JEFFERIES GROUP, INC. DEFERRED COMPENSATION PLAN As Amended and Restated as of January 1, 2009

Exhibit 10.4

JEFFERIES GROUP, INC.

DEFERRED COMPENSATION PLAN
As Amended and Restated as of January 1, 2009

     WHEREAS, in recognition of the success provided to the Company by certain Employees, the Company desires to establish a deferred compensation plan to enable those Employees to defer the payment of all or a portion of the compensation otherwise payable in cash by the Company;

     WHEREAS, the Company adopted the Plan effective January 1, 2001 and amended and restated the Plan effective January 1, 2003.

     NOW, THEREFORE, the Company hereby adopts this amendment and restatement of the Plan effective January 1, 2009, as follows:

ARTICLE I
DEFINITIONS

     1.1 Definitions : Whenever used in this Plan:

          (a) “Accounts” shall mean the separate bookkeeping accounts established under the Plan for each Participant. The Account includes two sub-accounts for purposes of complying with Code Section 409A: The “Grandfathered Account” is that portion of the Account resulting from deferrals of compensation that was vested before 2005, except for any designated deferred compensation which the Committee has caused to be not grandfathered for purposes of Code Section 409A. The “2005-and-Later Account” is the remaining portion of the Account which is not “grandfathered” for purposes of Code Section 409A. Note: In some cases compensation deferred in a given Plan Year may by in the Grandfathered Account for some Participants but in the 2005-and-Later Account for others, or for a single Participant compensation relating to a single Plan Year may be partly in the Grandfathered Account and partly in the 2005-and-Later Account.

          (b) “Administrator” shall mean a committee of officers authorized to administer the Plan. Unless otherwise determined by the Committee, the Administrator shall be a committee consisting of the Chief Executive Officer, the Chairman of the Executive Committee, the Chief Financial Officer and the Treasurer.

          (c) “Board” shall mean the Board of Directors of the Company.

          (d) “Change of Control” shall mean the first to occur of any of the following events after the effective date of the Plan:

     (i) Any “person,” as such term is used in Section 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding

securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), acquires voting securities of the Company and immediately thereafter is a “50% Beneficial Owner.” For purposes of this provision, a “50% Beneficial Owner” shall mean a person who is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then-outstanding voting securities; provided, however, that the term “50% Beneficial Owner” shall not include any person who shall become the beneficial owner of 50% or more of the combined voting power of the Company’s then-outstanding voting securities solely as a result of an acquisition by the Company of its voting securities, until such time thereafter as such person shall become the beneficial owner (other than by means of a stock dividend or stock split) of any additional voting securities and becomes a 50% Beneficial Owner in accordance with this subsection;

     (ii) During any period of two consecutive years commencing on or after the effective date of this Plan, individuals who at the beginning of such period constitute the Board, and any new director whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (the “Continuing Directors”), cease for any reason to constitute at least a majority thereof;

     (iii) The shareholders of the Company have approved a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse stock split of any class of voting securities of the Company, or the consummation of any such transaction if shareholder approval is not obtained, other than any such transaction which would result in at least 50% of the combined voting power of the voting securities of the Company or the surviving entity outstanding immediately after such transaction being beneficially owned by persons who together beneficially owned at least 80% of the combined voting power of the voting securities of the Company outstanding immediately prior to such transaction, with the relative voting power of each such continuing holder compared to the voting power of each other continuing holder not substantially altered as a result of the transaction; provided that, for purposes of this subsection, such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 50% threshold (or to substantially preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of the Company or of such surviving entity or a subsidiary thereof; and provided further, that, if consummation of the corporate transaction referred to in this subsection is subject, at the time of such approval by shareholders, to the consent of any government or governmental agency or approval of the shareholders of another entity or other material contingency, no Change of Control shall occur until such time as such

consent and approval has been obtained and any other material contingency has been satisfied;

     (iv) The shareholders of the Company have approved a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect); provided that, if consummation of the transaction referred to in this subsection is subject, at the time of such approval by shareholders, to the consent of any government or governmental agency or approval of the shareholders of another entity or other material contingency, no Change of Control shall occur until such time as such consent and approval has been obtained and any other material contingency has been satisfied; and

     (v) Any other event which the Board determines shall constitute a Change of Control for purposes of this Plan.

          (e) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations and other authority issued thereunder by the appropriate governmental authority. References to the Code shall include references to any successor section or provision of the Code.

          (f) “Committee” shall mean the Compensation Committee of the Board.

          (g) “Company” shall mean Jefferies Group, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation.

          (h) “Compensation” shall mean those elements of cash remuneration payable to an Employee by the Company designated by the Committee (or Administrator) as eligible for deferral with respect to a given Plan Year. Such designation must be made before any applicable deadline for the Participant to elect deferral for such Plan Year (to the extent required to comply with Code Section 409A). The Committee (or Administrator) may, in its discretion, designate salary, bonus awards, commissions, or sign-on bonus awards as eligible for deferral. Payments to any Employee for a period during which the Employee is determined to have a 409A Disability shall not be deferred, however.

