Document:

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                                                                    EXHIBIT 10.2

                             STOCK OPTION AGREEMENT

         AGREEMENT made as of the 7th day of May, 2001, by and between LADENBURG
THALMANN FINANCIAL SERVICES INC., a Florida corporation (the "Company"), and
David Thalheim (the "Consultant").

         WHEREAS, on April 13, 2001, pursuant to the terms and conditions of the
Company's 1999 Performance Equity Plan (the "Plan"), the Board of Directors of
the Company or the Committee (as such term is defined in the Plan) authorized
the grant to the Consultant of an option (the "Option") to purchase an aggregate
of 100,000 shares of the authorized but unissued common stock of the Company,
par value $0.0001 (the "Common Stock"), in connection with and pursuant to the
Second Amendment to the Employment Agreement, dated as of February 8, 2001,
between Consultant, GBI Capital Partners Inc. and the Company ("Resignation
Agreement"), and conditioned upon the Consultant's acceptance of the Option upon
the terms and conditions set forth in this Agreement and subject to the terms of
the Plan (capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Plan); and

         WHEREAS, the Consultant desires to acquire the Option on the terms and
conditions set forth in this Agreement and subject to the terms of the Plan;

         IT IS AGREED:

         1. GRANT OF STOCK OPTION. The Company hereby grants the Consultant the
Option to purchase all or any part of an aggregate of 100,000 shares of Common
Stock (the "Option Shares") on the terms and conditions set forth herein and
subject to the provisions of the Plan.

         2. NON-INCENTIVE STOCK OPTION. The Option represented hereby is not
intended to qualify as an "Incentive Stock Option" under Section 422 of the
Internal Revenue Code of 1986, as amended.

         3. EXERCISE PRICE. The exercise price of the Option shall be $3.05 per
share, subject to adjustment as hereinafter provided.

         4. EXERCISABILITY. This Option shall be fully vested as of the date
hereof and shall remain exercisable from May 7, 2001 until the close of business
on May 7, 2011 (the "Exercise Period").

         5. WITHHOLDING TAX. Not later than the date as of which an amount first
becomes includible in the gross income of the Consultant for Federal income tax
purposes with respect to the Option, the Consultant shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. The obligations of the Company under the Plan

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and pursuant to this Agreement shall be conditional upon such payment or
arrangements with the Company and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Consultant from the Company.

         6. ADJUSTMENTS. In the event of any reorganization, consolidation,
dividend (other than cash dividend), stock split, reverse stock split, or other
similar change in corporate structure affecting the number of issued shares of
Common Stock as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option in order to prevent
the dilution or enlargement of the Consultant's proportionate interest in the
Company and his rights hereunder, provided that the number of Option Shares
shall always be a whole number.

         7. METHOD OF EXERCISE.

                  7.1 NOTICE TO THE COMPANY. The Option shall be exercised in
whole or in part by written notice in substantially the form attached hereto as
Exhibit A directed to the Company at its principal place of business accompanied
by full payment as hereinafter provided of the exercise price for the number of
Option Shares specified in the notice.

                  7.2 DELIVERY OF OPTION SHARES. The Company shall deliver a
certificate for the Option Shares to the Consultant as soon as practicable after
payment therefor.

                  7.3 PAYMENT OF PURCHASE PRICE.

                           7.3.1 CASH PAYMENT. The Consultant shall make cash
payments by wire transfer, certified or bank check or personal check, in each
case payable to the order of the Company; the Company shall not be required to
deliver certificates for Option Shares until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.

