RESTRICTED UNIT AGREEMENT

        This Restricted Unit Agreement (this "Agreement") is made as of this 5th day of August, 2004 (the "Effective Date") between New Refco Group Ltd., LLC, a Delaware limited liability company (the "Company"), and the undersigned employee (the "Employee"). Certain capitalized terms used herein are defined in Section 7 hereof.

        WHEREAS, the Company believes it to be in the best interests of the Company and its unitholders to take action to promote work-force stability, to reward performance and otherwise align interests of key management employees with those of the Company;

        WHEREAS, accordingly the Company has determined to issue restricted units in accordance with the provisions of this Agreement; and

        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.

        NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.    Issuance of Employee Units.    

        (a)   Upon execution of this Agreement, the Company will issue to the Employee that number of Class B Common Units of the Company (the "Class B Common Units") set forth below such Employee's name on the signature page attached hereto. All of such Class B Common Units issued to the Employee hereby are referred to herein as "Employee Units." To secure the Company's rights under the Repurchase Option in Section 3, the Company will retain possession of the certificates representing the Employee Units and will provide the Employee with copies thereof.(1)


(1)
The IRS has published guidance to the effect that if the Company and the Employee treat the Employee as the owner of the Employee Units from the Effective Date and the Employee takes into account his distributive share of Company items in computing his income tax liability, it is not necessary, given that the Class B Common Units will represent a pure profits interest in a partnership for tax purposes, for the Employee to make a Section 83(b) election with respect to his receipt of the Employee Units. Nevertheless, many recipients of these type of interests make a Section 83(b) election as a matter of practice.

        (b)   In connection with the acquisition of the Employee Units hereunder, the Employee represents and warrants to the Company that:


        (c)   This Agreement constitutes the legal, valid and binding obligation of the Employee, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by the Employee does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which the Employee is a party or any judgment, order or decree to which the Employee is subject.

        (d)   As an inducement to the Company to issue the Employee Units to the Employee and as a condition thereto, the Employee acknowledges and agrees that:

        (e)   In connection with the issuance and sale by the Company to the Employee of the Employee Units, the Company represents and warrants that:

2.    Vesting of Employee Units.    

        (a)    General.    

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EBITDA Targets
(dollars in millions)

Measurement
Year

  Target
EBITDA

  Cumulative
Target
EBITDA

  90% of
Target
EBITDA

  90% of
Cumulative
Target
EBITDA

  Eligible
Performance
Units

2005 $294.7 $294.7 $265.2 $265.2 25% of Performance Units
2006 $348.9 $643.6 $314.01 $579.2 25% of Performance Units
2007 $403.9 $1,047.5 $363.51 $942.75 25% of Performance Units
2008 $464.6 $1,512.1 $418.14 $1,360.89 25% of Performance Units

The minimum EBITDA targets set forth above shall be appropriately adjusted by the Company's Board of Managers for acquisitions and dispositions made by the Company (whether by purchase or sale of assets, merger or otherwise) and such adjustments shall take into account the pro forma annual EBITDA of any acquired business.

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        (b)   In the event the Employee ceases to be employed by the Company or any of its subsidiaries on a full-time basis for any reason, then (i) all Employee Units shall cease vesting effective as of the date upon which the Employee ceases to be so employed (the "Termination Date"), (ii) a fraction of the Non Performance-Based Units that otherwise would become Vested Units at the end of the Measurement Year in which such termination occurs will become Vested Units, the numerator of which fraction shall equal the number of whole months during such year (or, in the case of such termination prior to February 28, 2005, the number of whole months since the date of this Agreement) that the Employee remained employed by the Company and the denominator of which shall be twelve (12), and, (iii) in the event that the Company achieves the EBITDA target with respect to the Measurement Year in which such termination occurs, then the Eligible Performance Units with respect to such year multiplied by a fraction, the numerator of which shall equal the number of whole months during such year that the Employee remained employed with the Company and the denominator of which is 12, shall become Vested Units as of the next Measurement Date.

