**Exhibit 10.17**

**COWEN GROUP, INC.**

**EXECUTIVE INCENTIVE AWARDAGREEMENT**

**[U.S. EMPLOYEES]**

**THIS AGREEMENT**(this “Agreement”) is made by and between **Cowen Group, Inc.**,a Delaware corporation (the “Company”), and _______________________, (the “Executive”),as of ______________.

**RECITALS**

WHEREAS, the Company has adopted the Cowen Group, Inc. 2006 Equity andIncentive Plan (the “Plan”) pursuant to which the Executive has been granted anaward (the “Award”); and

WHEREAS, the Award shall consist of a grant of stock options andrestricted stock in accordance with the terms and subject to the conditions setforth in this Agreement; and

WHEREAS, the Executive has accepted the grant of the Award and herebyagrees to the terms and conditions hereinafter stated; and

WHEREAS, the capitalized terms used herein but not defined in Section3.2 of this Agreement shall have the respective meanings given to them in thePlan;

NOW, THEREFORE, in consideration of theforegoing recitals and of the promises and conditions herein contained, it isagreed as follows:

**ARTICLE IGRANT OF OPTION**

**Section 1.1 - Grant of Option.**

Subject to the provisions of the Plan and this Agreement, the Companyhas granted, effective ___________________, 2006 (the “Grant Date”), to theExecutive an option to purchase all or any part of _______________ shares ofStock (the “Option”).  The Option grantedpursuant to this Agreement is not intended to qualify as an “incentive stockoption” within the meaning of Section 422 of the Internal Revenue Code of 1986,as amended (the “Code”).

**Section 1.2 - Exercise Price.**

The exercise price of the Option shall be the per share “price to public” of Stock in the IPOas set forth in the final prospectus of the Company dated the effective date of

 

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the IPO and filed with the Securities and ExchangeCommission, which amount is equal to the Fair Market Value on the Grant Date.

**Section 1.3 - Vesting and Exercisability.**

Subject to accelerated vesting upon a Change in Control in accordancewith Section 7 of the Plan and subject further to provisions relating toexpiration of the Option as described in Section 1.4, the Option shall vest andbecome exercisable with respect to twenty-five percent (25%) of the shares ofStock subject to the Option on each of the second through fifth anniversariesof the Grant Date and shall have a term of seven years from the Grant Date (the“Option Term”).

**Section 1.4 - Expiration of Option.**

(a)           Except asset forth herein or in subsections (i) or (ii) below, an Option may not beexercised unless the Executive continues to provide services to an entity forwhich the Stock constitutes “service recipient stock” within the meaning ofSection 409A of the Code and the regulations promulgated thereunder (“Section409A”), and unless the Executive continuously has provided such services sincethe Grant Date (such entities are collectively referred to as the “409AControlled Group”).

(i)                   If the Executive’s employment or service with the 409A Controlled Groupterminates as a result of the Executive’s death or Disability (as hereinafterdefined), the Option shall become immediately vested and exercisable as of thedate of termination of employment or service (the “Termination Date”) and shallremain exercisable until the expiration of the Option Term, and shall thereafterterminate.

(ii)                   Ifthe Executive’s employment or service with the 409A Controlled Group terminatesas a result of the Executive’s Retirement, the Option shall continue to vestand become exercisable according to the schedule set forth in Section 1.3 (butsubject to the provisions of Section 1.4(a)) and shall remain exercisable untilthe expiration of the Option Term, and shall thereafter terminate.  Notwithstanding anything to the contrary inthis Agreement or the Plan, in the event that prior to the sixth anniversary ofthe Grant Date, the Executive (X) violates any provision of this Agreement or(Y) directly or indirectly, in one or a series of transactions, owns, manages,operates, controls, invests or acquires an interest in, whether as a proprietor,partner, stockholder, member, lender, director, officer, employee, jointventurer, investor, lessor, supplier, customer, agent, representative or otherparticipant, or otherwise engages or participates in, whether as a proprietor,partner, stockholder, member, lender, 

 

 

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director, officer, employee, joint venturer, investor,lessor, supplier, customer, agent, representative or other participant, anybusiness which competes, directly or indirectly, with any businesses of theCompany, any Subsidiary or Affiliate of the Company (as determined by theCompany) (“Competitive Business”), then the Option shall immediately terminateand the Executive shall return to the Company any shares of Stock acquired byExecutive upon exercise of the Option after the Termination Date and prior tosuch violation or engagement with a Competitive Business (or, to the extentExecutive shall have disposed of such shares, an amount equal to the FairMarket Value of such shares on the date of disposition).  Notwithstanding the foregoing, ownership byExecutive as a passive investor of less than one percent (1%) of the stock of acorporation that is traded on an established exchange shall not constitute aviolation of clause (Y) above.

