<PAGE>

                                                                    EXHIBIT 10.2

                              JEFFERIES GROUP, INC.
                        2003 INCENTIVE COMPENSATION PLAN

                           RESTRICTED STOCK AGREEMENT

      AGREEMENT dated as of [Date] (the "Grant Date"), between JEFFERIES GROUP,
INC., a Delaware corporation (the "Company"), and [Name] ("Employee").

      WHEREAS, the Compensation Committee of the Board of Directors (the
"Committee") has determined that the Company shall make a grant of Restricted
Stock to Employee under the Company's 2003 Incentive Compensation Plan (the
"2003 Plan"), in furtherance of the purposes of the 2003 Plan and in recognition
of Employee's service as an employee of the Company and/or its subsidiaries; and

      WHEREAS, the Company desires to confirm the grant of Restricted Stock, and
to set forth the terms and conditions of such grant, and Employee desires to
accept such grant and agree to the terms and conditions thereof, as set forth in
this Restricted Stock Agreement (the "Agreement").

      NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:

      1. GRANT OF RESTRICTED STOCK. The Company hereby confirms the grant, under
the 2003 Plan, to Employee on the Grant Date set forth above of [# of shares]
shares of Restricted Stock (the "Restricted Stock"). The Restricted Stock is
subject to all of the terms and conditions set forth in this Agreement,
including the restrictions set forth in Section 3. The Company shall issue in
the name of Employee, as promptly as practicable, one or more certificates
representing the shares of Common Stock, $.0001 par value ("Common Stock"),
granted as Restricted Stock or shall instruct its transfer agent to issue
Restricted Stock which shall be maintained in "book entry" form on the books of
the transfer agent. The Restricted Stock shall bear the restrictive legend and
be subject to the other terms set forth in Section 3. For purposes of this
Agreement, [[the] / [each tranche of shares of]] Common Stock will remain
Restricted Stock until the expiration of the Restrictions (as defined in Section
3) [[or] / [on such tranche or the]] forfeiture of the Restricted Stock, without
regard to extraordinary transactions which may affect the Common Stock except as
may be otherwise provided under the 2003 Plan and determinations of the
Committee thereunder.

      2. INCORPORATION OF 2003 PLAN BY REFERENCE. The Restricted Stock has been
granted to Employee under the 2003 Plan. The 2003 Plan and information regarding
the 2003 Plan, including documents that constitute the "Prospectus" for the 2003
Plan under the Securities Act of 1933, can be viewed and printed out from the
Company's secure Intranet website, www.corp.jefco.com (go to PeopleNet, then to
Plan Documents). All of the terms, conditions, and other provisions of the 2003
Plan are hereby incorporated by reference into this Agreement. Capitalized terms
used in this Agreement but not defined herein shall have the same meanings as in
the 2003 Plan. If there is any conflict between the provisions of this Agreement
and the provisions of the 2003 Plan, the provisions of the 2003 Plan shall
govern. Employee hereby

<PAGE>

acknowledges that the 2003 Plan and information regarding the 2003 Plan has been
made readily available to him and agrees to be bound by all the terms and
provisions thereof (as presently in effect or hereafter amended), rules and
regulations adopted from time to time thereunder, and by all decisions and
determinations of the Committee made from time to time thereunder.

      3. RESTRICTIONS ON RESTRICTED STOCK AND RELATED TERMS.

            (a) Restrictions Generally. Until they expire in accordance with
Section 3(b), the following restrictions (the "Restrictions") shall apply to the
Restricted Stock: (1) the Restricted Stock shall be subject to a risk of
forfeiture as set forth in Section 3(b) (the "Risk of Forfeiture"), and (2)
Employee shall not sell, transfer, assign, pledge, margin, or otherwise encumber
or dispose of the Restricted Stock (except for transfers and forfeitures to the
Company). Upon issuance of certificates or the transfer agent making the
appropriate entry on its books representing the Restricted Stock in the name of
Employee, which shall occur as promptly as practicable after the Grant Date,
Employee shall be entitled to receive dividends on the Restricted Stock as
provided in Section 3(e), shall be entitled to vote Restricted Stock on any
matter submitted to a vote of holders of Common Stock, and shall have all other
rights in connection with such Restricted Stock as would a holder of Common
Stock except as otherwise expressly provided under this Section 3, and subject
to the Committee's authority (including authority to make adjustments to Awards)
under the 2003 Plan.