          (i) “Date of Grant” shall mean the date on which an Option is credited to a Participant’s Equity Subaccount pursuant to Section 3.4.

          (j) “Deferral Period” shall mean, with respect to each Account of a Participant, the five-year period beginning on the first day of the Plan Year with respect to which the Account was established; provided, however, that (i) this period will be subject to any extension in accordance with Section 3.6, and (ii), for Plan Years after 2002, the Committee may establish a duration for the Deferral Period of other than five years, but any such change shall be announced to Employees invited to participate prior to the enrollment deadline for that Plan Year.

          (k) “Deferred Shares” shall mean Shares or Restricted Shares during the applicable Deferral Period.

          (l) “Disability” shall mean a physical or mental impairment that would entitle the Participant to receive benefits under the Company’s long term disability program, as determined by the Committee in its sole discretion. The Committee may, in its sole discretion, require a medical examination performed by a physician at the expense of the Company, as a condition to any determination of Disability. The term “409A Disability” shall have the meaning as defined in Section 9.6(a)(v)(C) of the 2003 Incentive Compensation Plan

          (m) “Employee” shall mean any individual employed by the Company, Jefferies & Company, Inc., or any other subsidiary designated by the Committee.

          (n) “Equity Subaccount” shall mean the portion of a Participant’s Account deemed to comprise Options, Restricted Shares and/or Deferred Shares.

          (o) “Equity Unit” shall mean three Restricted Shares and an Option for one Share; provided, however, that, for any Plan Year after 2002, the Committee may vary the number of Restricted Shares and number of Options which constitute an Equity Unit, but any such change shall be announced to Employees invited to participate prior to the enrollment deadline for that Plan Year.

          (p) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and as now or hereafter construed, interpreted and applied by regulations, rulings and cases.

          (q) “Fair Market Value” shall mean the closing sale price of a Share on the composite tape of the New York Stock Exchange on the relevant valuation date or Date of Grant, or if Shares are not traded on such date, on the last date on which Shares are traded preceding such valuation date or Date of Grant.

          (r) “Investment Subaccount” shall mean the portion of the Participant’s Account that is not his or her Equity Subaccount.

          (s) “Option” shall mean an option to purchase Shares pursuant to Article V.

          (t) “Option Discount Percentage” means the percentage of the full value of an Option, determined under such option valuation methodology as may be reasonably selected by the Committee, represented by the price of an Option specified by the Committee for each Plan Year, which is used under Section 3.4 to calculate the number of Equity Units or Options credited to a Participant’s Account. In no event will the Option Discount Percentage be less than 50%.

          (u) “Participant” shall mean an Employee who has satisfied the requirements of Section 2.1.

          (v) “Plan” shall mean the Jefferies Group, Inc. Deferred Compensation Plan, as amended and restated, as set forth herein and as amended from time to time. The Plan is implemented as a sub-plan under the 2003 Incentive Compensation Plan.

          (w) “Plan Quarter” shall mean a calendar quarter ending on March 31, June 30, September 30, or December 31.

          (x) “Plan Year” shall mean the calendar year.

          (y) “Restricted Period” shall mean the period ending on the last day of the third consecutive Plan Year for which a Participant defers Compensation pursuant to Section 3.1; provided, however, that if a Participant ceases to defer Compensation by reason of Disability or 409A Disability, the Participant shall be treated as if such deferrals have not ceased for the duration of such Disability or 409A Disability for purposes of determining the end of the Restricted Period. The foregoing notwithstanding, for any Plan Year after 2002, the Committee may vary the length of the Restricted Period, but any such change shall be announced to Employees invited to participate prior to the enrollment deadline for that Plan Year and shall not operate to extend the Restricted Period applicable to any Account relating to a Participant’s deferrals in a previous Plan Year.

          (z) “Restricted Share” shall mean a contingent right, credited pursuant to Section 3.4, to receive delivery of a Share at the end of the Deferral Period. A Participant credited with a Restricted Share has no rights of a shareholder until delivery of a Share has been effected.

          (aa) “Restricted Share Discount Percentage” means the percentage of the Fair Market Value of a Share specified for the Committee for each Plan Year, which is used under Section 3.4 to calculate the number of Equity Units or Restricted Shares credited to a Participant’s Account. In no event will the Restricted Share Discount Percentage be less than 85%.

          (bb) “Retirement Age” shall mean the age at which an Employee’s age plus his years of service equals 65. For this purpose, years of service shall be credited for each twelve month period beginning on the date of the Participant’s commencement of employment with the Company and on each anniversary thereof during which the Employee was in active employment with the Company.

