BKF CAPITAL GROUP, INC.
                          STOCK OPTION AWARD AGREEMENT


         THIS STOCK OPTION AWARD AGREEMENT (the "Agreement") is made and entered
into as of ____________, between BKF Capital Group, Inc., a Delaware corporation
(the "Company") and ______________ (the "Employee") pursuant to the terms and
conditions of the BKF Capital Group, Inc., 1998 Incentive Compensation Plan (the
"Plan"). Unless otherwise provided, capitalized terms not defined in this
Agreement shall have the meanings set forth in the Plan.

         1.       AWARD OF OPTIONS. Pursuant to the Plan, the Company hereby
awards to Employee options (the "Options") to acquire ________ shares of Company
common stock (the "Stock") at the exercise price of $_____ per share (the
"Exercise Price"), subject to the terms and conditions set forth in this
Agreement and the Plan. A copy of the Plan has been delivered to the Employee.
By signing below, the Employee agrees to be bound by all the provisions of the
Plan. The Options granted hereunder are nonqualified stock options.

         2.       VESTING SCHEDULE. Subject to Sections 6 and 7 hereof, the
Options shall vest and become exercisable 33 1/3% on _____________, 33 1/3% on
_____________ and 33 1/3% remainder on _____________.

         3.       EXPIRATION DATE. Subject to Section 6 hereof, the Options
shall expire on _____________ (the "Expiration Date").

         4.       PAYMENT OF EXERCISE PRICE. The Exercise Price of the shares as
to which Options are exercised may be paid to the Company at the time of
exercise in cash or Stock or in such other consideration as shall be permitted
by the Committee at the time of exercise, in each case (a) pursuant to rules and
procedures established by the Committee and (b) having a total Fair Market Value
determined as of the date of exercise equal to the Exercise Price, or a
combination of cash or Stock or such other consideration having a total Fair
Market Value equal to such Exercise Price.

         5.       NON-TRANSFERABILITY. Except to the extent otherwise determined
by the Committee, the Options granted hereunder shall not be assignable or
otherwise transferable other than by will or the laws of descent and
distribution. Unless otherwise provided by the Committee, during Employee's
lifetime the Options shall be exercisable and elections with respect to the
Options may be made only by Employee or Employee's guardian or legal
representative.

         6.       TERMINATION OF EMPLOYMENT.

                  (a)      Except to the extent provided in Section 7 hereof or
any employment agreement or severance agreement between Employee and the
Company, the provisions of this Section 6 shall apply to the Options upon
Employee's termination of employment with the Company and all subsidiaries or
affiliates of the Company ("Termination") for any reason.

                  (b)      In the event of Employee's Termination by reason of
death, Disability (as defined) or Retirement (as defined), all Options shall
become immediately vested and shall be exercisable in whole or in part at any
time prior to the earlier of the Expiration Date and one year after the
Termination date.

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                  (c)      In the event of Employee's Termination for any reason
other than as provided in Section 6(b), Options which are unvested shall be
canceled and Options which are vested and exercisable may be exercised in whole
or in part at any time prior to the earlier of the Expiration Date and 30 days
after the Termination date.

         7.       CHANGE IN CONTROL. In the event of a Change in Control (as
defined) on or prior to Termination, any Option that was not previously
exercisable and vested shall become fully exercisable and vested at the time of
the Change in Control, except to the extent of any waiver by Employee and
subject to the applicable restrictions contained in any employment agreement or
severance agreement between Employee and the Company.

         8.       DEFINITIONS. For purposes of this Agreement:

                  (a)      "Change in Control" means the occurrence of any of
the following:

                           (i)      any "person" as such term is currently used
in Section 13(d) of the Exchange Act, other than John A. Levin or any entity
directly or indirectly controlled by him, becomes a "beneficial owner", as such
term is currently used in Rule 13d-3 promulgated under that Act, of 50% or more
of the Company's Voting Stock (as defined);

                           (ii)     a majority of the Company's board of
directors (the "Board") consists of individuals other than Incumbent Directors,
which term means the members of the Board on the date of this Agreement;
PROVIDED THAT any individual becoming a director subsequent to such date whose
election or nomination for election was supported by a majority of the directors
who then comprised the Incumbent Directors shall be considered an Incumbent
Director;

                           (iii)    all or substantially all of the assets or
business of the Company are disposed of pursuant to a merger, consolidation, or
other transaction (other than the asset distribution transactions contemplated
in the Company's proxy statement dated July 22, 1999) unless (A) the
shareholders of the Company immediately prior to such merger, consolidation or
other transaction beneficially own, directly or indirectly, in substantially the
same proportion as they owned the Company's Voting Stock, all of the Voting
Stock or other ownership interests of the entity or entities, if any, that
succeed to the business of the Company, or (B) a majority of the board of
directors of the surviving corporation in such a transaction consists of
Incumbent Directors or directors appointed by Levin Management Co., Inc. but
excluding directors who were members of the other entity's board of directors;

                           (iv)     the Board adopts any plan of liquidation
providing for the distribution of all or substantially all of the Company's
assets; or

                           (v)      the Company combines with another company
and is the surviving corporation but, immediately after the combination, the
shareholders of the Company immediately prior to the combination hold, directly
or indirectly, 50% or less of the Voting Stock of the combined company (there
being excluded from the number of shares held by such shareholders, but not from
the Voting Stock of the combined company, any shares received by affiliates of
such other company in exchange for securities of such other company).

                  (b)      "Disability" means the Employee's inability, due to
physical or mental incapacity, to substantially perform his duties and
responsibilities of employment for a period of 180 days in any consecutive
nine-month period.

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<PAGE>

                  (c)      "Retirement" means Employee's Termination after
reaching 65 years of age, or after reaching 55 years of age and completing at
least 10 years of service with the Company or any of its subsidiaries or
affiliates.

                  (d)      "Voting Stock" means the issued and outstanding
capital stock or other securities of any class or classes having general voting
power, under ordinary circumstances in the absence of contingencies, to elect
the directors of a corporation.

         9.       WITHHOLDING TAX. Employee may be subject to withholding taxes
as a result of the exercise or settlement of an Option or other payment in
respect of an Option. Unless the Committee permits otherwise, Employee shall pay
to the Company in cash, promptly when the amount of such obligations become
determinable, all applicable federal, state, local and foreign withholding taxes
that the Company in its discretion determines result from each such exercise,
settlement or payment. Unless the Committee otherwise determines and subject to
such rules and procedures as the Committee may establish, Employee may make an
election to have shares of Stock withheld by the Company or to tender any such
securities to the Company to pay the amount of tax that the Company in its
discretion determines to be required so to be withheld by the Company upon
exercise of an Option, subject to satisfying any applicable requirements for
compliance with Section 16(b) of the Exchange Act. Any shares of Stock or other
securities so withheld or tendered will be valued as of the date they are
withheld or tendered, provided that Stock shall be valued at Fair Market Value
on such date. Unless otherwise permitted by the Committee, the value of shares
withheld or tendered may not exceed the required federal, state, local and
foreign withholding tax obligations as computed by the Company.

         10.      COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         11.      GOVERNING LAW. This Agreement shall be governed by the laws of
the State of New York, without regard to conflict of law principles.


                                   BKF Capital Group, Inc.


                                   By:  ________________________________
                                        Name:    John A. Levin
                                        Title:   Chief Executive Officer


                                        ________________________________
                                             [Name of Employee]

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