(iii)                  Ifthe Executive’s employment or service with the 409A Controlled Group isterminated for Cause (as hereinafter defined), the Option and any portionthereof (whether vested or unvested) then currently outstanding shall terminateon the Termination Date and Executive shall return to the Company any shares ofstock acquired upon exercise of the Option (or, to the extent Executive shallhave disposed of such shares, an amount equal to the Fair Market Value of suchshares on the date of disposition).

(iv)                  Ifthe Executive’s employment or service with the 409A Controlled Group terminatesother than as described in subsections (i) through (iii) above, any portion ofthe Option that is vested and exercisable as of the Termination Date shallremain exercisable until the earlier of (i) thirty (30) days following theTermination Date and (ii) the expiration of the Option Term, and shallthereafter terminate.  Any portion of theOption that is not vested and exercisable as of the Termination Date shallexpire and terminate upon the Termination Date.

**Section 1.5 - Manner of Exercise.**

(a)           TheOption, to the extent then vested and exercisable, shall be exercisable bydelivery to the Company of a written notice stating the number of shares as towhich the Option is exercised pursuant to this Agreement and a designation ofthe method of payment of the exercise price with respect to Stock to bepurchased.

(b)           Theexercise price of the Option, or portion thereof, with respect to Stock to bepurchased, shall be paid in full at the time of exercise; payment may be madein 

 

 

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cash,which may be paid by check or other instrument or in any other manneracceptable to the Company.  In addition,the purchase price may be paid, in whole or in part, in shares of Stock valuedat the Fair Market Value on the date of exercise, including shares of Stockthat would otherwise be distributed to the Executive upon exercise of theOption.

**Section 1.6 - Transferability of Option.**

The Option is nontransferable, directly or indirectly, except by willor the laws of descent and distribution or a transfer to a family member orfamily-related trust pursuant to a gift or domestic relations order.

**Section 1.7 - Taxes and Withholdings.**

Notlater than the date of exercise of the Option granted hereunder, Executiveshall pay or make arrangements satisfactory to the Committee regarding paymentof any federal, state or local taxes of any kind required by law to be withheldupon the exercise of such Option.  TheCompany shall, to the extent permitted or required by law, have the right todeduct from any payment of any kind otherwise due to Executive federal, state,and local taxes of any kind required by law to be withheld upon the exercise ofsuch Option.  Such amount may also bepaid in Stock previously owned by the Executive, or a portion of Stock thatotherwise would be distributed to such Executive upon exercise of the Option,or a combination of cash and such Stock.

**ARTICLE IIGRANT OF RESTRICTED STOCK**

**Section 2.1 - Grant of Restricted Stock.**

The Company has granted as of the Grant Date _______________ shares ofStock pursuant to the terms and subject to the conditions and restrictions ofthis Agreement (the “Restricted Stock”).

**Section 2.2 - Restrictions and Restricted Period.**

(a)           Restrictions.  Shares of the Restricted Stock grantedhereunder may not be sold, assigned, transferred, pledged, hypothecated orotherwise disposed of and shall be subject to a risk of forfeiture as describedin Section 2.4 below until the lapse of the Restricted Period (as definedbelow) (the “Restrictions”).

(b)           RestrictedPeriod.  Subject to (i) acceleratedvesting upon a Change in Control as set forth in Section 7 of the Plan, (ii)the forfeiture provisions set forth in Section 2.4(a) or provisions regardingaccelerated vesting set forth in the Plan and (iii) any applicable Lock-UpPeriod (as hereinafter defined), the Restrictions shall lapse and the shares ofthe Restricted Stock shall become nonforfeitable and transferable (provided, 

 

 

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thatsuch transfer is in accordance with Section 3.1 and otherwise in compliance withFederal and state securities laws) with respect to (x) twenty-five percent(25%) of the shares of Restricted Stock subject to this Agreement on each ofthe third and fourth anniversaries of the Grant Date and (y) the remainingfifty percent (50%) of the shares of Restricted Stock subject to this Agreementon the fifth anniversary of the Grant Date (the “Restricted Period”).

**Section 2.3 - Rights of a Stockholder.**

  During the Restricted Periodand for so long as the Restricted Stock is held by or for the benefit of theExecutive, the Executive shall have all the rights of a stockholder of theCompany with respect to the Restricted Stock, including, but not limited to,the rights to vote and to receive ordinary dividends.  In the event that the Committee approves anadjustment to the Restricted Stock pursuant to Section 5(b) of the Plan, thenin such event, any and all new, substituted or additional securities to whichthe Executive is entitled by reason of the Restricted Stock shall beimmediately subject to the Restrictions with the same force and effect as theRestricted Stock subject to such Restrictions immediately before such event.

