INVESTMENT TECHNOLOGY GROUP, INC. PERFORMANCE STOCK UNIT GRANT AGREEMENT FOR EMPLOYEES

Exhibit 10.26

INVESTMENT TECHNOLOGY GROUP, INC.

PERFORMANCE STOCK UNIT GRANT AGREEMENT

FOR EMPLOYEES

THIS GRANT AGREEMENT, dated as of                             (the “ Date of Grant ”), is entered into by and between Investment Technology Group, Inc. (the “ Company ”), a Delaware corporation, and                         , an employee of the Company (the “ Employee ”).

WHEREAS, the Employee has been awarded the following Grant under the Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan (the “ Plan ”).  Capitalized terms used herein and not defined herein shall have the meanings set forth in the Plan.  In the event of any conflict between this Grant Agreement and the Plan, the Plan shall control.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1.          Grant of Stock Units .  Subject to the terms and conditions set forth in this Grant Agreement and the Plan, the Employee is hereby awarded            Stock Units that represent hypothetical shares of Company Stock on a one-for-one basis (the “ Stock Unit Grant ”).

2.          Grant Subject to Plan Provisions .  This Stock Unit Grant is granted pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The Plan and the Plan prospectus are available at http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047794.pdf and http://assetlib.itginc.com/stellent/groups/public/documents/itginc/047867.pdf, respectively; provided that paper copies of the Plan and the Plan prospectus are available upon request by contacting the Legal Department of the Company at ITG_Legal or 212.444.6378.  This Stock Unit Grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) the registration, qualification or listing of the shares issued under the Plan, (b) changes in capitalization, (c) requirements of applicable law and (d) all other Plan provisions.  The Committee has the authority to interpret and construe this Grant Agreement pursuant to the terms of the Plan, and its decisions are conclusive as to any questions arising hereunder.

3.          Stock Unit Account .  The Company shall establish and maintain a Stock Unit bookkeeping account (the “ Account ”) on its records for the Employee and shall record in the Account the number of Stock Units awarded to the Employee.  No shares of stock shall be issued to the Employee at the time the Stock Unit Grant is made.

4.          Vesting of the Stock Unit Grant .

(a)        Except as otherwise provided herein, a percentage between 0% and 100% of the Stock Units underlying this Stock Unit Grant shall vest on [insert third anniversary of the Date of Grant] , provided that the Employee has remained continuously

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employed by the Employer from the Date of Grant through the vesting date, based on the amount of the Employer’s “Cumulative Three Year Pre-Tax Operating Income” (as defined below) determined in accordance with the following schedule:

In the event the amount of Cumulative Three Year Pre-Tax Operating Income is between two of the thresholds set forth in the schedule above, the percentage of the Stock Units underlying the Stock Unit Grant that shall vest shall be determined by multiplying (A) 25% by (B) a fraction, the numerator of which is the excess of the actual Cumulative Three Year Pre-Tax Operating Income over the next lowest vesting threshold and the denominator of which is the excess of the next higher vesting threshold over the next lower vesting threshold and adding the product to the percentage corresponding to the next lowest vesting threshold.

For example, if Cumulative Three Year Pre-Tax Operating Income is $      million, the vesting percentage would be 86.5% = [[(     -     )/(     -       )] x 25%] + 75%.

For purposes hereof, (i) “ Cumulative Three Year Pre-Tax Operating Income ” shall mean the Employer’s “Pre-Tax Operating Income” for the period beginning              through             , and (ii) “ Pre-Tax Operating Income ” means the consolidated pre-tax income of the Employer, computed in accordance with generally accepted accounting principles, (A) prior to reduction for income taxes and (B) excluding one time gains, nonrecurring restructuring charges and non-cash charges (including impairment of good will).  The determination of “Cumulative Three Year Pre-Tax Operating Income” shall be made by the Committee in good faith, which determination shall be binding on the Employee.

(b)        To the extent the Stock Unit Grant does not vest on           , the Stock Unit Grant shall be forfeited.  In the event of the Employee’s Termination of Service (as defined below) for any reason prior to           , all Stock Units underlying the Stock Unit Grant that are not then vested shall be forfeited.

(c)        Notwithstanding any other provision of this Grant Agreement to the contrary, upon the occurrence of a Change in Control prior to             , 100% of the Stock Unit Grant shall become vested as of the date of the Change in Control, provided that the Employee has remained continuously employed by the Employer from the Date of Grant through the date of such Change in Control.

(d)        Unless otherwise provided by the Committee, all amounts receivable in connection with any adjustments to the Company Stock under Section 5(d) of the Plan shall be subject to the vesting schedule in this Section 4.

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5.             Termination of Service; Forfeiture of Unvested Stock Unit Grant .  In the event of the Employee’s Termination of Service prior to the date the Stock Unit Grant otherwise becomes vested in accordance with the provisions of Section 4 above, the Stock Unit Grant shall immediately be forfeited by the Employee.

“ Termination of Service ” means the Employee ceases to be employed by the Employer.  An Employee employed by a Subsidiary of the Company shall also be deemed to incur a Termination of Service if such Subsidiary ceases to be a Subsidiary of the Company and such Employee does not immediately thereafter become employed by the Company or another Subsidiary of the Company.  Temporary absences from employment because of illness, vacation or leave of