                           7.3.2 CASHLESS PAYMENT. At the election of the
Consultant, the purchase price for any or all of the Option Shares to be
acquired may be paid by: (i) the surrender of shares of Common Stock of the
Company held by or for the account of the Consultant with a "fair market value"
equal to the purchase price multiplied by the number of Option Shares to be
purchased, or (ii) the surrender of any exercisable but unexercised portion of
the Option having a "value" equal to the purchase price multiplied by the number
of Option Shares to be purchased. In either case, the fair market value of the
surrendered shares or the value of the options shall be determined as of the
date of exercise as follows: "Fair market value" of the Common Stock means, as
of the exercise date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last day trading day preceding such date, as reported by the
exchange or Nasdaq, as

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the case may be; (ii) if the Common Stock is not listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but
is traded in the over-the-counter market, the closing bid price of the Common
Stock on the last trading day preceding such date for which such quotations are
reported by the National Quotation Bureau, Incorporated or similar publisher of
such quotations; and (iii) if the fair market value of the Common Stock cannot
be determined pursuant to clause (i) or (ii) above, such price as the Company
shall determine, in good faith. The "value" of a surrendered portion of the
Option means, as of the exercise date, an amount equal to the excess of the
total fair market value of the shares of Common Stock underlying the surrendered
portion of the Option (as determined in accordance with the immediately
preceding sentence) over the total purchase price of such shares of Common Stock
underlying the surrendered portion of the Option. The Company shall issue a
certificate or certificates evidencing the Option Shares as soon as practicable
after the notice and payment is received. The certificate or certificates
evidencing the Option Shares shall be registered in the name of the person or
persons so exercising the Option.

                           7.3.3 PAYMENT THROUGH BANK OR BROKER. At the election
of the Consultant, the Consultant may make arrangements satisfactory to the
Company with a Bank or broker who is member of the National Association of
Securities Dealers, Inc. to either (a) sell on the exercise date a sufficient
number of the Option Shares being purchased so that the net proceeds of the sale
transaction will at least equal the Exercise Price multiplied by the number of
Option Shares being purchased pursuant to such exercise, plus the amount of any
applicable withholding taxes and pursuant to which the bank or broker undertakes
irrevocably to deliver the full Exercise Price multiplied by the number of
Option Shares being purchased pursuant to such exercise, plus the amount of any
applicable withholding taxes to the Company on a date satisfactory to the
Company, but no later than the date on which the sale transaction would settle
in the ordinary course of business or (b) obtain a "margin commitment" from the
bank or broker pursuant to which the bank or broker undertakes irrevocably to
deliver the full Exercise Price multiplied by the number of Option Shares being
purchased pursuant to such exercise, plus the amount of any applicable
withholding taxes to the Company, immediately upon receipt of the Option Shares.

                           7.3.4 PAYMENT PRICE OF WITHHOLDING TAX. Any required
withholding tax may be paid in cash or with Common Stock in accordance with
Sections 7.3.1., 7.3.2. or 7.3.3

                           7.3.5 EXCHANGE ACT COMPLIANCE. Notwithstanding the
foregoing, the Company shall have the right to reject payment in the form of
Common Stock if in the opinion of counsel for the Company, (i) it could result
in an event of "recapture" under Section 16(b) of the Securities Exchange Act of
1934, as amended ("Exchange Act"); (ii) such shares of Common Stock may not be
sold or transferred to the Company; or (iii) such transfer could create legal
difficulties for the Company.

         8. NONASSIGNABILITY. The Option shall not be assignable or transferable
except by will or by the laws of descent and distribution in the event of the
death of the Consultant. No transfer of the Option by the Consultant by will or
by the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.

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      9.  COMPANY REPRESENTATIONS. The Company hereby represents and warrants to
          the Consultant that:

                  (1) the Company, by appropriate and all required action, is
         duly authorized to enter into this Agreement and consummate all of the
         transactions contemplated hereunder; and

                  (2) the Option Shares, when issued and delivered by the
         Company to the Consultant in accordance with the terms and conditions
         hereof, will be duly and validly issued and fully paid and
         non-assessable.