**Section 2.4 - Cessation of Employment.**

(a)           Forfeiture.  If the Executive’s employment or service withthe Company and its Subsidiaries and Affiliates is terminated other than as aresult of death, Disability or Retirement, for any reason or no reason, thenany unvested shares of Restricted Stock shall be forfeited to the Company as ofthe Termination Date and neither the Executive nor any of Executive’ssuccessors, heirs, assigns, or personal representatives shall thereafter haveany further rights or interests in such shares of the Restricted Stock.  In addition, if the Executive’s employment orservice with the Company and its Subsidiaries and Affiliates is terminated forCause, then any shares of Restricted Stock that vested and which are still heldby the Executive as of the Termination Date shall be forfeited to the Companyas of the Termination Date (and to the extent any such shares are no longerheld by the Executive as of the Termination Date, Executive shall pay to theCompany an amount equal to the Fair Market Value of such shares on the date ofdisposition by the Executive).

(b)           Acceleration.  If the Executive’s employment or service withthe Company and its Subsidiaries and Affiliates is terminated as a result ofdeath or Disability, all restrictions on the unvested Restricted Stock shalllapse and the Restricted Stock shall immediately vest in full as of the TerminationDate.

(c)           ContinuedVesting.  In the event that theExecutive’s employment or service with the Company and its Subsidiaries andAffiliates is terminated as a result of the Executive’s Retirement, then theshares of Restricted Stock shall continue to vest in accordance with theschedule set forth in Section 2.2(b), provided, however, that any unvestedshares of Restricted Stock and any shares of Restricted Stock that vested after

 

 

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theTermination Date shall be immediately forfeited in the event that prior to thesixth anniversary of the Grant Date, the Executive (X) violates any provisionof this Agreement or (Y) commences employment with a Competitive Business, andto the extent any such shares that vested after the Termination Date are nolonger held by Executive as of the date of such violation or commencement ofcompetitive employment, the Executive shall pay to the Company an amount equalto the Fair Market Value of such shares on the date of disposition by theExecutive.

**Section 2.5 - Stock Certificates.**

Stockgranted herein may be evidenced in such manner as the Committee shalldetermine.  If one or more certificatesrepresenting the Restricted Stock are registered in the name of the Executive,then the Company may retain physical possession of any such certificate untilthe Restricted Period has lapsed.

**Section 2.6 - Taxes.**

The Executive shall pay promptly upon request, at the time theExecutive recognizes taxable income in respect of the shares of the RestrictedStock, an amount equal to the federal, state and/or local taxes the Companydetermines is required to be withheld under applicable tax laws with respect tothe shares of the Restricted Stock.  Inlieu of collecting payment from the Executive, the Company may, in itsdiscretion, distribute vested shares of Stock net of the number of whole sharesof Stock the Fair Market Value of which is equal to the minimum amount offederal, state and local taxes required to be withheld under applicable taxlaws.

**ARTICLE IIIMISCELLANEOUS**

**Section 3.1 - Securities Act Requirements**

(a)           Notwithstanding whether the Option isvested and exercisable in whole or in part, the Company shall not be obligatedto sell any shares of Stock subject to any such Option, if such exercise andsale or issuance would, in the opinion of counsel for the Company, violate theSecurities Act of 1933 (the “1933 Act”) or other Federal or state statuteshaving similar requirements, as they may be in effect at that time; and (ii)each Option shall be subject to the further requirement that, at any time thatthe Board or the Committee, as the case may be, shall determine, in theirrespective discretion, that the listing, registration or qualification of theshares of Stock subject to such Option under any securities exchangerequirements or under any applicable law, or the consent or approval of anygovernmental regulatory body, is necessary or desirable as a condition of, orin connection with, the issuance of shares of Stock, such Option may not beexercised in whole or in part unless such listing, registration, qualification,consent or approval shall have been effected or obtained free of any conditionsnot acceptable to the Board of Directors or the Committee, as the case may be.

 

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(b)           Theissuance of the Restricted Stock has not been registered under the 1933 Act,and is being issued to the Executive in reliance upon the exemption from suchregistration provided by Section 4(2) of the 1933 Act.

