance with this Section 1, without the express consent of the Company, unless:

 

i.                  such disclosure shall be required by applicable law;

 

ii.               such disclosure is reasonably required in connection with any tax audit involving the Company or its Affiliates;

 

iii.            such disclosure is reasonably required in connection with any litigation against or involving the Company; or

 

iv.           such disclosure is reasonably required in connection with any proposed Transfer of all or any part of the Participant’s RSUs; provided that with respect to any such use of any Confidential Information referred to in this clause (iv), advance notice must be given to the Company so that it may require any proposed transferee to enter into a confidentiality agreement with terms substantially similar to the terms of this Section 1 (excluding this clause (iv)) prior to the disclosure of such Confidential Information.

 

b.              In the event that the Participant or any Participant Party is required to disclose any of the Confidential Information, the Participant shall use reasonable efforts to provide the Company with prompt written notice so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement, and the Participant shall use reasonable efforts to cooperate with the Company in any effort the Company undertakes to obtain a protective order or other remedy.  In the event that such protective order or other remedy is not obtained, or that the Company waives compliance with the provisions of this Section 1, the Participant and the Participant Parties shall furnish only that portion of the Confidential Information that is legally required and shall exercise all reasonable efforts to obtain reasonably reliable assurance that the Confidential Information shall be accorded confidential treatment.

 

c.               Notwithstanding anything in this Agreement to the contrary, the Participant may disclose to any subsequent employer the restrictions to which the Participant is subject to pursuant to this Agreement.

 

2.              Non-Compete; Non-Solicit; Non-Disparagement.  During the Restrictive Covenant Period, the Participant:

 

a.              shall not directly or indirectly engage in any Competitive Activity;

 

(3)  Note to Draft:  Confidentiality and restrictive covenant provisions are intended to be substantially identical to the provisions set forth in the LLC Agreements.

 

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b.              shall not directly or indirectly solicit, or assist any other Person to solicit, as an employee or consultant any employee, former employee or member of the Company, Virtu Financial LLC or any of their respective subsidiaries (the “Company Parties”);

 

c.               shall not, and shall cause his or her Controlled Affiliates not to, hire, or assist any other Person to hire, as an employee or consultant any employee, former employee, member or retired member of the Company Parties; and

 

d.              shall not take, and shall take reasonable steps to cause his or her Affiliates not to take, any action or make any public statement, whether or not in writing, that disparages or denigrates the Company Parties or their respective directors, officers, employees, members, representatives and agents; provided, however, that nothing in this Section 2(d) shall prevent the Participant from (i) testifying truthfully in any legal or administrative proceeding if such testimony is compelled or requested, or (ii) complying with applicable legal requirements.

 

3.              Enforcement of Covenants.  The Participant agrees that (i) the agreements and covenants contained in Section 2 are reasonable in scope and duration and necessary to protect and preserve the Company Parties’ legitimate business interests and to prevent any unfair advantage conferred on the Participant taking into account and in specific consideration of the undertakings and obligations of the parties under the Agreement (ii) but for the Participant’s agreement to be bound by the agreements and covenants contained under Section 2 of this Exhibit A, the Company Parties would not have entered into or consummated those transactions contemplated by the Agreement, and (iii) that irreparable harm would result to the Company Parties as a result of a violation or breach (or potential violation or breach) by the Participant (or his or her Affiliates) of Section 2 of this Exhibit A and the Company Parties shall have the right to specifically enforce the provisions of Section 2 of this Exhibit A in any federal court located in the State of Delaware or any Delaware state court, in addition to any other remedy to which they are entitled at law or in equity.  If a final judgment of a court of competent jurisdiction or other Governmental Authority determines that any term, provision, covenant or restriction contained in Section 2 of this Exhibit A is invalid or unenforceable, then the parties hereto agree that the court of competent jurisdiction or other Governmental Authority will have the power to modify Section 2 of this Exhibit A (including by reducing the scope, duration or geographic area of the term or provision, deleting specific words or phrases or replacing any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision) so as to effect the original intention of the invalid or unenforceable term or provision.  To the fullest extent permitted by law, in the event that any proceeding is brought under or in connection with Section 2 of this Exhibit A, the prevailing party in such proceeding (whether at final or on appeal) shall be entitled to recover from the other party all costs, expenses, and reasonable attorneys’ fees incident to any such proceeding.  The term “prevailing party” as used herein means the party in whose favor the final judgment or award is entered in any such proceeding.

