Document:

Exhibit 10.17

COWEN GROUP, INC.

EXECUTIVE INCENTIVE AWARD
AGREEMENT

[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 and
Incentive Plan (the “Plan”) pursuant to which the Executive has been granted an
award (the “Award”); and

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

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

WHEREAS, the capitalized terms used herein but not defined in Section
3.2 of this Agreement shall have the respective meanings given to them in the
Plan;

NOW, THEREFORE, in consideration of the
foregoing recitals and of the promises and conditions herein contained, it is
agreed as follows:

ARTICLE I

GRANT OF OPTION

Section 1.1 - Grant of Option.

Subject to the provisions of the Plan and this Agreement, the Company
has granted, effective ___________________, 2006 (the “Grant Date”), to the
Executive an option to purchase all or any part of _______________ shares of
Stock (the “Option”).  The Option granted
pursuant to this Agreement is not intended to qualify as an “incentive stock
option” 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 IPO
as set forth in the final prospectus of the Company dated the effective date of

 

the IPO and filed with the Securities and Exchange
Commission, 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 accordance
with Section 7 of the Plan and subject further to provisions relating to
expiration of the Option as described in Section 1.4, the Option shall vest and
become exercisable with respect to twenty-five percent (25%) of the shares of
Stock subject to the Option on each of the second through fifth anniversaries
of 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 as
set forth herein or in subsections (i) or (ii) below, an Option may not be
exercised unless the Executive continues to provide services to an entity for
which the Stock constitutes “service recipient stock” within the meaning of
Section 409A of the Code and the regulations promulgated thereunder (“Section
409A”), and unless the Executive continuously has provided such services since
the Grant Date (such entities are collectively referred to as the “409A
Controlled Group”).

(i)                   
If the Executive’s employment or service with the 409A Controlled Group
terminates as a result of the Executive’s death or Disability (as hereinafter
defined), the Option shall become immediately vested and exercisable as of the
date of termination of employment or service (the “Termination Date”) and shall
remain exercisable until the expiration of the Option Term, and shall thereafter
terminate.

(ii)                   If
the Executive’s employment or service with the 409A Controlled Group terminates
as a result of the Executive’s Retirement, the Option shall continue to vest
and become exercisable according to the schedule set forth in Section 1.3 (but
subject to the provisions of Section 1.4(a)) and shall remain exercisable until
the expiration of the Option Term, and shall thereafter terminate.  Notwithstanding anything to the contrary in
this Agreement or the Plan, in the event that prior to the sixth anniversary of
the 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, joint
venturer, investor, lessor, supplier, customer, agent, representative or other
participant, or otherwise engages or participates in, whether as a proprietor,
partner, stockholder, member, lender, 

 

  
 
 

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

(iii)                  If
the Executive’s employment or service with the 409A Controlled Group is
terminated for Cause (as hereinafter defined), the Option and any portion
thereof (whether vested or unvested) then currently outstanding shall terminate
on the Termination Date and Executive shall return to the Company any shares of
stock acquired upon exercise of the Option (or, to the extent Executive shall
have disposed of such shares, an amount equal to the Fair Market Value of such
shares on the date of disposition).

(iv)                  If
the Executive’s employment or service with the 409A Controlled Group terminates
other than as described in subsections (i) through (iii) above, any portion of
the Option that is vested and exercisable as of the Termination Date shall
remain exercisable until the earlier of (i) thirty (30) days following the
Termination Date and (ii) the expiration of the Option Term, and shall
thereafter terminate.  Any portion of the
Option that is not vested and exercisable as of the Termination Date shall
expire and terminate upon the Termination Date.

Section 1.5 - Manner of Exercise.

(a)           The
Option, to the extent then vested and exercisable, shall be exercisable by
delivery to the Company of a written notice stating the number of shares as to
which the Option is exercised pursuant to this Agreement and a designation of
the method of payment of the exercise price with respect to Stock to be
purchased.

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

 

  
 
 

cash,
which may be paid by check or other instrument or in any other manner
acceptable to the Company.  In addition,
the purchase price may be paid, in whole or in part, in shares of Stock valued
at the Fair Market Value on the date of exercise, including shares of Stock
that would otherwise be distributed to the Executive upon exercise of the
Option.

Section 1.6 - Transferability of Option.

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

Section 1.7 - Taxes and Withholdings.

Not
later than the date of exercise of the Option granted hereunder, Executive
shall pay or make arrangements satisfactory to the Committee regarding payment
of any federal, state or local taxes of any kind required by law to be withheld
upon the exercise of such Option.  The
Company shall, to the extent permitted or required by law, have the right to
deduct 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 of
such Option.  Such amount may also be
paid in Stock previously owned by the Executive, or a portion of Stock that
otherwise would be distributed to such Executive upon exercise of the Option,
or a combination of cash and such Stock.

ARTICLE II

GRANT OF RESTRICTED STOCK

Section 2.1 - Grant of Restricted Stock.

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

Section 2.2 - Restrictions and Restricted Period.

(a)           Restrictions.  Shares of the Restricted Stock granted
hereunder may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of and shall be subject to a risk of forfeiture as described
in Section 2.4 below until the lapse of the Restricted Period (as defined
below) (the “Restrictions”).

(b)           Restricted
Period.  Subject to (i) accelerated
vesting 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 regarding
accelerated vesting set forth in the Plan and (iii) any applicable Lock-Up
Period (as hereinafter defined), the Restrictions shall lapse and the shares of
the Restricted Stock shall become nonforfeitable and transferable (provided, 

 

  
 
 

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

Section 2.3 - Rights of a Stockholder.

  During the Restricted Period
and for so long as the Restricted Stock is held by or for the benefit of the
Executive, the Executive shall have all the rights of a stockholder of the
Company 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 an
adjustment to the Restricted Stock pursuant to Section 5(b) of the Plan, then
in such event, any and all new, substituted or additional securities to which
the Executive is entitled by reason of the Restricted Stock shall be
immediately subject to the Restrictions with the same force and effect as the
Restricted Stock subject to such Restrictions immediately before such event.