(c)           TheExecutive hereby confirms that he or she has been informed that the shares ofRestricted Stock are restricted securities under the 1933 Act and may not beresold or transferred unless such shares are first registered under the federalsecurities laws or unless an exemption from such registration isavailable.  Accordingly, the Executivehereby acknowledges that he or she is prepared to hold the Restricted Stock foran indefinite period and that the Executive is aware that Rule 144 promulgatedby the Securities and Exchange Commission is not presently available to exemptthe resale of the Restricted Stock from the registration requirements of the1933 Act.  The Executive is aware of theadoption of Rule 144 by the Commission, promulgated under the 1933 Act, whichpermits limited public resales of securities acquired in a nonpublic offering,subject to the satisfaction of certain conditions.  The Executive understands that under Rule144, the conditions include, among other things: the availability of certaincurrent public information about the issuer, the resale occurring not less thanone year after the party has purchased and paid for the securities to be sold,the sale being through a broker in an unsolicited “broker’s transaction” andthe amount of securities being sold during any three-month period not exceedingspecified limitations.  The Executiveacknowledges and understands that the Company may not be satisfying the currentpublic information requirement of Rule 144 at the time the Executive wishes tosell the Restricted Stock or other conditions under Rule 144 that are requiredof the Company.  If so, the Executiveunderstands that he or she will be precluded from selling the securities underRule 144 even if the one-year holding period of said rule has beensatisfied.  Prior to the Executive’sacquisition of the Restricted Stock, the Executive acquired sufficientinformation about the Company to reach an informed knowledgeable decision toacquire the Restricted Stock.  TheExecutive has such knowledge and experience in financial and business mattersas to make the Executive capable of utilizing said information to evaluate therisks of the prospective investment and to make an informed investmentdecision.  The Executive is able to bearthe economic risk of his or her investment in the Restricted Stock.  The Executive agrees not to make, without theprior written consent of the Company, any public offering or sale of theRestricted Stock although permitted to do so pursuant to Rule 144(k) promulgatedunder the 1933 Act, until all applicable conditions and requirements of theRule (or registration of the Restricted Stock under the 1933 Act) and thisAgreement have been satisfied.

(d)           In orderto reflect the restrictions on disposition of the Restricted Stock, the stockcertificates for the Restricted Stock will be endorsed with a restrictivelegend, in substantially the following form:

“THE SHARES REPRESENTEDBY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED (THE “ACT”) AND ARE “RESTRICTED SECURITIES” AS DEFINED IN 

 

 

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RULE 144 PROMULGATED UNDER THE ACT.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE OROTHERWISE DISTRIBUTED EXCEPT (1) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATIONSTATEMENT FOR THE SECURITIES UNDER THE ACT, OR EVIDENCE SATISFACTORY TO THECOMPANY OF AN EXEMPTION THEREFROM, AND (2) IN COMPLIANCE WITH THE DISPOSITIONPROVISIONS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDEROF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).  SUCH AGREEMENT IMPOSES CERTAIN RESTRICTIONSIN CONNECTION WITH THE DISPOSITION OF THE SHARES.  THE SECRETARY OF THE COMPANY WILL, UPONWRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUTCHARGE.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECTTO A LOCK-UP AGREEMENT THAT RESTRICTS THE TRANSFER OF THESE SHARES BEFORE____________.  COPIES OF SUCH AGREEMENTMAY BE OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE COMPANY.”

If required by the authorities of any state in connection with theissuance of the shares of Stock, the legend or legends required by such stateauthorities also will be endorsed on all such certificates.

**Section 3.2 -  Definitions**

(a)           “Cause”shall have the meaning set forth in the Executive’s employment or otheragreement with the Company, any Subsidiary or any Affiliate, provided that ifthe Executive is not a party to any such employment or other agreement or suchemployment or other agreement does not contain a definition of Cause, thenCause shall mean, when the Company, in goodfaith and its sole discretion, determines that any of the following occurs:(x) a breach by Executive of any provisions of the Plan or this Agreement,including, but not limited to, any of the restrictive covenants set forth inparagraphs (a), (c), (d), (f), (g) or (h) under Section 3.3 of this Agreement,or (y) (i) the Executive has been convictedof any crime (whether or not related to his or her duties at the Company or anySubsidiary or Affiliate of the Company); (ii) fraud, dishonesty, grossnegligence or substantial misconduct in Executive’s performance of his or herduties and responsibilities; (iii) Executive’s violation of or failure tocomply with the internal policies of the Company or any Subsidiary or Affiliateof the Company or the rules and regulations of any regulatory orself-regulatory organization with jurisdiction over the Company or anySubsidiary or Affiliate of the Company; or (iv) Executive’s failure to performthe material duties of his or her position, including, by way of example and notof limitation, the failure or refusal to follow instructions reasonably givenby Executive’s superiors in the course of employment.

 

 

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(b)           “Disability”means that the Executive (i) is unable to engage in any substantial gainfulactivity by reason of any medically determinable physical or mental impairmentwhich can be expected to result in death or can be expected to last for acontinuous period of not less than 12 months, or (ii) is, by reason of anymedically determinable physical or mental impairment which can be expected toresult in death or can be expected to last for a continuous period of not lessthan 12 months, receiving income replacement benefits for a period of not lessthan 3 months under an accident and health plan covering employees of theCompany, any Subsidiary or Affiliate of the Company.

