Exhibit 10.2  EMPLOYMENT AGREEMENT  AGREEMENT by and between KBW, Inc. (the Company)
and Thomas B. Michaud (the Executive), dated as of the 1st of November,
2006.  WHEREAS, the Company is desirous of continuing to
employ the Executive in an executive capacity on the terms and conditions, and
for the consideration, hereinafter set forth, and the Executive is desirous of
being employed by the Company on such terms and conditions and for such
consideration.  NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:  1.Employment Period. The Company hereby agrees to continue to employ the Executive,
and the Executive hereby agrees to continue to serve the Company, subject to
the terms and conditions of this Agreement, for the period commencing on the
Effective Date (as defined below) and ending on the third anniversary thereof,
subject to earlier termination in accordance with the provision of Section 3
hereof (the Employment Period). Effective Date shall mean the
date immediately prior to the date on which the registration statement filed by
the Company under the Securities Act of 1933, as amended, registering the
initial public offering of the common stock of the Company, par value $0.01, is
effective.  2.             Terms
of Employment.  (a)Position and Duties. (i)  During
the Employment Period, the Executive shall serve as Vice Chairman, Chief
Operating Officer, President of the Company, with such duties and
responsibilities as are commensurate and consistent with such title and
position, report directly and
exclusively to the Chief Executive Officer of the Company and perform his services at the headquarters of
the Company in New York, New York. In addition, the Company shall cause
the Executive to be appointed as a member of the Board of Directors of the
Company (the Board of Directors), and shall nominate the Executive for
election and re-election to the Board of Directors as and when the Executives
term expires while the Executive remains employed under this Agreement.  (ii)During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially all of his attention and time during
normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executives reasonable best efforts to perform faithfully
and efficiently such responsibilities. During the Employment Period, it shall
not be a violation of this Agreement for the Executive to serve on corporate,
civic or charitable boards or committees, deliver lectures, fulfill speaking
engagements or teach at educational institutions and manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executives responsibilities as an employee of the Company
in accordance with this Agreement. It is expressly understood and agreed that
to the extent that any such activities have been conducted by the Executive
prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto)


subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executives responsibilities to the
Company.  (b)Compensation 
(i)  Base Salary. During the Employment Period, the Executive shall
receive an annual base salary (Annual Base Salary) of not less than the
Executives annual base salary as in effect immediately prior to the Effective
Date, in accordance with the Companys normal payroll policies. The Executives
Annual Base Salary shall be reviewed for increase (but not decrease) at least
annually by the Compensation Committee of the Board of Directors (the Compensation
Committee) pursuant to its normal performance review policies for senior
executives. Any increase in Annual Base Salary shall not serve to limit
or reduce any other obligation to the Executive under this Agreement. Annual
Base Salary shall not be reduced after any increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased.  (ii)Annual Bonus. In addition to the Annual Base
Salary, the Executive shall be eligible to be awarded, for each fiscal year of
the Company or portion of a fiscal year ending during the Employment Period, an
annual bonus (the Annual Bonus) pursuant to the terms of the Companys
Annual Incentive Plan, as in effect from time to time. Annual Bonus for any given fiscal year shall mean the amount, if any,
of annual bonus earned by the Executive with respect to the applicable fiscal
year of the Company, including amounts deferred and/or paid in the form of
equity compensation.  (iii)          Other Benefits. During the Employment Period:  (A) the Executive shall be entitled to
participate in incentive, savings and retirement plans, practices, policies and
programs of the Company to the same extent as provided generally to similarly
situated executives of the Company; and (B) the Executive and/or the Executives
family, as the case may be, shall be eligible for participation in, and shall
receive benefits under, welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation, medical, prescription,
dental, disability, employee life insurance, group life insurance, accidental
death and travel accident insurance plans and programs) to the same extent as
provided generally to similarly situated executives of the Company.  (iv)          Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the Companys policies.  (v)           Office and Support Staff. During the Employment
Period, the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments and with secretarial and support staff,
no less favorable than that provided similarly situated executives of the
Company.  3.             Termination
of Employment. (a)  Death or Disability.
The Executives employment shall terminate automatically upon the Executives
death during the Employment Period. If the Company determines in good faith
that the Disability (as defined below) of the Executive has occurred during the
Employment Period, it may provide the Executive with written notice in
accordance with Section 11(b) of this Agreement of its intention to terminate
the Executives employment. In such event, the Executives employment with the
Company  2


