BKF CAPITAL GROUP INC
EXHIBIT 10.1
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<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-1form8k_093004.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>

                                                                    EXHIBIT 10.1
                                                                    ------------



                                                     September 29, 2004



Mr. Gregory T. Rogers
3 Rockwood Lane Spur
Greenwich, Connecticut  06830

Dear Greg:

         This letter will confirm the terms of your Separation Agreement and
General Release ("Agreement") from Levin Management Co., Inc. (the "Company").
Your signature at the end of this Agreement will signify your acceptance of and
agreement to the provisions of this Agreement.

                  1.       Resignation Date. The effective date of your
resignation from the Company shall be September 30, 2004 ("Resignation Date").

                  2.       Separation Payments. In consideration for a general
release of all claims, the Company shall make the following payments to you:

                           a.   The Company shall pay you a lump sum separation
                           amount of ninety-seven thousand and six hundred
                           seventy seven dollars ($97,677) by directly
                           depositing such amount into your account on or about
                           September 30, 2004. You may direct that a portion of
                           this payment, in an amount up to the limit allowable
                           by law, be contributed to your 401(k) plan by
                           notifying the Company of your decision prior to
                           September 30, 2004.

                           b.   On each of January 1, 2005, February 1, 2005,
                           March 1, 2005, April 1, 2005, May 1, 2005 and June 1,
                           2005, the Company shall pay you a lump sum payment of
                           twelve thousand, five-hundred dollars ($12,500) by
                           sending a check payable to you (or to the entity
                           through which you are conducting consulting services)
                           to the address listed above. Such amounts shall be
                           payable to you in full payment for consulting
                           services for the period January 1 through June 30,
                           2005. On a quarterly basis, you shall provide up to
                           the greater of (i) 40 hours or (ii) the number of
                           hours determined by dividing 37,500 by your
                           applicable hourly billing rate, of consulting
                           services to be determined, which services may include
                           a quarterly review of the Company's risk management
                           report and discussion of the report with the
                           Company's head of client service. In the event that


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                           the Company does not request the full amount of work
                           from you to which it is entitled, your fees will not
                           be reduced. You acknowledge and agree, however, that
                           you shall forfeit any right you may have to a payment
                           if you provide services as an employee (or functional
                           equivalent) to a Competitive Business prior to the
                           date such payment is due. For purposes of this
                           Agreement, "Competitive Business" means any business
                           that competes directly or indirectly with the Company
                           in actively managing money, including but not limited
                           to, businesses that are engaged in long-only value
                           equity and short-bias equity, event driven,
                           distressed debt and equity long/short hedge fund
                           products, or that otherwise actively manages money or
                           seeds managers or sponsors hedge funds.

                           c.    On each of July 1, 2005 and September 1, 2005,
                           the Company shall pay you $37,500 for the type and
                           quantity of consulting services to the Company
                           described in paragraph 2(b) herein, or which are
                           otherwise relevant to the business of the Company
                           and/or its affiliates, provided however, that you
                           have established a bona fide consulting business. For
                           purposes of this paragraph, a "bona fide consulting
                           business" is a business with two or more paying
                           clients or two or more full-time employees (other
                           than yourself), as of July 1, 2005.


                  3.       Stock and Option Grants. With respect to the deferred
stock and option awards to which you are a party, the following provisions shall
apply.

                           a.    Deferred Stock: Within 30 days of your
                           Resignation Date and subject to receipt of written
                           delivery instructions in accordance with paragraph
                           3(c) herein, the Company shall deliver the following
                           shares of BKF Capital Group Inc. ("BKF") stock:

                                    [X]  Sixty-five thousand and forty-eight
                                         (65,048) shares of BKF stock pursuant
                                         to a Deferred Stock Award Agreement
                                         dated January 12, 2001 between you and
                                         BKF.

                                    [X]  Three-thousand, three-hundred and
                                         thirty-three (3,333) shares of BKF
                                         stock pursuant to a Deferred Stock
                                         Award Agreement dated January 10, 2003
                                         between you and BKF.