            (b) Risk of Forfeiture and Expiration Thereof. Unless otherwise
determined by the Committee, if for any reason Employee's employment by the
Company or a subsidiary terminates prior to the expiration of the Restrictions,
and immediately thereafter Employee is not employed by the Company or any direct
or indirect subsidiary of Company ("Termination"), except as set forth below,
[[any] / [all]] Restricted Stock as to which the Restrictions have not expired
at or before the time of such Termination (and any related property resulting
from Section 3(e)(iii)) shall be forfeited at the time of such Termination and
automatically repurchased by the Company upon the payment by the Company of
$1.00 in the aggregate for the repurchase of all such Restricted Stock (and
related property). Except as otherwise specifically set forth herein, the
Restrictions shall expire as to [[all]] / [vesting schedule]] of the shares of
Restricted Stock (and any related property) on [vesting schedule] ("Vesting
Date").

      (i)   Death or Disability. If such Termination is by reason of Employee's
            death or Disability (as defined below), then such forfeiture and
            automatic repurchase shall not occur, and the Restrictions as to all
            of the shares of Restricted Stock shall immediately expire upon such
            Termination.

      (ii)  Retirement. If such Termination is by reason of Employee's
            Retirement, and provided that (x) the Employee has provided a
            minimum of five years of service to the Company or any of its
            affiliates and reached Retirement Age and (y) the Employee executes
            a settlement agreement and release in such form as may be requested
            by the Company, Restricted Stock not presently vested shall not then
            be forfeited, but thereafter shall be forfeited if there occurs a
            Forfeiture Event prior to any Vesting Date for such Restricted
            Stock.

<PAGE>

      (iii) Involuntary Termination by the Company not for Cause. In the event
            of an involuntary Termination of Employment by the Company not for
            Cause, provided that the Employee executes a settlement agreement
            and release in such form as may be requested by the Company,
            Restricted Stock not previously vested shall not then be forfeited,
            but thereafter shall be forfeited if there occurs a Forfeiture Event
            prior to the Vesting Date for such Restricted Stock.

      (iv)  Termination by Employee for any reason or Termination by the Company
            for Cause. In the event of Employee's Termination of Employment by
            Employee for any reason or by the Company for Cause, the portion of
            the then-outstanding Restricted Stock not vested at the date of
            termination will be forfeited, and the portion of the
            then-outstanding Restricted Stock that is vested and non-forfeitable
            at the date of Termination will be settled as promptly as
            practicable thereafter (if it had not previously been settled).

            (c) Certain Definitions. The following definitions apply for
purposes of this Agreement:

      (i)   "Cause" means Employee's:

            Neglect, failure or refusal to timely perform the duties of
            Employee's employment (other than by reason of a physical or mental
            illness or impairment), or Employee's gross negligence in the
            performance of his or her duties;

            Material breach of any agreements, covenants and representations
            made in any employment agreement or other agreement with the Company
            or any of its subsidiaries or affiliates or violation of internal
            policies or procedures as are in effect as of the date such action
            is taken, including but not limited to the Company's Code of Ethics
            and Standards of Employee Conduct, as amended from time to time;

            Violation of any law, rule, regulation or by-law of any governmental
            authority (state, federal or foreign), any securities exchange or
            association or other regulatory or self-regulatory body or agency
            applicable to Employee, the Company, its subsidiaries or affiliates
            or any material general policy or directive of the Company, its
            subsidiaries or affiliates;

            Conviction of, or plea of guilty or nolo contendere to, a crime
            involving moral turpitude, dishonesty, fraud or unethical business
            conduct, or any felony of any nature whatsoever;

            Giving or accepting undisclosed material commissions or other
            payments in cash or in kind in connection with the affairs of the
            clients of the Company, its subsidiaries or affiliates;