          (cc) “Shares” shall mean the common stock of the Company, $.0001 par value.

ARTICLE II
PARTICIPATION

     2.1 Eligibility to Participate . An Employee who is a full-time employee of the Company or a participating subsidiary shall become a Participant upon his designation by the Committee as eligible to participate in the Plan and his election to defer Compensation in accordance with Article III. A Participant is not automatically eligible to defer compensation in a given Plan Year, but must be designated as eligible to defer in such Plan Year by the Committee.

     2.2 Termination of Participation . Once an Employee becomes a Participant, the Employee shall remain a Participant (subject to Section 2.1) until termination of employment with the Company and thereafter until all benefits to which the Participant or the Participant’s beneficiary is entitled under the Plan have been paid.

ARTICLE III
DEFERRAL OF COMPENSATION

     3.1 Deferral Election . With respect to each Plan Year, a Participant may elect to defer the receipt of Compensation otherwise payable to him. A Participant’s deferral election shall designate an annual dollar amount or percentage for deferral separately with respect to each component of Compensation (e.g., base salary, bonus, commissions, to the extent such component is deferrable). In the event that a designated dollar deferral amount for any component of Compensation exceeds the actual annual amount of such component of Compensation, 100% of such component of Compensation shall be deferred in lieu of this designated dollar amount. The Committee may establish a maximum limit on the aggregate amount of deferrals by any Participant during any Plan Year. Such election must be made before the beginning of the Plan Year to which the deferral relates, or by such other deadline as may be specified by the Committee, in the form and manner prescribed by the Committee; provided, however, that the election deadline for any deferral of compensation credited or to be credited to the 2005-and-Later Account shall comply with Exhibit A to the 2003 Incentive Compensation Plan (and to the extent applicable Section 9.6(a)(ii) of that Plan). Notwithstanding the foregoing, with respect to the Plan Year beginning January 1, 2001, deferral elections must be made before February 16, 2001, and such elections will relate only to amounts not yet earned or not yet payable as of that date, as specified by the Committee. Elections to defer (including the related election as to the time of distribution) become irrevocable at the applicable deadline for the filing of such elections, or at such earlier time as may be specified by the Committee.

     3.2 Establishment of Account . With respect to each Plan Year, an Account will be established for each Participant and the Compensation that the Participant elects to defer under the Plan with respect to that Plan Year will be credited to that Account. Unless otherwise determined by the Committee, each such credit will be made to the Account as of the last day of the Plan Quarter during which such Compensation would have otherwise been payable to the Participant in cash. Prior to the deadline for deferral elections for a given Plan Year, the Committee will establish the proportions in which amounts deferred will be allocated to the Participant’s Investment Subaccount in accordance with Section 3.3 and to the Equity Subaccount in accordance with Section 3.4; provided, however, that Committee may permit the Participant to elect from among two or more choices as to the allocations of the Participant’s deferrals for the Plan Year to the Subaccounts, and may permit the Participant to elect among investment alternatives within each Subaccount.

     3.3 Investment Subaccount . Amounts allocated to the Investment Subaccount portion of a Participant’s Account shall be treated as if invested in the investment vehicles selected by the Participant from among the investment vehicles made available by the Committee, as follows:

          (a) The Participant shall select, in the form and manner prescribed by the Committee, the investment vehicles in which the Investment Subaccount portion of each Account shall be deemed to be invested. If one of the available investment vehicles is a money market fund, the Participant shall be permitted to elect at least once during each Plan Year, in the form and manner prescribed by the Committee, to treat any amounts deemed invested in the money market fund as if they were thereafter invested in such other available investment vehicles (if any are made available by the Committee) as the Participant shall designate.

          (b) The investment vehicles deemed to be made available to the Participant, and any limitation on the maximum or minimum percentages of the Participant’s Investment Subaccount that may be invested in any particular investment vehicle and the times and terms upon which Participants will be permitted to reallocate balances between different investment vehicles, shall be determined by the Committee from time to time, and the Committee may add, change, or delete investment vehicles at any time.

          (c) As of the last day of each Plan Quarter, each of a Participant’s Investment Subaccounts shall be credited or debited with earnings and losses (net of investment management fees and expenses) as if invested for such Plan Quarter (or portion thereof from the date any deferred amount would otherwise have been payable to the Participant in cash until the last day of the Plan Quarter) in the investment vehicles selected by the Participant. The Committee may cause such crediting or debiting of earnings and losses as of other dates, in its discretion.

          (d) If a Participant does not furnish complete and clear investment designation instructions, the undesignated portion of the Participant’s Investment Subaccount shall be deemed to be invested in the money market fund made available under the Plan, until such time as complete and clear investment designation instructions are provided by the Participant.

3.4 Equity Subaccount .

          (a) As of the last day of each Plan Quarter, the Equity Suba