shall terminate effective on the 30th day
after receipt of such notice by the Executive (the Disability Effective
Date), provided that, within the 30 days 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 from the Executives duties with the Company on a
full-time basis for 180 consecutive business days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by
a physician selected by the Company or its insurers and acceptable to the Executive
or the Executives legal representative.  (b)Cause. The Company may terminate the
Executives employment during the Employment Period either with or without
Cause. For purposes of this Agreement, Cause shall mean:  (i)            the
willful and continued failure substantially to perform the Executives duties
(other than as a result of physical or mental illness or injury), after the Chief
Executive Officer of the Company delivers to the Executive a written demand for
substantial performance that specifically identifies the manner in which the Chief
Executive Officer of the Company believes that the Executive has not
substantially performed the Executives duties; or  (ii)           illegal
conduct or gross misconduct by the Executive, in either case that is willful
and results in material and demonstrable damage to the business or reputation
of the Company; or  (iii)          conviction
of, or plea of guilty or nolo contendere to, a charge of commission of a
felony.  For purposes of this provision, no act or failure to
act, on the part of the Executive, shall be considered willful unless it is
done, or omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executives action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board of Directors 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. The cessation of employment of the Executive shall
not be deemed to be 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 two-thirds of the entire membership of the Board of Directors at
a meeting of the Board of Directors called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board of Directors),
finding that, in the good faith opinion of the Board of Directors, the Executive
is guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.  (c)Good Reason. The Executives employment may
be terminated by the Executive with or without Good Reason. For purposes of
this Agreement, Good Reason shall mean in the absence of the prior
written consent of the Executive:  3


(i)            the
failure of the Company to nominate the Executive for election and re-election
to the Board of Directors, or the assignment to the Executive of any duties
inconsistent in any respect with the Executives job description, or any other
action by the Company that results in a diminution in the Executives position,
authority, duties or responsibilities, other than an isolated, insubstantial
and inadvertent action that is not taken in bad faith and is remedied by the
Company promptly after receipt of notice thereof from the Executive;  (ii)any failure by the Company to
comply with any of the provisions of Section 2(b) of this Agreement, other than
an isolated, insubstantial and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after receipt of notice thereof
given by the Executive;  (iii)          any requirement by the Company that
the Executives services be rendered primarily at a location or locations other
than the location set forth in this Agreement;  (iv)          any
purported termination by the Company of the Executives employment otherwise
than as expressly permitted by this Agreement; or  (v)           any
failure by the Company to comply with and satisfy Section 9(c) of this
Agreement.  (d)Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination (as defined below) to the other party hereto given in accordance
with Section 11(b) of this Agreement. For purposes of this Agreement, a Notice
of Termination means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executives employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executives or the
Companys rights hereunder.  (e)Date of Termination. Date of Termination
means (i) if the Executives employment is terminated by the Company for Cause,
or by the Executive with or without Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein within 30 days of
such notice, as the case may be, (ii) if the Executives employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (iii) if the Executives employment is terminated by
reason of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case may be.  4