                                    [X]  Three-thousand, three-hundred and
                                         thirty-four (3,334) shares of BKF
                                         stock, pursuant to a Deferred Stock
                                         Award Agreement dated January 10, 2003
                                         between you and BKF; provided, however,
                                         that you may elect to receive in lieu
                                         of such shares, the cash value of such
                                         shares as reflected in the closing
                                         price of the stock on September 30,
                                         2004, by giving notice in writing by
                                         the Resignation Date.


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                                    [X]  Four-thousand, four-hundred and
                                         thirteen (4,413) shares of BKF stock
                                         provided to you pursuant to a Deferred
                                         Stock Award Agreement dated March 12,
                                         2003.

                           b.   BKF Stock Options. You shall have thirty days
                           from the Resignation Date to purchase up to
                           sixty-five thousand and forty-nine (65,049) shares of
                           BKF stock at an exercise price of $13.03125 per
                           share, pursuant to the Stock Option Award Agreement
                           dated January 20, 2000. If you elect to purchase, you
                           must provide written instructions regarding delivery
                           consistent with paragraph 3(c) herein and the
                           exercise price must be paid in cash to the Company.

                           c.   Stock Delivery Instructions. You shall provide
                           written instructions to BKF to instruct BKF's
                           transfer agent to either (i) deliver the stock
                           certificates to you and if so, the delivery address,
                           or (ii) to deliver the stock certificates to a
                           brokerage account and, if so, the account number and
                           address. The delivery of all of the above shares of
                           BKF stock is subject to your right to elect that a
                           number of shares sufficient to pay withholding taxes
                           be withheld. In the event that shares are not
                           withheld, you shall remit an estimated cash amount to
                           BKF. All shares of BKF stock so delivered shall be
                           free of any and all legends, and BKF shall take
                           reasonable steps to notify relevant brokers that you
                           are no longer an affiliate of BKF for securities laws
                           purposes.

                           d.   Proxy. With respect to the shares of BKF stock
                           to be delivered pursuant to this agreement, you
                           hereby grant to such persons as shall be designated
                           by BKF with respect to any meeting of stockholders
                           your proxy to vote in accordance with the
                           recommendation of management with respect to any
                           matters to be voted on by stockholders of BKF.

                  4.       Medical Benefits. The Company shall continue to
provide you with medical benefits at the Company's sole expense by paying your
family medical premium under the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("COBRA") until the earlier of (a) September 30, 2005, or (b) until you
become employed and are eligible for another group insurance plan. From and
after such date, you may be eligible to continue the Company's insurance at your
own expense, pursuant to COBRA.

                  5.       Other Payments. The Company shall provide you with
your base salary through September 30, 2004 and reimbursement for authorized
expenses. In addition, the Company shall pay or reimburse you (within 10 days of
being invoiced with reasonable supporting documentation) for all reasonable
expenses incurred by you in connection with your travel to and attendance at the
meetings with Merrill Lynch scheduled for October 1 and 29, 2004 and with UBS
scheduled for October 9, 2004 and any other reasonable expenses you incur after
September 30, 2004 while performing services at the request of the Company.

                  6.      Mutual Release of Claims. In consideration of the
obligations of the Company herein, you, on behalf of yourself and your heirs,
successors, administrators and assigns (the "Releasing Parties") hereby
irrevocably, fully, and unconditionally release and


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forever discharge the Company and any and all of its current and former
shareholders, partners, officers, directors, trustees, employees, agents,
contractors, successors and assigns (collectively "Released Parties"), from
all actions, claims, obligations, liabilities, demands and causes of action,
known or unknown, fixed or contingent, in law or equity, which you ever had,
now have or hereafter can, shall or may have for, upon or by reason of any
matter, cause or thing occurring up to and including the date you sign this
Agreement, including, but not limited to, those arising under:

                      o    Any equity award Agreements between BKF and you,
                           except as set forth herein;

                      o    Title VII of the Civil Rights Act of 1964, 42 U.S.C.
                           ss. 2000e et seq., the Employee Retirement Income
                           Security Act of 1974, 29 U.S.C. ss. 1001 et seq., the
                           Americans with Disabilities Act, 42 U.S.C. ss. 12101
                           et seq., the Family and Medical Leave Act of 1993, 29
                           U.S.C. ss. 2601 et seq., Age Discrimination in
                           Employment Act, 29 U.S.C. ss. 621 et seq., New York
                           State Human Rights Law, N.Y. Exec. Law ss. 296 et
                           seq., New York State Labor Law, and the New York City
                           Human Rights Law, N.Y.C. Admin. Code ss. 8-107 et
                           seq., all as amended;