Section 2.4 - Cessation of Employment.

(a)           Forfeiture.  If the Executive’s employment or service with
the Company and its Subsidiaries and Affiliates is terminated other than as a
result of death, Disability or Retirement, for any reason or no reason, then
any unvested shares of Restricted Stock shall be forfeited to the Company as of
the Termination Date and neither the Executive nor any of Executive’s
successors, heirs, assigns, or personal representatives shall thereafter have
any further rights or interests in such shares of the Restricted Stock.  In addition, if the Executive’s employment or
service with the Company and its Subsidiaries and Affiliates is terminated for
Cause, then any shares of Restricted Stock that vested and which are still held
by the Executive as of the Termination Date shall be forfeited to the Company
as of the Termination Date (and to the extent any such shares are no longer
held by the Executive as of the Termination Date, Executive shall pay to the
Company an amount equal to the Fair Market Value of such shares on the date of
disposition by the Executive).

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

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

 

  
 
 

the
Termination Date shall be immediately forfeited in the event that prior to the
sixth anniversary of the Grant Date, the Executive (X) violates any provision
of this Agreement or (Y) commences employment with a Competitive Business, and
to the extent any such shares that vested after the Termination Date are no
longer held by Executive as of the date of such violation or commencement of
competitive employment, the Executive shall pay to the Company an amount equal
to the Fair Market Value of such shares on the date of disposition by the
Executive.

Section 2.5 - Stock Certificates.

Stock
granted herein may be evidenced in such manner as the Committee shall
determine.  If one or more certificates
representing the Restricted Stock are registered in the name of the Executive,
then the Company may retain physical possession of any such certificate until
the Restricted Period has lapsed.

Section 2.6 - Taxes.

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

ARTICLE III

MISCELLANEOUS

Section 3.1 - Securities Act Requirements

(a)           Notwithstanding whether the Option is
vested and exercisable in whole or in part, the Company shall not be obligated
to sell any shares of Stock subject to any such Option, if such exercise and
sale or issuance would, in the opinion of counsel for the Company, violate the
Securities Act of 1933 (the “1933 Act”) or other Federal or state statutes
having 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 that
the Board or the Committee, as the case may be, shall determine, in their
respective discretion, that the listing, registration or qualification of the
shares of Stock subject to such Option under any securities exchange
requirements or under any applicable law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or
in connection with, the issuance of shares of Stock, such Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors or the Committee, as the case may be.

  
 

(b)           The
issuance 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 such
registration provided by Section 4(2) of the 1933 Act.

(c)           The
Executive hereby confirms that he or she has been informed that the shares of
Restricted Stock are restricted securities under the 1933 Act and may not be
resold or transferred unless such shares are first registered under the federal
securities laws or unless an exemption from such registration is
available.  Accordingly, the Executive
hereby acknowledges that he or she is prepared to hold the Restricted Stock for
an indefinite period and that the Executive is aware that Rule 144 promulgated
by the Securities and Exchange Commission is not presently available to exempt
the resale of the Restricted Stock from the registration requirements of the
1933 Act.  The Executive is aware of the
adoption of Rule 144 by the Commission, promulgated under the 1933 Act, which
permits limited public resales of securities acquired in a nonpublic offering,
subject to the satisfaction of certain conditions.  The Executive understands that under Rule
144, the conditions include, among other things: the availability of certain
current public information about the issuer, the resale occurring not less than
one 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” and
the amount of securities being sold during any three-month period not exceeding
specified limitations.  The Executive
acknowledges and understands that the Company may not be satisfying the current
public information requirement of Rule 144 at the time the Executive wishes to
sell the Restricted Stock or other conditions under Rule 144 that are required
of the Company.  If so, the Executive
understands that he or she will be precluded from selling the securities under
Rule 144 even if the one-year holding period of said rule has been
satisfied.  Prior to the Executive’s
acquisition of the Restricted Stock, the Executive acquired sufficient
information about the Company to reach an informed knowledgeable decision to
acquire the Restricted Stock.  The
Executive has such knowledge and experience in financial and business matters
as to make the Executive capable of utilizing said information to evaluate the
risks of the prospective investment and to make an informed investment
decision.  The Executive is able to bear
the economic risk of his or her investment in the Restricted Stock.  The Executive agrees not to make, without the
prior written consent of the Company, any public offering or sale of the
Restricted Stock although permitted to do so pursuant to Rule 144(k) promulgated
under the 1933 Act, until all applicable conditions and requirements of the
Rule (or registration of the Restricted Stock under the 1933 Act) and this
Agreement have been satisfied.

(d)           In order
to reflect the restrictions on disposition of the Restricted Stock, the stock
certificates for the Restricted Stock will be endorsed with a restrictive
legend, in substantially the following form:

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

 

  
 
 

RULE 144 PROMULGATED UNDER THE ACT.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (1) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE ACT, OR EVIDENCE SATISFACTORY TO THE
COMPANY OF AN EXEMPTION THEREFROM, AND (2) IN COMPLIANCE WITH THE DISPOSITION
PROVISIONS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER
OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).  SUCH AGREEMENT IMPOSES CERTAIN RESTRICTIONS
IN CONNECTION WITH THE DISPOSITION OF THE SHARES.  THE SECRETARY OF THE COMPANY WILL, UPON
WRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A LOCK-UP AGREEMENT THAT RESTRICTS THE TRANSFER OF THESE SHARES BEFORE
____________.  COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE COMPANY.”