      10. CONSULTANT REPRESENTATIONS. The Consultant hereby represents and
          warrants to the Company that

                  (1) he is acquiring the Option and shall acquire the Option
         Shares for his own account and not with a view towards the distribution
         thereof;

                  (2) he has received a copy of all reports and documents
         required to be filed by the Company with the Commission pursuant to the
         Exchange Act within the last 24 months and all reports issued by the
         Company to its stockholders;

                  (3) he understands that he must bear the economic risk of the
         investment in the Option Shares, which cannot be sold by his unless
         they are registered under the Securities Act of 1933 (the "1933 Act")
         or an exemption therefrom is available thereunder and that the Company
         is under no obligation to register the Option Shares for sale under the
         1933 Act;

                  (4) in his position with the Company, he has had both the
         opportunity to ask questions and receive answers from the officers and
         directors of the Company and all persons acting on its behalf
         concerning the terms and conditions of the offer made hereunder and to
         obtain any additional information to the extent the Company possesses
         or may possess such information or can acquire it without unreasonable
         effort or expense necessary to verify the accuracy of the information
         obtained pursuant to clause (ii) above;

                  (5) he is aware that the Company may place stop transfer
         orders with its transfer agent against the transfer of the Option
         Shares in the absence of registration under the 1933 Act or an
         exemption therefrom as provided herein; and

                  (6) if, at the time of issuance of the Option Shares, the
         issuance of such shares have not been registered under the 1933 Act,
         the certificates evidencing the Option Shares may bear the following
         legend:

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                  "The shares represented by this certificate have been acquired
                  for investment and have not been registered under the
                  Securities Act of 1933. The shares may not be sold or
                  transferred in the absence of such registration or an
                  exemption therefrom under said Act."

         11. RESTRICTION ON TRANSFER OF OPTION SHARES. Anything in this
Agreement to the contrary notwithstanding, the Consultant hereby agrees that he
shall not sell, transfer by any means or otherwise dispose of the Option Shares
acquired by him without registration under the 1933 Act, or in the event that
they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Consultant has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.

         12. MISCELLANEOUS.

                  12.1 NOTICES. All notices, requests, deliveries, payments,
demands and other communications which are required or permitted to be given
under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier,
return receipt requested, postage prepaid to the Company at its principal
executive office and to the Consultant at his address set forth below, or to
such other address as either party shall have specified by notice in writing to
the other. Notice shall be deemed duly given hereunder when delivered or mailed
as provided herein.

                  12.2 CONFLICTS WITH PLAN. This Agreement and the Option shall,
in all respects, be subject to the terms and conditions of the Plan, whether or
not stated herein. In the event of a conflict between the provisions of the Plan
and the provisions of this Agreement, the provisions of the Plan shall in all
respects be controlling.

                  12.3 SHAREHOLDER RIGHTS. The Consultant shall not have any of
the rights of a shareholder with respect to the Option Shares until such shares
have been issued after the due exercise of the Option.

                  12.4 WAIVER. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.

                  12.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. This
Agreement may not be amended except by writing executed by the Consultant and
the Company.

                  12.6 BINDING EFFECT; SUCCESSORS. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to

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confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.

         12.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (without regard to choice
of law provisions).

         12.8 HEADINGS. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.

         IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above written.

Consultant:                         LADENBURG THALMANN FINANCIAL SERVICES INC.

/s/ DAVID THALHEIM                  By:   /S/ VICTOR M. RIVAS
------------------                     ----------------------------------------
David Thalheim                      Victor M. Rivas, President

Address of Consultant:              Address of Company:

6 Trusdale Drive                    1055 Stewart Avenue
Old Westbury, NY 11568              Bethpage, New York 11714

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                                       FORM OF NOTICE OF EXERCISE OF OPTION

-----------------------
           DATE

Ladenburg Thalmann Financial Services Inc.
1055 Stewart Avenue
Bethpage, NY 11714
Attention:  Stock Option Committee of Board of Directors

                  Re:      PURCHASE OF OPTION SHARES

Gentlemen:

         In accordance with my Stock Option Agreement dated as of May 7, 2001
("Agreement") with Ladenburg Thalmann Financial Services Inc. (the "Company"), I
hereby irrevocably elect to exercise the right to purchase _________ shares of
the Company's common stock ("Common Stock"), which are being purchased for
investment and not for resale.