(c)           “Retirement”or “Retire” shall mean any retirement in accordance with the applicablepolicies of the Company, if any, as amended from time to time, and after theretiree having attained the age of fifty-five (55) and completing five years ofcontinuous service with the 409A Controlled Group, but only including suchservice after December 31, 2003, provided that such retiree shallcertify in writing to the Company that he or she will permanently retire as ofthe Termination Date and will not thereafter be employed by or otherwise engagein any Competitive Business.

(d)           “SG” meansany of Société Générale, SG Americas, Inc., SG Americas Securities Holdings,Inc. and any Subsidiaries thereof other than the Company and its Subsidiaries.

**Section 3.3 - Notice of Termination and RestrictiveCovenants.**

(a)           Noticeof Termination.  The Executive shall not voluntarily Retire, resign orotherwise terminate his or her employment relationship with the Company or any ofits Subsidiaries or Affiliates, for any reason or no reason, without firstgiving the Company at least ninety (90) days prior written notice of theeffective date of such Retirement, resignation or other termination.  Such written notice shall be sent in accordance with Section 3.8 of thisAgreement.  The Company retains the right to waive the notice requirementin whole or in part or to place the Executive on paid leave for all or part ofthis ninety (90) day period.  In the alternative, at any time after theExecutive gives notice, the Company may, but shall not be obligated to, providethe executive with work and (i) require the Executive to comply with suchconditions as it may specify in relation to transitioning the Executive’sduties and responsibilities; (ii) assign the Executive other duties; or (iii)withdraw any powers vested in, or duties assigned to the Executive.

(b)           Non-Solicitation.   Executive agrees that if the Executivevoluntarily terminates employment or if the Executive’s employment isterminated, for any reason or no reason, the Executive shall not, for a periodof one hundred eighty (180) days, less ninety (90) days where a proper noticeof termination was given by the Executive in accordance with Section 3.3(a)above, after the Executive’s Termination Date, without the Company’s priorwritten consent, directly or indirectly: (i) solicit or induce, or cause othersto solicit or induce, any director, officer or employee of the Company, anySubsidiary or Affiliate of the Company or SG to leave the Company, suchSubsidiary or Affiliate or SG or in any way modify their relationship with theCompany, such Subsidiary or 

 

 

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Affiliateor SG; (ii) hire or cause others to hire any director, officer or employee ofthe Company, any Subsidiary or Affiliate of the Company or SG; (iii) encourageor assist in the hiring process of any director, officer or employee of theCompany, any Subsidiary or Affiliate of the Company or SG or in themodification of any such person’s relationship with the Company, suchSubsidiary or Affiliate or SG, or cause others to participate, encourage orassist in the hiring process of any director, officer or employee of theCompany, any Subsidiary or Affiliate of the Company or SG; (iv) interfere inany way with the rendering of professional services to the Company, anySubsidiary or Affiliate of the Company or SG by any client, prospective client,consultant, independent contractor or vendor, or their respective individualemployees; or (v) solicit the trade or patronage of any client, prospectiveclient, customers or any other persons engaged in any business relationshipwith the Company or any Subsidiary of the Company or any prospective clients,customers, suppliers, agents, distributors or any other persons currently in negotiationwith the Company or any Subsidiary of the Company for purposes of engaging inany business relationship with respect to any products, services, trade secretsor other matters in which the Company or such Subsidiary of the Company isactive.

(c)           Non-Disclosureof Confidential Information. Executive shall not at any time, whether during Executive’s employmentor following the termination of employment, for any reason whatsoever, directlyor indirectly, disclose or furnish to any entity, firm, corporation or person,except as otherwise required by applicable law, any confidential or proprietaryinformation of the Company, any Subsidiary or Affiliate of the Company or SG; provided,however, that in the event disclosure is required by applicable law, theExecutive shall provide the Company, any Subsidiary or Affiliate of the Companyor SG, as applicable, with prompt notice of such requirement prior to makingany disclosure, so that the Company, such Subsidiary or Affiliate of theCompany or SG, as applicable, may seek an appropriate protective order.  “Confidential or propriety information” shallmean information generally unknown to the public to which Executive gainsaccess by reason of Executive’s relationship with the Company, any Subsidiaryor Affiliate of the Company or SG, and includes, but is not limited to,information relating to all present or potential customers, business andmarketing plans, sales, trading and financial data and strategies, salaries andemployment benefits, and operational costs.

(d)           Non-Disparagement.  Executive shall not at any time, whetherduring Executive’s employment or following the termination of employment, forany reason whatsoever, and shall not cause or induce others to, defame ordisparage the Company, any Subsidiary or Affiliate of the Company or SG, or thedirectors or officers of the Company, any Subsidiary or Affiliate of theCompany or SG.