If required by the authorities of any state in connection with the
issuance of the shares of Stock, the legend or legends required by such state
authorities 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 other
agreement with the Company, any Subsidiary or any Affiliate, provided that if
the Executive is not a party to any such employment or other agreement or such
employment or other agreement does not contain a definition of Cause, then
Cause shall mean, when the Company, in good
faith 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 in
paragraphs (a), (c), (d), (f), (g) or (h) under Section 3.3 of this Agreement,
or (y) (i) the Executive has been convicted
of any crime (whether or not related to his or her duties at the Company or any
Subsidiary or Affiliate of the Company); (ii) fraud, dishonesty, gross
negligence or substantial misconduct in Executive’s performance of his or her
duties and responsibilities; (iii) Executive’s violation of or failure to
comply with the internal policies of the Company or any Subsidiary or Affiliate
of the Company or the rules and regulations of any regulatory or
self-regulatory organization with jurisdiction over the Company or any
Subsidiary or Affiliate of the Company; or (iv) Executive’s failure to perform
the material duties of his or her position, including, by way of example and not
of limitation, the failure or refusal to follow instructions reasonably given
by Executive’s superiors in the course of employment.

 

  
 
 

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

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

(d)           “SG” means
any 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 Restrictive
Covenants.

(a)           Notice
of Termination.  The Executive shall not voluntarily Retire, resign or
otherwise terminate his or her employment relationship with the Company or any of
its Subsidiaries or Affiliates, for any reason or no reason, without first
giving the Company at least ninety (90) days prior written notice of the
effective date of such Retirement, resignation or other termination.  
Such written notice shall be sent in accordance with Section 3.8 of this
Agreement.  The Company retains the right to waive the notice requirement
in whole or in part or to place the Executive on paid leave for all or part of
this ninety (90) day period.  In the alternative, at any time after the
Executive gives notice, the Company may, but shall not be obligated to, provide
the executive with work and (i) require the Executive to comply with such
conditions as it may specify in relation to transitioning the Executive’s
duties 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 Executive
voluntarily terminates employment or if the Executive’s employment is
terminated, for any reason or no reason, the Executive shall not, for a period
of one hundred eighty (180) days, less ninety (90) days where a proper notice
of termination was given by the Executive in accordance with Section 3.3(a)
above, after the Executive’s Termination Date, without the Company’s prior
written consent, directly or indirectly: (i) solicit or induce, or cause others
to solicit or induce, any director, officer or employee of the Company, any
Subsidiary or Affiliate of the Company or SG to leave the Company, such
Subsidiary or Affiliate or SG or in any way modify their relationship with the
Company, such Subsidiary or 

 

  
 
 

Affiliate
or SG; (ii) hire or cause others to hire any director, officer or employee of
the Company, any Subsidiary or Affiliate of the Company or SG; (iii) encourage
or assist in the hiring process of any director, officer or employee of the
Company, any Subsidiary or Affiliate of the Company or SG or in the
modification of any such person’s relationship with the Company, such
Subsidiary or Affiliate or SG, or cause others to participate, encourage or
assist in the hiring process of any director, officer or employee of the
Company, any Subsidiary or Affiliate of the Company or SG; (iv) interfere in
any way with the rendering of professional services to the Company, any
Subsidiary or Affiliate of the Company or SG by any client, prospective client,
consultant, independent contractor or vendor, or their respective individual
employees; or (v) solicit the trade or patronage of any client, prospective
client, customers or any other persons engaged in any business relationship
with the Company or any Subsidiary of the Company or any prospective clients,
customers, suppliers, agents, distributors or any other persons currently in negotiation
with the Company or any Subsidiary of the Company for purposes of engaging in
any business relationship with respect to any products, services, trade secrets
or other matters in which the Company or such Subsidiary of the Company is
active.

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

(d)           Non-Disparagement.  Executive shall not at any time, whether
during Executive’s employment or following the termination of employment, for
any reason whatsoever, and shall not cause or induce others to, defame or
disparage the Company, any Subsidiary or Affiliate of the Company or SG, or the
directors or officers of the Company, any Subsidiary or Affiliate of the
Company or SG.

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

  
 

possesses
or comes into contact with while Executive is an employee of the Company, any
Subsidiary or Affiliate of the Company or SG shall remain the sole property of
the Company, such Subsidiary or Affiliate or SG.  Executive agrees that upon Executive’s termination
of employment, for any reason or no reason, Executive shall provide to the
Company, any Subsidiary or Affiliate of the Company or SG, as applicable, all
documents, papers, files or other material in Executive’s possession and under
Executive’s control that are connected with or derived from Executive’s
services to the Company, any Subsidiary or Affiliate of the Company or SG.  Executive agrees that the Company, the
applicable Subsidiary or Affiliate of the Company or SG owns all work product,
patents, copyrights and other material produced by Executive during Executive’s
employment with the Company, any Subsidiary or Affiliate of the Company or SG.

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

(g)           Cooperation.  Executive agrees to cooperate fully with the
Company, its Subsidiaries and Affiliates and SG at any time, whether during
Executive’s employment or following the termination of employment, taking into
account the requirements of any subsequent employment by the Executive, on all
matters relating to Executive’s employment, which cooperation shall be provided
without additional consideration or compensation and shall include, without
limitation, being available to serve as a witness and be interviewed and making
available any books, records or other documents within Executive’s control,
provided, however, that Executive need not take any action hereunder that would
constitute a violation of law or an obligation to any third party or cause a
waiver of attorney-client privilege. 
Without limiting the generality of the foregoing, Executive shall
cooperate 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 or
investigation by or before any governmental authority; or (iii) arbitration or
mediation tribunal, in each case involving the Company, its Subsidiaries or
Affiliates or SG.  In connection with
Executive’s providing such cooperation, the Company, its Subsidiaries and
Affiliates or SG, as applicable, shall reimburse the Executive for reasonable
travel, lodging and other expenses incurred by Executive, upon submission of
documentation reasonably acceptable to the Company, its Subsidiaries and
Affiliates or SG, as applicable.

(h)           Lock-Up
Agreement.  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 one
hundred eighty (180) days and any applicable extension applicable thereto (the “Lock-Up
Period”), refrain from offering, pledging, selling or contracting to sell any
shares of Stock, granting any option, right or warrant for the sale of any
shares of Stock, lending or otherwise disposing of or transferring any shares
of Stock, requesting or demanding any underwriter of the IPO to 

 

  
 
 

file a
registration statement related to shares of Stock, or entering into any swap or
other agreement that transfers, in whole or in part, the economic consequence
of ownership of any shares of Stock, whether any such swap or transaction is to
be settled by delivery of shares of Stock or other securities, in cash or
otherwise, directly or indirectly, without the prior written consent of the
underwriters of the IPO.