<PAGE>

            Failure to obtain or maintain any registration, license or other
            authorization or approval that Employee is required to maintain or
            that the Company, its subsidiaries or affiliates reasonably believes
            is required in order for Employee to perform his or her duties,
            provided, however, that Employee shall be given written notice of
            any such registration, license or other authorization or approval
            that he or she is required to obtain and a reasonable period of time
            to obtain such registration, license, or other authorization or
            approval;

            Willful failure to execute a directive of the board of directors of
            the Company or any of its subsidiaries or affiliates, the Executive
            Committee of any of the Company's subsidiaries or affiliates, or
            Employee's supervisor (unless such directive would result in the
            commission of an act which is illegal or unethical) or commission of
            an act against the directive of such Board, such Executive Committee
            or Employee's supervisor; or

            Substantial negotiations concerning or acceptance of employment with
            a competitor of the Company or any of its subsidiaries or affiliates
            prior to Employee's Termination of Employment.

      (ii)  "Disability" means that Employee has commenced receipt of long-term
            disability benefits under the Company's long-term disability policy
            as in effect at the date of Employee's termination of employment.

      (iii) A "Forfeiture Event" means and shall be deemed to have occurred if,
            at any time after the grant of the Restricted Stock including
            following Employee's Termination of Employment, Employee shall have
            failed to comply with any of the following conditions. Without the
            consent in writing of the Board, Employee will not, at any time
            prior to an applicable Vesting Date, acting alone or in conjunction
            with others, directly or indirectly (A) render services for any
            organization or engage (either as owner, investor, partner,
            stockholder, employer, employee, consultant, advisor, or director)
            directly or indirectly, in any business, which is or becomes
            competitive with the Company, its subsidiaries or affiliates; (B)
            induce any customer or client of or investor (excluding anyone who
            is an investor solely as a holder of Common Stock of the Company) in
            the Company, its subsidiaries or affiliates with whom Employee has
            had contacts or relationships, directly or indirectly, during and
            within the scope of his employment with the Company or any of its
            subsidiaries or affiliates, to curtail, limit, or cancel their
            business with the Company, its subsidiaries or affiliates; (C)
            induce, or attempt to influence, any employee of the Company, its
            subsidiaries or affiliates to terminate employment; (D) solicit,
            hire or retain as an employee or independent contractor, or assist
            any third party in the solicitation, hire, or retention as an
            employee or independent contractor, any person who during the
            previous 12 months was an employee of the Company or any of its
            subsidiaries or affiliates; or (E) otherwise fail to comply with the
            conditions set forth in Section 7.4(a), (b) and (c) of the Plan.
            However, following Termination, Employee shall be free to purchase
            stock or other securities of an organization or

<PAGE>

            business so long as (i) Employee does not directly or indirectly
            participate in the management of such organization or business and
            (ii) it is listed upon a recognized securities exchange or traded
            over-the-counter and such investment does not represent a greater
            than five percent equity interest in the organization or business.

      (iv)  "Retirement" means retirement after attaining the age at which an
            Employee's age plus his years of service equals 60, provided,
            however, that Employee has provided a minimum of five years of
            service to the Company, its subsidiaries or affiliates. For this
            purpose, years of service shall be credited for each twelve month
            period beginning on the date of Employee's commencement of
            employment with the Company and on each anniversary thereof during
            which the Employee was in active employment with the Company.

      (v)   "Termination of Employment" means the event by which Employee ceases
            to be employed by the Company, its subsidiaries and affiliates and
            immediately thereafter is not employed by any other entity included
            within the Company.