4.             Obligations
of the Company upon Termination. (a) 
Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executives
employment other than for Cause, death or Disability or the Executive shall terminate
employment for Good Reason:  (i)            the
Company shall pay to the Executive the aggregate of the following amounts in a
lump sum in cash within 30 days after the Date of Termination:  A.the sum of (1) the
Executives Annual Base Salary and any accrued vacation pay through the Date of
Termination, (2) the Executives Annual Bonus for the fiscal year immediately
preceding the fiscal year in which the Date of Termination occurs if such bonus
has not been paid as of the Date of Termination, and (3) the Executives
business expenses that have not been reimbursed by the Company as of the Date
of Termination that were incurred by the Executive prior to the Date of
Termination in accordance with the applicable Company policy, in each case, to
the extent not theretofore paid (the sum of the amounts described in clauses
(1) through (3), shall be hereinafter referred to as the Accrued
Obligations); and  B.            the product of (1) the highest
Annual Bonus earned by the Executive for the last three full fiscal
years of the Company ending prior to the year in which theDate of Termination occurs (including any
amounts deferred or satisfied with equity award grants) (the Highest Annual
Bonus) and (2) a fraction, the numerator of which is the number of days in
the fiscal year in which the Date of Termination occurs through the Date of
Termination, and the denominator of which is 365 (the Pro-rata Bonus);
and  C.            an amount equal to three times the
sum of (1) the Executives Annual Base Salary, (2) the Highest Annual Bonus and
(3) the Companys contribution on behalf of the Executive to the Companys
Profit Sharing Retirement Plan (or successor plan) for the plan year ending immediately
prior to the plan year during which the Date of Termination occurs; and  (ii)during the three-year period
following the Date of Termination or such longer period as may be provided by
the terms of the appropriate plan, program, practice or policy, but, to the
extent required in order to comply with Section 409A, in no event beyond the
end of the second calendar year that begins after the Executives separation
from service within the meaning of Section 409A (the Benefit Continuation
Period), the Executive and/or the Executives family shall be provided
with welfare benefits at least as favorable, and at the after-taxsame cost to the Executive and/or the
Executives family, as those that would have been provided to them under Section
2(b)(iii)(B) of this Agreement if the Executives employment had continued
until the end of the Continuation Period; provided, however, that
during any period when the Executive is eligible to receive such benefits under
another employer-provided plan, the benefits provided by the Company under this
Section 4(a)(ii) may be made secondary to those provided under such other plan.
The Executives entitlement to COBRA continuation coverage under Section 4980B
of the Code (COBRA Coverage) shall not be offset by  5


the provision of benefits under this Section
4(a)(ii) and the period of COBRA Coverage shall commence at the end of the
Benefit Continuation Period. For purposes of determining eligibility (but not
the time of commencement of benefits) of the Executive for retiree benefits pursuant
to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until the end of the Benefit Continuation
Period and to have retired on the last day of such period; and  (iii)          to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies through the Date of Termination (such other amounts and benefits
shall be hereinafter referred to as the Other Benefits).  Notwithstanding the foregoing provisions of this
Section 4(a), to the extent required in order to comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the Code), cash amounts
that would otherwise be payable under this Section 4(a) during the six-month
period immediately following the Date of Termination shall instead be paid,
with interest on any delayed payment at the applicable federal rate provided
for in Section 7872(f)(2)(A) of the Code (Interest), on the first business
day after the date that is six months following the Executives separation
from service within the meaning of Section 409A.  (b)Death. If the Executives employment
is terminated by reason of the Executives death during the Employment Period,
this Agreement shall terminate without further obligations to the Executives
legal representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. In addition,
the Executive shall be entitled to the Pro-rata Bonus. Accrued Obligations
shall be paid to the Executives estate or beneficiary, as applicable, in a
lump sum in cash within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this
Section 4(b) shall include death benefits as in effect on the date of the
Executives death with respect to similarly situated executives of the Company
and their beneficiaries.  (c)Disability. If the Executives employment
is terminated by reason of the Executives Disability during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. In addition, the Executive shall be entitled to
the Pro-rata Bonus. Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination, provided,
that to the extent required in order to comply with Section 409A of the Code,
amounts and benefits to be paid or provided under this Section 4(c) shall be
paid, with Interest, or provided to the Executive on the first business day
after the date that is six months following the Executives separation from
service within the meaning of Section 409A. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 4(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits as in effect at any time
thereafter generally with respect to similarly situated executives of the
Company.  6


