Exhibit 10.28

EXECUTION COPY
SEPARATION AGREEMENT
     This Separation Agreement (the “Agreement”) is entered into by and between
BKF Capital Inc., a Delaware company (the “Company”), and John C. Siciliano (the
“Executive”) and dated as of October 31, 2006 (the “Effective Date”).
     In consideration of the promises set forth in the Agreement, which the
Executive agrees and acknowledges constitute adequate consideration, the
Executive and the Company (the “Parties”) hereby agree as follows:
1. Entire Agreement. The Agreement is the entire agreement between the Parties
with respect to the subject matter hereof and contains all agreements, whether
written, oral, express or implied, between the Parties relating thereto and
supersedes and extinguishes any other agreement relating thereto, whether
written, oral, express or implied, between the Parties, including, without
limitation, the employment agreement between the Parties, dated September 28,
2005 (the “Employment Agreement”); provided that no rights or obligations
established under any such superseded agreement and specifically preserved by
the Agreement are extinguished. Other than the Agreement and as otherwise
explicitly stated herein, there are no agreements of any nature whatsoever
between the Executive and the Company that survive the Agreement. The Agreement
may not be modified or amended, nor may any rights under it be waived, except in
a writing signed and agreed to by the Parties.
2. Cessation of Employment. The Company and the Executive hereby acknowledge
that the Executive resigned as Chairman of the Board, effective as of
October 31, 2006. The Executive and the Company hereby agree that the
Executive’s employment and appointment as President and Chief Executive Officer
of the Company, and any subsidiary of the Company, shall cease as of January 2,
2007 (the “Termination Date”). Effective as of the Termination Date, the
Executive shall have no authority to act on behalf of the Company and shall not
hold himself out as having such authority or otherwise act in an executive or
other decision making capacity.
3. Entitlements. In consideration for the Executive’s entering into the
Agreement, the Company will provide the Executive with the following:
     (a) The Company shall provide the Executive the following post-termination
payments and benefits if he continues working as President and Chief Executive
Officer of the Company through the Termination Date or if the Executive is
terminated without “Cause” (as defined in the Employment Agreement) by the
Company prior to the Termination Date; upon any other cessation of employment
the arrangements described below will not apply. If he dies or becomes disabled
prior to January 2, 2007 his entitlements under the Employment Agreement will be
preserved.

 

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          (i) Per Employment Agreement, severance payment of $950,000, payable
on the Termination Date.
          (ii) Per Employment Agreement, pro rata vesting of restricted stock
totaling 12,500 shares, reflecting vesting through December 31, 2006.
          (iii) A $700,000 bonus upon the consummation in 2006 or 2007 of a
“Change in Control” (as defined in the BKF Capital Group, Inc. 1998 Incentive
Compensation Plan as amended and restated on March 28, 2001) involving
identified parties named in a letter delivered by the Company to the Executive
on the date of the Agreement (“Identified Parties”). A Change in Control which
occurs after 2007 involving any of the Identified Parties also will trigger
payment of this bonus if any Form 8-K relating to such Change in Control
transaction is required to be filed by the Company during 2007. The letter
referenced above which lists Identified Parties may be amended through
January 2, 2007 to add additional parties, which shall then be considered
Identified Parties, if mutually agreed by the Company and the Executive.
          (iv) The Company shall pay the Executive’s reasonable attorneys’ fees
and disbursements incurred by him in connection with the documentation and
execution of the Agreement, at the Executive’s counsel’s regular hourly rates,
upon submission to the Company of a reasonably detailed invoice therefor.
          (v) As of and after the Termination Date, the Executive shall no
longer participate in, accrue service credit or have contributions made on his
behalf under any employee benefit plan sponsored by the Company in respect of
periods commencing on and following the Termination Date, including without
limitation, any plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code of 1986, as amended. The Executive shall be entitled to
all benefits accrued up to the Termination Date, to the extent vested under all
employee benefit plans of the Company, in accordance with the terms of such
plans. Notwithstanding the foregoing, the Executive may timely elect to continue
to participate in the group medical insurance plans of the Company to the extent
allowed by law under COBRA; provided, that the Executive pays the premiums under
COBRA.
4. Consulting Services. The executive shall remain available to provide
consulting services to the Company in response to reasonable requests therefor
during the period commencing on January 3, 2007 and ending on July 3, 2007. As
consideration for such consulting services, the Company shall pay the Executive
a consulting fee of $300,000 on January 15, 2007. The Company acknowledges and
agrees that the Executive shall be allowed to retain the following e-mail
address with Company through July 3, 2007: jsiciliano@bkfcapital.com. In
connection with the aforementioned consulting services the Company shall
reimburse the Executive for reasonable out-of-pocket expenses, including travel
and lodging, in each case approved in accordance with the Company’s reasonable
policies and procedures.
5. Return of Company Property. No later than the Termination Date, the Executive
shall return to the Company all originals and copies of papers, notes and
documents (in any medium, including computer disks), whether property of any
member of the Company or not, prepared, received or obtained by the Executive or
his counsel during the course of, and in connection

