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Exhibit 10.2    
    

EXECUTION COPY  

  
 

    EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT    
    
    BY AND BETWEEN    
    
    REFCO GROUP LTD., LLC    
    
    AND    
    
    PHILLIP R. BENNETT    
    

JUNE 8, 2004    
    

 
 

EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT    
    

        This EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement"), dated as of June 8,
2004, by and between REFCO GROUP LTD., LLC, a Delaware limited liability company (the "Company"), and PHILLIP R. BENNETT (the
"Executive"), shall become effective upon the Effective Date (as defined below). 

WITNESSETH:  

        WHEREAS, the Executive currently serves as the President and Chief Executive Officer of the Company; 

        WHEREAS,
concurrently with the execution hereof, Thomas H. Lee Equity Fund V, L.P. and certain of its affiliates (collectively, the
"Buyers") and the holders of Membership Interests of the Company are entering into that certain Equity Purchase and Merger Agreement (the
"Purchase Agreement"), whereby, pursuant to the transactions described therein (the "Transactions"), the
Buyers will acquire a majority ownership interest in the Company and the Executive will receive substantial cash proceeds therefrom and acquire a new interest in exchange for his previous interest
therein; 

        WHEREAS,
in connection with the Transactions, the Buyers and the Company desire to ensure the continued and valued services of the Executive to the Company and the Executive desires to
continue to be employed by the Company; 

        WHEREAS,
the Company desires to be assured that the confidential information and goodwill of the Company will be preserved for the exclusive benefit of the Company; and 

        WHEREAS,
in consideration for (i) inducing the Buyers to enter into the Purchase Agreement and agreeing to consummate the Transactions, pursuant to which the Executive will
receive substantial cash proceeds and acquire a new interest in exchange for his previous interest therein, (ii) the continued employment of the Executive by the Company, (iii) the
mutual covenants and promises contained herein and intending to be legally bound thereby and (iv) for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged; 

        NOW,
THEREFORE, the Company and the Executive hereby agree as follows: 

	1.
	EMPLOYMENT.    The Company agrees to employ the Executive, and the Executive agrees to be employed by the Company, for the
period set forth in Section 2, in the positions and with the duties and responsibilities set forth in  Section 3, and upon the other terms and
conditions provided herein.

	2.
	EMPLOYMENT TERM.    The employment of the Executive by the Company pursuant to this Agreement shall be for the period
commencing on the closing date for the transactions contemplated by the Purchase Agreement (such date, the "Effective Date") through and ending on
February 28, 2007 unless earlier terminated pursuant to the provisions of Section 5 hereof (as such period may be extended pursuant to the
immediately following sentence, the "Employment Term"). Beginning on February 28, 2007 and on the last day of each fiscal year of the Company
thereafter (each a "Reset Date"), the Employment Term shall be automatically extended so as to terminate one year after such Reset Date, unless earlier
terminated pursuant to the terms of this Agreement. Notwithstanding anything herein to the contrary, this Agreement will automatically terminate upon termination of the Purchase Agreement prior to the
Effective Date.

	3.
	POSITIONS AND DUTIES.

	(a)
	During
the Employment Term, the Executive's positions shall be Chairman and Chief Executive Officer of the Company. The Executive's responsibilities shall be carried out with the
advice and counsel of the Company's Board of Managers (the "Board") and shall include, but shall not be limited to the following: (i) formulating
and executing the Company's business strategy; (ii) providing senior level counsel as to the business and operations of the Company; (iii) directing the
day-to-day management of the Company's affairs; (iv) representing the 

 

Company
in relationships and business dealings within the financial services industry; and (v) participating in and supporting the activities of the Board. The Executive shall be a member of
the Board and report directly to the Board. 

	(b)
	During
the Employment Term, the Executive shall devote his full business time and attention to the business and affairs of the Company and its affiliated companies (as defined below),
and shall utilize the Executive's best efforts to discharge faithfully and efficiently the duties and responsibilities delegated and assigned to the Executive, except for usual, ordinary, and
customary periods of vacation and absence due to illness; provided, however, that the Executive may
(i) serve on non-profit industry-related, civic or charitable boards or committees, (ii) serve on up to two (2) boards or committees of for-profit
entities, (iii) deliver lectures and fulfill speaking engagements and (iv) manage the Executive's personal investments, so long as such activities do not significantly interfere with the
performance and fulfillment of the Executive's duties and responsibilities as an employee of the Company in accordance with this Agreement and, in the case of the activities described in
clause (ii) of this proviso, such activities will not, in the reasonable judgment of the Board, constitute an actual or potential conflict of interest with the business of the Company or an
affiliated company. It is hereby acknowledged and agreed that, during the Employment Term, the Executive may serve on the board of directors or equivalent supervisory board of the Asset Management
Entities (as defined in the Purchase Agreement), but may not otherwise participate in or manage the affairs or business of such entities. As used in this Agreement, the term
"affiliated company" or "affiliate" shall include any entity or person controlled by, controlling, or
under common control with the Company; provided, however, that such term shall not include any entity
that is affiliated with the Company solely because such entity is controlled by any of the Buyers.

	(c)
	All
services that the Executive may render to the Company or any of its affiliated companies in any capacity during the Employment Term shall be deemed to be services required by this
Agreement and in consideration for the compensation provided for herein.

	4.
	COMPENSATION AND RELATED MATTERS.

	(a)
	Base Salary.    During the Employment Term, the Executive shall receive an annual base salary ("Base
Salary") of $1,100,000. The Base Salary shall be payable in installments in accordance with the Company's general payroll practices for executives in effect at the time such
payment is made, and shall be subject to all necessary withholding taxes, FICA contributions and similar deductions. During the Employment Term, the Executive's Base Salary shall be subject to such
increases (but not decreases) as may be determined from time to time by the Board in its sole discretion; provided,  however, that the Executive's Base
Salary shall be reviewed by the Board at least annually, with a view to making such upward adjustment, if any, as the
Board deems appropriate. Any increased Base Salary shall become the new "Base Salary" for purposes of this Agreement. Payments of Base Salary to the Executive shall not be deemed exclusive and shall
not prevent the Executive from participating in any employee benefit plans, programs, or arrangements of the Company in which the Executive is entitled to participate. Payments of Base Salary to the
Executive shall not in any way limit or reduce any other obligation of the Company hereunder, and no other compensation, benefit, or payment to the Executive hereunder shall in any way limit or reduce
the obligation of the Company regarding the Executive's Base Salary hereunder.

	(b)
	Annual Bonus.    During the Employment Term, the Executive shall be eligible to receive an annual performance bonus for each
fiscal year of the Company, payable in cash (each an "Annual Bonus"), which shall be determined in accordance with the Management Bonus Pool Plan to be
adopted by the Board as of the Effective Date, as amended, modified or supplemented from time to time. 

2

 

	(c)
	Incentive Compensation Awards.    The Executive shall be eligible to participate, in amounts and on terms no less favorable
than with respect to any other employee of the Company, in equity-based compensation plans, including option plans, restricted or phantom membership interest plans and other equity incentive plans as
shall be determined by the Board from time to time during the Employment Term. It is acknowledged that on the Effective Date, the Company will grant the Executive certain restricted Class B
Common Units of the Company, pursuant to that certain Restricted Unit Agreement, by and between the Company and the Executive (the "Restricted Unit
Agreement").

	(d)
	Employee Benefits.

	(i)
	Incentive, Savings, and Retirement Plans.    During the Employment Term, the Executive shall be entitled to
participate, in amounts and on terms no less favorable than with respect to any other employee of the Company, in all incentive, savings, and retirement plans, programs, and arrangements applicable
generally to other senior executives at the Company.

	(ii)
	Welfare Benefit Plans.    During the Employment Term, the Executive and/or the Executive's family, as the case
may be, shall be eligible to participate in and shall receive all benefits under, in amounts and on terms no less favorable than with respect to any other employee of the Company, all welfare benefits
plans, programs, and arrangements provided by the Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death,
and travel accident insurance plans, programs, and arrangements) to the extent applicable generally to other senior executives at the Company. The life insurance benefits that the Company shall
provide pursuant to this Section 4d(ii) shall include, without limitation, the payment of all annual premiums due in respect of each of the
following life insurance policies with Equitable, as insurer: (A) Policy # 49-243-688 and (B) Policy # 44-231-710 (collectively, the
"Executive Life Insurance Benefits"). The Company may, at its election and for its benefit, obtain insurance against the disability, accidental loss or
death of the Executive (e.g. "Key Man Insurance") and the Executive shall submit to such physical examinations and supply such information as may be reasonably required in connection with the
obtainment thereof.