(i)            Injunctive
Relief.  In the event of a breach by
Executive of Executive’s obligations under this Agreement, the Company (and/or
SG, if applicable), in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. 
Executive acknowledges that the Company (and/or SG, if applicable) shall
suffer irreparable harm in the event of a breach or prospective breach of
paragraphs (a), (b), (c), (d), (e), (f) or (g) of this Section 3.3 and that
monetary damages would not be adequate relief. 
Accordingly, the Company (and/or SG, if applicable) shall be entitled to
seek injunctive relief in any federal or state court of competent jurisdiction
located in New York County, or in any state in which Executive resides.  Executive further agrees that the Company and
its Subsidiaries and Affiliates (and/or SG, if applicable) shall be entitled to
recover all costs and expenses (including attorneys’ fees) incurred in
connection with the enforcement of the Company’s rights hereunder.

Section 3.4 - Release of Claims.

As a condition to execution of this Agreement, Executive
shall execute a copy of the release of claims attached hereto as Exhibit A (the
“Release”).  Any revocation of the
Release by the Executive shall cause this Agreement to be null and void and of
no effect.

Section 3.5 - Offset.

In the event that the Executive voluntarily terminates
employment or if the Executive’s employment is terminated, for any reason or no
reason, the Company may offset, to the fullest extent permitted by law, any
amounts of money or shares of Stock due to the Company from the Executive, or
advanced or loaned to Executive by the Company, from any monies or shares of
Stock owed to the Executive or the Executive’s estate by the Company as a
result of such termination of employment.

Section 3.6 - Third-Party Beneficiary.

This Agreement is expressly entered into for the benefit of
the 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 beneficiary
hereof solely for the purpose of such Sections, insofar as they apply to
SG).  Nothing expressed or referred to in
this Agreement shall be construed to give any Person other than the parties
hereto 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 of
this Agreement.

 

  
 
 

Section
3.7 - Governing Law.

This Agreement shall be governed by and construed in accordance with
the laws of the State of New York other than its laws regarding conflicts of
law (to the extent that the application of the laws of another jurisdiction
would be required thereby).  The
Committee shall have final authority to interpret and construe this Agreement
and to make any and all determinations under them, and its decision shall be
binding and conclusive upon the Executive and the Executive’s legal
representative 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 in
writing 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 set
forth below or at such other address as either party may hereafter designate in
writing to the other by like notice.

Section
3.9 - Effect of Agreement.

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

Section
3.10 - Amendment.

This Agreement may not be amended or modified in any manner (including
by waiver) except by an instrument in writing signed by both parties hereto;
provided, however that no amendment or modification shall be made to, and the
Company 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 prior
written consent of Parent, which consent may be withheld by Parent in its sole
discretion.  The waiver by either party
of compliance with any provision of this Agreement shall not operate or be
construed as a waiver of any other provision of this Agreement or of any
subsequent breach of such party of a provision of this Agreement.

Section
3.11 -   No Right to Continued
Employment.

Nothing in this Agreement shall be deemed to confer on the
Executive any right to continued employment with the Company or any of its
Subsidiaries or Affiliates.

Section 3.12 -  
Section 409A.

This Agreement is intended to comply
with the requirements of Section 409A of the Code and shall be interpreted
accordingly.  In the event that any
provision of this Agreement would cause this Agreement to become subject to
Section 409A or cause this Agreement to fail to comply with Section 409A, such
provision may be deemed null and 

 

  
 
 

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

Section
3.13 - Entire Agreement.

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

Section 3.14 - Arbitration.

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

(b)           The
arbitrators shall not have authority to amend, alter, modify, add to or subtract
from the provisions hereof.  The award of
the arbitrators, in addition to granting the relief prescribed above and such
other relief as the arbitrators may deem proper, may contain provisions
commanding or restraining acts or conduct of the parties or their
representatives and may further provide for the arbitrators to retain
jurisdiction over this Agreement and the enforcement thereof.  If either party shall deliberately default in
appearing 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 be
construed to limit the Company’s or SG’s right to obtain relief under paragraph
3.3(i) (relating to equitable remedies) with respect to any matter or
controversy subject to paragraph 3.3(i), and, pending a final determination by
the arbitrators with respect to any such matter or controversy, the Company and
SG shall be entitled to obtain any such relief by direct application to state,
federal or other applicable court, without being required to first arbitrate
such matter or controversy.

  
 

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

	
   

  	
  COWEN GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
  Christopher A. White

  
	
   

  	
   

  	
  Vice President

  

 

	
  

  	
   

  
	
  Signature of Executive:

  	
   

  
	
  [EXECUTIVE NAME]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Social Security Number

  	
   

  

 

 15
 

EXHIBIT A

FORM OF
GENERAL RELEASE

_____________________
(“Releasor”) for and in consideration of the Award (as such term is defined in
the Award Agreement) described in the Executive Incentive Award Agreement
between COWEN GROUP, INC., a Delaware corporation (the “Company”) and Releasor
dated as of ________, 2006 (the “Award Agreement”) to be provided by the
Company, does for himself and his heirs, executors, administrators, successors
and assigns, hereby now and forever, voluntarily, knowingly and willingly
release and discharge SG (as such term is defined in the Award Agreement) and
its investors, together with each of their respective subsidiaries and
affiliates (other than COWEN GROUP, INC. and its subsidiaries), together with
each 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 “Company
Releasees”) from any and all liabilities, charges, complaints, claims,
promises, agreements, controversies, causes of action and demands of any nature
whatsoever, known or unknown, suspected or unsuspected, which against the
Company Releasees, jointly or severally, Releasor or Releasor’s heirs,
executors, administrators, successors or assigns ever had, now have or
hereafter can, shall or may have by reason of any matter, cause or thing
whatsoever  arising from the beginning of
time to the time Releasor executes this Release.  Without limiting the preceding sentence, this
General Release includes, but is not limited to, any rights or claims arising
under any statute or regulation, including the Age Discrimination in Employment
Act of 1967, Title VII of the Civil Rights Act of 1964, or the Americans with
Disabilities Act of 1990, each as amended, or any other federal, state or local
law, regulation, ordinance or common law, or under any policy, agreement,
understanding or promise, written or oral, formal or informal, between any
Company Releasee and Releasor.

