EXHIBIT - 10.1

                               FIRST AMENDMENT TO
                             THE MORGAN GROUP, INC.
                              INCENTIVE STOCK PLAN
                                AUGUST 18, 1997


     Pursuant to Section 12 of The Morgan Group, Inc.  Incentive Stock Plan (the
"Plan"),  The  Morgan  Group,  Inc.  (the  "Company")  hereby  amends  the Plan,
effective as of August 21, 1997, as follows:

          A.   Section 3 of the Plan is hereby  amended  to  delete  the  fourth
               sentence thereof and to add, in lieu thereof, the following:

         "Outside Directors (other than persons who were previously employees of
         the Corporation or any of its Subsidiaries)  first elected to the Board
         of  Directors at or after the 1994 annual  meeting of the  stockholders
         but prior to or at the 1997 annual meeting of the stockholders  will be
         granted  options to purchase  8,000 shares of Class A Common Stock upon
         their initial  election to the Board of Directors at an exercise option
         price equal to 80% of the fair market value of the Class A Common Stock
         subject  to the option on the date of grant,  or on the next  preceding
         trading  date if such date was not a trading  date.  Outside  Directors
         (other than persons who were previously employees of the Corporation or
         any of its Subsidiaries)  first elected to the Board of Directors after
         the 1997 annual meeting of the  stockholders  may be granted options to
         purchase up to 8,000 shares of Class A Common  Stock,  with an exercise
         price of not less than 80% of the fair  market  value of Class A Common
         Stock subject to the option on the date of grant,  consistent  with the
         terms hereof, if and to the extent determined by action of the Board of
         Directors."

          B.   Section  5(b)  of the  Plan  is  hereby  amended  by  adding  the
               following provision to the end of the sentence thereof:

         "; provided, that options awarded to Outside Directors first elected to
         the Board of Directors  after the 1997 annual  meeting of  stockholders
         shall  have the term or terms  determined  by  action  of the  Board of
         Directors."

         This First Amendment to The Morgan Group, Inc. Incentive Stock Plan was
approved by the Board of Directors of the Company at a meeting on September  23,
1997. Pursuant to such  authorization,  the following officer of the Company has
executed this Amendment this 18th day of August,  1997, but this Amendment shall
be retroactively effective as of August 21, 1997.

                                             THE MORGAN GROUP, INC.



                                    By:   /s/ Charles C. Baum
                                         ----------------------------------
                                         Charles C. Baum
                                    Its: Chairman and Chief Executive Officer