Exhibit 10.3

                           HUDSON HOLDING CORPORATION

                         COMPENSATION COMMITTEE CHARTER

      The Board of  Directors  of Hudson  Holding  Corporation  (the  "Company")
hereby establishes the Compensation Committee of the Board of Directors with the
following purposes, authority, powers, duties and responsibilities:

1. Members. The Board of Directors shall appoint a Compensation  Committee of at
least two (2) members,  consisting  entirely of  "independent"  directors of the
Board, and shall designate one (1) member as chairperson. "Independent director"
means a director who meets the definition of "independence" within the rules and
regulations  of the  Securities  and  Exchange  Commission  (the  "SEC") and the
American Stock Exchange, as determined by the Board of Directors. Each appointed
member of the  Compensation  Committee will be subject to annual  reconfirmation
and may be removed by the Board of Directors at any time.

2. Purposes, Duties and Responsibilities. The Compensation Committee advises the
Board of Directors with respect to the compensation of senior Company  employees
and determines certain  compensation  awards for executives.  Specifically,  the
Compensation Committee will:

      (a) Review annually the approve the Company's compensation strategy.

      (b) Review, determine and recommend to the Board of Directors for approval
the  individual  elements  of the total  compensation  for the  Chief  Executive
Officer  ("CEO") who must not be present during the voting or  deliberations  of
the Compensation Committee with respect to the compensation matters of the CEO.

      (c) Review, determine and recommend to the Board of Directors for approval
the  individual  elements  of the  total  compensation  of all  other  executive
officers (other than the CEO).

      (d) Review and analyze the  appropriateness  and adequacy of the Company's
annual,  periodic or long-term incentive compensation programs and other benefit
plans and assure that they are  administered  in a manner  consistent with their
terms, the Company's compensation strategy and applicable rules and regulations.

      (e) Make awards to executives  under the incentive  stock option plans and
other plans as may be adopted by the Company.

      (f)  Prepare  and  approve   reports  on  the   Compensation   Committee's
compensation  policies  applicable  to the  Company's  executive  officers,  the
factors and criteria on which the CEO's  compensation  was based, and such other
matters as may be required by the applicable  rules and  regulations of the SEC,
and other regulatory authorities.

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      (g) Review,  recommend to the Board of Directors, and administer all plans
that  require   "disinterested   administration"  under  Rule  16b-3  under  the
Securities Exchange Act of 1934.

      (h) Approve the amendment or modification  of any  compensation or benefit
plan pertaining to executives of the Company that does not require shareholders'
approval.

      (i) Review and recommend to the Board of Directors  changes to the outside
directors' compensation.

      (j) Retain  outside  consultants  and obtain  assistance  from  members of
management as the  Compensation  Committee deems  appropriate in the exercise of
its authority.

      (k) Make reports and  recommendations to the Board of Directors within the
scope of the Compensation Committee's functions.

      (l) Approve all  special  perquisites,  special  cash  payments  and other
special  compensation  and  benefit  arrangements  for the  Company's  executive
officers.

      (m)  Review  the  Compensation  Committee  Charter  from  time to time and
recommend any changes thereto to the Board of Directors.

3. Meetings. The Compensation Committee will meet as often as it deems necessary
or appropriate, in its judgment, either in person or telephonically, and at such
times and places as the Committee determines. The majority of the members of the
Compensation  Committee  constitutes  a quorum and shall be  empowered to act on
behalf of the Compensation Committee.  The Compensation Committee may, from time
to time,  delegate authority to subcommittees  consisting of one or more members
as it shall deem  appropriate,  subject to such reporting to or  ratification by
the Compensation  Committee as the Compensation  Committee shall direct. Minutes
will be kept of each meeting of the Compensation Committee and any subcommittees
thereof.


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