Releasor represents that
he has not filed any charges, claims, demands, proceedings or actions against
any of the Company Releasees.  Releasor
shall 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 way
arising out of or relating to the matters released under this General Release.

Releasor has been advised
to consult with an attorney of Releasor’s choice prior to signing this General
Release.  Releasor understands and agrees
that Releasor has the right and has been given the opportunity to review this
General Release with an attorney of Releasor’s choice should Releasor so
desire.  Releasor also agrees that
Releasor has entered into this General Release freely and voluntarily.  Relaseasor represents that he is not entitled
to receive the Award described in this General Release absent his execution of
this General Release.

 

Releasor has at least
twenty-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 this
General Release, Releasor has seven (7) additional days to revoke Releasor’s
consent 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 Release
and returned it to the Company, assuming that Releasor has not revoked
Releasor’s consent to this Release prior to such date.

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

This General Release
shall be governed by the law of the State of New York without reference to its
choice of law rules.

Signed as of this ___ day
of ________, ____________ .

 

 

	
   

  	
  

  
	
   

  	
  [Name of Releasor]Exhibit 10.18

COWEN GROUP, INC.

EXECUTIVE INCENTIVE AWARD
AGREEMENT

THIS AGREEMENT
(this “Agreement”) is made by and between Cowen Group, Inc.,
a Delaware corporation (the “Company”), and Kim S.
Fennebresque (the “Executive”), as of July      ,
2006.

RECITALS

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

WHEREAS, the Award shall consist of a grant of restricted stock in
accordance with the terms and subject to the conditions set forth in this
Agreement; and

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

WHEREAS, the capitalized terms used herein but not defined in Section
2.2 of this Agreement shall have the respective meanings given to them in the
Plan;

NOW, THEREFORE, in consideration of the
foregoing recitals and of the promises and conditions herein contained, it is
agreed as follows:

ARTICLE I

GRANT OF RESTRICTED STOCK

Section 1.1 - Grant of Restricted Stock.

The Company has granted, effective as of the date the IPO is priced
(the “Grant Date”), 975,000 shares of Stock pursuant to the terms and subject
to the conditions and restrictions of the Plan and this Agreement (the “Restricted
Stock”).

Section 1.2 - Restrictions and Restricted Period.

(a)           Restrictions.  Shares of the Restricted Stock granted
hereunder may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of and shall be subject to a risk of forfeiture as described
in Section 1.4 below until the lapse of the Restricted Period (as defined
below) (the “Restrictions”).

(b)           Restricted
Period.  Subject to (i) accelerated
vesting, forfeiture and other provisions set forth in Section 1.4, (ii) the
forfeiture provisions set forth in Section 1.4(a)

or
provisions regarding accelerated vesting set forth in the Plan and (iii) any
applicable Lock-Up Period (as hereinafter defined), the Restrictions shall
lapse and the shares of the Restricted Stock shall become nonforfeitable and
transferable (provided, that such transfer is in accordance with Section 2.1
and otherwise in compliance with Federal and state securities laws) with
respect to one hundred percent (100%) of the shares of Restricted Stock subject
to this Agreement on December 31, 2010 (the “Restricted Period”).

Section 1.3 - Rights of a Stockholder.

During the Restricted Period and for so long as the Restricted Stock is
held by or for the benefit of the Executive, the Executive shall have all the
rights of a stockholder of the Company 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 an adjustment to the Restricted Stock pursuant to Section 5(b) of the
Plan, then in such event, any and all new, substituted or additional securities
to which the Executive is entitled by reason of the Restricted Stock shall be
immediately subject to the Restrictions with the same force and effect as the
Restricted Stock subject to such Restrictions immediately before such event.

Section 1.4 - Cessation of Employment.

(a)           Forfeiture.  If the Executive’s employment or service with
the Company and its Subsidiaries and Affiliates is terminated for Cause or by
the Executive without Good Reason (including by reason of Executive’s
retirement) prior to December 31, 2010, then any unvested shares of Restricted
Stock shall be forfeited to the Company as of the date of termination of
employment or service (the “Termination Date”) and neither the Executive nor
any of Executive’s successors, heirs, assigns, or personal representatives
shall thereafter have any further rights or interests in such shares of the
Restricted Stock.

(b)           Acceleration.  If the Executive’s employment or service with
the Company and its Subsidiaries and Affiliates is terminated (i) by the
Company other than for Cause (for purposes of this provision, the Company’s
failure to renew the Term of the Employment Agreement through December 31, 2010
shall constitute a termination by the Company other than for Cause), (ii) by
the Executive for Good Reason or (iii) as a result of death or Disability, all
restrictions on the unvested Restricted Stock shall lapse and the Restricted Stock
shall immediately vest in full as of the Termination Date.  Upon the occurrence of a Change in Control
(as such term is defined in the Employment Agreement), all restrictions on the
unvested Restricted Stock shall lapse and the Restricted Stock shall immediately
vest.

 2
 

Section 1.5 - Stock Certificates.

Stock
granted herein may be evidenced in such manner as the Committee shall
determine.  If one or more certificates
representing the Restricted Stock are registered in the name of the Executive,
then the Company may retain physical possession of any such certificate until
the Restricted Period has lapsed.

Section 1.6 - Taxes.

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

ARTICLE II

MISCELLANEOUS

Section 2.1 - Securities Act Requirements

(a)           The
issuance 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 such
registration provided by Section 4(2) of the 1933 Act.

