APPENDIX D
TAX SHARING AND INDEMNIFICATION AGREEMENT
THIS AGREEMENT is entered into as of the 17th day of March, 1999, by and
among JEFFERIES GROUP, INC., a Delaware corporation ("JEFG"), JEF HOLDING
COMPANY, INC., a Delaware corporation ("HOLDING"), and INVESTMENT TECHNOLOGY
GROUP, INC., a Delaware corporation ("ITGI").
WITNESSETH:
WHEREAS, the JEFG Board of Directors has determined that it is appropriate
and desirable to distribute all of the shares of HOLDING common stock that it
owns to the holders of JEFG common stock (the "Distribution") in a transaction
intended to qualify as a tax-free distribution for federal income tax purposes
under Section 355 of the Internal Revenue Code of 1986, as amended (the "Code");
and
WHEREAS, JEFG has applied to the Internal Revenue Service for a private
letter ruling (the "Ruling") to the effect that the Distribution will qualify as
a tax-free distribution for federal income tax purposes under Section 355 of the
Code; and
WHEREAS, ITGI will be the principal subsidiary of JEFG immediately after the
Distribution; and
WHEREAS, it is intended that ITGI will merge with and into JEFG following
the Distribution (the "Merger"); and
WHEREAS, it is intended that HOLDING and its subsidiaries will accordingly
cease to be members of the affiliated group (within the meaning of Section
1504(a) of the Code) of which JEFG is the common parent, effective on or about
April 27, 1999 (the "Effective Date"); and
WHEREAS, the parties desire to provide for and agree upon the allocation of
liabilities for taxes with respect to the parties for the taxable year that
includes the Effective Date (the "1999 Taxable Year"); and
WHEREAS, the parties hereto also desire to provide for the preparation and
filing of tax returns along with the payment of taxes shown due and payable
thereon with respect to the 1999 Taxable Year, the treatment of carrybacks and
adjustments with respect to the parties for the 1999 Taxable Year, and any other
matters related to taxes with respect to the 1999 Taxable Year, including
indemnification for any taxes imposed as a result of certain actions by the
parties that are inconsistent with the treatment of the Distribution as
tax-free; and
WHEREAS, the Tax Sharing Agreement entered into as of January 1, 1994 by and
between JEFG and ITGI has been terminated in its existing form and the Amended
and Restated Tax Sharing Agreement dated as of March 17, 1999 by and among JEFG,
HOLDING and ITGI (the "Prior Agreement") (attached hereto as Exhibit A) will
apply to all tax years ending before the 1999 Taxable Year,
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions hereinafter contained, the parties hereto
agree as follows:
1. DEFINITIONS
The following terms as used in this Agreement shall have the meanings set
forth below:
(a) "Additional Amount" shall mean the amount determined under Section
3 hereof.
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(b) "Consolidated Return" shall mean a consolidated Federal income tax
return filed pursuant to Section 1501 of the Code.
(c) "Consolidated Taxable Income" shall mean the consolidated Federal
taxable income of the JEFG Group for any taxable year for which the JEFG
Group files a Consolidated Return.
(d) "Consolidated Tax Liability" shall mean the consolidated Federal
income tax liability of the JEFG Group for any taxable year for which the
JEFG Group files a Consolidated Return.
(e) "IRS" shall mean the Internal Revenue Service.
(f) "JEFG Group" shall mean the affiliated group of corporations of
which JEFG is the common parent. In the event that the merger takes place as
contemplated and JEFG changes its name to Investment Technology Group, Inc.
("New ITGI"), the term "JEFG Group" shall include the affiliated group of
corporations of which New ITGI is the common parent.
(g) "Loss Amount" shall mean the amount determined under Section 2
hereof.
(h) "Member" shall mean each includible member of the JEFG Group.
(i) "Regulations" shall mean the Treasury Regulations as in effect from
time to time.
