October 10, 2002

Ladenburg Thalmann Financial Services Inc.
Ladenburg Capital Management Inc.
590 Madison Avenue, 34th Floor
New York, New York  10022

                                         RE: EMPLOYMENT AGREEMENT

Gentlemen:

         Reference is made to my Employment Agreement, dated as of August 24,
1999, as amended, with Ladenburg Thalmann Financial Services Inc. ("LTS") and
Ladenburg Capital Management Inc. In light of the current financial condition of
LTS and its subsidiaries, I hereby waive, for the period September 1, 2002 to
December 31, 2002, 25% of any payments due to me for such period under LTS's
Special Performance Incentive Plan (the "Plan") and agree that such waiver shall
not be deemed to be Reason under the Agreement with respect to any payment due
to me under the Plan for the fiscal year ending December 31, 2002.

                                                Sincerely,

                                                /s/ Vincent Mangone

                                                Vincent Mangone

Acknowledged and agreed this
10th day of October, 2002

Ladenburg Thalmann Financial Services Inc.


By: /s/ SALVATORE GIARDINA
    ------------------------------
Ladenburg Capital Management Inc.


By: /s/ RICHARD ROSENSTOCK
    ------------------------------

Source: OneCLE Business Contracts.