(b)           The
Executive hereby confirms that he or she has been informed that the shares of
Restricted Stock are restricted securities under the 1933 Act and may not be
resold or transferred unless such shares are first registered under the federal
securities laws or unless an exemption from such registration is
available.  Accordingly, the Executive
hereby acknowledges that he or she is prepared to hold the Restricted Stock for
an indefinite period and that the Executive is aware that Rule 144 promulgated
by the Securities and Exchange Commission is not presently available to exempt
the resale of the Restricted Stock from the registration requirements of the
1933 Act.  The Executive is aware of the
adoption of Rule 144 by the Commission, promulgated under the 1933 Act, which
permits limited public resales of securities acquired in a nonpublic offering,
subject to the satisfaction of certain conditions.  The Executive understands that under Rule 144,
the conditions include, among other things: the availability of certain current
public information about the issuer, the resale occurring not less than one
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” and the
amount of securities being sold during any three-month period not exceeding
specified limitations.  The Executive
acknowledges and understands that the Company may not be satisfying the current
public information requirement of Rule 144 at the time the Executive wishes to
sell the

 3
 

Restricted
Stock or other conditions under Rule 144 that are required of the Company.  If so, the Executive understands that he or
she will be precluded from selling the securities under Rule 144 even if the one-year
holding period of said rule has been satisfied. 
Prior to the Executive’s acquisition of the Restricted Stock, the
Executive acquired sufficient information about the Company to reach an
informed knowledgeable decision to acquire the Restricted Stock.  The Executive has such knowledge and
experience in financial and business matters as to make the Executive capable
of utilizing said information to evaluate the risks of the prospective
investment and to make an informed investment decision.  The Executive is able to bear the economic
risk of his or her investment in the Restricted Stock.  The Executive agrees not to make, without the
prior written consent of the Company, any public offering or sale of the Restricted
Stock although permitted to do so pursuant to Rule 144(k) promulgated under the
1933 Act, until all applicable conditions and requirements of the Rule (or
registration of the Restricted Stock under the 1933 Act) and this Agreement
have been satisfied.

(c)           In order
to reflect the restrictions on disposition of the Restricted Stock, the stock
certificates for the Restricted Stock will be endorsed with a restrictive
legend, in substantially the following form:

“THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”) AND ARE “RESTRICTED SECURITIES” AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT.  THEY MAY NOT
BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (1) IN CONJUNCTION
WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE ACT, OR
EVIDENCE SATISFACTORY TO THE COMPANY OF AN EXEMPTION THEREFROM, AND (2) IN
COMPLIANCE WITH THE DISPOSITION PROVISIONS OF A WRITTEN AGREEMENT BETWEEN THE
COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST
TO THE SHARES).  SUCH AGREEMENT IMPOSES
CERTAIN RESTRICTIONS IN CONNECTION WITH THE DISPOSITION OF THE SHARES.  THE SECRETARY OF THE COMPANY WILL, UPON
WRITTEN REQUEST, FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A LOCK-UP AGREEMENT THAT RESTRICTS THE TRANSFER OF THESE SHARES BEFORE
____________.  COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST OF THE SECRETARY OF THE COMPANY.”

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

 4
 

Section 2.2 -  
Definitions

(a)           “Cause”
shall have the meaning set forth in the Employment Agreement.

(b)           “Code” means the Internal Revenue Code of 1986,
as amended from time to time.

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

(d)           “Employment
Agreement” means the employment agreement by and between the Executive and the
Company dated March 14, 2006.

(e)           “Good
Reason” shall have the meaning set forth in the Employment Agreement.

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

(g)           “Term”
shall have the meaning set forth in the Employment Agreement.

Section 2.3 - Notice of Termination and Restrictive
Covenants.

(a)           Notice
of Termination.  The Executive shall not voluntarily retire, resign or
otherwise terminate his or her employment relationship with the Company or any
of its Subsidiaries or Affiliates, other than with respect to a termination for
Good Reason in which case no notice shall be required, without first giving the
Company at least one hundred eighty (180) days prior written notice of the
effective date of such retirement, resignation or other termination.  
Such written notice shall be sent in accordance with Section 2.8 of this
Agreement.  The Company retains the right to waive the notice requirement
in whole or in part or to place the Executive on paid leave for all or part of
this one hundred eighty (180) day period.  In the alternative, at any time
after the Executive gives notice, the Company may, but shall not be obligated
to, provide the executive with work and (i) require the Executive to comply
with such conditions as it may specify in relation to transitioning the
Executive’s duties and responsibilities; (ii) assign the Executive other
duties; or (iii) withdraw any powers vested in, or duties assigned to the
Executive.

 5
 

(b)           Non-Solicitation.   Executive agrees that if the Executive
voluntarily terminates employment or if the Executive’s employment is
terminated, for any reason other than due to a Change in Control (as such term
is defined in the Employment Agreement), during the Term of the Employment
Agreement or within one (1) year following expiration of the Term of the
Employment Agreement, the Executive shall not, for a period of one hundred
eighty (180) days after the Executive’s Termination Date, without the Company’s
prior written consent, directly or indirectly: (i) solicit or induce, or cause
others to solicit or induce, any director, officer or employee of the Company,
any Subsidiary or Affiliate of the Company or SG to leave the Company, such
Subsidiary or Affiliate or SG or in any way modify their relationship with the
Company, such Subsidiary or Affiliate or SG (except the Executive’s
then-current secretary); (ii) hire or cause others to hire any director,
officer or employee of the Company, any Subsidiary or Affiliate of the Company
or SG; or (iii) encourage or assist in the hiring process of any director,
officer or employee of the Company, any Subsidiary or Affiliate of the Company
or SG or in the modification of any such person’s relationship with the
Company, such Subsidiary or Affiliate or SG, or cause others to participate,
encourage or assist in the hiring process of any director, officer or employee
of the Company, any Subsidiary or Affiliate of the Company or SG.  In addition, if the Executive is terminated
during the Term or within one (1) year following the expiration of the Term,
other than a termination due to a Change in Control (as such term is defined in
the Employment Agreement), the Executive shall not, for a period of ninety (90)
days, directly or indirectly solicit the trade or patronage of any clients or
customers or any prospective clients or customers of the Company with respect
to any products, services, trade secrets or other matters in which the Company
is active.