	(e)
	Expenses.    During the Employment Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in performing the Executive's duties and responsibilities hereunder. The Executive shall comply with such reasonable limitations and reporting requirements with
respect to such expenses as the Board may establish from time to time.

	(f)
	Use of Company Aircraft.    For each 12-month period (or ratable portion thereof) during the Employment Term, the
Executive shall be entitled to use aircraft operated by or for the Company (the "Company Aircraft"), to the extent such aircraft are reasonably
available, (1) for business uses related to the Executive's responsibilities with respect to the management of the Company's global operations and (2) subject to the Company's priority
for business purposes, personal uses. The timing and amount of the Executive's use of the Company Aircraft shall be at the Executive's reasonable discretion but shall be consistent with prior use
thereof by the Executive and, in any event, the number of hours of use of Company Aircraft by the Executive shall be limited to the greater of (A) 250 hours per 12-month
period (of which up to 50 hours may be for personal use pursuant to clause (2) above) and (B) such higher number of hours as may be approved in advance by the Board. 

To
the extent that the Executive's actual personal use of any Company Aircraft is properly imputed to the Executive as taxable compensation, the Company shall pay to the Executive an 

3

 

additional
bonus equal to the amount of any federal, state and local taxes payable in respect of such imputed compensation. For purposes of determining the amount of the additional bonus payable
pursuant hereto, the Executive shall be deemed to pay federal, state and local income taxes at the highest marginal rates applicable to individuals for the calendar year in which such additional bonus
payment is to be made. The additional bonus payments provided for in this Section 4(f) shall be made upon the earlier of: 

	(i)
	written
certification to the Company by the Executive's tax advisor (who must be a certified public accountant with professional experience in such matters) that the
Executive is liable for taxes with respect to his personal use of the Company Aircraft; and

	(ii)
	the
assessment of the Executive by any federal, state or municipal taxing authority of any taxes with respect to the Executive's personal use of the Company Aircraft;  provided, however, that no payment under this clause (ii) shall be required to be paid prior to
the 31st of March following the calendar year in which the imputed income giving rise to the payment occurred. 

In
no event shall the Executive be permitted to use any Company Aircraft if and to the extent it would cause the Company's ability to deduct the use, ownership or operation of any Company Aircraft as
an expense or otherwise to be impaired or lost. 

	(g)
	Vacation.    During the Employment Term, the Executive shall be entitled to paid vacation and such other paid absences,
whether for holidays, illness, personal time, or any similar purposes, in accordance with the most favorable policies, practices, and procedures of the Company as in effect for other senior executives
at the Company.

	(h)
	Compensation for Partial Periods.    Except as otherwise noted herein, any payments payable to the Executive pursuant to this
Agreement shall be pro-rated for any partial period of service applicable to such payment.

	5.
	TERMINATION OF EMPLOYMENT.

	(a)
	Death.    The Executive's employment shall terminate automatically upon the Executive's death during the Employment Term.

	(b)
	Disability.    If the Board determines in good faith that the Disability (as defined below) of the Executive has occurred
during the Employment Term, the Company may give the Executive notice of its intention to terminate the Executive's employment (a "Disability Notice of
Termination"). In such event, the Executive's employment hereunder shall terminate effective on the 30th day after receipt of such Disability Notice of Termination by the
Executive (the "Disability Effective Date"), provided that, within the 30-day period after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the
Executive or the inability of the Executive to perform his duties hereunder for an aggregate of one hundred eighty (180) days within any given period of three hundred sixty
(360) consecutive days, as a result of incapacity of the Executive, due to bodily injury or disease or any other mental or physical illness, which may be permanent with regard to the
Executive's ability to return to work in his full capacity; provided, however, that the Executive's
return to work after receipt of a Disability Notice of Termination shall not require or cause the resetting of the one hundred eighty (180) day measurement period set forth above for
determining a Disability. Any determination of Disability shall be made by the Board in consultation with a qualified physician or physicians selected by the Board and/or the Company's insurers and
reasonably acceptable to the Executive (or, if applicable, his legal representative). During any period (not to exceed 360 days) in which the Board believes that the Executive's incapacity
could reasonably be expected to result in a Disability, the Board shall be entitled to appoint an 

4

 

interim
Chief Executive Officer of the Company, without such appointment in and of itself triggering the "Good Reason" termination provisions set forth herein. 

	(c)
	Termination by the Company for Cause.    The Company may terminate the Executive's employment hereunder at any time during
the Employment Term for Cause (as defined below). 

For
purposes of this Agreement, "Cause" shall mean only any of the following: 

	(i)
	the
willful failure or refusal of the Executive to perform substantially the Executive's duties hereunder (other than any such failure resulting from the Executive being
disabled) that is not cured within thirty (30) days after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in
which the Board believes the Executive has not substantially performed the Executive's duties; provided,  however, that the Board's dissatisfaction with the
quality of the Executive's performance hereunder shall not constitute the failure of the Executive to
substantially perform his duties within the meaning of this Section 5(c)(i);

	(ii)
	the
engaging by the Executive in illegal conduct or willful misconduct that, in either case, is materially detrimental to the Company, monetarily or reputationally;

	(iii)
	the
commitment by the Executive of any act of fraud, embezzlement or misappropriation of funds;

	(iv)
	the
conviction by the Executive of, or the plea by the Executive of nolo contendere to, any felony involving moral
turpitude; provided, however, that after indictment of the Executive, the Company may place the
Executive on paid leave of absence until resolution or dismissal of such indictment; or

	(v)
	the
material breach by the Executive of Section 7 or  Section 8 hereof that is not cured by the Executive within thirty (30) days of written
notice of such breach by the Board. 

The
Executive's employment shall not be deemed to have been terminated for "Cause" unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than one-half (1/2) of the entire membership of the Board (excluding the Executive) at a meeting of the Board called and held for such purpose,
finding that in the good faith opinion of the Board, the Executive is guilty of conduct constituting "Cause" and specifying the particulars thereof in detail;  provided, however, that no such determination shall be made by the Board unless the Executive is
provided with reasonable advance notice of the Board meeting, indicating that the purpose of such meeting is the determination of whether such "Cause" exists, and unless the Executive, together with
his counsel, is provided with an opportunity to be heard before the Board at such meeting prior to such determination being made. 

Any
act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by the Executive in good faith and in the best interests of the Company, and no act or failure to act, on the Executive's part, shall be deemed "willful" unless done by the
Executive not in good faith and without a reasonable belief that the Executive's actions or omissions were in the best interest of the Company. 

	(d)
	Termination by the Company without Cause.    The Company may terminate the Executive's employment hereunder at any time
during the Employment Term without Cause.

	(e)
	Termination by the Executive for Good Reason.    The Executive may terminate the Executive's employment hereunder at any time
during the Employment Term for Good Reason (as defined below). 

5

 

For
purposes of this Agreement, "Good Reason" shall mean only any of the following (without the Executive's written consent): 

	(i)
	any
material diminution in the Executive's position (including status, title and reporting requirements), functions, responsibilities, or authority as contemplated by  Section 3(a) of this Agreement
(other than as provided in Section 5(b)), excluding for
this purpose any isolated, insubstantial, and inadvertent actions not taken in bad faith and which are remedied by the Company promptly after receipt of written notice thereof given by the Executive;

	(ii)
	any
failure by the Company to comply with any of its obligations under this Agreement, other than any isolated, insubstantial, and inadvertent actions not taken in bad
faith and which are remedied by the Company promptly after receipt of written notice thereof given by the Executive; or

	(iii)
	the
Company's requiring the Executive to reside in or be based at any office or location other than the greater metropolitan area of New York, New York.