        (c)   Notwithstanding the vesting terms set forth in clause (a) above, if the Employee remains employed on a full-time basis with the Company or any of its subsidiaries from the Effective Date through the eighth anniversary of the Effective Date, all Performance Units that have not previously vested shall automatically and immediately vest on the eighth anniversary of the Effective Date.

3.    Repurchase or Forfeiture of Units.    

        (a)   In the event that the Employee ceases to be employed by the Company or any of its subsidiaries on a full-time basis for any reason, then all Employee Units (whether held by the Employee or by one or more of the Employee's transferees) which as of the date of termination:

        (b)   In the event of a Change of Control, then all Performance Units (whether held by the Employee or by one or more of the Employee's transferees) which, as of the date of such Change of Control, have not become Vested Units pursuant to Section 2, will be forfeited and returned to the Company.

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        (c)   The Repurchase Option shall be exercised by the Company, or its designee, from time to time, by delivering to the Employee a written notice of exercise and a check in the amount of the Fair Market Value. Upon delivery of such notice and payment of the purchase price as described above (or automatically upon any forfeiture of units pursuant to Section 3(a) or 3(b)), the Company, or its designee, shall become the legal and beneficial owner of the Employee Units being repurchased and all rights and interest therein or related thereto, and the Company, or its designee, shall have the right to transfer to its own name the number of Employee Units being repurchased without further action by the Employee or any of his or her transferees. If the Company or its designee elect to exercise the Repurchase Option pursuant to this Section 3 and the Employee or his or her transferee fails to deliver the Employee Units in accordance with the terms hereof, the Company, or its designee, may, at its option, in addition to all other remedies it may have, deposit the purchase price in an escrow account administered by an independent third party (to be held for the benefit of and payment over to the Employee or his or her transferee in accordance herewith), whereupon (or, in any case, upon any forfeiture of units pursuant to this Section 3) the Company shall by written notice to the Employee cancel on its books the certificates(s) representing such Employee Units registered in the name of the Employee and all of the Employee's or his or her transferee's right, title, and interest in and to such Employee Units shall terminate in all respects.

        (d)   Notwithstanding the foregoing, if at any time the Company elects to repurchase any Class B Common Units pursuant to the Repurchase Option, the Company shall pay the purchase price for the Class B Common Units it purchases (i) first, by offsetting indebtedness, if any, owing from such Employee to the Company and (ii) then, by the Company's delivery of cash for the remainder of the purchase price, if any, against delivery of the certificates or other instruments representing the Class B Common Units so purchased, duly endorsed; provided that, (x) if any such cash payment at the time such payment is required to be made would result (A) in a violation of any law, statute, rule, regulation, policy, order, writ, injunction, decree or judgment promulgated or entered by any federal, state, local or foreign court or governmental authority applicable to the Company or any of its subsidiaries or any of its or their property or (B) after giving effect thereto, in a Financing Default, or (y) if the Board determines in good faith that immediately prior to such purchase there shall exist a Financing Default which prohibits such purchase ((x) and (y) collectively the "Cash Deferral Conditions"), the portion of the cash payment so affected may be made by the Company's delivery of a promissory note or senior preferred units of the Company with a liquidation preference equal to the balance of the purchase price. The promissory note or senior preferred units shall accrue interest or yield, as the case may be, annually at the "prime rate" published in The Wall Street Journal on the date of issuance, which interest or yield, as the case may be, shall be payable at maturity. The value of each such senior preferred unit shall as of its issuance be deemed to equal (A) the portion of the cash payment paid by the issuance of such preferred units divided by (B) the number of senior preferred units so issued. Any senior preferred units or the promissory note shall be redeemed or payable when and to the extent the Cash Deferral Condition which prompted their issuance no longer exists.

        (e)   In the event that Employee Units are repurchased or forfeited pursuant to this Section 3, the Employee and his or her successors, assigns or Representatives shall take (at the Company's expense) all steps necessary and desirable to obtain all required third-party, governmental and regulatory consents and approvals and take all other actions necessary and desirable to facilitate consummation of such repurchase in a timely manner.