         As payment for my shares, enclosed is (check and complete applicable
box[es]):

                  a [personal check] [certified check] [bank check] payable to
                  the order of "Ladenburg Thalmann Financial Services Inc." in
                  the sum of $_________;

                  confirmation of wire transfer in the amount of $_____________;
                  and/or

                  certificate for ____ shares of the Company's Common Stock,
                  free and clear of any encumbrances, duly endorsed, having a
                  Fair Market Value (as such term is defined in the Agreement)
                  of $_________.

                  I hereby surrender that portion of the unexercised, but
                  exercisable, portion of the Option having a value equal to the
                  purchase price multiplied by the number of shares of Common
                  Stock being purchased hereunder, to wit: the Option to
                  purchase _____ Option Shares.

                  through broker payment as provided in Section 7.3.3 (see
                  broker letter attached)

         I hereby represent, warrant to, and agree with, the Company that

         (i) I am acquiring the Option Shares for my own account and not with a
view towards the distribution thereof;

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         (ii) I have received a copy of the Plan and all reports and documents
required to be filed by the Company with the Commission pursuant to the Exchange
Act within the last 24 months and all reports issued by the Company to its
stockholders;

         (iii) I understand that I must bear the economic risk of the investment
in the Option Shares, which cannot be sold by me unless they are registered
under the Securities Act of 1933 (the "1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;

         (iv) I understand I am subject to the Company's Insider Trading Policy
and have received a copy of such policy as of the date of this Agreement;

         (v) I agree that I will not sell, transfer by any means or otherwise
dispose of the Option Shares acquired by me hereby except in accordance with
Company's policy, if any, regarding the sale and disposition of securities owned
by employees and/or directors of the Company;

         (vi) in my position with the Company, I have had both the opportunity
to ask questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and conditions
of the offer made hereunder and to obtain any additional information to the
extent the Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;

         (vii) I am aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption therefrom as provided herein;

         (viii) in my rights with respect to the Option Shares shall, in all
respects, be subject to the terms and conditions of this Company's 1999
Performance Equity Plan and this Agreement; and

         (ix) the certificates evidencing the Option Shares shall bear the
following legend:

                  "The shares represented by this certificate have been acquired
                  for investment and have not been registered under the
                  Securities Act of 1933. The shares may not be sold or
                  transferred in the absence of such registration or an
                  exemption therefrom under said Act."

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         Kindly forward to me my certificate at your earliest convenience.

         Very truly yours,

         ------------------------------     ------------------------------
         (Signature)                                (Address)

         ------------------------------     ------------------------------
         (Print Name)                               (Address)

                                            ------------------------------
                                               (Social Security Number)

                                       9<PAGE>   1
                                                                    EXHIBIT 10.3

                             STOCK OPTION AGREEMENT

                  AGREEMENT made as of the 7th day of May 2001, by and between
LADENBURG THALMANN FINANCIAL SERVICES INC., a Florida corporation (the
"Company"), and __________ (the "Director").

                  WHEREAS, on May 7, 2001 (the "Grant Date"), pursuant to the
terms and conditions of the Company's 1999 Performance Equity Plan (the "Plan"),
the Compensation Committee and the Board of Directors of the Company authorized
the grant to the Director of an option (the "Option") to purchase an aggregate
of 20,000 shares of the authorized but unissued Common Stock of the Company,
$.0001 par value (the "Common Stock"), conditioned upon the Director's
acceptance thereof upon the terms and conditions set forth in this Agreement and
subject to the terms of the Plan; and

                  WHEREAS, the Director desires to acquire the Option on the
terms and conditions set forth in this Agreement and subject to the terms of the
Plan;

                  IT IS AGREED:

                  1. GRANT OF STOCK OPTION. The Company hereby grants the
Director the Option to purchase all or any part of an aggregate of 20,000 shares
of Common Stock (the "Option Shares") on the terms and conditions set forth
herein and subject to the provisions of the Plan.