	(f)
	Termination by the Executive Voluntarily.    The Executive may terminate the Executive's employment hereunder at any time
during the Employment Term for any reason other than Good Reason, or for no reason.

	(g)
	Notice of Termination.    Any termination of the Executive's employment hereunder by the Company or by the Executive (other
than a termination due to the Executive's death) shall be communicated by a Notice of Termination (as defined below) to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) in
the case of a termination for Disability, Cause, or Good Reason, sets forth the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so
indicated, and (iii) specifies the Date of Termination (as defined below); provided, however,
that, notwithstanding any provision of this Agreement to the contrary, a Notice of Termination given in connection with a termination for Good Reason shall be given by the Executive within a
reasonable period of time, not to exceed 60 days, following the occurrence of the event giving rise to such right of termination. The failure by the Company or the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of Disability, Cause, or Good Reason shall not waive any right of the Company or the Executive hereunder or preclude the
Company or the Executive from asserting such fact or circumstance in enforcing the Company's or the Executive's rights hereunder.

	(h)
	Date of Termination.    For purposes of this Agreement, the "Date of
Termination" shall mean the effective date of termination of the Executive's employment hereunder, which date shall be: (i) if the Executive's employment is terminated
by the Executive's death, the date of the Executive's death; (ii) if the Executive's employment is terminated because of the Executive's Disability, the Disability Effective Date or such later
date (up to 30 days) specified in the Disability Notice of Termination; (iii) if the Executive's employment is terminated by the Company for Cause or by the Executive for Good Reason,
the date on which the Notice of Termination is given; and (iv) if the Executive's employment is terminated by either party for any other reason, the date specified in the Notice of Termination,
which date shall in no event be earlier than the 30th day after the date such notice is given (such 30 day period, the "Notice Period");  provided,
however, that in lieu of a thirty (30) day Notice Period, the Company may accept or
give a shorter notice period (or no notice period) and place the Executive on paid leave (with such leave constituting active status as the term is used in  Section 6(a) of this Agreement) during
the Notice Period. 

6

 

	(i)
	Public Statement of Termination.    In the event the Executive's employment terminates for any reason other than death of the
Executive, the Company and the Executive shall agree upon a public statement pertaining to the Executive's termination of employment, and the terms of said statement shall not be subject to subsequent
modification by either party unless required by law; provided, however, that in the event the Company
and the Executive are unable in good faith to agree on such a statement, either party may make public statements as are necessary to comply with law.

	6.
	OBLIGATIONS OF THE COMPANY UPON TERMINATION.

	(a)
	Termination by the Company Without Cause or by the Executive for Good Reason.    If, during the Employment Term, the Company
shall terminate the Executive's employment hereunder without Cause, or the Executive shall terminate the Executive's employment for Good Reason, the Executive shall be entitled to receive, as his
exclusive right and remedy in respect of such termination: (i) the payment of (A) all Accrued Obligations plus (B) at the time the
Company pays its executives bonuses in accordance with its general payroll policies, the Pro Rata Bonus plus (C) severance pay equal to
one-twelfth (1/12) of the Executive's Base Salary and Annual Bonus as of the Date of Termination for each of the first twenty-four (24) months from and
following the Date of Termination, payable in accordance with the Company's regular pay schedule and policies and (ii) the provision of the Welfare Benefit Continuation. Within thirty
(30) days of the Company's receipt of a written request from the Executive, the Company shall deposit all amounts due to the Executive pursuant to this  Section 6(a), to the extent that such
amounts are calculable at such time (and, if not so calculable, within thirty (30) days such amounts
become calculable), into an escrow account or rabbi trust pursuant to an escrow or trust agreement that is reasonably acceptable to the Executive. 

For
purposes of this Agreement, "Accrued Obligations" shall mean, (1) all Base Salary earned by the Executive but unpaid as of the Date of
Termination, (2) reimbursement for any and all monies advance in connection with the Executive's employment for reasonable and necessary expenses incurred by the Executive through the Date of
Termination and (3) all other payments and benefits to which the Executive may be entitled under the terms of any applicable compensation arrangement or benefit plan or program of the Company.
For purposes of this Agreement, "Pro Rata Bonus" shall mean, as to any fiscal year of the Company in which the Executive's employment with the Company
is terminated, an amount equal to that pro rata portion of the Executive's Annual Bonus which, but for the Executive's termination of employment, would have been earned by the Executive during such
year. Such pro rata portion shall be determined based upon a formula, the denominator of which shall be 365 and the numerator of which shall be the number of days during the Company's fiscal year in
question which the Executive was employed by the Company on active status (including any period of paid leave in lieu of a notice period, as contemplated by  Section 5(h) of this Agreement). For
purposes of this Agreement, "Welfare Benefit Continuation"
shall mean provision of welfare benefits such that the Executive shall continue to be (1) covered, upon the same terms and conditions described in  Section 4(d)(ii) hereof, by the same or
equivalent medical and dental as in effect for the Executive and the Executive's family immediately prior
to the Date of Termination until the Executive's sixty-fifth (65th) birthday and (2) provided with the Executive Life Insurance Benefits from the Date of Termination until the
second anniversary thereof. 

	(b)
	Death.    If the Executive's employment is terminated by reason of the Executive's death during the Employment Term, this
Agreement shall terminate without further obligations to the Executive's heirs, executors, administrators or other legal representatives under this Agreement, other than for payment of (i) all
Accrued Obligations plus (ii) at the time the 

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Company
pays its executives bonuses in accordance with its general payroll policies, the Pro Rata Bonus. 

	(c)
	Disability.    If the Executive's employment is terminated by reason of the Executive's Disability during the Employment
Term, this Agreement shall terminate without further obligations to the Executive, other than for payment of (i) all Accrued Obligations plus
(ii) at the time the Company pays its executives bonuses in accordance with its general payroll policies, the Pro Rata Bonus.

	(d)
	Termination by the Company for Cause.    If the Executive's employment is terminated for Cause during the Employment Term,
this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive his Accrued Obligations through the Date of Termination, to the extent
theretofore unpaid.

	(e)
	Termination by the Executive.    If the Executive voluntarily terminates the Executive's employment during the Employment
Term, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations.

	(f)
	Accrued Benefits.    Notwithstanding anything else herein to the contrary, all Accrued Obligations to which the Executive (or
his estate or beneficiary) is entitled shall be payable in cash promptly upon termination of his employment, except as otherwise specifically provided herein, or under the terms of any applicable
policy, plan or program.

	(g)
	Complete Payment.    The payments and other benefits to be made or to be extended to the Executive under the provisions of
this Section 6 upon termination of the Executive's employment shall be in complete satisfaction of any and all payments that would otherwise be
due the Executive had he remained employed by the Company during the remainder of the Employment Term and the Company shall have no further obligation to make any payment or extend any benefit to the
Executive pursuant to this Agreement or otherwise upon or after such termination. Except as specifically provided in this Section 6, the
Executive shall not be entitled to any compensation, severance or other benefits from the Company or any of its subsidiaries or affiliates upon the termination of this Agreement for any reason
whatsoever. Acceptance by the Executive of performance by the Company shall constitute full settlement of any claims that the Executive might otherwise assert against the Company, its affiliates or
any of their respective equityholders, partners, directors, officers, employees or agents relating to such termination. The Executive shall not be entitled to any severance or other payments upon
termination of employment except pursuant to this Agreement.

	7.
	PROPRIETARY INFORMATION; INVENTIONS IN THE FIELD.

	(a)
	Proprietary Information.    In the course of service to the Company, the Executive will have access to confidential
information regarding the organization, business and finances of the Company and its affiliated companies, including products, services, designs, methods, techniques, systems, specifications,
know-how, strategic or technical data, marketing research data, product research and development data, sales techniques, confidential customer lists and information, sources of supply and
trade secrets, all of which are confidential and may be proprietary and are owned or used by the Company, or any of its affiliates. Such information shall hereinafter be called
"Proprietary Information" and shall include any and all items enumerated in the preceding sentence and coming within the scope of the business of the
Company or any of its affiliated companies as to which the Executive may have access, whether conceived or developed by others or by the Executive alone or with others during the period of service to
the Company, whether or not conceived or developed during regular working hours. Proprietary Information shall not include any records, data or information 

8

 

which
are (i) in the public domain during or after the Employment Term provided the same are not in the public domain as a consequence of disclosure directly or indirectly by the Executive in
violation of this Agreement, (ii) required to be disclosed by law, or (iii) reasonably required to be disclosed in prosecuting or defending any suit, proceeding or investigation to which
the Executive is a party. 