            (d) Evidence of Restricted Stock. Restricted Stock shall be
evidenced either (i) by issuance of one or more certificates in the name of
Employee or (ii) by an entry on the books of the Company's transfer agent. The
Restricted Stock shall bear an appropriate legend referring to the terms,
conditions, and Restrictions applicable hereunder in substantially the following
form:

      The shares of Common Stock represented by this certificate (the "Shares")
      have been granted by Jefferies Company, Inc. (the "Company") as Restricted
      Stock under the Company's 2003 Incentive Compensation Plan (the "2003
      Plan") and the Restricted Stock Agreement (the "Agreement"), dated as of [
      ], between the registered owner named hereon ("Employee") and the Company.
      Under the 2003 Plan and the Agreement, copies of which may be examined at
      the office of the Secretary of the Company, until [ ] (subject to
      acceleration in certain circumstances), Employee shall not sell, transfer,
      assign, pledge, margin, or otherwise encumber or dispose of the Shares
      (except for transfers and forfeitures to the Company), and Employee shall
      forfeit the Shares upon termination of Employee's employment with the
      Company and its subsidiaries in certain circumstances. The Shares are
      subject to certain other terms and conditions set forth in the Agreement.

Unless otherwise determined by the Company, certificates representing Restricted
Stock shall remain in the physical custody of the General Counsel of the Company
or his designee until such time as all Restrictions have expired. In addition,
Restricted Stock shall be subject to such stop-transfer orders and other
restrictive measures as the General Counsel of the Company shall deem advisable
under federal or state securities laws, rules and regulations thereunder, and
the rules of the New York Stock Exchange (the "NYSE") or any national securities
exchange or automated quotation system on which Common Stock is then listed or
quoted, or to implement the Restrictions.

            (e) Dividends and Distributions; Stock Splits. Employee shall be
entitled to receive dividends and distributions payable with respect to
Restricted Stock if and to the extent

<PAGE>

that he or she is the record owner of such Restricted Stock on any record date
for such a dividend or distribution and he or she has not forfeited such
Restricted Stock on or before the payment date for such dividend or
distribution, and Restricted Stock shall be subject to any stock split, subject
to the following terms and conditions:

      (i)   In the event of a cash dividend or distribution on Common Stock
            which is not a large, special and non-recurring dividend or
            distribution (as determined by the Board of Directors), such
            dividend or distribution shall be paid in cash to Employee;

      (ii)  In the event of a large, special and non-recurring cash dividend
            payable on Common Stock, the Company shall retain the amount of such
            cash dividend and, in lieu of delivery thereof, shall grant to
            Employee additional shares of Restricted Stock having a fair market
            value (as determined by the Committee) at the payment date of the
            dividend or distribution equal to the amount of cash paid as a
            dividend or distribution on each share of Common Stock multiplied by
            the number of shares of Employee's Restricted Stock. Such additional
            Restricted Stock will be subject to the same Restrictions and to
            such other terms and conditions as applied to the Restricted Stock;

      (iii) In the event of any non-cash dividend or distribution in the form of
            property other than Common Stock payable on Common Stock (including
            shares of a subsidiary of the Company distributed in a spin-off),
            the Company shall retain in its custody the property so distributed
            in respect of Employee's Restricted Stock, which property will be
            subject to the same Restrictions and to such other terms and
            conditions of the 2003 Plan and this Agreement as apply to the
            Restricted Stock with respect to which such property was
            distributed, until such time as the Restrictions expire or the
            Restricted Stock (together with such property) are forfeited. To the
            greatest extent practicable, such property will be treated the same
            as such Restricted Stock with respect to which the property was
            distributed, including in the event of any dividends or
            distributions paid in respect of such property or with respect to
            the placement of any legend on certificate(s) or documents
            representing such property.

      (iv)  In the event of a dividend or distribution in the form of Common
            Stock or split-up of shares, the Common Stock issued or delivered as
            such dividend or distribution or resulting from such split-up will
            be deemed to be additional Restricted Stock and will be subject to
            the same Restrictions and to such other terms and conditions of the
            2003 Plan and this Agreement as applied to the Restricted Stock with
            respect to which such dividend or distribution was paid or which was
            subject to such split-up.

            (f) Delivery of Certificates. Upon expiration of all Restrictions on
any Restricted Stock, the shares previously issued in the name of Employee as
such Restricted Stock shall no longer be deemed to be Restricted Stock, and the
Company shall, subject to the satisfactory payment of any federal, state or
foreign taxes or other amounts referred to in Section 4, below, cause any legend
referring to the Restrictions to be removed from the certificate(s)

<PAGE>

representing such shares and shall deliver such certificate(s) (together with
any property resulting from Section 3(e)(iii)) to Employee.

