Exhibit 10.3  EMPLOYMENT AGREEMENT  AGREEMENT by and between KBW, Inc. (the Company)
and Andrew M. Senchak (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, President and Co-Head of Investment Banking 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.  ANDREW M. SENCHAK/s/Andrew M. SenchakKBW, INC.By
  /s/ Mitchell B. KleinmanName:   Mitchell
  B. KleinmanTitle:     General
  Counsel  15