(j) "Separate Return Tax Liability" shall mean the Federal income tax
liability of a Member and its subsidiaries computed as if they had filed a
separate Federal income tax return for the applicable taxable year with the
modifications set forth in Section 1.1552-1(a)(2)(ii) of the Regulations. If
the computation of a Member's Separate Return Tax Liability as provided
herein does not result in a positive amount, such Member's Separate Return
Tax Liability shall be deemed to be zero. For purposes of this definition,
ITGI's Separate Return Tax Liability shall include JEFG's Separate Return
Tax Liability for the period after the Distribution.
(k) "Separate Taxable Income" shall mean an amount determined with
respect to a Member and its subsidiaries in accordance with Section
1.1502-12 of the Regulations with the adjustments contained in Section
1.1552-1(a)(1)(ii) of the Regulations. If the computation of a Member's
Separate Taxable Income as provided herein does not result in a positive
amount, such Member's Separate Taxable Income shall be deemed to be zero.
For purposes of this definition, ITGI's Separate Taxable Income shall
include JEFG's Separate Taxable Income for the period after the
Distribution.
(l) "Separate Tax Liability" shall mean the amount determined under
Section 2 hereof.
2. SEPARATE TAX LIABILITY
(a) The Separate Tax Liability of ITGI shall be the amount set forth in
paragraph (b) hereof as modified by paragraphs (c) and (d) hereof.
(b) The amount referred to in this paragraph (b) shall be an amount
equal to that portion of the Consolidated Tax Liability for such taxable
year that the Separate Taxable Income of ITGI for such taxable year bears to
the sum of the Separate Taxable Incomes of all Members for such taxable
year; PROVIDED, HOWEVER, that such amount shall not exceed the Consolidated
Tax Liability for such taxable year.
(c) The amount computed pursuant to paragraph (b) above shall be
increased by 100% of the excess, if any, of the ITGI Separate Return Tax
Liability for such taxable year over such amount (the "Loss Amount").
(d) Any federal, state or local income tax deduction resulting from (i)
the payment to the JEFG Pension Plan described in Section 3.03(a) of the
Benefits Agreement (or from benefits distributions related thereto), or (ii)
the payment of benefits under the JEFG CAP Plan to JEFG
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employees (each as defined in the Benefits Agreement), shall be for the
benefit of ITGI (and the JEFG Group after the Distribution) and not for the
benefit of HOLDING.
3. ADDITIONAL AMOUNT
The Additional Amount shall be equal to 100% of the amount, if any, by which
the Consolidated Tax Liability for the 1999 Taxable Year has been decreased by
reason of the inclusion of ITGI and its subsidiaries in the JEFG Group for the
1999 Taxable Year.
4. PAYMENTS
For the 1999 Taxable Year, payment of (i) the Separate Tax Liability of ITGI
by ITGI (less any Loss Amount paid to HOLDING) to JEFG (or to the IRS after the
Merger), (ii) the excess of the Consolidated Tax Liability over the amount
described in (i) (the "Holding Liability") by HOLDING to JEFG, (iii) the
Additional Amount, if any, by HOLDING to ITGI and (iv) the Loss Amount, if any,
by ITGI to HOLDING with respect to such taxable year shall be made as follows:
(a) On or before the 15th day of the fourth month of such taxable year,
JEFG shall cause KPMG LLP to estimate the Separate Tax Liability (less any
Loss Amount to be paid to HOLDING), the Holding Liability, the Additional
Amount and the Loss Amount for such taxable year.