 

4.              Definitions

 

a.              “Algorithmic Liquidity Trading” means trading Financial Assets through the use of an electronically automated trading system that generates order sets (which, for purposes of clarity, can consist of a single order) with the intention of (i) creating profit by providing two-sided liquidity to the market, (ii) making a profit margin consistent with the business of making the bid-offer spread or less per unit of the Financial Asset(s) being traded (including by providing either one-sided or two sided liquidity to the market) or (iii) creating Simultaneous order sets that are generated with the intention of locking in an Arbitrage profit.  For the avoidance of doubt, “Algorithmic Liquidity Trading” does not include trading in which an Order or Orders are

 

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manually generated and submitted for execution by a natural person (including, without limitation, Stop Orders, Limit Orders, Volume-Weighted Average Price Orders and other common Order types that may involve multiple instructions to a third party and which may involve such third party employing an algorithm in executing the Order provided the algorithm executes only on one side of the market as a “buy” or “sell” Order, and including a portfolio-rebalancing Order (which for the avoidance of doubt may involve both a “buy” and a “sell” component within a single Order)).

 

b.              “Arbitrage” means arbitrage consistent with the practice of high frequency trading.

 

c.               “Competitive Activity” means (i) serving as a director, officer, employee, trader, manager, consultant, agent or advisor of, or otherwise directly or through an Affiliate providing services to a Competitive Enterprise; (ii) designing or developing any Competitive Technology; (iii) directly or through an Affiliate (A) engaging in Strategy Competition or (B) retaining or otherwise engaging any other Person to undertake any of the actions described in clauses (i), (ii), (iii)(A) or (iv) of this definition; (iv) serving as a director, officer, employee, trader, manager, consultant, agent or advisor of, or otherwise directly or through an Affiliate providing services to any business, financial institution, investment bank or other business enterprise (in any form, including without limitation as a corporation, partnership, limited liability company or other Person) that is, or whose Affiliate is, engaged in Strategy Competition, in each case except in a capacity that does not involve or require the Participant to engage in any activities described in clauses (i), (ii) or (iii) of this definition above or have any direct management oversight of or involvement in Strategy Competition; (v) acquiring directly or through an Affiliate in the aggregate directly or beneficially, whether as a shareholder, partner, member or otherwise, any equity (including stock options or warrants, whether or not exercisable), voting or profit participation interests (collectively, “Ownership Interests”) in a Competitive Enterprise, or any derivative where the reference asset is an Ownership Interest in a Competitive Enterprise, other than a passive investment of not more than, as calculated at the time of acquisition (but after giving effect to any transaction or transactions to occur in connection with such acquisition), 1% (measured by voting power or value, whichever is greater) of the fully diluted Ownership Interests of a Competitive Enterprise (for the avoidance of doubt, such percentage interest shall be calculated based on the Participant’s percentage of direct and indirect ownership of the Competitive Enterprise and not any intermediary, such as a holding company or partnership) (it being understood that this clause (v) shall not apply to prohibit the holding of an Ownership Interest if, at the time of acquisition of such Ownership Interest, the Person in which such direct or indirect Ownership Interest is acquired is not a Competitive Enterprise and the Participant is not aware at the time of such acquisition, after reasonable inquiry, that such Person has any plans to become a Competitive Enterprise); or (vi) directly or through an Affiliate owning any Ownership Interests in any Person listed in Schedule 1 of this Exhibit A (or any parent company or entity of a Person listed in Schedule 1 or any successors thereto, other than a parent company or entity that is not a Competitive Enterprise) (a “Restricted Investment”), or any derivative where the reference asset is an Ownership Interest in a Restricted Investment, except to the extent such Ownership Interests or derivatives are held through an index fund, an exchange traded fund, a mutual fund, hedge fund, or other form of collective investment or fund, or through a managed account, in each case, where a third party that is not affiliated with the Participant exercises sole investment discretion in respect of such fund or account and such third party has not disclosed at the time the Participant makes his or her investment that it holds or intends to hold any Ownership Interests in a Restricted Investment.