	(b)
	Fiduciary Obligations.    The Executive agrees that Proprietary Information is of critical importance to the Company and a
violation of this Section 7 would seriously and irreparably impair and damage the Company's business. The Executive agrees that he shall keep all
Proprietary Information in a fiduciary capacity for the sole benefit of the Company.

	(c)
	Non-Use and Non-Disclosure.    The Executive shall not during the Employment Term or at any time
thereafter: (i) disclose, directly or indirectly, any Proprietary Information to any person, other than any person who, in the reasonable judgment of the Executive, needs to know such
Proprietary Information or such other persons to whom the Executive has been specifically instructed to make disclosure by the Board and in all such cases only to the extent required in the course of
the Executive's service to the Company; or (ii) use any Proprietary Information, directly or indirectly, for the Executive's own benefit or for the benefit of any person or entity other than
the Company.

	(d)
	Assignment of Inventions.    The Executive agrees to assign and transfer to the Company or its designee, without any separate
remuneration or compensation, his entire right, title and interest in and to all Inventions in the Field (as defined below), together with all United States and foreign rights with respect thereto,
and, at the Company's expense, to execute and deliver all appropriate patent and copyright applications for securing United States and foreign patents and copyrights on Inventions in the Field and to
perform all lawful acts, including giving testimony, and to execute and deliver all such instruments that may be necessary or proper to vest all such Inventions in the Field and patents and copyrights
with respect thereto in the Company, and to assist the Company in the prosecution or defense of any interference which may be declared involving any of said patent applications, patents, copyright
applications or copyrights. For the purposes of this Agreement, the words "Inventions in the Field" shall include any discovery, process, design,
development, improvement, application, technique, or invention, whether patentable or copyrightable or not and whether reduced to practice or not, conceived, created, discovered, invented or made by
the Executive, individually or jointly with others (whether on or off the Company's premises or during or after normal working hours), while in the employ of the Company or any of its affiliated
companies, and which was or is directly or indirectly related to the business of the Company or any of its affiliated companies or suppliers or customers, or which resulted or results from any work
performed by, or use of any Documents, Property or other personal property of the Company (whether tangible or intangible and whether owned, leased or contracted for) by, any executive, employee or
agent of the Company or any of its affiliated companies.

	(e)
	Return of Documents.    All (i) notes, memoranda, reports, lists, letters, documents, records, specifications,
software programs, software code, data, tapes and other media of every kind, form and description relating to or within the scope of the business of the Company or any of its affiliated companies and
any copies, in whole or in part, thereof (collectively, the "Documents"), whether or not prepared by the Executive, and (ii) all computers,
cellular telephones, pagers, credit and/or calling cards, keys, access cards or other personal property of or relating to the Company or any of its affiliated companies (collectively, the
"Property") shall be the sole and exclusive property of the Company. The Executive shall safeguard all Documents and Property and shall surrender to the
Company within five (5) days of any Date of Termination, or at such earlier time or times as the Board or its designee may specify, all 

9

 

Documents
and Property then in the Executive's possession or control; provided, however, that the
Executive may retain a copy of any personnel-related materials relating to his employment with the Company, including, but not limited to, this Agreement, any compensation or benefit plan or program,
or any awards or evidence of participation in such plans or programs, or any other communications to or from the Company related to Executive's employment. During the Employment Term, the Executive
shall not make, use or permit to be used any Documents or Property otherwise than for the benefit of the Company. After the Employment Term, the Executive shall not use or permit others to use any
Documents or Property. 

	(f)
	Acknowledgement.    This Section 7 shall not be construed to
unreasonably restrict the Executive's ability to disclose Proprietary Information in an arbitration or court proceeding regarding the assertion of, or defense against, any claim of breach of this
Agreement.

	8.
	RESTRICTIONS ON ACTIVITIES OF THE EXECUTIVE.

	(a)
	Acknowledgments.    The Executive and Company acknowledge and agree that the Executive is being employed hereunder in a key
capacity with the Company and that the Company is engaged in a highly competitive business and that the success of the Company's business in the marketplace depends upon its goodwill and reputation
for quality and dependability. The Executive and the Company further acknowledge and agree that (i) reasonable limits may be placed on the Executive's ability to compete against the Company and
its affiliated companies as provided herein to the extent that they protect and preserve the legitimate business interests and goodwill of the Company and/or its affiliated companies and
(ii) such limits are (A) in consideration for and as an inducement for, among other things, the consummation of the Transactions that will result in the Executive receiving substantial
cash proceeds, (B) the result of arms-length negotiations between the parties, (C) reasonable in scope and duration, and (D) necessary to protect the legitimate
business interests of the Company and its affiliated companies. In addition, the Executive acknowledges (1) that the business of the Company and its subsidiaries is international in scope and
without geographical limitation and (2) notwithstanding the state of incorporation or formation or principal office or location of the Company or any of its affiliated companies, or any of
their respective executives or employees (including the Executive), it is expected that the Company will have business activities and have valuable business relationships within its industry
throughout the United States and the world. The Executive acknowledges that he has carefully read this Agreement and has given careful consideration to the restraints imposed upon the Executive by
this Agreement, and is in full accord as to their necessity for the reasonable and proper protection of the Proprietary Information, whether now existing or to be developed in the future. The
Executive expressly acknowledges and agrees that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area.

	(b)
	Non-Competition Restrictions.    During the Non-Competition Period (as defined below), the Executive
will not and will not permit any of his Affiliates (as defined in the Purchase Agreement) to anywhere in the Territory (as defined below) engage or participate in, directly or indirectly, alone or as
principal, agent, employee, employer, consultant, investor or partner of, or assist in the management of, or provide advisory or other services to, or own any stock or any other ownership interest in,
or make any financial investment in, any business or entity which is Competitive with the Company (as defined below); provided, however, that
(i) the ownership of not more than 2% of the outstanding securities of any class of securities listed on a national exchange or inter-dealer quotation system and (ii) service as a
non-employee member of the board of directors or other governing body of an Asset Management Entity shall not constitute a violation of this  Section 8(b). For purposes of this Agreement, a business
or entity shall be considered "Competitive with the
Company" as of any point in time during the Non-Competition Period if it competes with (A) the products then marketed or sold by 

10

 

the
Company and/or any of its affiliated companies and as such products may be improved and/or modified, (B) the services then marketed, sold or provided by the Company and/or any of its
affiliated companies and as such services may be improved and/or modified or (C) the products and/or services that the Company and/or any of its affiliated companies, is then actively
developing, designing, marketing, producing or supplying in the future including, without limitation, the business of providing financial products or services, including those involving or related to
exchange-traded derivatives, managed futures, prime brokerage services, fixed income securities, foreign exchange, equities, over-the-counter derivatives and asset management
of structured products related to the Company's core business. For purposes of this Agreement, the "Non-Competition Period" shall mean the
period commencing on the Effective Date and ending on the later of (x) the two year anniversary of the Date of Termination and (y) the five year anniversary of the Effective Date. For
purposes of this Agreement, "Territory" shall mean the States of New York and Illinois and every other State or foreign country where the Company and/or
any of its affiliated companies maintains employees, owns or leases property or otherwise conducts business during the Non-Competition Period. 