(d)Cause; Other than for Good
Reason. If the
Executives employment shall be terminated for Cause or the Executive
terminates his employment other than for Good Reason during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (i) the Accrued
Obligations through the Date of Termination and (ii) Other Benefits, in each
case to the extent theretofore unpaid. Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination, provided,
that to the extent required in order to comply with Section 409A of the Code,
amounts and benefits to be paid or provided under this sentence of this Section
4(d) shall be paid, with Interest, or provided to the Executive on the first
business day after the date that is six months following the Executives separation
from service within the meaning of Section 409A.  5.             Non-exclusivity
of Rights. Except as specifically provided, nothing in this Agreement shall
prevent or limit the Executives continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies. Amounts
that are vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.  6.             Full
Settlement. The Companys obligation to make the payments provided for in,
and otherwise to perform its obligations under, this Agreement shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action that the Company may have against the Executive or others. 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, except as specifically provided in
Section 4(a)(ii), such amounts shall not be reduced, regardless of whether the
Executive obtains other employment.  7.             Certain
Additional Payments by the Company. (a) 
Anything in this Agreement to the contrary notwithstanding and except as
set forth below, in the event it shall be determined that any Payment (as
defined below) would be subject to the Excise Tax (as defined below), then the
Executive shall be entitled to receive an additional payment (the Gross-Up
Payment) in an amount such that, after payment by the Executive of all
taxes (and any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding
any income taxes and penalties imposed pursuant to Section 409A of the Code,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 7(a), if it shall be determined that the Executive is entitled to the
Gross-Up Payment, but that the Parachute Value (as defined below) of all
Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-Up
Payment shall be made to the Executive and the amounts payable under this
Agreement shall be reduced so that the Parachute Value of all Payments, in the
aggregate, equals the Safe Harbor Amount (as defined below). The reduction of
the amounts  7


payable hereunder, if applicable, shall be
made by first reducing the payments under Section 4(a)(i)(C), unless an alternative
method of reduction is elected by the Executive, and in any event shall be made
in such a manner as to maximize the Value (as defined below) of all Payments
actually made to the Executive. For purposes of reducing the Payments to the
Safe Harbor Amount, only amounts payable under this Agreement (and no other
Payments) shall be reduced. If the reduction of the amount payable under this
Agreement would not result in a reduction of the Parachute Value of all
Payments to the Safe Harbor Amount, no amounts payable under the Agreement
shall be reduced pursuant to this Section 7(a). The Companys obligation to
make Gross-Up Payments under this Section 7 shall not be conditioned upon the
Executives termination of employment.  (b)Subject to the provisions of Section 7(c), all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by a nationally recognized certified public accounting firm designated by the Executive
and reasonably acceptable to the Company (the Accounting Firm). The Accounting
Firm shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment or such earlier time as is requested by the
Company. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Section 7,
shall be paid by the Company to the Executive within five days of the receipt
of the Accounting Firms determination. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (the Underpayment), consistent with the calculations required to
be made hereunder. In the event the Company exhausts its remedies pursuant to
Section 7(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.  (c)           The Executive shall notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable, but no later than ten
business days after the Executive is informed in writing of such claim. The
Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
the Executive gives such notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the Executive shall:  (i)            give
the Company any information reasonably requested by the Company relating to
such claim,  8


(ii)           take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,  (iii)          cooperate
with the Company in good faith in order effectively to contest such claim, and  (iv)          permit
the Company to participate in any proceedings relating to such claim;  provided, however, that the
Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest,
and shall indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and penalties) imposed as a
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 7(c), the Company shall
control all proceedings taken in connection with such contest, and, at its sole
discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing authority in
respect of such claim and may, at its sole discretion, either pay the tax claimed
to the appropriate taxing authority on behalf of the Executive and direct the
Executive to sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however,
that, if the Company pays such claim and directs the Executive to sue for a refund,
the Company shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties)
imposed with respect to such payment or with respect to any imputed income in
connection with such payment; and provided, further, that any extension
of the statute of limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount is claimed to be
due is limited solely to such contested amount. Furthermore, the Companys
control of the contest shall be limited to issues with respect to which the
Gross-Up Payment would be payable hereunder, and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.  (d)If, after the receipt by the Executive of a Gross-Up Payment
or payment by the Company of an amount on the Executives behalf pursuant to
Section 7(c), the Executive becomes entitled to receive any refund with
respect to the Excise Tax to which such Gross-Up Payment relates or with
respect to such claim, the Executive shall (subject to the Companys complying
with the requirements of Section 7(c), if applicable) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after payment by the Company of an
amount on the Executives behalf pursuant to Section 7(c), a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then the amount of such payment shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.  9