 

d.              “Competitive Enterprise” means any Person or business enterprise (in any form, including without limitation as a corporation, partnership, limited liability company or other Person), or

 

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subsidiary, division, unit, group or portion thereof, whose primary business is (A) engaging in Strategy Competition; or (B) engaging in any other business in which the Company Parties engage in a material way, or have concrete plans to engage in a material way as of the Relevant Date, in each case as reasonably determined by the Company.  For the sake of clarity, in the case of a subsidiary, division, unit, group or portion whose primary business is described above: (1) the larger business enterprise or Person owning such subsidiary, division, unit, group or portion shall not be deemed to be a Competitive Enterprise unless the primary business of such larger business enterprise or Person is engaged in Strategy Competition and (2) the subsidiary, division, unit, group or portion whose primary business is engaging in Strategy Competition shall be deemed a Competitive Enterprise.

 

e.               “Competitive Technology” means any system, program, hardware or software (including any network architecture, system architecture, messaging architecture, trade processing and clearing systems and architecture, database architecture and storage of market and trading data for purposes of statistical analysis, network infrastructure, market data processing and messaging types that support such market data processing, order processing or any other software or hardware): (a) only if developed for one or more financial institution(s) or designed primarily for use by, or sale or license to, one or more financial institutions, is (i) used (or will be used in the future in its current or any enhanced or modified form) in Strategy Competition to evaluate, route or execute orders or trades in any Financial Asset or (ii) used (or will be used in the future in its current or any enhanced or modified form) in Strategy Competition for the efficient processing and dissemination of market data or messaging for Financial Assets, or (b) in any case, is specifically designed or intended for use in Strategy Competition.

 

f.                “Confidential Information” means any information related to the activities of the Company Parties that the Participant may acquire from the Company, other than information that (i) is already available through publicly available sources of information (other than as a result of disclosure by the Participant), (ii) was available to the Participant on a non-confidential basis prior to its disclosure to the Participant by the Company, or (iii) becomes available to the Participant on a non-confidential basis from a third party, provided such third party is not known by the Participant, after reasonable inquiry, to be bound by this Agreement or another confidentiality agreement with the Company.  Such Confidential Information may include information that pertains or relates to the business and affairs of any other Company matters. Confidential Information may be used by the Participant and its Participant Parties only in connection with Company matters and in connection with the maintenance of the Participant’s interest in the Company.

 

g.               “Financial Asset” means commodities, currencies, equities, notes, bonds, securities, evidence of indebtedness and derivatives thereof.

 

h.              “Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof.

 

i.                  “Jaguar Trading” means trading through the use of electronically automated means to analyze and act upon Economic Numerical Data (i.e., economic data released by government agencies, quasi-governmental agencies, or industry groups commonly tracked by investors (e.g., ADP or Gallup employment data, the Michigan Consumer Sentiment Index and National Association of Realtors home-sale data)) with the intent to enter a position within two seconds after the public (or equivalent) release of such economic numerical data, including by using models and algorithms to predict the effect on prices of such economic numerical data.  Economic Numerical

 

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Data does not include financial instrument price and volume data.  Jaguar Trading does not include trading in which each instruction to acquire or dispose of a specified quantity of a single instrument is individually manually generated and submitted for execution by a natural person (and not by any algorithmic means), even if such Order is executed within two seconds after the release of such economic numerical data (for example, and without limitation, the execution of a previously placed Stop Order triggered after the release of economic numerical data).

 

j.                 “Order” means an instruction to acquire or dispose of a specified quantity or amount of a Financial Asset.

 

k.              Relevant Date” means, (i) for as long as the Termination Date has not occurred, the date that the Participant engages in any activity that is prohibited by Section 2 hereof and (ii) if the Termination Date has occurred such Termination Date.