(b) ITGI shall pay to JEFG (or to the IRS after the Merger), HOLDING
shall pay to JEFG, HOLDING shall pay to ITGI and ITGI shall pay to HOLDING
on or before each of the due dates for JEFG to make payment of estimates of
JEFG Group's Federal income taxes for such taxable year one-fourth of the
amount estimated pursuant to paragraph (a) above (collectively, the
"Estimated Amounts"). If, after paying any such installment of the Estimated
Amounts, KPMG LLP makes a new estimate, the amount of each remaining
installment (if any) shall be the amount which would have been payable if
the new estimate had been made when the first estimate for the taxable year
was made, increased or decreased, as applicable, by the amount computed by
dividing:
(i) the difference between (A) the amount of the Estimated Amounts
required to be paid before the date on which the new estimate is made,
and (B) the amount of the Estimated Amounts which would have been
required to be paid before such date if the new estimate had been made
when the first estimate was made, by
(ii) the number of installments remaining to be paid on or after the
date on which the new estimate is made.
(c) If, after the end of the 1999 Taxable Year, at the time of the
filing of an application for extension of the time to file the tax return
for the 1999 Taxable Year, if so filed, it is determined that the estimated
Separate Tax Liability of ITGI (less any Loss Amount paid to HOLDING),
Holding Liability, Additional Amount or the Loss Amount for such taxable
period exceeds the aggregate amount paid pursuant to subparagraph (b) above
with respect to such taxable period, then such excess shall be paid on or
before the later of (i) the 15th day of the third month after the end of
such taxable period, and (ii) the date on which such excess is finally
determined, which shall be no later than 30 days after the extension for
such taxable period is filed.
(d) If, after the end of the 1999 Taxable Year, it is determined that
the actual Separate Tax Liability of ITGI (less any Loss Amount paid to
HOLDING), Holding Liability, Additional Amount or Loss Amount for such
taxable period exceeds the aggregate amount paid pursuant to subparagraph
(b) and (c) above with respect to such taxable period, then such excess
shall be paid on or before the later of (i) the 15th day of the third month
after the end of such taxable period, and (ii) the date on which such excess
is finally determined, which shall be no later than 30 days after the
Consolidated Return for such taxable period is filed.
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(e) If, after the end of the 1999 Taxable Year, it is determined that
the amount paid pursuant to subparagraphs (b), (c) or (d) above with respect
to such taxable period exceeds the actual Separate Tax Liability of ITGI
(less any Loss Amount paid to HOLDING), Holding Liability, Additional Amount
or Loss Amount for such taxable period, then such excess shall be paid on or
before the later of (i) the 15th day of the third month after the end of
such taxable period, and (ii) the date on which such excess is finally
determined, which shall be no later than 30 days after the Consolidated
Return for such taxable period is filed.
5. CARRYBACKS
(a) If the JEFG Group has a consolidated unused investment credit, a
consolidated unused foreign tax credit, a consolidated excess charitable
contribution, a consolidated net capital loss or a consolidated net
operating loss, as such terms defined in the Regulations (a "Consolidated
Excess Amount") for any taxable year, the portion of such Consolidated
Excess Amount which is attributable to a Member (the "Separate Excess
Amount") shall be computed in accordance with Section 1.1502-79 of the
Regulations. Any consolidated unused research and experimentation credit of
the JEFG Group shall be treated and calculated in a manner consistent with
the foregoing sentence, and shall be included in the term "Consolidated
Excess Amount."
(b) If such Consolidated Excess Amount originates in the 1999 Taxable
Year, it will be carried back to a prior taxable year of the JEFG Group and
the effect of such carryback will be determined in accordance with the Prior
Agreement.
(c) Payment of any amount due under this Section 5 shall be made on the
date that a credit or refund is allowed with respect to the taxable year to
which such payment relates.
6. SUBSEQUENT ADJUSTMENTS AND PROCEDURAL MATTERS
(a) If any adjustments (other than adjustments made pursuant to Section
5 hereof) are made to the income, gains, losses, deductions or credits of
the JEFG Group for the 1999 Taxable Year, whether by reason of the filing of
an amended return or a claim for refund with respect to such taxable year or
an audit with respect to such taxable year by the IRS, the amounts due under
this Agreement for such taxable year shall be redetermined by taking into
account such adjustments. If, as a result of such redetermination, any
amounts due under this Agreement shall differ from the amounts previously
paid, then payment of such difference shall be made (a) in the case of an
adjustment resulting in a credit or refund, on the date on which such credit
or refund is allowed with respect to such adjustment or (b) in the case of
an adjustment resulting in the assertion of a deficiency, on the date on
which such deficiency is paid. Any amounts due under this paragraph (a)
shall include any interest attributable thereto computed in accordance with
Sections 6601 or 6611 of the Code, as the case may be, and any penalties or
additional amounts which may be imposed.