4.    Legend.    

        The certificates representing the Employee Units will bear the following legend:

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5.    Restrictions on Transfer, Conversion and Voting.    

        (a)   The Company and the Employee acknowledge and agree that the Employee Units are subject to and restricted by the Securityholders' Agreement. Notwithstanding anything to the contrary contained in the Securityholders' Agreement, no Employee Units that have not become Vested Units pursuant to Section 2 hereof may be transferred to any Person and no Employee Units that are Vested Units may be transferred to any Person who is not an Affiliate of the Employee. The Vested Units may be transferred by will or the laws of descent and distribution.

        (b)   Prior to any Transfer, the transferee shall agree, by execution of a Joinder Agreement, to be bound by this Agreement as holder of Employee Units and by the Securityholders' Agreement. Any Transfer or attempted Transfer of any Employee Units in violation of the preceding sentence shall be void, and the Company shall not record such Transfer on its books or treat any purported transferee of such Employee Units as the owner of such units for any purpose.

        (c)   The Employee agrees that so long as the Employee owns Employee Units which have not become Vested Units pursuant to Section 2 hereof, the Employee shall be obligated to vote all of his, her or its Employee Units which have not become Vested Units pursuant to Section 2 hereof in the same manner and proportions as the votes cast by the holders of a majority of the Company's voting equity interests not subject to such repurchase rights. If the Employee fails or refuses to vote his, her or its Employee Units which have not become Vested Units pursuant to Section 2 hereof as required by, or votes his, her or its Employee Units which have not become Vested Units pursuant to Section 2 hereof in contravention of this Section 5(c), then the Employee hereby grants to each of the President and Treasurer of the Company, acting solely in his or her capacity as such, an irrevocable proxy, coupled with an interest, to vote such units in accordance with Section 5(c).

6.    Restricted Activities.    

        (a)   The Employee acknowledges and agrees 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.

        (b)   The Employee further acknowledges and agrees that (i) reasonable limits may be placed on the Employee's ability to compete against the Company and its Affiliates as provided herein to the extent that they protect and preserve the legitimate business interests and goodwill of the Company and/or its Affiliates and (ii) such limits are (A) in consideration for and as an inducement for, among

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other things, the receipt of the units, (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 Affiliates. In addition, the Employee acknowledges (1) that the business of the Company and its Affiliates 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 Affiliates, or any of their respective executives or employees (including the Employee), 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.

        (c)   The Employee acknowledges that he has carefully read this Agreement and has given careful consideration to the restraints imposed upon by the Employee by this Agreement, and is in full accord as to their necessity for the reasonable and proper protection of Proprietary Information, whether now existing or to be developed in the future. The Employee 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.

        (d)   Having acknowledged the foregoing, the Employee covenants and agrees with the Company as follows:

        6.1    Proprietary Information.    

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        6.2    Protection 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 Affiliates and any copies, in whole or in part, thereof (collectively, the "Documents"), whether or not prepared by the Employee, 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 Affiliates (collectively, the "Property") shall be the sole and exclusive property of the Company. The Employee shall safeguard all Documents and Property and shall surrender to the Company within five (5) days of the date of termination of the Employee, or at such earlier time or times as the Board of Managers or its designee may specify, all Documents and Property then in the Employee's possession or control; provided, however, that the Employee may retain a copy of any personnel-related materials relating to his or her 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 Employee's employment. During the Employee's term of employment, the Employee shall not make, use or permit to be used any Documents or Property otherwise than for the benefit of the Company. After the Employee's term of employment, the Employee shall not use or permit others to use any Documents or Property. This Section 6.2 and Section 6.1 shall not be construed to unreasonably restrict the Employee'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.