 

l.                  “Restrictive Covenant Period” means, any time until the third (3rd) anniversary of the Termination Date.

 

m.          “Simultaneous” means, with respect to more than one event, the occurrence of such events occurring within 500 milliseconds of each other.

 

n.              “Strategy Competition” means, (i) trading activities that utilize trading strategies that constitute Algorithmic Liquidity Trading or Jaguar Trading or (ii) any other strategy in which the Company Parties engage in a material way or have concrete plans to engage in a material way as of the Relevant Date, in each case as reasonably determined by the Company.

 

o.              “Termination Date” means, the date the Participant ceases to be employed by the Company, Virtu Financial LLC or any of their respective Controlled Affiliates.

 

A-5Exhibit 10.17

 

[UNIT VESTING,] EQUITY RETENTION AND
  RESTRICTIVE COVENANT AGREEMENT

 

                          , 2015

 

Douglas A. Cifu
 Chief Executive Officer
 Virtu Financial, Inc. 
 645 Madison Avenue
 New York, New York 10022-1010

 

Re:  [Unit Vesting, ]Equity Retention and Restrictive Covenant Agreement

 

Dear Mr. Cifu:

 

[Employee] (the “Executive”) [and [Family Entity]] (collectively, the “undersigned”) understand that Virtu Financial LLC, a Delaware limited liability company (“Virtu LLC”), proposes to consummate a reorganization in connection with an initial public offering (the “IPO”) of Class A common stock, $0.00001 par value per share (“Class A Common Stock”), of Virtu Financial, Inc., a Delaware corporation (the “Company”).  In connection with the IPO, the Company requires that management employees who hold Pre-IPO Company Securities (as defined below) be subject to certain restrictions regarding the sale and transfer of such Pre-IPO Company Securities and acknowledge and agree to continue to be bound by certain post-termination restrictive covenants, as further described herein.

 

1.                                      Equity Reclassification

 

(a)                                 The undersigned owns (i) limited liability company interests of Virtu LLC (“Existing Virtu LLC Interests”) and (ii) Class A limited liability company interests of East MIP (“Existing East MIP Interests”), which represent an indirect interest in a number of Existing Virtu LLC Interests.  In accordance with the Reorganization Agreement, immediately prior to the date and time the IPO becomes effective, among other things, (x)  East MIP will be liquidated, and in connection therewith, certain Existing Virtu LLC Interests will be transferred to East MIP by holders of Existing East MIP Interests and holders of Existing East MIP Interests will be distributed additional Existing Virtu LLC Interests and (y) all outstanding Existing Virtu LLC Interests will be reclassified into non-voting common limited liability company interests of Virtu LLC (“Common Units”) based on a hypothetical liquidation value of Virtu LLC (the “Hypothetical Liquidation Value”) and the IPO price per share of the Class A Common Stock.

 

(b)                                 In addition, the undersigned will subscribe for a number of shares of Class [C/D] Common Stock equal to the number of Common Units held thereby.  From and after the IPO,

 

 

such Common Units, together with such shares of Class [C/D](1) Common Stock, are exchangeable for shares of Class [A/B] Common Stock pursuant to the Exchange Agreement.

 

(c)                                  The undersigned acknowledge and agree that the equity interests set forth on Exhibit A attached hereto (i) represent all of the undersigned’s Existing Virtu LLC Interests and Existing East MIP Interests (determined after giving effect to the dissolution of any entities through which the undersigned previously indirectly held any such equity interests) and (ii) after giving effect to the transactions described in paragraph 1(a), the undersigned’s Common Units will continue to be subject to [(x)] the Virtu LLC Agreement [and (y) in the case of unvested Common Units, the Virtu LLC MIP and the time-based vesting terms applicable to such equity interests as in effect immediately prior to the IPO as set forth on Exhibit A attached hereto].

 

(d)                                 As soon as reasonably practicable following the IPO, the undersigned will be provided by Virtu LLC with written notice setting forth the portion of the Hypothetical Liquidation Value represented by the undersigned’s Common Units and the resulting number of Common Units that the undersigned then own after giving effect to the transactions contemplated by the Reorganization Agreement and the IPO.