	(c)
	Non-Solicitation and No-Hire Restrictions.    During the Non-Competition Period, the
Executive will not and will not permit any of his Affiliates to (i) solicit, or attempt to solicit any officer, director, consultant or executive of the Company or any of its affiliated
companies (each such individual, a "Company Affiliate") to leave his or her engagement with the Company or such affiliated company, (ii) hire any
Company Affiliate or (iii) call upon, solicit, divert or attempt to solicit or divert from the Company or any of its affiliated companies any of their customers or suppliers or potential or
prospective customers or suppliers of whom the Executive was aware were potential or prospective customers prior to or during the Employment Term in any manner that harms or interferes with such
person's relationship with the Company; provided, however, that nothing in this  Section 8(c) shall be
deemed to prohibit the Executive from calling upon or soliciting a customer or supplier of the Company or any affiliated
company during the Non-Competition Period if such action relates solely to a business which is not Competitive with the Company; provided,  further, that
nothing in this Section 8(c) shall be deemed to prohibit the Executive from
(A) soliciting or hiring any Company Affiliate if such Company Affiliate is a member of the Executive's immediate family; (B) placing advertisements in newspapers or other media of
general circulation advertising employment opportunities; and (C) hiring any Company Affiliate who responds to such advertisements without any prior notice thereof by the Executive or any of
his Affiliates; provided that such Company Affiliate was not otherwise solicited by the Executive or any of his Affiliates in violation of this Agreement.

	(d)
	Non-Disparagement Restrictions.    Each of the Executive and the Company covenants and agrees that during the
Non-Competition Period, such party will not, directly or indirectly, either in writing or by any other medium, make any disparaging, derogatory or negative statement, comment or remark
about the other party or any of its affiliated companies, or Thomas H. Lee Partners or any of its affiliates, or any of their respective officers, directors, employees, affiliates, subsidiaries,
successors and assigns, as the case may be; provided, however, that either party may make such
statements, comments or remarks as are necessary to comply with law.

	(e)
	The Executive's Skills and Abilities.    THE EXECUTIVE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE
POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF
WITHOUT 

11

 

VIOLATING
ANY PROVISION OF SECTION 7 OR SECTION 8 HEREOF, FOR EXAMPLE, BY USING SUCH KNOWLEDGE, SKILLS
AND ABILITIES, OR SOME OF THEM, IN THE SERVICE OF A BUSINESS THAT IS NOT COMPETITIVE WITH THE COMPANY. 

	(f)
	The
Executive will not circumvent the purpose of any restriction contained in this Section 8 by engaging in business outside the
Territory through remote means such as telephone, correspondence or computerized communication.

	9.
	REPRESENTATIONS AND WARRANTIES.

	(a)
	The
Company represents and warrants to the Executive that the execution, delivery, and performance by the Company of this Agreement have been duly authorized by all necessary limited
liability company action of the Company and do not and will not conflict with or result in a violation of any provision of, or constitute a default under, any material contract, agreement, instrument,
or obligation to which the Company is a party or by which it is bound.

	(b)
	The
Executive represents and warrants to the Company that the execution, delivery, and performance by the Executive of this Agreement do not and will not conflict with or result in a
violation of any provision of, or constitute a default under, any material contract, agreement, instrument, or obligation to which the Executive is a party or by which the Executive is bound.

	10.
	FULL SETTLEMENT.

	(a)
	There
shall be no right of set off or counterclaim against, or delay in, any payments to the Executive, or to the Executive's heirs or legal representatives, provided for in this
Agreement, in respect of any claim against or debt or other obligation of the Executive or others, whether arising hereunder or otherwise.

	(b)
	In
no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains other employment.

	11.
	INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE.    The Company agrees that in connection with the Executive's service to
the Company pursuant hereto, the Executive shall be entitled to the benefit of any indemnification provisions in the Company's Limited Liability Company Agreement and/or any of its affiliated
companies and any director and officer liability insurance coverage carried by the Company and/or any of its affiliated companies, if any. The Company shall take no action to amend or revise the
provisions in its Limited Liability Company Agreement that would reduce or impair the right of the Executive to indemnification thereunder.

	12.
	INJUNCTIVE RELIEF.    In recognition of the fact that a breach by the Executive of any of the provisions of  Section 7 or Section 8 hereof will cause irreparable damage to the Company for which
monetary damages alone will not constitute an adequate remedy, the Company shall be entitled as a matter of right (without being required to prove damages or furnish any bond or other security) to
obtain a restraining order, an injunction, an order of specific performance, or other equitable or extraordinary relief from any court of competent jurisdiction restraining any further violation of
such provisions by the Executive or requiring the Executive to perform the Executive's obligations hereunder. Such right to equitable or extraordinary relief shall not be exclusive but shall be in
addition to all other rights and remedies to which the Company may be entitled at law or in equity, including without limitation the right to recover monetary damages for the breach by the Executive
of any of the provisions of this Agreement.

	13.
	GOVERNING LAW.    This Agreement shall be governed by and construed in accordance with the laws of the State of New York,
without giving effect to any choice of law or conflict of law 

12

 

provision
or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York. 

	14.
	NOTICES.    All notices, requests and demands to or upon the parties hereto to be effective shall be in writing, by
facsimile, by overnight courier or by registered or certified mail, postage prepaid and return receipt requested, and shall be deemed to have been duly given or made upon: (a) delivery by hand,
(b) one business day after being sent by nationally recognized overnight courier; or (c) in the case of transmission by facsimile, when confirmation of receipt is obtained. Such
communications shall be addressed and directed to the parties as follows (or to such other address as either party shall designate by giving like notice of such change to the other party):

	(i)
	if
to the Company: 

Refco
Group Ltd., LLC

One World Financial Center

200 Liberty Street

New York, NY 10281

Attention: Board of Managers 

with
a copy (which shall not constitute notice to the Company) to: 

Weil,
Gotshal & Manges LLP

100 Federal Street

Boston, MA 02110

Attention: James Westra 

	(ii)
	if
to the Executive: 

Phillip
R. Bennett

125 Colt Lane

Gladstone, NJ 07934 

with
a copy (which shall not constitute notice to the Executive) to: 

Mayer,
Brown, Rowe & Maw LLP

1675 Broadway

New York, NY 10019

Attention: Joseph P. Collins 

or
to such other address as the party to whom notice is given may have previously furnished to the other in writing in the manner set forth above. 

	15.
	BINDING EFFECT; NO THIRD PARTY BENEFIT.

	(a)
	This
Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive. This Agreement shall inure to the benefit of
and shall be enforceable by the Executive's legal representatives.

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

	(c)
	The
Company shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all the business and/or assets
of the Company, by agreement in writing, expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such
succession or assignment had taken place. As used in this Agreement, the "Company" shall mean the Company as hereinabove defined and any successor or assign to its business and/or assets as aforesaid
which executes and delivers this Agreement provided for in this 

13

 

 Section 15(c) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 

	(d)
	Nothing
in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties hereto, and their respective heirs, legal representatives,
successors, and permitted assigns, any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement.

	16.
	MISCELLANEOUS.

	(a)
	Amendment.    This Agreement may not be modified or amended in any respect except by an instrument in writing signed by each
of the Company and the Executive. No person, other than pursuant to a resolution of the Board or a committee thereof, shall have authority on behalf of the Company to agree to modify, amend, or waive
any provision of this Agreement or anything in reference thereto.

	(b)
	Actions by the Company and/or the Board.    Any action to be taken by the Company and/or the Board pursuant to this Agreement
shall be subject to the minimum approval and other requirements set forth in the Company's Limited Liability Company Agreement and that certain Securityholders' Agreement, dated as of the Effective
Date, by and among the Company and certain of its securityholders, as amended, modified or supplemented from time to time (the "Securityholders'
Agreement").

	(c)
	Waiver.    Any term or condition of this Agreement may be waived at any time by the party hereto which is entitled to have
the benefit thereof, but such waiver shall only be effective if evidenced by a writing signed by such party, and a waiver on one occasion shall not be deemed to be a waiver of the same or any other
type of breach on a future occasion. No failure or delay by a party hereto in exercising any right or power 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 or power.

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

	(e)
	Nonalienation of Benefits.    The Executive shall not have any right to pledge, hypothecate, anticipate, or in any way create
a lien upon any payments or other benefits provided under this Agreement; and no benefits payable hereunder shall be assignable in anticipation of payment either by voluntary or involuntary acts, or
by operation of law, except by will or pursuant to the laws of descent and distribution.

	(f)
	Attorneys' Fees.    The Executive and the Company agree that in any court, arbitration or other dispute resolution
proceedings arising out of this Agreement, the prevailing party shall be entitled to its or his reasonable attorneys' fees and costs incurred by it or him in connection with resolution of the dispute
in question in addition to any other relief granted thereby.