(b) If any tax audit is undertaken by any tax authority, HOLDING shall
initially have primary control of any dealings with such tax authority. Upon
a determination that such audit could give rise to an increase in either
HOLDING's or ITGI's liability under this Agreement, then HOLDING or ITGI, as
the case may be, shall be given primary control of any dealings with such
tax authority; provided, however, that the other party will be consulted
with respect to any matters which could result in an increase in the other
party's liability under this Agreement.
(c) If any adjustment or deficiency is proposed, asserted or assessed
by any tax authority which would give rise to an increase in either
HOLDING's or ITGI's liability under this Agreement, then HOLDING or ITGI, as
the case may be, shall have the primary right to contest, compromise or
settle any such adjustment or deficiency; provided, however, that the other
party will be consulted with respect to any matters which could result in an
increase in such other party's
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liability under this Agreement. If such adjustment or deficiency would give
rise to an increase in both HOLDING's and ITGI's liability under this
Agreement, then HOLDING and ITGI shall jointly have the right to contest,
compromise or settle any such adjustment or deficiency.
7. CARRYBACKS FROM SEPARATE RETURN YEARS
This Agreement shall have no application to the carryback of a net operating
loss or credit from a separate return year (within the meaning of Section
1.1502-1(e) of the Treasury Regulations) to any taxable year of JEFG Group, and
no recomputation or other payment shall be made in respect of such carryback.
8. FILING OF CALIFORNIA SINGLE RETURNS
HOLDING may file or cause to be filed a single return for California
franchise and income tax purposes ("California Single Return") for those
affiliated corporations that are includible in a California combined report (the
"JEFG Combined Group") for the 1999 Taxable Year if the JEFG Combined Group is
required or permitted to file such a return. To the extent that it qualifies
under California law, JEFG shall be the "key corporation" with respect to any
such California Single Return and, to the extent that it does not so qualify,
shall designate a "key corporation" from among the members of the JEFG Combined
Group that does so qualify. Each party to this Agreement hereby consents to any
such designation on behalf of itself and any direct or indirect subsidiary
thereof. With regard to any income year with respect to which the JEFG Combined
Group files, or it is reasonably anticipated that the JEFG Combined Group will
file, a California Single Return for the 1999 Taxable Year, the estimated and
final California tax liability of each member of the JEFG Combined Group shall
be determined, to the extent permitted by California law, in a manner consistent
with the principles set forth in this Agreement, and payments of the estimated
and final tax liability so determined shall be made to the key corporation at
the time that payments of corresponding Federal payments are due.
9. FILING OF STATE CONSOLIDATED RETURNS
To the extent permitted or required by the applicable laws of any state
other than California, JEFG and its affiliated corporations (the "state
consolidated group"), at the election of HOLDING in its sole discretion, may
join for the 1999 Taxable Year in the filing of a single, combined or
consolidated franchise or income tax return ("state consolidated return") with
any such corporation required to file a franchise or income tax return in such
state for such taxable year. With regard to the 1999 Taxable Year with respect
to which the state consolidated group files, or it is reasonably anticipated
will file, a state consolidated return which includes ITGI, the estimated and
final state tax liability of each member of the state consolidated group shall
be determined, to the extent permitted by law of the state in which the return
is to be filed, in a manner consistent with the principles set forth in this
Agreement, and payments of the estimated and final tax liability so determined
shall be made to the member of the state consolidated group responsible for
payment of the state consolidated group's tax liability at the time that
payments of corresponding Federal payments are due.