(c)           Non-Disclosure
of Confidential Information.  The
Executive shall not at any time, whether during his employment or following the
termination or expiration of his employment, for any reason whatsoever, and
forever hereafter, directly or indirectly disclose or furnish to any firm,
corporation or person, except as otherwise required by law, any confidential or
proprietary information of the Company with respect to any respect of its
operations or affairs.  “Confidential or
proprietary information” shall mean information generally unknown to the public
to which the Executive gains access by reason of his employment by the Company
and includes, but is not limited to, information relating to all present or
potential customers, business and marketing plans, sales, trading and financial
data and strategies, salaries and employment benefits, and operational costs.

(d)           Non-Disparagement.  Executive shall not at any time, whether
during Executive’s employment or following the termination of employment, for
any reason whatsoever, and shall not cause or induce others to, defame or
disparage the Company, any Subsidiary or Affiliate of the Company or SG, or the
directors or officers of the Company, any Subsidiary or Affiliate of the
Company or SG.

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(e)           Company
Property.  All records, files,
memoranda, reports, customer information, client lists, documents, equipment,
and the like, relating to the business of SG or the Company which the Executive
prepared or came into contact with while he was an employee of SG and the
Company, shall remain the sole property of the Company.  On request by SG or the Company, and in any
event upon the termination of the Executive’s employment, the Executive shall
turn over to the Company all documents, papers, or other material in his
possession and under his control which may contain or be derived from
confidential information, together with all documents, notes, or other work
product which is connected with or derived from his services to the Company
whether or not such material is in his possession.  The Executive shall have no proprietary
interest in any work product developed or used by him and arising out of
employment by the Company.

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

(g)           Cooperation.  Executive agrees to cooperate fully with the
Company, its Subsidiaries and Affiliates and SG at any time, whether during
Executive’s employment or following the termination of employment, taking into
account the requirements of any subsequent employment by the Executive, on all
matters relating to Executive’s employment, which cooperation shall be provided
without additional consideration or compensation and shall include, without
limitation, being available to serve as a witness and be interviewed and making
available any books, records or other documents within Executive’s control,
provided, however, that Executive need not take any action hereunder that would
constitute a violation of law or an obligation to any third party or cause a
waiver of attorney-client privilege. 
Without limiting the generality of the foregoing, Executive shall
cooperate 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 or
investigation by or before any governmental authority; or (iii) arbitration or
mediation tribunal, in each case involving the Company, its Subsidiaries or
Affiliates or SG.  In connection with
Executive’s providing such cooperation, the Company, its Subsidiaries and
Affiliates or SG, as applicable, shall reimburse the Executive for reasonable
travel, lodging and other expenses incurred by Executive, upon submission of
documentation reasonably acceptable to the Company, its Subsidiaries and
Affiliates or SG, as applicable.

(h)           Lock-Up
Agreement.  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 one
hundred eighty (180) days and any applicable extension applicable thereto (the “Lock-Up
Period”), refrain from offering, pledging, selling or contracting to sell any
shares of Stock, granting any option, right or warrant for the sale of any
shares of Stock, lending or otherwise disposing of or

 7
 

transferring
any shares of Stock, requesting or demanding any underwriter of the IPO to file
a registration statement related to shares of Stock, or entering into any swap
or other agreement that transfers, in whole or in part, the economic
consequence of ownership of any shares of Stock, whether any such swap or
transaction is to be settled by delivery of shares of Stock or other
securities, in cash or otherwise, directly or indirectly, without the prior
written consent of the underwriters of the IPO.

(i)            Injunctive
Relief.  In the event of a breach by
Executive of Executive’s obligations under this Agreement, the Company (and/or
SG, if applicable), in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. 
Executive acknowledges that the Company (and/or SG, if applicable) shall
suffer irreparable harm in the event of a breach or prospective breach of
paragraphs (a), (b), (c), (d), (e), (f) or (g) of this Section 2.3 and that
monetary damages would not be adequate relief. 
Accordingly, the Company (and/or SG, if applicable) shall be entitled to
seek injunctive relief in any federal or state court of competent jurisdiction
located in New York County, or in any state in which Executive resides.  Executive further agrees that the Company and
its Subsidiaries and Affiliates (and/or SG, if applicable) shall be entitled to
recover all costs and expenses (including attorneys’ fees) incurred in
connection with the enforcement of the Company’s rights hereunder.

Section 2.4 - Release of Claims.

As a condition to execution of this Agreement, Executive
shall execute a copy of the release of claims attached hereto as Exhibit A (the
“Release”).  Any revocation of the
Release by the Executive shall cause this Agreement to be null and void and of
no effect.

Section 2.5 - Offset.

In the event that the Executive voluntarily terminates
employment or if the Executive’s employment is terminated, for any reason or no
reason, the Company may offset, to the fullest extent permitted by law, any
amounts of money or shares of Stock due to the Company from the Executive, or
advanced or loaned to Executive by the Company, from any monies or shares of
Stock owed to the Executive or the Executive’s estate by the Company as a
result of such termination of employment.

Section 2.6 - Third-Party Beneficiary.

This Agreement is expressly entered into for the benefit of
the parties hereto and, and with respect to Sections 2.3(b), (c), (d), (e),
(f), (g) and (i) hereof, SG (which shall be deemed a third-party beneficiary
hereof solely for the purpose of such Sections, insofar as they apply to
SG).  Nothing expressed or referred to in
this Agreement shall be construed to give any Person other than the parties
hereto 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 of
this Agreement.

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Section 2.7 - Governing Law.