	(g)
	Severability.    The parties agree that each provision herein shall be treated as a separate and independent clause, and the
unenforceability of any one clause shall in no way impair the enforceability of any other clauses of this Agreement. If any one or more provisions of this Agreement is held to be invalid or
unenforceable for any reason, including due to being overbroad in scope activity, subject or otherwise: (i) this Agreement shall be considered divisible; (ii) such provision shall be
deemed inoperative to the extent it is deemed invalid or unenforceable; and (iii) in all other respects this Agreement shall remain full force and effect;  provided, however, that if any such provision maybe made valid or enforceable by limitation
 

14

 

thereof,
then such provision shall be deemed to be so limited and shall be valid and/or enforceable to the maximum extent permitted by applicable law. 

	(h)
	Entire Agreement.    This Agreement, the Company's Limited Liability Company Agreement, the Securityholders Agreement and the
Restricted Unit Agreement constitute the entire agreement and understanding of the parties hereto concerning the Executive's employment with the Company and from and after the Effective Date, this
Agreement shall supersede any other prior negotiations, discussions, writings, agreements or understandings, both written and oral, between the parties with respect to such subject matter.

	(i)
	Captions.    The captions herein are inserted for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect in any manner the meaning or interpretation of this Agreement.

	(j)
	References.    All references in this Agreement to Sections, subsections and other subdivisions refer to the Sections,
subsections and other subdivisions of this Agreement unless expressly provided otherwise. The words "this Agreement," "herein," "hereof'," "hereunder," and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so limited. Whenever the words "include," "includes," and "including" are used in this Agreement, such words shall be deemed
to be followed by the words "without limitation." Words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. 

15

        IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer, and the Executive has executed this Agreement, as of the date first
above set forth. 

	 	 	REFCO GROUP LTD., LLC
	

/s/  PHILLIP R. BENNETT      
	
 	

By:	
 	

/s/  PHILLIP BENNETT      

	PHILLIP R. BENNETT	 	Name:	 	Phillip Bennett

	 	 	Title:	 	President

QuickLinks

Exhibit 10.2

EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT BY AND BETWEEN REFCO GROUP LTD., LLC AND PHILLIP R. BENNETT JUNE 8, 2004

EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.3    
    

 
  FIRST AMENDMENT
  TO
  EQUITY PURCHASE AND MERGER AGREEMENT    
    

        This First Amendment to Equity Purchase and Merger Agreement (this "Amendment"), dated as of July 9, 2004,
is made by and among Refco Group Ltd., LLC, a Delaware limited liability company (the "Company"), Refco Group Holdings, Inc., a Delaware
corporation ("RGHI"), THL Refco Acquisition Partners, a Delaware general partnership (the "Buyer"),
Refco Merger LLC, a Delaware limited liability company ("Merger Company" and, collectively with the Company, RGHI and Buyer, the
"Original Parties"), and New Refco Group Ltd., LLC, a Delaware limited liability company ("New
Refco"). 

        WHEREAS,
the Original Parties (and certain other parties identified in the preamble thereof for the limited purposes set forth therein) entered into that certain Equity Purchase and
Merger Agreement (the "Agreement"), dated as of June 8, 2004; 

        WHEREAS,
the parties to this Amendment desire that the Agreement be amended as specifically provided in this Amendment; and 

        WHEREAS,
capitalized terms used but not otherwise defined in this Amendment shall be given the respective meanings ascribed to them in the Agreement. 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: 

        1.    Amendments to the Agreement.    

        (a)   The
final "Whereas" clause in the preamble to the Agreement is hereby amended to read in its entirety as follows: 

        "WHEREAS,
subject to the terms and conditions hereof, the Contribution (as defined in Section 1.2) will occur on the terms
described in this Agreement;" 

        (b)   Article 1 of the Agreement is hereby amended to read in its entirety as follows: 

"ARTICLE 1  

MEMBERSHIP INTERESTS PURCHASE; CONTRIBUTION  

        Section 1.1    Purchase and Sale of the Membership Interests.    

        (a)   Upon
the terms and subject to the conditions set forth in this Agreement, at the Closing the Buyer will purchase from RGHI, and RGHI will sell to the Buyer, three
hundred forty-nine and six/tenths (349.6) Voting Membership Interests, for cash equal to the Per Share Amount for each Voting Membership Interest. "Per Share
Amount" means the quotient of the Aggregate Consideration Amount divided by the total number of Membership Interests issued and outstanding immediately prior to the
Contribution. "Aggregate Consideration Amount" means $2,250,000,000 minus the sum of (i) the total amount of Company Indebtedness outstanding as
of immediately prior to the Closing (including amounts required to be repaid as a condition to the Closing in accordance with Section 6.2(l)),
plus (ii) any out-of-pocket expenses or other additional amounts (other than interest accrued prior to the Closing), including prepayment premiums, that are required to
be paid in order to fully repay as promptly as practicable in connection with or following the Closing any Company Indebtedness outstanding as of immediately prior to the Closing, plus
(iii) any amounts that were paid by the Company or any of the Subsidiaries following February 29, 2004 and prior to the Closing for or in connection with the repayment of any Company
Indebtedness (other than payments of interest accrued prior to such repayment), plus (iv) any amounts that have been paid following February 29, 2004 and prior to the Closing by the
Company or any of the Subsidiaries that represent any deferred (whether or not contingent) obligation to pay purchase price or other consideration in connection with any acquisition of a business or
any business combination transaction, plus (v) any Company Transaction Expenses in excess of $20,000,000 in the aggregate, plus (vi) any amounts payable by the Company 

 

pursuant
to a Change in Control (as defined in the Memphis Holdings Purchase Agreement) pursuant to that certain Stock Purchase Agreement, dated as of January 2, 2001, between Memphis Holdings,
LLC and the Company (the "Memphis Holdings Purchase Agreement"). The items in clauses (i) through (vi) collectively are referred to herein
as the "Debt and Excess Expense Amount." The parties acknowledge and agree that it is their intention that the Per Share Amount will result in the net
earnings or losses, as the case may be, of the Company and the Subsidiaries (other than the net earnings or losses, as the case may be, of the Asset Manager Entities), for all periods following
February 29, 2004, accruing to the benefit of Persons who will be the owners of the Company from and following the Closing. 

        (b)   The
number of Voting Membership Interests purchased by the Buyer pursuant to Section 1.1(a) may be reduced or
increased at the election of the Buyer; provided, however, that such number of Voting Membership Interests cannot be increased above the number that can
be purchased for $627,000,000 at the Per Share Amount. Such election to reduce or increase the number of purchased Voting Membership Interests will have the effect of increasing or reducing,
respectively, the number of Voting Membership Interests held by RGHI that are exchanged for the right to receive cash pursuant to the Contribution, as specified in  Section 2.1(a). The Voting
Membership Interests purchased by the Buyer pursuant to  Section 1.1(a) are referred to herein as the "Purchased Membership Interests." 

        (c)   At
the Closing, RGHI shall deliver to the Buyer certificate(s) representing the Purchased Membership Interests, duly endorsed in blank or accompanied by stock powers or
any other proper instrument of assignment endorsed in blank in proper form for transfer. At the Closing, the Buyer shall pay to RGHI, in consideration for the Purchased Membership Interests, by wire
transfer of immediately available funds to the account designated by RGHI, the cash amount provided in Section 1.1(a). 

        Section 1.2    Contribution of Membership Interests.    Upon the terms and subject to the conditions set forth
in this Agreement, at the Closing at the time provided for in Section 1.6(b), and upon the terms and subject to the conditions in this Agreement,
Buyer and RGHI shall contribute all of the Membership Interests held by them to New Refco in exchange for the consideration described in  Section 2.1 (the "Contribution"). 

        Section 1.3    Contribution Effective Time.    Subject to the provisions of this Agreement, the Contribution
shall be consummated effective on the Closing Date at the time specified in Section 1.6(b) (the "Contribution Effective
Time"). 