10. LIABILITY FOR TAKING CERTAIN ACTIONS INCONSISTENT WITH THE TREATMENT OF
THE DISTRIBUTION AS TAX-FREE.
(a) Notwithstanding any other provision of this Agreement (other than
in this Section 10), (i) in the event that any party, or employee, officer,
or director of such party, takes any action inconsistent with, or fails to
take any action required by, or in accordance with, the treatment of the
Distribution as tax-free, then such party shall be liable for the
inconsistent action or failure to take required action of it or its
employees, officers and directors and shall indemnify and hold the other
parties harmless from any tax liabilities, including the costs thereof,
resulting from such
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inconsistent action or failure to take required action, and (ii) if any
party engages in any transaction involving its stock or assets or makes any
factual statement or representation to the Internal Revenue Service in or in
connection with the Ruling that is inaccurate or incomplete in any material
respect, and as a result of that transaction or inaccuracy or incompleteness
of such factual statement or representation, the Distribution is treated as
a taxable event notwithstanding the receipt of the Ruling, then the party
engaging in such transaction or making such factual statement or
representation shall hold the other parties harmless from any tax
liabilities, including the costs thereof, that result from the treatment of
the Distribution as a taxable event.
(b) For purposes of this Section 10, (i) any action taken (or failure
to take action) prior to the Distribution by any subsidiary of JEFG (other
than ITGI or a subsidiary of ITGI) or any employee, officer or director of
such subsidiary of JEFG shall be deemed to be an action taken (or failure to
take action) by HOLDING (and not JEFG) or by an employee, officer or
director of HOLDING (and not JEFG); (ii) any action taken (or failure to
take action) prior to the Distribution by JEFG or any employee, officer or
director of JEFG shall be deemed to be an action taken (or failure to take
action) by HOLDING (and not JEFG) or by an employee, officer or director of
HOLDING (and not JEFG); (iii) any action taken (or failure to take action)
prior to the Distribution by any subsidiary of ITGI or any employee, officer
or director of such subsidiary of ITGI shall be deemed an action (or failure
to take action) by ITGI (and not HOLDING) or by an employee, officer or
director of ITGI (and not HOLDING); (iv) any action taken (or failure to
take action) prior to the Distribution by any employee, officer or director
of ITGI shall be deemed to be an action taken (or failure to take action) by
ITGI (and not HOLDING) or by an employee, officer or director of ITGI (and
not HOLDING); (v) any action taken (or failure to take action) after the
Distribution by JEFG, any subsidiary of JEFG (including ITGI and any
subsidiary of ITGI) (other than HOLDING or a subsidiary of HOLDING) or any
employee, officer or director of JEFG or such subsidiary of JEFG (including
ITGI and any subsidiary of ITGI) shall be deemed to be an action taken (or
failure to take action) by ITGI or by an employee, officer or director of
ITGI; and (vi) any action taken (or failure to take action) after the
Distribution by HOLDING, any subsidiary of HOLDING or any employee, officer
or director of HOLDING or such subsidiary of HOLDING shall be deemed to be
an action taken (or failure to take action) by HOLDING or by an employee,
officer or director of HOLDING.
(c) For purposes of this Section 10, any factual statement or
representation made by JEFG in or in connection with the Ruling with respect
to (i) ITGI and any subsidiary of ITGI, or with respect to JEFG following
the Distribution, including, without limitation, the intentions of JEFG
following the Distribution, shall be deemed to be a factual statement or
representation made by ITGI (and not HOLDING) or by an employee, officer or
director of ITGI (and not HOLDING), and (ii) JEFG and any subsidiary of JEFG
(other than ITGI or any subsidiary of ITGI and other than with respect to
JEFG following the Distribution, including, without limitation, the
intentions of JEFG following the Distribution) shall be deemed to be a
factual statement or representation made by HOLDING (and not JEFG) or by an
employee, officer or director of HOLDING (and not JEFG).