 

2.                                      Equity Retention

 

(a)                                 Except as otherwise provided herein, the undersigned hereby agree that, without the prior written consent of the Company, the undersigned will not directly or indirectly Transfer all or any part of their respective Pre-IPO Company Securities or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company or Virtu LLC pursuant thereto (the foregoing restrictions are hereinafter referred to as the “Lock-Up Restrictions”).

 

(b)                                 Notwithstanding anything herein to the contrary, the Lock-Up Restrictions shall cease to apply to the Pre-IPO Company Securities as follows:

 

(i)                                     upon the consummation of the IPO, the undersigned, collectively, may Transfer up to 15% of their Pre-IPO Company Securities pursuant to the Equity Purchase Agreement, to the extent such Pre-IPO Company Securities have vested;

 

(ii)                                  on and after the first (1st) anniversary of the consummation of the IPO, the undersigned, collectively, may Transfer up to a cumulative 30% of their Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(iii)                               on and after the second (2nd) anniversary of the consummation of the IPO, the undersigned, collectively, may Transfer up to a cumulative 45% of their Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(iv)                              on and after the third (3rd) anniversary of the consummation of the IPO, the undersigned, collectively, may Transfer up to a cumulative 60% of their Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(1)         Note to Draft: References to Class B Common Stock and Class D Common Stock applicable only in agreement with Vincent Viola.

 

2

 

(v)                                 on and after the fourth (4th) anniversary of the consummation of the IPO, the undersigned, collectively, may Transfer up to a cumulative 75% of their Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(vi)                              on and after the fifth (5th) anniversary of the consummation of the IPO, the undersigned, collectively, may Transfer up to a cumulative 90% of their Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested; and

 

(vii)                           on and after the sixth (6th) anniversary of the consummation of the IPO, the Lock-Up Restrictions shall no longer apply, and the undersigned may Transfer any or all of their remaining Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested.

 

For the purposes of this paragraph 2(b), the percentage of Pre-IPO Company Securities permitted to be Transferred shall be determined based on the total number of shares of Class A Common Stock owned by the undersigned and their Permitted Transferees as of the Reorganization Date (including any Pre-IPO Company Securities to be sold thereby pursuant to the Equity Purchase Agreement, but excluding any shares of Class A Common stock underlying awards under the Company MIP made thereto in connection with the IPO (“IPO Grants”)), in each case, determined on an “as-converted” basis based on the number of shares of Class A Common Stock, in the aggregate and without duplication, into which the Pre-IPO Company Securities owned of record thereby (whether vested or unvested) are directly or indirectly convertible or exchangeable; provided that, for the purposes of clause (b)(i) only, such total number of Pre-IPO Company Securities owned by the undersigned and their Permitted Transferees shall be determined based on the number of such Pre-IPO Company Securities that would have been owned thereby as of the Reorganization Date assuming the Midpoint Liquidation Value was the Hypothetical Liquidation Value and the IPO price per share of the Class A Common Stock was the IPO Price Range Midpoint.

 

(c)                                  Notwithstanding anything herein to the contrary, the Lock-Up Restrictions shall not apply to (i) shares of Company Common Stock and any securities then convertible into or exchangeable for shares of Company Common Stock acquired (x) in open market transactions after the completion of the IPO or (y) pursuant to awards under the Company MIP (including any IPO Grants), (ii) the establishment of a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the Transfer of shares of Company Common Stock; provided that such plan does not provide for the Transfer of shares of Company Common Stock not otherwise permitted pursuant to clause (b) above, (iii) the granting of a revocable proxy to officers or directors of the Company at the request of the board of directors of the Company (the “Board”) in connection with actions to be taken at annual or special meetings of stockholders or in connection with any action by written consent of the stockholders solicited by the Board (at such times as action by written consent of stockholders is permitted under the certificate of incorporation of the Company), (iv) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with the Company and/or its stockholders that (A) is disclosed in writing to the Secretary of the Company, (B) either has a term not exceeding one (1) year or is terminable by the undersigned at any time and (C) does not involve any payment of cash, securities, property or other consideration to the undersigned other than the mutual promise to vote Pre-IPO Company Securities in a designated manner, (v)