(e)           Company Property.  All records, files, memoranda, reports,customer information, client lists, documents and equipment relating to thebusiness of the Company, any Subsidiary or Affiliate of the Company or SG whichExecutive prepares,

 

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possessesor comes into contact with while Executive is an employee of the Company, anySubsidiary or Affiliate of the Company or SG shall remain the sole property ofthe Company, such Subsidiary or Affiliate or SG.  Executive agrees that upon Executive’s terminationof employment, for any reason or no reason, Executive shall provide to theCompany, any Subsidiary or Affiliate of the Company or SG, as applicable, alldocuments, papers, files or other material in Executive’s possession and underExecutive’s control that are connected with or derived from Executive’sservices to the Company, any Subsidiary or Affiliate of the Company or SG.  Executive agrees that the Company, theapplicable Subsidiary or Affiliate of the Company or SG owns all work product,patents, copyrights and other material produced by Executive during Executive’semployment with the Company, any Subsidiary or Affiliate of the Company or SG.

(f)            Compliancewith Company Policies.  Executiveagrees to fully comply with the applicable internal policies of the Company orany of its Subsidiaries, as such policies may be amended from time to time, atany time, during Executive’s employment by the Company or any of itsSubsidiaries.

(g)           Cooperation.  Executive agrees to cooperate fully with theCompany, its Subsidiaries and Affiliates and SG at any time, whether duringExecutive’s employment or following the termination of employment, taking intoaccount the requirements of any subsequent employment by the Executive, on allmatters relating to Executive’s employment, which cooperation shall be providedwithout additional consideration or compensation and shall include, withoutlimitation, being available to serve as a witness and be interviewed and makingavailable any books, records or other documents within Executive’s control,provided, however, that Executive need not take any action hereunder that wouldconstitute a violation of law or an obligation to any third party or cause awaiver of attorney-client privilege. Without limiting the generality of the foregoing, Executive shallcooperate in connection with any (i) past, present or future suit, countersuit,action, arbitration, mediation, alternative dispute resolution process, claim,counterclaim, demand, proceeding; (ii) inquiry, proceeding orinvestigation by or before any governmental authority; or (iii) arbitration ormediation tribunal, in each case involving the Company, its Subsidiaries orAffiliates or SG.  In connection withExecutive’s providing such cooperation, the Company, its Subsidiaries andAffiliates or SG, as applicable, shall reimburse the Executive for reasonabletravel, lodging and other expenses incurred by Executive, upon submission ofdocumentation reasonably acceptable to the Company, its Subsidiaries andAffiliates or SG, as applicable.

(h)           Lock-UpAgreement.  With respect to the IPO,Executive agrees to enter into a lock-up agreement (the “Lock-Up Agreement”)and, in accordance with the terms of the Lock-Up Agreement, for a period of onehundred eighty (180) days and any applicable extension applicable thereto (the “Lock-UpPeriod”), refrain from offering, pledging, selling or contracting to sell anyshares of Stock, granting any option, right or warrant for the sale of anyshares of Stock, lending or otherwise disposing of or transferring any sharesof Stock, requesting or demanding any underwriter of the IPO to 

 

 

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file aregistration statement related to shares of Stock, or entering into any swap orother agreement that transfers, in whole or in part, the economic consequenceof ownership of any shares of Stock, whether any such swap or transaction is tobe settled by delivery of shares of Stock or other securities, in cash orotherwise, directly or indirectly, without the prior written consent of theunderwriters of the IPO.

(i)            InjunctiveRelief.  In the event of a breach byExecutive of Executive’s obligations under this Agreement, the Company (and/orSG, if applicable), in addition to being entitled to exercise all rightsgranted by law, including recovery of damages, will be entitled to specificperformance of its rights under this Agreement. Executive acknowledges that the Company (and/or SG, if applicable) shallsuffer irreparable harm in the event of a breach or prospective breach ofparagraphs (a), (b), (c), (d), (e), (f) or (g) of this Section 3.3 and thatmonetary damages would not be adequate relief. Accordingly, the Company (and/or SG, if applicable) shall be entitled toseek injunctive relief in any federal or state court of competent jurisdictionlocated in New York County, or in any state in which Executive resides.  Executive further agrees that the Company andits Subsidiaries and Affiliates (and/or SG, if applicable) shall be entitled torecover all costs and expenses (including attorneys’ fees) incurred inconnection with the enforcement of the Company’s rights hereunder.

