exv10w16






Exhibit 10.16




February [•], 2010




[Name]

[Address]



Dear [Name]:




          You have been selected by the Compensation Committee of the Board of Directors of KBW, Inc. to
receive the LTIP Awards described below pursuant to the Long-Term Incentive Program (the
“LTIP”) established under the KBW, Inc. 2009 Incentive Compensation Plan (the
“Plan”). Capitalized terms used but not defined in this letter agreement have the meanings
given those terms in the Plan and the LTIP.




          You have been granted three LTIP Awards for each of three Performance Cycles as described in
the following table:




	 	 	 	 	 	 	 	 	 
	Performance	 	LTIP Award Amount at Attainment of Target	 	Year of Potential
	Cycle	 	Cumulative Adjusted EPS	 	Payout
	2010
	 	$	333,333	 	 	 	2011	 
	2010-2011
	 	$	666,667	 	 	 	2012	 
	2010-2012
	 	$	1,000,000	 	 	 	2013	 






          The following table shows the Cumulative Adjusted EPS (as defined below) targets for each of
the three Performance Cycles at threshold, target and maximum compound annual growth rate
(“CAGR”) in Cumulative Adjusted EPS:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2010	 	2010-2011	 	2010-2012
	 	 	Performance Cycle	 	Performance Cycle	 	Performance Cycle
	Threshold 3% CAGR
above 2010 level
	 	$	0.85	 	 	$	1.73	 	 	$	2.63	 
	Target
9% CAGR above 2010
level
	 	$	0.95	 	 	$	1.99	 	 	$	3.11	 
	Maximum 12% or more
CAGR above 2010
level
	 	$	1.05	 	 	$	2.23	 	 	$	3.54	 






          “Cumulative Adjusted EPS” is defined as earnings per share, as reported in the
consolidated financial statements of the Company prepared in conformity with United States
generally accepted accounting principles as codified in the FASB Accounting Standards Codification
(“GAAP”), as applied to SEC registrants (or any other governing accounting standards as may
from time to time in the future be applicable for SEC registrants), as adjusted by the Committee in
accordance with the Plan and the LTIP to eliminate:





	 	a)	 	the impact of all performance based awards during the relevant
Performance Cycle, including awards under the LTIP, for any named executive officer
of the Company;




 









 





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	 	b)	 	the effect of any tax, assessment or similar charge enacted or
implemented by a government or governmental agency which is not of general
application to corporate taxpayers in the relevant jurisdiction; and
	 
	 	c)	 	any quantifiable Non-GAAP (or other applicable accounting standard)
adjustment to net income for the relevant Performance Cycle reported in a public
filing with the SEC prior to the determination of the percentage of LTIP Awards
earned for such Performance Cycle.





          The percentage of your LTIP Awards earned and settlement of your earned LTIP Awards (if any)
are governed by the LTIP and the Plan. All provisions of your LTIP Awards are subject to the terms
and conditions set forth in the LTIP and the Plan, which are hereby incorporated into this letter
agreement by this reference.




          If you agree to the foregoing terms and conditions, please execute this letter agreement and
the attached copy of this letter agreement and return one such executed original copy to the
Company.




	 	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	KBW, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:  	 	 	 	 
	 

	 	 	 

	 	 
	 

	 	 	Name:	 	 	 
	 

	 	 	Title:	 

	 	 
	 

	 	 	 	 	 	 






          I hereby accept the LTIP Awards described in this letter agreement in accordance with the
terms and conditions set forth herein and those of the KBW, Inc. 2009 Incentive Compensation Plan
and the Long-Term Incentive Program established thereunder.




	 	 	 	 	 	 	 
	 

	 	 	 	 

[Name]