 

3

 

entering into a customary voting or support agreement (with or without granting a proxy) in connection with any merger, consolidation or other business combination of the Company, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock receive the same consideration per share paid in the tender offer) (a “Business Combination”), (vi) the fact that the spouse of the Executive possesses or obtains an interest in such holder’s Pre-IPO Company Securities arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a Transfer of such shares of Pre-IPO Company Securities, (vii) any Transfer in connection with, and as contemplated by, the Reorganization Agreement, (viii) any Transfer pursuant to any Business Combination and, to the extent such Business Combination is a Disposition Event (as such term is defined in the certificate of incorporation of the Company), following such Disposition Event (it being understood and agreed that, to the extent such Business Combination is not a Disposition Event, the Lock-Up Restrictions shall continue to apply to any securities into which such Pre-IPO Company Securities are exchanged or converted in such Business Combination), (ix) transfers of Pre-IPO Company Securities to Permitted Transferees; provided that such Permitted Transferee shall have executed and delivered to the Company such instruments as the Company deems necessary or desirable, in its reasonable discretion, to confirm the agreement of such Permitted Transferee to be bound by all the terms and provisions of this letter agreement and that, except as otherwise required by Applicable Law, such Permitted Transferee shall immediately Transfer such Pre-IPO Company Securities and all rights and obligations hereunder to the undersigned or another Permitted Transferee at such time that it ceases to be a Permitted Transferee, (x) the pledge of Pre-IPO Company Securities by the undersigned that creates a mere security interest in such Pre-IPO Company Securities pursuant to a bona fide loan or indebtedness transaction so long as the undersigned continue to exercise sole voting control over such pledged Pre-IPO Company Securities; provided, however, that a foreclosure on such Pre-IPO Company Securities or other similar action by the pledgee shall constitute a Transfer for the purposes of the Lock-Up Restrictions, or (xi) any Exchange (as such term is defined in the Exchange Agreement), it being understood and agreed that any shares of Class [A/B] Common Stock issued in such Exchange shall continue to be subject to the Lock-Up Restrictions.

 

(d)                                 The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Company Common Stock except in compliance with the foregoing restrictions.

 

(e)                                  For the avoidance of doubt, in addition to the Lock-Up Restrictions, (i) any Transfer of Common Units shall be subject to the restrictions on Transfer applicable thereto pursuant to the Virtu LLC Agreement and (ii) the Common Units in which the undersigned have a direct or indirect ownership interest shall be subject to the restrictions on exchange set forth in the Exchange Agreement (collectively, the “Transfer Restrictions”).

 

3.                                      Restrictive Covenants.  The undersigned hereby acknowledge and agree that they shall continue to be bound by the Virtu LLC Agreement as Members thereof, including, for the avoidance of doubt, the restrictive covenants set forth in Section 9.04 of the Virtu LLC Agreement, in accordance with the terms and conditions thereof.

 

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4.                                      Definitions.

 

(a)                                 “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that no holder of Pre-IPO Company Securities nor any Affiliate of such holder shall be deemed to be an Affiliate of any other holder of Pre-IPO Company Securities or any of its Affiliates solely by virtue of such holder’s Pre-IPO Company Securities.

 

(b)                                 “Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.

 

(c)                                  “Class C Common Stock” means Class C common stock, $0.00001 par value per share, of the Company.

 

(d)                                 “Class D Common Stock” means Class D common stock, $0.00001 par value per share, of the Company.

 

(e)                                  “Company Common Stock” means all classes and series of common stock of the Company, including the Class A Common Stock and Class C Common Stock.

 

(f)                                   “Company MIP” means the Virtu Financial, Inc. 2015 Management Incentive Plan.

 

(g)                                  “Control” (including the terms “controlling” and “controlled”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

(h)                                 “East MIP” means Virtu East MIP LLC, a Delaware limited liability company.