This Agreement shall be governed by and construed in accordance with
the laws of the State of New York other than its laws regarding conflicts of
law (to the extent that the application of the laws of another jurisdiction
would be required thereby).  The
Committee shall have final authority to interpret and construe this Agreement
and to make any and all determinations under them, and its decision shall be
binding and conclusive upon the Executive and the Executive’s legal
representative in respect of any questions arising under this Agreement.

Section 2.8 - Notices.

Any notice to be given under the terms of this Agreement shall be in
writing 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 set
forth below or at such other address as either party may hereafter designate in
writing to the other by like notice.

Section
2.9 - Effect of Agreement.

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

Section
2.10 - Amendment.

This Agreement may not be amended or modified in any manner (including
by waiver) except by an instrument in writing signed by both parties hereto;
provided, however that no amendment or modification shall be made to, and the
Company shall not agree to any waiver of, Sections 2.3(b), (c), (d), (e), (f),
(g) or (i) hereof, insofar as such Sections apply to SG, without the prior
written consent of Parent, which consent may be withheld by Parent in its sole
discretion.  The waiver by either party
of compliance with any provision of this Agreement shall not operate or be
construed as a waiver of any other provision of this Agreement or of any
subsequent breach of such party of a provision of this Agreement.

Section
2.11 -   No Right to Continued
Employment.

Nothing in this Agreement shall be deemed to confer on the
Executive any right to continued employment with the Company or any of its
Subsidiaries or Affiliates.

Section 2.12 -  
Section 409A.

This Agreement is intended to comply
with the requirements of Section 409A of the Code (“Section 409A”) and shall be
interpreted accordingly.  In the event
that any provision of this Agreement would cause this Agreement to become
subject to Section 409A or cause this Agreement to fail to comply with Section
409A, such provision may

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be
deemed null and void and the Company and the Executive agree to amend or
restructure this Agreement, to the extent necessary and appropriate to avoid
adverse tax consequences under Section 409A.

Section
2.13 - Entire Agreement.

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

Section 2.14 - Arbitration.

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

(b)           The
arbitrators shall not have authority to amend, alter, modify, add to or
subtract from the provisions hereof.  The
award of the arbitrators, in addition to granting the relief prescribed above
and such other relief as the arbitrators may deem proper, may contain
provisions commanding or restraining acts or conduct of the parties or their
representatives and may further provide for the arbitrators to retain
jurisdiction over this Agreement and the enforcement thereof.  If either party shall deliberately default in
appearing before the arbitrators, the arbitrators are empowered, nonetheless,
to take the proof of the party appearing and render an award thereon.

(c)           This
Section 2.14 shall not be construed to limit the Company’s or SG’s right to
obtain relief under paragraph 2.3(i) (relating to equitable remedies) with
respect to any matter or controversy subject to paragraph 2.3(i), and, pending
a final determination by the arbitrators with respect to any such matter or
controversy, the Company and SG shall be entitled to obtain any such relief by
direct application to state, federal or other applicable court, without being
required to first arbitrate such matter or controversy.

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Section 2.15 - Grant Contingent Upon Completion of
IPO.

The
Award hereunder is completely contingent upon the completion of an IPO for the
Company.  Should there be no IPO consummated
for the Company, then no ownership interest shall be granted to any employees
under the Plan.

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

	
   

  	
   

  	
  COWEN GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
   

  	
  Christopher A. White

  
	
   

  	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kim S.
  Fennebresque

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Social Security Number

  	
   

  	
   

  	
   

  

 

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EXHIBIT A

FORM OF
GENERAL RELEASE

Kim S.
Fennebresque (“Releasor”) for and in consideration of the
Award (as such term is defined in the Award Agreement) described in the
Executive Incentive Award Agreement between COWEN GROUP, INC., a Delaware
corporation (the “Company”) and Releasor dated as of ________, 2006 (the “Award
Agreement”) to be provided by the Company, does for himself and his heirs,
executors, administrators, successors and assigns, hereby now and forever,
voluntarily, knowingly and willingly release and discharge SG (as such term is
defined in the Award Agreement) and its investors, together with each of their
respective subsidiaries and affiliates (other than COWEN GROUP, INC. and its
subsidiaries), together with each 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 “Company Releasees”) from any and all liabilities, charges,
complaints, claims, promises, agreements, controversies, causes of action and
demands of any nature whatsoever, known or unknown, suspected or unsuspected,
which against the Company Releasees, jointly or severally, Releasor or Releasor’s
heirs, executors, administrators, successors or assigns ever had, now have or
hereafter can, shall or may have by reason of any matter, cause or thing
whatsoever  arising from the beginning of
time to the time Releasor executes this Release.  Without limiting the preceding sentence, this
General Release includes, but is not limited to, any rights or claims arising
under any statute or regulation, including the Age Discrimination in Employment
Act of 1967, Title VII of the Civil Rights Act of 1964, or the Americans with
Disabilities Act of 1990, each as amended, or any other federal, state or local
law, regulation, ordinance or common law, or under any policy, agreement,
understanding or promise, written or oral, formal or informal, between any
Company Releasee and Releasor.

Releasor
represents that he has not filed any charges, claims, demands, proceedings or
actions against any of the Company Releasees. 
Releasor shall 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 way arising out of or relating to the matters released under this
General Release.

Releasor has been
advised to consult with an attorney of Releasor’s choice prior to signing this
General Release.  Releasor understands
and agrees that Releasor has the right and has been given the opportunity to
review this General Release with an attorney of Releasor’s choice should
Releasor so desire.  Releasor also agrees
that Releasor has entered into this General Release freely and voluntarily.  Relaseasor represents that he is not entitled
to receive the Award described in this General Release absent his execution of
this General Release.

Releasor has at
least twenty-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 this
General Release, Releasor has seven (7) additional days to revoke Releasor’s
consent 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 Release
and returned it to the Company, assuming that Releasor has not revoked Releasor’s
consent to this Release prior to such date.

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

This General
Release shall be governed by the law of the State of New York without reference
to its choice of law rules.

Signed as of this ___ day
of ________, ____________ .

 

	
  

  	
   

  
	
   

  	
  Kim S.
  Fennebresque

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