        6.3    Non-Competition.    During the Non-Competition Period (as defined below), the Employee will not and will not permit any of his Affiliates 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 the ownership of not more than two percent (2%) of the outstanding securities of any class of securities listed on a national exchange or inter-dealer quotation system shall not constitute a violation of this Section 6.3. 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 the Company and/or any of its Affiliates and as such products may be improved and/or modified, (B) the services then marketed, sold or provided by the Company and/or

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any of its Affiliates 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 Affiliates 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 date of this Agreement and ending eighteen (18) months after the date of termination of the Employee's employment with the Company. 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 Affiliates maintains employees, owns or leases property or otherwise conducts business during the Non-Competition Period.

        6.4    Non-Solicitation and No-Hire Restrictions.    During the Non-Competition Period, the Employee will not and will not permit any of his Affiliates (i) solicit, or attempt to solicit any officer, director, consultant or executive of the Company or any of its Affiliates (each such individual, a "Company Affiliate") to leave his or her engagement with the Company or such Affiliate, (ii) hire any Company Affiliate or (iii) call upon, solicit, divert or attempt to solicit or divert from the Company or any of its Affiliates any of their customers or suppliers or potential or prospective customers or suppliers of whom the Employee was aware were potential customers prior to or during the Employee's term of employment in any manner that harms or interferes with such person's relationship with the Company; provided, however, that nothing in this Section 6.4 shall be deemed to prohibit the Employee from calling upon or soliciting a customer or supplier of the Company or any Affiliate 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 6.4 shall be deemed to prohibit the Employee from (A) soliciting or hiring any Company Affiliate if such Company Affiliate is a member of the Employee'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 Employee; provided that such Company Affiliate was not otherwise solicited by the Employee or any of his Affiliates in violation of this Agreement.

        6.5    No Disparagement.    Each of the Company and the Employee 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 Affiliates, 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.

        6.6    Further Assurances.    The Employee will not circumvent the purpose of any restriction contained in this Section 6 by engaging in business outside the Territory through remote means such as telephone, correspondence or computerized communication.

7.    Definitions.    

        The following terms shall have the meanings ascribed below:

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8.    General Provisions.    

        (a)    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 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.

        (b)    Entire Agreement.    This Agreement and the Securityholders Agreement constitute the entire agreement and understanding of the parties hereto concerning the subject matter hereof and from and after the date of this Agreement, 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.

        (c)    Counterparts.    This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

        (d)    Successors and Assigns.    

        (e)    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 provision or

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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.

        (f)    Remedies.    Each of the parties to this Agreement and any such Person granted rights hereunder whether or not such Person is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs (including reasonable attorney's fees) for any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party and any such Person granted rights hereunder whether or not such Person is a signatory hereto may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or other injunctive relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Agreement.

        (g)    Amendment and Waiver.    The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Employee and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

        (h)    Notices.    Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via facsimile, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via facsimile, five (5) days after deposit in the U.S. mail and one (1) day after deposit with a reputable overnight courier service.

        If to the Company, to:

        (i)    Business Days.    If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or holiday in the state in which the Company's chief executive office is located, the time period for giving notice or taking action shall be automatically extended to the business day immediately following such Saturday, Sunday or holiday.

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        (j)    Survival of Representations, Warranties and Agreements.    All representations, warranties and agreements contained herein shall survive the consummation of the transactions contemplated hereby and the termination of this Agreement indefinitely.

        (k)    Descriptive Headings.    The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

        (l)    Construction.    Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

        (m)    WAIVER OF JURY TRIAL.    EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

        (n)    Nouns and Pronouns.    Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.

[SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, the parties hereto have executed this Restricted Unit Agreement as of the date first written above.

  NEW REFCO GROUP LTD, LLC

 

 

By:

 
   /s/  PHILLIP R. BENNETT      
  Name: 
   Phillip R. Bennett
  Title: 
   President

  EMPLOYEE:
    

 

 

/s/  PHILLIP R. BENNETT      
Phillip R. Bennett

 

 

Address:

Phillip R. Bennett
125 Colt Lane
Gladstone, NJ 07934

 

 

Number of Employee Units Received
    

 

 

5.94

Source: OneCLE Business Contracts.