 

(i)                                     “Equity Purchase Agreement” means the Purchase Agreement by and among the Company, Virtu LLC and certain other members of Virtu LLC.

 

(j)                                    “Exchange Agreement” means the Exchange Agreement, dated as of the Reorganization Date, by and among the Company, Virtu LLC and the holders of Common Units and shares of Class C Common Stock and Class D Common Stock from time to time party thereto.

 

(k)                                 “Governmental Authority” means any transnational, domestic or foreign, federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any subdivision thereof.

 

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(l)                                     “IPO Price Range Midpoint” means the midpoint of the estimated public offering price range for the Class A Common Stock set forth on the cover page of the preliminary prospectus forming a part of the registration statement on Form S-1 filed by the Company with the Securities and Exchange Commission on [    ], 2015.

 

(m)                             “Midpoint Liquidation Value” means the aggregate equity value of Virtu LLC as of the Reorganization Date implied by the IPO Price Range Midpoint.

 

(n)                                 “Permitted Transferee” means, with respect to the undersigned, (i) any immediate family member of the Executive (which would include parents, grandparents, lineal descendants, siblings of the Executive or the Executive’s spouse, and lineal descendants of siblings of the Executive or the Executive’s spouse) or any trust, family-partnership or estate-planning vehicle so long as the Executive and/or his or her immediate family members are the sole economic beneficiaries thereof, (ii) any corporation, limited liability company, partnership or other entity of which all of the economic beneficial ownership thereof belongs to the Executive, his or her immediate family members or any trust, family-partnership or estate-planning vehicle whose economic beneficiaries consist solely of the Executive and/or his or her immediate family members, (iii) a charitable institution controlled by the Executive, (iv) an individual mandated under a qualified domestic relations order and (v) a legal or personal representative of the Executive in the event of his or her death or disability.

 

(o)                                 “Person” means, any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, Governmental Authority or other entity.

 

(p)                                 “Pre-IPO Company Securities” means (i) any Common Units and any corresponding shares of Class [C/D] Common Stock and (ii) any shares any Company Common Stock (x) into which the foregoing are converted or exchanged (including pursuant to an exchange of Common Units, together with shares of Class [C/D] Common Stock, for shares of Class [A/B] Common Stock pursuant to the Exchange Agreement) or (y) that are distributed in respect of the foregoing.

 

(q)                                 “Registration Rights Agreement” means the Registration Rights Agreement by and among the Company and the stockholders party thereto, dated as of the Reorganization Date.

 

(r)                                    “Regulatory Agency” means the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Financial Services Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company, Virtu LLC or any of Virtu LLC’s subsidiaries.

 

(s)                                   “Reorganization Agreement” means the Reorganization Agreement, dated as of the Reorganization Date, by and among the Company, Virtu LLC, Virtu Employee Holdco, East MIP and the other Persons listed on the signature pages thereto.

 

(t)                                    “Reorganization Date” means the date on which transactions contemplated by the Reorganization Agreement are consummated.

 

6

 

(u)                                 “Reorganization Documents” means the Reorganization Agreement, the Virtu LLC Agreement, the Virtu Employee Holdco LLC Agreement, the Tax Receivable Agreement, the Exchange Agreement, the Registration Rights Agreement, the Virtu LLC MIP and this letter.

 

(v)                                 “Tax Receivable Agreement” means the Tax Receivable Agreement by and among the Company, the undersigned and the other persons listed on the signature pages thereto.

 

(w)                               “Transfer” means any offer, sale, contract to sell, grant of an option to purchase, short sale, assignment, transfer, exchange, gift, bequest, pledge or other disposition or encumbrance, direct or indirect, in whole or in part, by operation of law or otherwise.  The foregoing restriction is expressly agreed to preclude the relevant person from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the referent securities even if such securities would be disposed of by someone other than such person. Such prohibited hedging or other transactions would include any short sale or any purchase, sale or grant of any right (including any put or call option) with respect to any of the referent securities or with respect to any security that includes, relates to, or derives any significant part of its value from such securities.  The terms “Transferred”, “Transferring”, “Transferor”, “Transferee” and “Transferable” have meanings correlative to the foregoing.