                      o    any and all federal, state and local laws, rules,
                           regulations or common law relating to discrimination,
                           including national origin, wages, hours, overtime
                           pay, or employment; and

                      o    any and all other federal, state and local laws,
                           rules, regulations, contract law or principal of
                           common law, including but not limited to breach of an
                           express or implied contract, breach of a covenant of
                           good faith and fair dealing, defamation,
                           misrepresentation, or fraud.

                  Nothing in this section, however, releases any of the
Company's obligations (i) as set forth in this Agreement or precludes an action
by you to enforce the terms of this Agreement; (ii) to indemnify you in
accordance with the organizational documents, policies or other indemnification
undertakings generally applicable to executive officers of the Company, as in
effect from time to time; and (iii) pay or provide benefits vested as of the
Resignation Date under the Company's qualified retirement and other benefit
plans.

                  In consideration for this release and other good and valuable
consideration, the Company hereby irrevocably, fully and unconditionally
releases and forever discharges you from all actions, claims, obligations,
liabilities, demands and causes of action, known or unknown, fixed or
contingent, in law or equity, which it ever had, now has or hereafter can, shall
or may have for, upon or by reason of any matter, cause of thing occurring up to
and including the date of this Agreement.

                  7.       Company Property. By your signature below, you agree
that on the Resignation Date you will return all Company Property to the
Company. Company Property includes, but is not limited to, (a) Building photo
identification card and security access card; and (b) any other Company
documents and property not set forth above.


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                  8.       Confidentiality. You agree that the terms and
conditions of this Agreement are confidential and that you shall not disclose
the existence of this Agreement or any of its terms to any third parties
(including but not limited to other current or former Company employees), other
than to your spouse, attorney, financial advisor/accountant, or as required by
law or as may be necessary to enforce this Agreement. The Company acknowledges
that the terms and conditions of this Agreement are confidential and agrees that
the existence of this Agreement and its terms only shall be disclosed internally
on a need-to-know basis only, and, to third parties as required by law, as
necessary to enforce this Agreement, or as required for an external
investigation or audit.

                  9.       Full Understanding and Access to Counsel. You
acknowledge, represent and agree that you understand the terms of this
Agreement and the Release and that they are written in a manner calculated to
be understood by you. You further acknowledge and agree that you had an
opportunity to discuss the terms of this Agreement with your attorney.

                 10.       Knowing and Voluntary. You agree that you are
entering into this Agreement knowingly and voluntarily, and no promises or
inducements for this Agreement have been made other than those set forth in
this Agreement. You further agree that you are entering into this Agreement of
your own free will, without any duress, and being fully informed and after due
deliberation you accept its terms.

                 11.       Entire Agreement. This Agreement contains the entire
agreement and understanding of the parties with respect to the termination of
your employment. This Agreement cannot be modified, amended, waived or
terminated, in whole or in part, except in writing signed by both parties.

                 12.       Choice of Law. This Agreement shall be construed
and enforced in accordance with the laws of the State of New York.

                 13.       Acceptance of Agreement. By signing this Agreement,
you are providing a complete waiver of all claims that may have arisen,
whether known or unknown, up until this Agreement is executed.

                 Please acknowledge your acceptance and agreement to the
foregoing by signing it before a notary where indicated below and returning it
to the Company.


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                  PLEASE READ CAREFULLY BEFORE SIGNING. THIS DOCUMENT INCLUDES
A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.


                                                Sincerely,


                                                /s/ Glenn A. Aigen
                                                ------------------------------
                                                Glenn A. Aigen
                                                Chief Financial Office and
                                                Senior Vice-President


Sworn to before me this 30th
day of September, 2004


/s/ Susan Shanklin
-----------------------------
Notary Public




/s/ Gregory T. Rogers                            Dated:  September 30, 2004
-----------------------------                            ---------------------
Gregory T. Rogers




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