            (g) Stock Powers. Employee shall deliver to the General Counsel of
the Company, at the time of execution of this Agreement and/or at such other
time or times as the General Counsel may request, one or more executed stock
powers, in the form attached hereto as Exhibit A or such other form as may be
specified by the General Counsel, authorizing the transfer of the Restricted
Stock to the Company upon forfeiture, and Employee shall take such other steps
or perform such other actions as may be requested by the General Counsel to
effect the transfer of any forfeited Restricted Stock (together with any
property resulting from Section 3(e)(iii)) to the Company.

      4. TAX WITHHOLDING. Employee shall make arrangements satisfactory to the
Company, or, in the absence of such arrangements, the Company and any subsidiary
may deduct from any payment to be made to Employee any amount necessary, to
satisfy requirements of federal, state, local, or foreign tax law to withhold
taxes or other amounts with respect to the grant of the Restricted Stock or the
expiration of the Restrictions applicable to the Restricted Stock (and any
property resulting from Section 3(e)(iii)). In the event that Employee files,
under Section 83(b) of the Code, an election to be taxed on his receipt of
Restricted Stock as the receipt of ordinary income at the date of grant of the
Restricted Stock, Employee shall at the time of such filing notify the Company
of the making of such election and furnish a copy of the notice to the Company.
Unless Employee has made separate arrangements satisfactory to the Company, the
Company may elect to withhold shares deliverable in settlement of the Restricted
Stock grant having a fair market value (as determined by the Committee) equal to
the amount of such tax liability required to be withheld in connection with the
grant of the Restricted Stock or the expiration of the Restrictions applicable
to the Restricted Stock, but the Company shall not be obligated to withhold such
shares.

      5. LEGAL COMPLIANCE. Employee agrees to take any action the Company
reasonably deems necessary in order to comply with federal and state laws, or
the rules and regulations of the NYSE, the National Association of Securities
Dealers, Inc., or any other stock exchange, or any other obligation of the
Company or Employee relating to the Restricted Stock or this Agreement.

      6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws principles.

      7. MISCELLANEOUS. This Agreement shall be binding upon the heirs,
executors, administrators, and successors of the parties. This Agreement and the
2003 Plan constitute the entire agreement between the parties with respect to
the Restricted Stock, and supersede any prior agreements or documents with
respect thereto. No amendment, alteration, suspension, discontinuation, or
termination of this Agreement which may impose any additional obligation upon
the Company or materially impair the rights of Employee with respect to the
Restricted Stock shall be valid unless in each instance such amendment,
alteration, suspension, discontinuation, or termination is expressed in a
written instrument duly executed in the name and on behalf of the

<PAGE>

Company and by Employee. Neither the Restricted Stock nor the granting thereof
shall constitute or be evidence of any agreement or understanding, express or
implied, that Employee has a right to continue as an officer or employee of the
Company or any subsidiary for any period of time, or at any particular rate of
compensation. Any waiver by the Company of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of such provision or any other provision hereof.

            The Employee hereby acknowledges that the type and periods of
restriction imposed in the provisions of this Agreement are fair and reasonable.
The Employee hereby further acknowledges that the provisions of this Agreement
shall be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, the Employee agrees that if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made. In addition, if any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

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

Employee:                                       JEFFERIES GROUP, INC.

______________________________                  By:  ___________________________
Name
Social Sec. No.

Address:

<PAGE>

                                   STOCK POWER

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto Jefferies Group, Inc. [number] shares of Common Stock, $0.0001 par value
per share, of Jefferies Group, Inc., a Delaware corporation (the "Corporation"),
registered in the name of the undersigned on the books and records of the
Corporation, and does hereby irrevocably constitute and appoint Lloyd H. Feller
and Judith O. Kester, and each of them, attorneys, to transfer the Common Stock
on the books of the Corporation, with full power of substitution in the
premises.

                     __________________________________________________________
                     (Signature should be in exact form as on Stock certificate)

                     __________________________________________________________
                     Date