 

(x)                                 “Virtu Employee Holdco” means Virtu Employee Holdco LLC, a Delaware limited liability company and special purpose vehicle through which the members thereof indirectly own Common Units.

 

(y)                                 “Virtu Employee Holdco LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of Virtu Employee Holdco, dated as of the Reorganization Date.

 

(z)                                  “Virtu LLC Agreement” means the Third Amended and Restated Limited Liability Company Agreement of Virtu LLC, dated as of the Reorganization Date, in the form attached hereto as Exhibit B.

 

(aa)                          [“Virtu LLC MIP” means the Virtu LLC Management Incentive Plan, as amended.]

 

5.                                      Miscellaneous.

 

(a)                                 IPO.  The undersigned understand that the Company is relying upon this letter agreement in proceeding toward consummation of the IPO.  The undersigned further understands that this letter agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.  This letter agreement shall lapse and become null and void if the IPO shall not have occurred on or before [   ], 2015 or earlier if the Company has provided written notice to the undersigned that it has determined not to pursue the IPO. Whether or not the IPO actually occurs depends on a number of factors, including market conditions.

 

7

 

(b)                                 Amendment and Waiver.

 

(i)                                     Any provision of this letter agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this letter agreement or, in the case of a waiver, by each party against whom the waiver is to be effective.

 

(ii)                                  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

 

(c)                                  Binding Effect; Benefit; Assignment. The provisions of this letter agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  No provision of this letter agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.  No party may assign, delegate or otherwise transfer any of its rights or obligations under this letter agreement without the consent of each other party hereto, except that the Company may transfer or assign its rights and obligations under this letter agreement, in whole or from time to time in part, to any Person; provided that such transfer or assignment shall not relieve the Company of its obligations hereunder or enlarge, alter or change any obligation of any other party hereto or due to the Company.

 

(d)                                 Governing Law.  This letter agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this letter agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.

 

(e)                                  Jurisdiction.  The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this letter agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, the undersigned agrees that service of process on such party as at the address provided on the signature page hereto shall be deemed effective service of process on the undersigned.

 

(f)                                   WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW.

 

8

 

(g)                                  Counterparts; Effectiveness. This letter agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This letter agreement shall be deemed entered into when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this letter agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

(h)                                 Entire Agreement. This letter agreement, the Reorganization Documents and the Company MIP (and any award to the undersigned under any of the foregoing), constitute the entire agreement between the parties with respect to the subject matter of this letter agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this letter agreement.

 

(i)                                     Severability. If any term or provision of this letter agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms or provisions of this letter agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.

 

(j)                                    Interpretation.  Each and every provision of this letter agreement shall be construed as though both parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this letter agreement.  The words “hereof”, “herein” and “hereunder” and words of like import used in this letter agreement shall refer to this letter agreement as a whole and not to any particular provision of this letter agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  Any singular term in this letter agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this letter agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law.

 

[signature pages follow]

 

9

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Employee]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Family Entity]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Address)
    

 

	
Acknowledged and Agreed:
    
	
 
    
	
VIRTU FINANCIAL, INC.
    
	
 
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    
	
Title:
    
	
 
    
	
 
    
	
VIRTU FINANCIAL LLC
    
	
 
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    
	
Title:
    

 

 

Exhibit A

 

Existing Equity Interests

 

	
Class of Equity Interests
    	
 
    	
Date of Grant
    	
 
    	
Vesting Term
    	
 
    	
Total Equity
   Interests
    	
 
    	
Vested Equity 
   Interests
    	
 
    	
Unvested Equity
   Interests
    
	
Class A-2 Capital Interests of   Virtu Financial LLC
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
N/A
    
	
[Class B Interests of Virtu   Financial LLC]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Class A Interests of Virtu East   MIP LLC
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
N/A
    

 

 

Exhibit B

 

Virtu Financial LLC Agreement

 

See attached.

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