Warrants and Stock Repurchases

Warrants

As a portion of the consideration in the 2013 Mergers, former GETCO unitholders received, in addition to KCG Class A Common Stock, 24.3 million Class A, Class B and Class C Warrants, which were issued in accordance with the Warrant Agreement, dated July 1, 2013, between KCG and Computershare Shareowner Services LLC (the “Warrant Agreement”) and which are subject to the terms and conditions of the Warrant Agreement.

The Warrant Agreement includes various anti-dilution and similar provisions that require adjustments to the exercise prices of the Class A, Class B and Class C Warrants and/or the number of shares of KCG Class A Common Stock issuable upon exercise of the Warrants upon certain events and actions taken by the Company, including the Company’s repurchase of KCG Class A Common Stock through a public tender offer.

As a result of the Company's "modified dutch auction" tender offer ("Tender Offer") in the second quarter of 2015, the exercise price of each of the Class A, Class B and Class C Warrants was adjusted in accordance with the terms of the Warrant Agreement. All other terms of the Warrants remained the same.

The adjusted exercise price for each class of Warrants and the activity for the three months ended March 31, 2017 were as follows (Warrants in thousands):



	Class A			Class B			Class C
Original Exercise Price	$	12.00		$	13.50		$	15.00
Adjusted Exercise Price	$	11.70		$	13.16		$	14.63
Initial term (years)	4			5			6
Expiration	7/1/2017			7/1/2018			7/1/2019

										Total
Warrants - Outstanding at December 31, 2016	2,026			2,069			2,087			6,182
Exercised	(545		)	(44		)	(44		)	(633	)
Repurchased	(359		)	(359		)	(359		)	(1,077	)
Warrants - Outstanding at March 31, 2017	1,122			1,666			1,684			4,472

The Company repurchased, from GA, 1.1 million Warrants for $2.9 million in the first quarter of 2017. During the first quarter of 2016, the Company repurchased 1.5 million Warrants for $1.0 million.

See Footnote 8 "Investments" and Footnote 11 "Related Parties" for more information on warrant repurchases from related parties and not under the Company's Board approved program.

Stock Repurchases

During the first quarter of 2017, the Company repurchased 0.9 million shares of KCG Class A Common Stock for $13.3 million under the Company's Board approved program. As of March 31, 2017, approximately $136.8 million in authority remained under the current share repurchase program, which is subject to the restrictive covenants in the 6.875% Senior Secured Notes Indenture.

During the first quarter of 2016, the Company repurchased 1.8 million shares of KCG Class A Common Stock for $20.5 million.