 

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with, his employment with the Company or any member of the Company, and all
equipment and property of any member of the Company which may be in the
Executive’s possession or under his control, whether at the Company’s offices,
the Executive’s home or elsewhere, including all such papers, work papers,
notes, documents and equipment in the possession of the Executive and his
counsel. The Executive agrees that he and his family and counsel shall not
retain copies of any such papers, work papers, notes and documents.
Notwithstanding the foregoing, the Executive may retain copies of any
employment, compensation, benefits or shareholders agreements between the
Executive and the Company, the Agreement and any employee benefit plan materials
distributed generally to participants in any such plan by the Company; the
Executive may also retain his rolodex, address book and similar information and
any non-proprietary documents he received as a director or executive of the
Company; provided that the Company may retain copies of any such documents. On
the Termination Date, all telephone and other accounts being paid by the Company
on the Executive’s behalf, shall be terminated and all company credit cards
shall be returned to the Company and canceled. To the extent any charges are
made by the Executive using company accounts or credit cards after the
Termination Date, such charges will be solely the Executive’s responsibility.
6. Restrictive Covenants. The restrictive covenants in Section 10 of the
Employment Agreement (the “Restrictive Covenants”) shall remain in full force
and effect, and are incorporated by reference herein as if fully set forth
herein.
7. Non-disparagement and Cooperation.
     (a) The Executive hereby agrees not to defame, disparage or criticize any
member of the Company or any of their products, services, finances, financial
condition, capabilities or other aspect of or any of their business, or any
former or existing employees, managers, directors, officers or agents of, or
contracting parties with, any member of the Company in any medium to any person
or entity without limitation in time. The Company (on behalf of itself and its
directors, officers and controlled affiliates) hereby agrees not to defame,
disparage or criticize the Executive in any medium to any person or entity
without limitation in time. Notwithstanding this provision, each of the
Executive and the Company may confer in confidence with their respective legal
representatives and make truthful statements as required by law. The Company
shall have sole and complete discretion regarding the timing, content and any
and all aspects of its internal, external and media communication concerning the
termination of the Executive’s employment by the Company. The Executive shall
not participate in any such communication without the advance written consent of
the Company’s Chief Executive Officer or his designee.
     (b) In addition to Section 4 of the Agreement, the Executive shall continue
to make himself available at reasonable times, so as not to unreasonably
interfere with his ongoing business activities, to the Company and to advise the
Company, at its reasonable request, about disputes with third parties as to
which the Executive has knowledge, and the Executive agrees to cooperate fully
with the Company in connection with litigation, arbitration and similar
proceedings (collectively “Dispute Proceedings”) and to provide testimony with
respect to the Executive’s knowledge in any such Dispute Proceedings involving
the Company and or any officer or director of the Company, in all cases without
additional compensation or consideration

 

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from the Company. In the event that the Executive is requested by the Company to
cooperate as required in this Section 7(b), the Company shall reimburse the
Executive for his reasonable out-of-pocket expenses, including travel and
lodging.
8. Indemnification. The Executive’s rights to indemnification under Section 23
of the Employment Agreement and pursuant to that certain indemnification
agreement between the Parties, dated May 16, 2006, shall remain in full force
and effect.
9. Availability of Relief.
     (a) In the event that the Executive knowingly and materially fails to abide
by any of the terms of the Agreement, including but not limited to the
Restrictive Covenants, after receiving reasonable notice of such failure in
writing from the Company and failing to subsequently remedy such failure within
a reasonable period of time, the Company may, in addition to any other remedies
it may have, terminate any benefits or payments that are subsequently due under
the Agreement.
     (b) The Executive acknowledges and agrees that the remedy at law available
to the Company for breach of any of his post-termination obligations under the
Agreement, including but not limited to the Restrictive Covenants, would be
inadequate and that damages flowing from such a breach may not readily be
susceptible to being measured in monetary terms. Accordingly, the Executive
acknowledges, consents and agrees that, in addition to any other rights or
remedies which the Company may have at law, in equity or under the Agreement,
upon adequate proof of his violation of any such provision of the Agreement, the
Company shall be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach, without the
necessity of proof of actual damage and without the requirement of posting a
bond.
10. Miscellaneous.
     (a) Notices. Any notice given pursuant to the Agreement to any party hereto
shall be deemed to have been duly given when mailed by registered or certified
mail, return receipt requested, or when hand delivered or received by overnight
courier as follows:
If to the Company:
BFK Capital Inc.
One Rockefeller Plaza
New York, New York. 10020
Attention: Chief Executive Officer and Chairman, Board of Directors