(e)Notwithstanding any other provision of this Section 7, the
Company may, in its sole discretion, withhold and pay over to the Internal
Revenue Service or any other applicable taxing authority, for the benefit of
the Executive, all or any portion of any Gross-Up Payment, and the Executive
hereby consents to such withholding.  (f)Definitions. The following terms shall have
the following meanings for purposes of this Section 7:  (i)            Excise
Tax shall mean the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to such excise tax.  (ii)           Parachute
Value of a Payment shall mean the present value as of the date of the
change of control for purposes of Section 280G of the Code of the portion of
such Payment that constitutes a parachute payment under Section 280G(b)(2),
as determined by the Accounting Firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.  (iii)          A
Payment shall mean any payment, distribution or benefit in the nature
of compensation (within the meaning of Section 280G(b)(2) of the Code) to or
for the benefit of the Executive, whether paid or payable pursuant to this Agreement
or otherwise.  (iv)          The
Safe Harbor Amount means 2.99 times the Executives base amount,
within the meaning of Section 280G(b)(3) of the Code.  (g)Value of a Payment shall mean the economic present
value of a Payment as of the date of the change of control for purposes of
Section 280G of the Code, as determined by the Accounting Firm using the
discount rate required by Section 280G(d)(4) of the Code.  8.             Restrictive
Covenants. (a)  Confidential
Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executives employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). After
termination of the Executives employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.  (b)Non-competition. While employed by the Company
and during the two-year period following the Executives termination of
employment with the Company (the Covenant Period), the Executive shall
not:  (i)            form,
or acquire a five percent or greater equity ownership, voting or profit participation
interest in, any Competitive Enterprise (as defined below); or  10


(ii)           associate
(including, but not limited to, association as an officer, employee, partner,
director, consultant, agent or advisor) with any Competitive Enterprise and in
connection with such association engage in, or directly or indirectly manage or
supervise personnel engaged in, any activity:  A.which is similar or
substantially related to any activity in which the Executive was engaged, in
whole or in part, at the Company,  B.for which the Executive had
direct or indirect managerial or supervisory responsibility at the Company, or  C.which calls for the
application of the same or similar specialized knowledge or skills as those
utilized by the Executive in the Executives activities at the Company, and, in
any such case, irrespective of the purpose of the activity or whether the
activity is or was in furtherance of advisory, agency, proprietary or fiduciary
business of either the Company or the Competitive Enterprise.  For purposes of the Executive Covenants (as defined
below), a Competitive Enterprise is a business enterprise that engages
in, or owns or controls a significant interest in any entity that engages in
financial services such as investment banking, public or private finance,
financial advisory services, private investing (for anyone other than the
Executive and members of the Executives family), merchant banking, asset or
hedge fund management, securities brokerage, sales, lending, custody,
clearance, settlement or trading. It is the intention of the parties to restrict
the activities of the Executive under this Section 8(b) only to the extent
necessary for the protection of the legitimate business interests of the
Company.  (c)Non-Solicitation of Clients.  (i)            the
Executive hereby agrees that during the Covenant Period, the Executive will
not, in any manner, directly or indirectly, (A) Solicit (as defined below)
a Client (as defined below) to transact business with a Competitive Enterprise
or to reduce or refrain from doing any business with the Company or (B)
interfere with or damage (or attempt to interfere with or damage) any
relationship between the Company and a Client.  (ii)           For
purposes of this Section 8, the term Solicit means any direct or indirect
communication of any kind whatsoever, regardless of by whom initiated,
inviting, advising, encouraging or requesting any person or entity, in any
manner, to take or refrain from taking any action.  (iii)          For
purposes of this Section 8, the term Client means any client or prospective
client of the Company to whom the Executive provided services, or for whom the
Executive transacted business, or whose identity became known to the Executive
in connection with the Executives relationship with or employment by the
Company.  (d)Nonsolicitation of Employees. The Executive hereby agrees
that during the Covenant Period, the Executive will not, in any manner,
directly or indirectly, Solicit any person who is an employee of the Company or
any of its subsidiaries (or was an employee of the  11


