EMPLOYMENT AGREEMENT



            EMPLOYMENT AGREEMENT, dated as of March 4, 2005 (the "Effective

Date") by and between Ladenburg Thalmann Financial Services Inc. (the

"Company"), and Mark D. Klein ("Executive").



            IN CONSIDERATION of the premises and the mutual covenants set forth

below, the parties hereby agree as follows:



            1.    Employment. The Company hereby agrees to employ Executive as

the President and Chief Executive Officer of the Company, and Executive hereby

accepts such employment, on the terms and conditions hereinafter set forth.



            2.    Term. The period of employment of Executive by the Company

under this Agreement (the "Employment Period") shall commence on April 1, 2005

(the "Commencement Date") and shall continue through the second (2nd)

anniversary thereof; provided, that, on the second anniversary of the

Commencement Date and on each anniversary thereafter, the Employment Period

shall automatically be extended for one (1) additional year unless either party

gives written notice to the other party not to extend this Agreement at least

ninety (90) days prior to the end of the Employment Period. The Employment

Period may be sooner terminated by either party in accordance with Section 6 of

this Agreement.



            3.    Position and Duties. During the Employment Period, Executive

shall serve as President and Chief Executive Officer of the Company, and shall

report solely and directly to the Board of Directors of the Company (the

"Board"). Executive shall have those powers and duties normally associated with

the position of President and Chief Executive Officer of entities comparable to

the Company and such other powers and duties as may be prescribed by the Board;

provided, that, such other powers and duties are consistent with Executive's

position as President and Chief Executive Officer. Executive shall devote his

full business time to satisfactorily perform his duties and responsibilities for

the Company hereunder. Notwithstanding the above, Executive shall be permitted,

to the extent such activities do not substantially interfere with the

performance by Executive of his duties and responsibilities hereunder, to (i)

manage Executive's personal, financial and legal affairs, and (ii) to serve on

civic or charitable boards or committees (it being expressly understood and

agreed that Executive's continuing to serve on any such board and/or committees

on which Executive is serving, or with which Executive is otherwise associated,

as of the Commencement Date, (all of which are listed on Schedule A hereto),

shall be deemed not to interfere with the performance by Executive of his duties

and responsibilities under this Agreement). During the Employment Period, the

Company will use its best efforts to cause Executive to be nominated to serve as

a director of the Company, and Executive agrees to serve as a director of the

Company, without additional compensation. During the Employment Period,

Executive also shall serve as Chairman and Chief Executive Officer of the

Company's subsidiary, Ladenburg Thalmann & Co. Inc. ("Ladenburg").



<PAGE>



            4.    Place of Performance. The principal place of employment of

Executive shall be at the Company's principal executive offices in Manhattan,

New York.



            5.    Compensation and Related Matters.



            (a)   Base Salary and Bonus. During the Employment Period, the

Company shall pay Executive a base salary at the rate of not less than $500,000

per year ("Base Salary"). Executive's Base Salary shall be paid in approximately

equal installments in accordance with the Company's customary payroll practices.

The Compensation Committee of the Board (the "Committee") shall review

Executive's Base Salary for increase (but not decrease) no less frequently than

annually and consistent with the compensation practices and guidelines of the

Company. If Executive's Base Salary is increased by the Company, such increased

Base Salary shall then constitute the Base Salary for all purposes of this

Agreement.



            (b)   Bonus. In addition to Base Salary, Executive shall be eligible

to be paid an annual bonus of $500,000 per year (the "Bonus"), based upon the

achievement of performance goals which have been agreed to by the parties. For

the first year of the Term (the twelve months following the Commencement Date),

the performance goals shall be: preparation of a business plan and operating

budget; review and evaluation of current personnel and development of management

incentive program; origination of at least $1 million of gross revenue from any

source (including existing sources if generated by new hires or if in excess of

amount generated from that source in previous year, by any employees) (for the

avoidance of doubt, there shall be no offset against this amount if revenue from

existing sources is lost). For the second year of the Term (which shall for

bonus purposes be coterminous with the first full fiscal year that begins and

ends during the Term), and each full fiscal year thereafter (if any),

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