 

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With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Michael J. Segal
If to the Executive,
John C. Siciliano
955 Avondale Road
San Marino, California 91108
With a copy to:
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022-4834
Attention: Bradd L. Williamson
or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
     (b) Successors. The Agreement shall be binding upon and inure to the
benefit of the Parties, their respective heirs, successors and assigns.
     (c) Taxes. The Executive shall be responsible for the payment of any and
all required federal, state, local and foreign taxes incurred, or to be
incurred, in connection with any amounts payable to the Executive under the
Agreement. Notwithstanding any other provision of the Agreement, the Company may
withhold from amounts payable under the Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws and
regulations.
     (d) Severability. In the event that any provision of the Agreement is
determined to be invalid or unenforceable, the remaining terms and conditions of
the Agreement shall be unaffected and shall remain in full force and effect. In
addition, if any provision is determined to be invalid or unenforceable due to
its duration and/or scope, the duration and/or scope of such provision, as the
case may be, shall be reduced, such reduction shall be to the smallest extent
necessary to comply with applicable law, and such provision shall be
enforceable, in its reduced form, to the fullest extent permitted by applicable
law.
     (e) Non-Admission. Nothing contained in the Agreement shall be deemed or
construed as an admission of wrongdoing or liability on the part of the
Executive or on the part of the Company.
     (f) No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for pursuant to the Agreement by seeking other
employment and, to the extent that the Executive obtains or undertakes other
employment, the payment will not be reduced by the earnings of the Executive
from the other employment.

 

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     (g) Governing Law/Venue. The Agreement shall be governed by, and construed
in accordance with the internal laws of the State of New York, without regard to
principles of conflicts of laws. Any action, suit, or other legal proceeding
arising under or relating to any provision of this Agreement shall be commenced
only in a court of the State of New York. The Company and the Executive each
hereby waive any right to a trial by jury in any action, suit or other legal
proceeding arising under or relating to any provision of this Agreement. The
Company and the Executive each hereby waive any right to arbitrate any provision
of this Agreement. For the avoidance of doubt, the Company and the Executive
hereby waive any right to arbitrate the Employment Agreement.
     (h) Counterparts. The Agreement may be executed by one or more of the
Parties hereto on any number of separate counterparts and all such counterparts
shall be deemed to be one and the same instrument. Each party hereto confirms
that any facsimile copy of such party’s executed counterpart of the Agreement
(or its signature page thereof) shall be deemed to be an executed original
thereof.

 

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     IN WITNESS WHEREOF, the undersigned have executed the Agreement on the date
first written above.

            BKF CAPITAL GROUP INC.
      By:   /s/ Marvin Olshan       Name:   Marvin Olshan        Title:  
Chairman, Board of Directors        /s/ John C. Siciliano     John C. Siciliano 
       

 

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BKF CAPITAL, INC.
October 31, 2006
John C. Siciliano
955 Avondale Road
San Marino, California 91108
Re: Identified Parties
Dear Mr. Siciliano:
          The “Identified Parties” as defined in Section 3(a)(iii) of the
Separation Agreement between you and BKF Capital, Inc. (the “Company”), dated as
of October 31, 2006 (the “Separation Agreement”), are as follows: (i) Clinton
Group, (ii) Leerink Swann, (iii) Alternative Asset Management, (iv) Ironwood
Partners and (v) Pacesetter (in each case including any of their respective
controlled affiliates or subsidiaries).
          As described in the Separation Agreement, this letter may be amended
through January 2, 2007, if mutually agreed by you and the Company.

            Sincerely,
      /s/ Marvin Olshan     Name:   Marvin Olshan      Title:   Chairman, Board
of Directors     

          Accepted and Agreed to:
      By:   /s/ John C. Siciliano       John Siciliano