vested in accordance herewith shall be forfeited. Upon the Employee’s Termination during thePeriod of Restriction due to the Employee’s death or Disability, the Period of Restrictionapplicable to the Shares of Restricted Stock, not theretofore forfeited in accordance herewith,shall lapse, and such Shares of Restricted Stock shall become free of all restrictions and becomefully vested. Upon the Employee’s Termination during the Period of Restriction upon Retirement,the Period of Restriction applicable to the Restricted Stock shall continue, and such RestrictedStock shall continue to potentially vest according to the original vesting schedule specified inthe Employee Account Records, unless the Company, in its sole discretion elects to accelerate suchvesting schedule. Nothing in this Agreement or the Plan shall confer upon the Employee any rightto continue in the employ of the Company or any Subsidiary or Affiliate or interfere in any waywith the right of the Company or any Subsidiary or Affiliate to terminate the Employee’s employmentat any time.2. Issuance of Shares.          During the Period of Restriction, the Restricted Stock may be evidenced by a stock certificateor certificates as set forth in Section 4 below or by a book-entry in the records of the TransferAgent in the Employee’s name, which shall be subject to a stop transfer order consistent with thisAgreement and the Plan and the legend set forth in Section 4 hereof. Subject to Section 8 hereof(pertaining to the withholding of taxes), as soon as practicable after the applicable portion ofthe Period of Restriction lapses (provided there has been no prior forfeiture of theRestricted Stock pursuant to the terms of this Agreement and the Plan), the Company shall issue (orcause to be delivered) the Shares of Restricted Stock becoming vested upon such lapse to theEmployee or to Employee’s personal representative, in book-entry or certificate form. Such Sharesshall be free of restrictions or restrictive legends making reference to this Agreement, exceptthat such Shares shall be subject to any restrictions required under the federal securities laws oras otherwise provided by Section 7 hereof. Notwithstanding the foregoing, the Company shall beentitled to hold the Shares of Restricted Stock that have vested until the Company or the TransferAgent shall have received from the Employee a duly executed Form W-9 or W-8, as applicable.3. Non-transferability of the Restricted Stock.          During the Period of Restriction, the Shares of Restricted Stock shall not be transferable bythe Employee by means of sale, assignment, exchange, encumbrance, pledge or otherwise. Anypurported or attempted transfer of such Shares or such rights shall be null and void.4. Rights as a Stockholder.          Except as otherwise specifically provided in this Agreement, during the Period of Restrictionthe Employee shall have all the rights of a stockholder with respect to the Restricted Stock,including without limitation the right to vote the Restricted Stock and the right to receive anydividends with respect thereto. If the Company declares and pays cash dividends on the Sharesduring the Period of Restriction, the Employee shall be paid such dividends with respect to suchShares at such time as such dividends are paid to holders of Shares generally.
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5. Certificates.          Any certificates representing the Shares of Restricted Stock as originally issued or from timeto time issued during the Period of Restriction shall bear the following legend:The Shares represented by this stock certificate have been granted as restricted stock undera Restricted Stock Agreement between the registered holder of these Shares and KBW, Inc.(the “Company”). The Shares represented by this stock certificate may not be sold,exchanged, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposedof until the restrictions set forth in the Restricted Stock Agreement between the registeredholder of these Shares and the Company shall have lapsed.6. Payment of Transfer Taxes, Fees and Other Expenses.          The Company agrees to pay any and all original issue taxes and stock transfer taxes that maybe imposed on the issuance of Shares received by an Employee in connection with the RestrictedStock, together with any and all other fees and expenses necessarily incurred by the Company inconnection therewith.7. Other Restrictions.          (a) The Restricted Stock shall be subject to the requirement that, if at any time the Companyshall determine that (i) the listing, registration or qualification of the Shares subject orrelated thereto upon any securities exchange or under any state or federal law, or (ii) the consentor approval of any government regulatory body, or (iii) an agreement by the Employee with respectto the disposition of Shares is necessary or desirable as a condition of, or in connection with,the delivery or purchase of Shares pursuant thereto, then in any such event, the grant ofRestricted Stock shall not be effective unless such listing, registration, qualification, consent,approval or agreement shall have been effected or obtained free of any conditions not acceptable tothe Company.          (b) The Employee acknowledges that the Employee is subject to the Company’s policies regardingcompliance with securities laws, including but not limited to its Insider Trading Policy (as ineffect from time to time and any successor policies), and, pursuant to these policies, the Employeeshall be required to obtain pre-clearance prior to purchasing or selling any of the Company’ssecurities, including any Shares issued upon vesting of the Restricted Stock, and may be prohibitedfrom selling such Shares other than during an open trading window. The Employee furtheracknowledges that, in its discretion, the Company may prohibit the Employee from selling suchShares even during an open trading window if the Company has concerns over the potential forinsider trading.8. Taxes and Withholding.          No later than the date as of which an amount first becomes includible in the gross income ofthe Employee for federal, state, local or foreign income or employment or other tax purposes withrespect to any Restricted Stock, the Employee shall pay to the Company, or make arrangementssatisfactory to the Company regarding the payment of, all federal, state, local and foreign taxesthat are required by applicable laws and regulations to be withheld with respect to
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such amount. The obligations of the Company under this Agreement shall be conditioned oncompliance by the Employee with this Section 8, and the Company shall, to the extent permitted bylaw, have the right to deduct or cause to be deducted by the Transfer Agent any such taxes from anypayment otherwise due to the Employee, including the delivery of the Restricted Stock that givesrise to the withholding requirement.9. Notices.          All notices and other communications under this Agreement shall be in writing and shall begiven by hand delivery to the other party or by facsimile, overnight courier, or registered orcertified mail, return receipt requested, postage prepaid, addressed as follows:          If to the Employee:At the most recent address