**Section 3.4 - Release of Claims.**

**As a condition to execution of this Agreement, Executiveshall execute a copy of the release of claims attached hereto as Exhibit A (the“Release”).  Any revocation of theRelease by the Executive shall cause this Agreement to be null and void and ofno effect.**

**Section 3.5 - Offset.**

**In the event that the Executive voluntarily terminatesemployment or if the Executive’s employment is terminated, for any reason or noreason, the Company may offset, to the fullest extent permitted by law, anyamounts of money or shares of Stock due to the Company from the Executive, oradvanced or loaned to Executive by the Company, from any monies or shares ofStock owed to the Executive or the Executive’s estate by the Company as aresult of such termination of employment.**

**Section 3.6 - Third-Party Beneficiary.**

**This Agreement is expressly entered into for the benefit ofthe parties hereto and, and with respect to Sections 3.3(b), (c), (d), (e),(f), (g) and (i) hereof, SG (which shall be deemed a third-party beneficiaryhereof solely for the purpose of such Sections, insofar as they apply toSG).  Nothing expressed or referred to inthis Agreement shall be construed to give any Person other than the partieshereto and SG (to the extent provided above) any legal or equitable right,remedy or claim under or with respect to this Agreement or any provision ofthis Agreement.**

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**Section3.7 - Governing Law.**

This Agreement shall be governed by and construed in accordance withthe laws of the State of New York other than its laws regarding conflicts oflaw (to the extent that the application of the laws of another jurisdictionwould be required thereby).  TheCommittee shall have final authority to interpret and construe this Agreementand to make any and all determinations under them, and its decision shall bebinding and conclusive upon the Executive and the Executive’s legalrepresentative in respect of any questions arising under this Agreement.

**Section 3.8 - Notices.**

Any notice to be given under the terms of this Agreement shall be inwriting and addressed to the Company at 1221 Avenue of the Americas, New York,NY 10020, Attention: General Counsel, and to the Executive at the address setforth below or at such other address as either party may hereafter designate inwriting to the other by like notice.

**Section3.9 - Effect of Agreement.**

Except as otherwise provided hereunder, this Agreement shall be bindingupon and shall inure to the benefit of any successor or successors of theCompany.

**Section3.10 - Amendment.**

This Agreement may not be amended or modified in any manner (includingby waiver) except by an instrument in writing signed by both parties hereto;provided, however that no amendment or modification shall be made to, and theCompany shall not agree to any waiver of, Sections 3.3(b), (c), (d), (e), (f),(g) or (i) hereof, insofar as such Sections apply to SG, without the priorwritten consent of Parent, which consent may be withheld by Parent in its solediscretion.  The waiver by either partyof compliance with any provision of this Agreement shall not operate or beconstrued as a waiver of any other provision of this Agreement or of anysubsequent breach of such party of a provision of this Agreement.

**Section3.11 -   No Right to ContinuedEmployment.**

**Nothing in this Agreement shall be deemed to confer on theExecutive any right to continued employment with the Company or any of itsSubsidiaries or Affiliates.**

**Section 3.12 -  Section 409A.**

This Agreement is intended to complywith the requirements of Section 409A of the Code and shall be interpretedaccordingly.  In the event that anyprovision of this Agreement would cause this Agreement to become subject toSection 409A or cause this Agreement to fail to comply with Section 409A, suchprovision may be deemed null and 

 

 

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voidand the Company and the Executive agree to amend or restructure this Agreement,to the extent necessary and appropriate to avoid adverse tax consequences underSection 409A.

**Section3.13 - Entire Agreement.**

The Plan is incorporated herein byreference.  The Plan and this Agreementconstitute the entire agreement of the parties with respect to the subjectmatter hereof and supersede in their entirety all prior undertakings,agreements, correspondence and term sheets of or between the Company and theExecutive respect to the subject matter hereof. If there is a conflict between the terms and conditions of the Plan andthe terms and conditions of this Award Agreement, the terms and conditions ofthe Plan shall govern.

**Section 3.14 - Arbitration.**

(a)           Any andall disputes arising out of or relating to this Agreement will be submitted toand resolved exclusively by a panel of three (3) arbitrators from either theNew York Stock Exchange or the National Association of Securities Dealers,Inc.  The arbitration shall be held inthe City of New York.  In agreeing toarbitrate these disputes, Executive recognizes that Executive is waivingExecutive’s right to a trial in court and by a jury.  The arbitration award shall be final andbinding upon both parties, and judgment upon the award may be entered in acourt of competent jurisdiction.

(b)           Thearbitrators shall not have authority to amend, alter, modify, add to or subtractfrom the provisions hereof.  The award ofthe arbitrators, in addition to granting the relief prescribed above and suchother relief as the arbitrators may deem proper, may contain provisionscommanding or restraining acts or conduct of the parties or theirrepresentatives and may further provide for the arbitrators to retainjurisdiction over this Agreement and the enforcement thereof.  If either party shall deliberately default inappearing before the arbitrators, the arbitrators are empowered, nonetheless,to take the proof of the party appearing and render an award thereon.