Company or any of its subsidiaries at any
time during the six-month period prior to any such solicitation) to resign from
the Company or any of its subsidiaries or to apply for or accept employment
with any Competitive Enterprise.  (e)Transfer of Client Relationships. During the portion of the Covenant
Period following the date of the Executives termination of employment, the
Executive hereby agrees to take all actions and do all such things as may be
reasonably requested by the Company from time to time to maintain for the
Company the business, goodwill and business relationships with any of the
Companys Clients with whom the Executive worked during the Employment Period.  (f)Prior Notice Required. The Executive hereby agrees
that prior to accepting employment with any other person or entity during the
Covenant Period, the Executive will provide such prospective employer with
written notice of the provisions of this Agreement, with a copy of such notice
delivered simultaneously to the General Counsel of the Company.  (g)Executive
Covenants Generally.  (i)            The
Executives covenants as set forth in this Section 8 are from time to time
referred to herein as the Executive Covenants.  If any of the Executive Covenants is finally
held to be invalid, illegal or unenforceable (whether in whole or in part),
such Executive Covenant shall be deemed modified to the extent, but only to the
extent, of such invalidity, illegality or unenforceability and the remaining
Executive Covenants shall not be affected thereby; provided, however,
that if any of the Executive Covenants is finally held to be invalid, illegal
or unenforceable because it exceeds the maximum scope determined to be
acceptable to permit such provision to be enforceable, such Executive Covenant
will be deemed to be modified to the minimum extent necessary to modify such
scope in order to make such provision enforceable hereunder.  (ii)           The
Executive understands that the Executive Covenants may limit the Executives
ability to earn a livelihood in a business similar to the business of the
Company.  (h)Remedies. The Executive acknowledges
that the Company would be irreparably injured by a violation of this Section 8
and that it is impossible to measure in money the damages that will accrue to
the Company by reason of a failure by the Executive to perform any of his obligations
under this Section 8. Accordingly, if the Company institutes any action or
proceeding to enforce any of the provisions of this Section 8, to the extent
permitted by applicable law, the Executive hereby waives the claim or defense
that the Company has an adequate remedy at law, and the Executive shall not
urge in any such action or proceeding the defense that any such remedy exists
at law. Furthermore, in addition to other remedies that may be available, the
Company shall be entitled to specific performance and other injunctive relief,
without the requirement to post bond.  9.             Successors.
(a)  This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than  12


by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and 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 will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly 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 had taken place. As used in this Agreement, Company shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise. As used in this Agreement, the term affiliated companies
shall include any company controlled by, controlling or under common control
with the Company.  10.           Attorneys
Fees. The Company agrees to pay, as incurred (within ten business days of
receipt of an invoice from the Executive), to the fullest extent permitted by
law, all legal fees and expenses that the Executive may reasonably incur as a
result of any contest by the Company, the Executive or others of the validity
or enforceability of or liability under, or otherwise involving, any provision
of this Agreement (whether such contest is between the Company and the
Executive or between either of them and any third party), together with Interest.  11.           Miscellaneous.
(a)  This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.  (b)All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:  If to the Executive:At
the most recent address
on file at the Company.  If to the Company:KBW,
Inc.
787 Seventh Avenue
New York, New York 10019
Attention:  Mitchell B. Kleinman, Esq.
Executive Vice President and General Counsel 
Facsimile:  (212) 541-6668  or to such other address as either party shall have
furnished to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the addressee.  13


(c)           The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.  (d)           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)           The Executives or the Companys
failure to insist upon strict compliance with any provision of this Agreement
or the failure to assert any right the Executive or the Company may have
hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 3(c)(i)-(v) of
this Agreement, shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement.  (f)            If any compensation or benefits
provided by this Agreement may result in the application of Section 409A of the
Code, the Company shall, in consultation with the Executive, modify the
Agreement in the least restrictive manner necessary in order to exclude such
compensation from the definition of deferred compensation within the meaning
of such Section 409A or in order to comply with the provisions of Section 409A,
other applicable provision(s) of the Code and/or any rules, regulations or
other regulatory guidance issued under such statutory provisions and without
any diminution in the value of the payments to the Executive.  (g)           Any provision of this Agreement that
by its terms continues after the expiration of the Employment Period or the
termination of the Executives employment shall survive in accordance with its
terms.   [Remainder of page
intentionally left blank]  14


IN WITNESS WHEREOF, the Executive has hereunto set
the Executives hand and, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.  THOMAS B. MICHAUD/s/ Thomas B. MichaudKBW, INC.By
  /s/ Mitchell B. KleinmanName: Mitchell B. KleinmanTitle:   General
  Counsel  15