(d) ITGI has reviewed the materials submitted to the IRS in and in
connection with the Ruling. All such materials concerning ITGI and all such
materials concerning JEFG following the Distribution, including, without
limitation, any factual statements and representations concerning ITGI, its
business operations, capital structure and organization, are complete and
accurate in all material respects.
(e) HOLDING has reviewed the materials submitted to the IRS in and in
connection with the Ruling. All such materials concerning JEFG and
subsidiaries (other than (i) materials relating to ITGI or any subsidiary of
ITGI and (ii) materials concerning JEFG following the Distribution)
including, without limitation, any factual statements and representations
concerning JEFG or its
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subsidiaries, their business operations, capital structure and organization,
are complete and accurate in all material respects.
(f) HOLDING and ITGI agree to split equally the costs of defending the
Ruling in a subsequent examination by the IRS if it is reasonably determined
that no party is otherwise responsible for such costs as provided in this
Section 10.
(g) ITGI is considering an internal restructuring involving a transfer
by ITG Inc. ("ITGX") of the assets, liabilities and employees of ITGX's
research and development division to a newly formed subsidiary of ITGX (the
"R&D Subsidiary"), followed by a distribution by ITGX of all of the stock of
the R&D Subsidiary to ITGI (such transfer and distribution referred to
hereinafter as the "Internal Spin"). ITGI hereby represents and warrants
that ITGI and ITGX have not consummated the Internal Spin in its entirety
and have not consummated either of (i) such transfer of assets, liabilities
and employees to the R&D Subsidiary or (ii) such distribution of the stock
of the R&D Subsidiary. ITGI further represents and agrees that it will not
consummate, and will cause ITGX not to consummate, either the Internal Spin
in its entirety or either of (i) such transfer of assets, liabilities and
employees to the R&D Subsidiary or (ii) such distribution of the stock of
the R&D Subsidiary unless and until it has received a ruling from the IRS
that any such consummation will not adversely affect any ruling issued by
the IRS pursuant to the Ruling, and the subsequent supplements to the
Ruling.
11. REPRESENTATIONS OF HOLDING. HOLDING represents and warrants to ITGI
that, to the best of its knowledge, subject to the exceptions provided in
Schedule attached hereto, and subject to other exceptions that are not
material individually or in the aggregate:
(a) JEFG will have prepared and timely filed with the appropriate
taxing authority all tax returns and reports required to be filed through
the date of the Distribution, taking into account any extension of time to
file granted to JEFG;
(b) JEFG will have timely paid all taxes (including interest and
penalties thereon and additions thereto) due and payable by it (including
any federal income tax liability of the JEFG Group and any tax liability of
a combined or consolidated state, local or foreign group which includes JEFG
for any period prior to the Distribution);
(c) any deficiencies or assessments asserted in writing against JEFG by
any taxing authority through the date of the Distribution will have been
paid or fully settled;
(d) JEFG is not presently under examination or audit by any taxing
authority;
(e) no extension of the period for assessment or collection of any tax
is currently in effect with respect to JEFG;
(f) copies of all tax returns and reports filed by JEFG and any other
books and records and other information relating to any liability (or
potential liability) of JEFG for taxes have been made available to ITGI; and
(g) no Member of the JEFG Group has entered into any intercompany
transaction (as that term is defined in Section 1.1502-13 of the Treasury
Regulations) that may result in any material tax or addition to tax such as
interest or penalties.
12. FURTHER ACTIONS
Each of the parties hereto agrees, and agrees to cause any direct or
indirect subsidiary of such party, to file such consents, elections and other
documents and take such other action as may be necessary or appropriate to carry
out the purpose of this Agreement.
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13. RECORD RETENTION, RETURN PREPARATION AND COSTS
(a) HOLDING will retain all records relating to the determination of
taxes hereunder as agent and custodian for JEFG, and HOLDING will make such
records available to JEFG.