(c)           This Section 3.14 shall not beconstrued to limit the Company’s or SG’s right to obtain relief under paragraph3.3(i) (relating to equitable remedies) with respect to any matter orcontroversy subject to paragraph 3.3(i), and, pending a final determination bythe arbitrators with respect to any such matter or controversy, the Company andSG shall be entitled to obtain any such relief by direct application to state,federal or other applicable court, without being required to first arbitratesuch matter or controversy.

 

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**IN WITNESS WHEREOF**,the Company has caused this Agreement to be executed on its behalf by a dulyauthorized officer and Executive has hereunto set Executive’s hand as of thedate indicated above.

|   | COWEN GROUP, INC. |
|--------|-------------------|
|   |              |
|   |              |
|   |              |
|   |              |
|   | BY:               |   |
|   |              | Christopher A. White |
|   |              | Vice President |

 

|                         |   |
|-------------------------|--------|
| Signature of Executive: |   |
| [EXECUTIVE NAME]        |   |
|                    |   |
|                    |   |
| Address                 |   |
|                    |   |
|                    |   |
|                    |   |
|                    |   |
| Social Security Number  |   |

 

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**EXHIBIT A**

**FORM OFGENERAL RELEASE**

_____________________(“Releasor”) for and in consideration of the Award (as such term is defined inthe Award Agreement) described in the Executive Incentive Award Agreementbetween COWEN GROUP, INC., a Delaware corporation (the “Company”) and Releasordated as of ________, 2006 (the “Award Agreement”) to be provided by theCompany, does for himself and his heirs, executors, administrators, successorsand assigns, hereby now and forever, voluntarily, knowingly and willinglyrelease and discharge SG (as such term is defined in the Award Agreement) andits investors, together with each of their respective subsidiaries andaffiliates (other than COWEN GROUP, INC. and its subsidiaries), together witheach of their respective present and former partners, officers, directors,shareholders, employees and agents, and each of their predecessors, heirs,executors, administrators, successors and assigns (collectively, the “CompanyReleasees”) from any and all liabilities, charges, complaints, claims,promises, agreements, controversies, causes of action and demands of any naturewhatsoever, known or unknown, suspected or unsuspected, which against theCompany Releasees, jointly or severally, Releasor or Releasor’s heirs,executors, administrators, successors or assigns ever had, now have orhereafter can, shall or may have by reason of any matter, cause or thingwhatsoever  arising from the beginning oftime to the time Releasor executes this Release.  Without limiting the preceding sentence, thisGeneral Release includes, but is not limited to, any rights or claims arisingunder any statute or regulation, including the Age Discrimination in EmploymentAct of 1967, Title VII of the Civil Rights Act of 1964, or the Americans withDisabilities Act of 1990, each as amended, or any other federal, state or locallaw, regulation, ordinance or common law, or under any policy, agreement,understanding or promise, written or oral, formal or informal, between anyCompany Releasee and Releasor.

Releasor represents thathe has not filed any charges, claims, demands, proceedings or actions againstany of the Company Releasees.  Releasorshall not seek or be entitled to any recovery, in any charges, claims, demands,proceedings or actions that may be commenced on Releasor’s behalf in any wayarising out of or relating to the matters released under this General Release.

Releasor has been advisedto consult with an attorney of Releasor’s choice prior to signing this GeneralRelease.  Releasor understands and agreesthat Releasor has the right and has been given the opportunity to review thisGeneral Release with an attorney of Releasor’s choice should Releasor sodesire.  Releasor also agrees thatReleasor has entered into this General Release freely and voluntarily.  Relaseasor represents that he is not entitledto receive the Award described in this General Release absent his execution ofthis General Release.

 

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Releasor has at leasttwenty-one (21) calendar days to consider the terms of this General Release,although Releasor may sign it sooner if Releasor wishes.  Furthermore, once Releasor has signed thisGeneral Release, Releasor has seven (7) additional days to revoke Releasor’sconsent and may do so by writing to the Company at 1221 Avenue of the Americas,New York, NY 10020, Attention: Bill Dibble. The Release shall not be effective, and no Award shall be due hereunder,until the eighth day after Releasor shall have executed this General Releaseand returned it to the Company, assuming that Releasor has not revokedReleasor’s consent to this Release prior to such date.

In the event that any oneor more of the provisions of this Release shall be held to be invalid, illegalor unenforceable, the validity, legality and enforceability of the remainder ofthe Release shall not in any way be affected or impaired thereby.

This General Releaseshall be governed by the law of the State of New York without reference to itschoice of law rules.

Signed as of this ___ dayof ________, ____________ .

 

 

|   |                    |
|--------|--------------------|
|   | [Name of Releasor] |

 

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