        Section 1.4    Finance Company Merger.    At the time provided for in  Section 1.6(b), and upon the terms and subject to the conditions
in this Agreement and in accordance with the Delaware Limited Liability Company
Act (the "DLLCA"), New Refco and the Company shall cause Finance Company to be merged with and into the Company, with the Company being the surviving
entity of the merger (the "Finance Company Merger"). New Refco, Finance Company and the Company shall cause the Finance Company Merger to be consummated
by filing an appropriate certificate of merger or other appropriate documents with the Secretary of State of the State of Delaware in such form as required by, and executed in accordance with, the
relevant provisions of the DLLCA, on the Closing Date. Pursuant to the Finance Company Merger, (i) all equity interests of Finance Company outstanding immediately prior to the Finance Company
Merger shall be extinguished in their entirety and (ii) all equity interests of the Company outstanding immediately prior to the Finance Company Merger shall remain outstanding and shall not be
affected by the Finance Company Merger. 

        Section 1.5    Limited Liability Company Agreement.    At the Contribution Effective Time, (i) the
limited liability company agreement of New Refco shall be amended and restated to read as set forth in the form attached hereto as Exhibit C (the
"Amended and Restated Limited Liability Company Agreement") and (ii) the limited liability company agreement of the Company shall be amended and 

2

 

restated
in a manner reasonably satisfactory to RGHI and the Buyer to reflect a customary form of limited liability company agreement for a single member limited liability company. 

        Section 1.6    Closing.    

        (a)    Time and Place of Closing.    The closing of the transactions contemplated hereby (the
"Closing") shall take place at 10:00 a.m., New York time, on a date to be specified by the Parties, which shall be no later than the second
Business Day after satisfaction (or waiver) of the conditions set forth in Article 6 other than those conditions that, by their terms cannot be satisfied until the Closing (the
"Closing Date"), at the offices of Mayer, Brown, Rowe & Maw LLP, 1675 Broadway, New York, New York 10019, unless another time, date or place is
agreed to in writing by the Parties. 

        (b)    Closing Procedures.    At the Closing, the following transactions will occur in the following chronological
order: (i) the purchase of the Purchased Membership Interests in accordance with Section 1.1, (ii) the BAWAG Interest Transfer
Transactions (in the order specified in Section 5.13), (iii) the distributions set forth in  Section 5.14 (subject, in the case of the
$500 million cash distribution referred to in  Section 5.14, to the provisions of Section 5.9), and (iv) simultaneously, the
Contribution and the Finance Company Merger." 

        (c)   Section 2.1 of the Agreement is hereby amended to read in its entirety as follows: 

        "Section 2.1    Specific Provisions Regarding the Contribution.    

        (a)   At
the Contribution Effective Time, each of Buyer and RGHI will contribute to New Refco the outstanding Membership Interests of the Company held by Buyer and RGHI in
exchange for the following consideration: 

        (i)    each
outstanding Voting Membership Interest and Non-Voting Membership Interest held by RGHI that was acquired by RGHI pursuant to the BAWAG Interest Transfer
Transactions (the "BAWAG Transferred Interests") shall, pursuant to the Contribution, be exchanged for one Class A Common Unit (as defined in the
Amended and Restated Limited Liability Company Agreement) of New Refco (each, a "Class A Common Unit"); 

        (ii)   in
the case of the number of outstanding Voting Membership Interests other than BAWAG Transferred Interests held by RGHI that is equal to the RGHI Equity Portion, each
such outstanding Voting Membership Interest shall, pursuant to the Contribution, be exchanged for one Class A Common Unit; 

        (iii)  in
the case of the outstanding Voting Membership Interests held by RGHI that are not exchanged for Class A Common Units in accordance with clauses
(i) and (ii) above, each such outstanding Voting Membership Interest shall, pursuant to the Contribution, be exchanged for cash equal to the Per Share Amount; and 

        (iv)  each
of the Purchased Membership Interests shall, pursuant to the Contribution, be exchanged for one Class A Common Unit. 

        (b)    Surrender of Certificates.    At the Contribution Effective Time, each holder of Membership Interests shall
deliver to New Refco such holder's certificate(s) representing such holder's Membership Interests, duly endorsed in blank or accompanied by stock powers or any other proper instrument of assignment
endorsed in blank in proper form for transfer. At the Closing, each holder will be entitled to receive: (i) cash in the amount provided in  Section 2.1(a) for any Membership Interests of such
holder that were exchanged for the right to receive the Per Share Amount, and
(ii) certificates representing any Class A Common Units issued to such holder pursuant to the Contribution for any Membership Interests of such holder that were exchanged for
Class A Common Units. 

        (c)    Redemption of Existing Equity Interests of New Refco.    At the Contribution Effective Time, all equity
interests of New Refco that were outstanding immediately prior to the Contribution Effective 

3

 

Time
shall be redeemed by New Refco in exchange for the cash (not to exceed $1,000) that previously was contributed by the Buyer to New Refco for such equity interests." 

        (d)   Section 2.5 of the Agreement is hereby amended to read in its entirety as follows: 

        "Section 2.5    Distribution of Proceeds.    Immediately following the Finance Company Merger, the Company
shall distribute to New Refco the net proceeds received from the debt financing transactions referred to in Section 6.2(f) along with any
additional funds up to $50 million (or such other amount of additional funds as agreed by the Buyer and the Company). These amounts shall provide the cash that is to be paid at the Closing by
New Refco on account of the Contribution." 

4

   
        (e)   Section 4.5 of the Agreement is hereby amended to add the following sentence at the end thereof: 

        "For
sake of clarity, it is agreed and understood that this representation is not intended to cover the investment bankers retained in connection with the placement and issuance of the
debt that will be issued by Finance Company in connection with the Closing, as contemplated by this Agreement." 

        (f)    Section 5.1(c)(ii) of the Agreement is hereby amended to read in its entirety as follows: 

        "(ii) prior
to the Closing, the Company shall contribute to Forstmann-Leff International Associates LLC ("FLIA")
(i) the 99% equity interest owned by the Company in Forstmann-Leff Associates, LLC and, (ii) subject to the receipt of consent number 48A on  Schedule 3.5, the 99% equity interest owned by
the Company in Forstmann-Leff Associates Holdings, LLC, and at the Closing (at the
time described in Section 1.6(b)), the Company shall distribute to RGHI the equity interest in FLIA, which directly or indirectly holds all of
the equity interests of the entities listed on Schedule 5.1(c) (collectively, FLIA, Forstmann-Leff Associates Holdings, LLC,
Forstmann-Leff Associates, LLC and the entities listed on Schedule 5.1(c) are referred to as the "Asset
Manager Entities"), and" 

        (g)   Section 5.1(f)(ii) of the Agreement is hereby amended to read in its entirety as follows: 

        "(ii) may
effect the acquisition by the Asset Manager Entities that is contemplated by the Asset Purchase Agreement, dated April 23, 2004, between
Forstmann-Leff Associates, LLC and Schroder Investment Management North America Inc., as amended, as previously disclosed to the Buyer;" 

        (h)   Section 5.1(k) of the Agreement is hereby amended to read in its entirety as follows: 

        "use
any funds, other than funds generated by the Asset Manager Entities, to fund the Asset Manager Entities or their operations;" 

        (i)    Section 5.1(m) of the Agreement is hereby amended by deleting the reference to
"Section 5.1(k)" appearing in the third line and substituting "Section 5.1(f)(ii)"
therefor. 

        (j)    Section 5.14 of the Agreement is hereby amended by inserting "and" immediately prior to clause (iii) and
deleting clause (iv) and the "and" appearing at the end of clause (iii) and inserting a period therefor. 

        (k)   Section 6.3(a) of the Agreement is hereby amended by inserting "and New Refco" after each instance of the word
"Buyer" appearing therein. 

        (l)    Section 7.3 of the Agreement is hereby amended (i) to add "or any Subsidiary of Buyer" after the word
"Buyer" the first time that it appears in clause (iii) of such Section 7.3 and (ii) to add "or such Subsidiary of Buyer" after the
word "Buyer" the second time it appears in clause (iii) of such Section 7.3. 