(b) KPMG LLP will prepare all tax returns to be filed pursuant to this
Agreement in a manner consistent with past practice and will make all
computations relating to estimated taxes and carrybacks for purposes of this
Agreement.
(c) HOLDING and ITGI agree to split equally the costs arising from the
preparation and filing of all tax returns filed pursuant to this Agreement
(including any applicable computations relating to carrybacks).
14. DETERMINATIONS
Except as provided in Section 13 of this Agreement, all determinations
required hereunder shall be made by the independent public accountants regularly
employed by the JEFG Group at the time that such determination is required to be
made. Such determinations shall be binding and conclusive upon the parties for
purposes hereof.
15. INTEREST
If any payment required to be made pursuant to Section 4, 5, 8 or 9 of this
Agreement is not made within the time periods specified in those Sections, the
delinquent payment shall bear interest from its due date until the date of
actual payment at the rate (or rates) charged by the Internal Revenue Service on
underpayments of tax for the periods in question.
16. MISCELLANEOUS PROVISIONS
(a) All references and provisions under this Agreement that refer to
ITGI shall be deemed to refer also to JEFG with respect to any period after
the Merger.
(b) This Agreement applies only with respect to the 1999 Taxable Year
and the Prior Agreement remains in full force and effect with respect to all
tax years prior to the 1999 Taxable Year.
(c) This Agreement contains the entire understanding of the parties
hereto with respect to the subject matter contained herein. No alteration,
amendment or modification of any of the terms of this Agreement shall be
valid unless made by an instrument signed in writing by an authorized
officer of each party hereto.
(d) This Agreement has been made in and shall be construed and enforced
in accordance with the laws of the State of New York from time to time
obtaining.
(e) This Agreement shall be binding upon and inure to the benefit of
each party hereto and their respective successors and assigns.
(f) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) All notices and other communications hereunder shall be deemed to
have been duly given if given in writing and delivered by either in person
or by facsimile with receipt
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acknowledged or confirmed or by certified or registered mail, return receipt
requested, postage prepaid and addressed as follows:
(i)If to JEFG or any of its successors prior to the Distribution at:
Jefferies Group, Inc.
11100 Santa Monica Boulevard, 11th Floor
Los Angeles, California 90025
Attention: Chief Executive Officer
Facsimile: 310-914-1013
With a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attention: Brian J. Lynch, Esq.
(ii)If to JEFG or any of its successors after the Distribution at:
Investment Technology Group, Inc.
380 Madison Avenue, 4th Floor
New York, New York 10017
Attention: Chief Financial Officer
Facsimile: 212-444-6490
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Immanuel Kohn, Esq.
(iii)If to ITGI or any of its successors at:
Investment Technology Group, Inc.
380 Madison Avenue, 4th Floore
New York, New York 10017
Attention: Chief Financial Officer
Facsimile: 212-444-6490
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Immanuel Kohn, Esq.
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(iv)If to HOLDING at:
Jefferies Group, Inc.
JEF Holding Company, Inc.
11100 Santa Monica Boulevard, 11th Floor
Los Angeles, California 90025
Attention: Chief Financial Officer
With a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attention: Brian J. Lynch, Esq.
(h) The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not constitute a part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be affixed hereto, all on the
date and year first above written.
"JEFG" JEFFERIES GROUP, INC.,
a Delaware corporation
By: /s/ CLARENCE T. SCHMITZ
-----------------------------------------
Clarence T. Schmitz, Executive Vice
President
and CFO
"ITGI"
INVESTMENT TECHNOLOGY GROUP, INC.
a Delaware corporation
By: /s/ RAYMOND L. KILLIAN, JR.
-----------------------------------------
Raymond L. Killian, Jr., Chairman,
Chief Executive Officer and President
"HOLDING"
JEF HOLDING COMPANY, INC.
A Delaware corporation
By: /s/ JERRY M. GLUCK
-----------------------------------------
Jerry M. Gluck, Secretary and General
Counsel
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