        (m)  Section 8.2(a) of the Agreement is hereby amended by adding the following sentence at the end of
Section 8.2(a): 

"In
addition, if the Closing occurs, RGHI agrees to indemnify, defend and hold the Company and each of its Subsidiaries harmless from any Loss that represents a payment or payment obligation in excess
of $10,000,000 in the aggregate (whether arising as the result of a settlement or a judgment but not including the Company's or such Subsidiary's legal expenses or the Company's or such Subsidiary's
other defense costs in connection with such matter) in connection with the matter disclosed on Schedule 3.13 and referred to as  Tradewinds, et. al. v. Refco Securities and
Refco Capital Markets." 

5

 

        (n)   Section 8.2(b) of the Agreement is hereby amended (i) by inserting "or New Refco" after "Buyer" in
clause (i) thereof, and (ii) by deleting "which are to be performed by the Surviving Company after the Closing Date" from clause (iii). 

        (o)   Section 9.11 of the Agreement is hereby amended as follows: 

          (i)  The
definition of "Company Transaction Expenses" is hereby amended to add "or any Subsidiary of the Company (other than Finance Company)" after the words "the Company"
in the second line thereof. 

         (ii)  The
following definition of "New Refco" is hereby added in the appropriate alphabetical location: 

        "New Refco" means New Refco Group Ltd., LLC. 

        (iii)  The
definition of "RGHI Equity Portion" is hereby amended to read in its entirety as follows: 

"RGHI Equity Portion" means the number of the Voting Membership Interests other than BAWAG Transferred Interests held by RGHI that must be exchanged for
Class A Common Units pursuant to the Contribution in order that the total number of Class A Common Units that are held by RGHI immediately following the Contribution (including
Class A Common Units that are issued to RGHI on account of the contribution of the BAWAG Transferred Interests) will represent 43% of the total Class A Common Units that will be issued
and outstanding immediately following the Contribution." 

        (p)   The
Schedules to the Agreement are hereby amended as follows: 

          (i)  Schedule 3.5
is hereby amended by inserting the following as new number 48A under "Third Party Consents, Miscellaneous Agreements": 

        "48A.
Amended and Restated Limited Liability Company Agreement of Forstmann-Leff Associates Holdings, LLC dated January 1, 2003 between HLA Holdings LLC and Refco
Group Ltd., LLC (consent to transfer of membership interests in Forstmann-Leff Associates Holdings, LLC to FLIA as contemplated by  Section 5.1(c)(ii) of the Agreement)." 

         (ii)  Schedule 3.5
is hereby amended by inserting the following as new number 55 under "Third Party Consents, Agreements Triggering Possible Repurchase upon a Change
of Control": 

        "55.
Amended and Restated Buy-Out Agreement dated January 1, 2003 by and among Refco Group Ltd., LLC, Forstmann-Leff Associates, LLC,
Forstmann-Leff Holdings, LLC, HLA Holdings LLC, FLA Advisers L.L.C., FLA Asset Manager L.L.C. and William F. Harnisch (put right of HLA Holdings LLC with respect to 1% membership interests
of Forstmann-Leff Associates Holdings LLC)." 

        (iii)  Schedule 5.1(c)
is hereby amended by deleting "Forstmann-Leff Associates, LLC" from the list of entities. 

        2.     Certain Other References.    In addition to the modifications provided for in  Section 2 of this Amendment, (i) all references in the
Agreement to "Surviving Company" or "Merger Company" shall be deemed to be
references to "New Refco" (except that the references to "Surviving Company" in Section 2.4, Section 5.7, Section 7.3,
Section 8.1 and in the definition of "Company Transaction Expenses" shall be deemed to be references to the "Company"), (ii) all references in the Agreement to
"the Merger" shall be deemed to be references to "the Contribution," (iii) all references in the Agreement to "the Effective Time" shall be deemed to be references to "the Contribution
Effective Time," and (iv) all references to "this Equity Purchase and Merger Agreement" shall be deemed to be references to "this Equity Purchase and Contribution Agreement." 

6

 

        3.     Forms of Certain Exhibits.    The forms of the Amended and Restated Limited Liability Company Agreement, the
Escrow Agreement, the Securityholders Agreement, the Management Agreement and the Letter Agreement, as such agreements are actually executed in connection with the Closing, shall be modified from the
forms set forth as exhibits to the Agreement solely as contemplated by the Agreement or as necessary to reflect that New Refco, rather than the Company, will be the subject thereof or the applicable
party thereto, as appropriate. Except for the change provided for in the immediately preceding sentence, such modifications will in no way affect the relative rights and obligations under such
agreements of the parties hereto and the other persons who will be parties to such agreements. The form of Securityholders Agreement that is actually executed in connection with the Closing also shall
be modified from the form set forth as an exhibit to the Agreement in the following respects: 

          (i)  References
therein to the "THL Holders" shall also be deemed to refer to Limited Partners (as defined therein) (or affiliates of Limited Partners) who hold Securities,
so long as THL Refco Acquisition Partners or any of its Affiliates (as defined therein) maintains voting control over such Securities. 

         (ii)  Section 3.1
thereof shall be modified to permit a THL Holder to transfer Class A Common Units (as defined therein) to an Affiliate of such THL Holder. 

        4.     Removal of Refco Merger LLC as a Party.    Refco Merger LLC is hereby removed as a party to the Agreement. 

        5.     Waiver.    The parties agree that notwithstanding the provisions of  Section 5.6 or any other section of the Agreement, the Company may transfer
its interests in Forstmann-Leff Associates Holdings, LLC
and Forstmann-Leff Associates, LLC to FLIA and Buyer hereby waives, on behalf of itself and its Affiliates, the right to enforce  Section 5.6 with respect to such transfers by the Company and
further agrees that the amendments to the Schedules set forth in
Section 1(p) of this Amendment shall be effective to modify the Agreement as if the provisions set forth in such amendments had been in place as of the original date of the Agreement. 

        6.     Continued Effectiveness of Agreement; No Other Modifications.    Except as expressly modified by  Sections 1, 2, 3, 4 and 5 of this Amendment, (i) the Agreement shall continue in effect
following the execution and delivery of this Amendment in the form in which it was effective immediately prior to the execution and delivery of this Agreement and (ii) the respective rights and
obligations of the parties to the Agreement will not be diminished or otherwise modified. 

        7.     Miscellaneous.    The provisions of Sections 9.1, 9.2, 9.3, 9.4, 9.5, 9.6,
9.7 and 9.9 of the Agreement shall be applicable to this Amendment as if such provisions referred specifically to this
Amendment. 

7

 

        IN
WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed on its behalf as of the day and year first above written. 

	 
	 	 
	 	 

	 	 	REFCO GROUP LTD., LLC
	

 	
 	

By:	
 	

/s/  PHILLIP BENNETT      
	 	 	 	 	

	 	 	Name:	 	Phillip Bennett
	 	 	Title:	 	President & CEO
	

 	
 	

NEW REFCO GROUP LTD., LLC
	

 	
 	

By:	
 	

/s/  SCOTT SCHOEN      

	 	 	Name	 	Scott Schoen
	 	 	Title:	 	President
	

 	
 	

REFCO GROUP HOLDINGS, INC.
	

 	
 	

By:	
 	

/s/  PHILLIP BENNETT      
	 	 	 	 	

	 	 	Name:	 	Phillip Bennett
	 	 	Title:	 	President & CEO
	

 	
 	

THL REFCO ACQUISITION PARTNERS
	 	 	By:	 	THL Refco GP LLC, a general partner
	

 	
 	

By:	
 	

/s/  SCOTT SCHOEN      

	 	 	Name:	 	Scott Schoen
	 	 	Title:	 	President
	

 	
 	

REFCO MERGER LLC
	

 	
 	

By:	
 	

/s/  SCOTT SCHOEN      

	 	 	Name:	 	Scott Schoen
	 	 	Title:	 	President
	

 	
 	

Solely for purposes of confirming the continued applicability of Section 9.12 of the Agreement:
	

 	
 	

PHILLIP R. BENNETT
	

 	
 	

/s/  PHILLIP R. BENNETT      

	

 	
 	

Solely for purposes of confirming the continued applicability of Section 9.12 of the Agreement:
	

 	
 	

TONE GRANT
	

 	
 	

/s/  TONE GRANT      

8

QuickLinks

Exhibit 10.3

FIRST AMENDMENT TO EQUITY PURCHASE AND MERGER AGREEMENT

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