                  2. NON-INCENTIVE STOCK OPTION. The Option represented hereby
is not intended to be an option which qualifies as an "Incentive Stock Option"
under Section 422 of the Internal Revenue Code of 1986, as amended.

                  3. EXERCISE PRICE. The exercise price of the Option shall be
$3.05 per share, subject to adjustment as hereinafter provided.

                  4. EXERCISABILITY. This Option is exercisable, subject to the
terms and conditions of the Plan, on and after May 7, 2002. After the Option
becomes exercisable, it shall remain exercisable except as otherwise provided
herein, until the close of business on May 7, 2011 (the "Exercise Period").

                  5. TERMINATION DUE TO DEATH. Upon the death of the Director,
the portion of the Option, if any, that was exercisable as of the date of death
may thereafter be exercised by the legal representative of the estate or by the
legatee of the Director under the will of the Director, for a period of one year
from the date of such death or until the expiration of the Exercise Period,
whichever period is shorter. The portion of the Option, if any, that was not
exercisable as of the date of death shall immediately terminate upon death.

<PAGE>   2

                  6. WITHHOLDING TAX. Not later than the date as of which an
amount first becomes includable in the gross income of the Director for Federal
income tax purposes with respect to the Option, the Director shall pay to the
Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state and local taxes of any kind required by law to be
withheld or paid with respect to such amount. The obligations of the Company
under the Plan and pursuant to this Agreement shall be conditional upon such
payment or arrangements with the Company and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Director from the Company.

                  7. ADJUSTMENTS. In the event of any merger, reorganization,
consolidation, recapitalization, dividend (other than cash dividend), stock
split, reverse stock split, or other change in corporate structure affecting the
number of issued shares of Common Stock, the Company shall proportionally adjust
the number and kind of Option Shares and the exercise price of the Option in
order to prevent the dilution or enlargement of the Director's proportionate
interest in the Company and her rights hereunder, provided that the number of
Option Shares shall always be a whole number.

                  8. METHOD OF EXERCISE.

                           8.1. NOTICE TO THE COMPANY. The Option shall be
exercised in whole or in part by written notice in substantially the form
attached hereto as Exhibit A directed to the Company at its principal place of
business accompanied by full payment as hereinafter provided of the exercise
price for the number of Option Shares specified in the notice.

                           8.2. DELIVERY OF OPTION SHARES. The Company shall
deliver a certificate for the Option Shares to the Director as soon as
practicable after payment therefor.

                           8.3. PAYMENT OF PURCHASE PRICE.

                                    8.3.1. CASH PAYMENT. The Director shall make
cash payments by wire transfer, certified or bank check or personal check, in
each case payable to the order of the Company; the Company shall not be required
to deliver certificates for Option Shares until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.

                                    8.3.2. CASHLESS PAYMENT. At the election of
the Director, the purchase price for any or all of the Option Shares to be
acquired may be paid by the surrender of shares of Common Stock of the Company
held by or for the account of the Director with a "fair market value" equal to
the purchase price multiplied by the number of Option Shares to be purchased.
"Fair market value" of the Common Stock means, as of the exercise date: (i) if
the Common Stock is listed on a national securities exchange or quoted on the
Nasdaq National Market or Nasdaq SmallCap Market, the last sale price of the
Common Stock in the principal trading market for the Common Stock on the last
day trading day preceding such date, as reported by the exchange or Nasdaq, as
the case may be; (ii) if the Common Stock is not listed on a national securities

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exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but
is traded in the over-the-counter market, the closing bid price of the Common
Stock on the last trading day preceding such date for which such quotations are
reported by the National Quotation Bureau, Incorporated or similar publisher of
such quotations; and (iii) if the fair market value of the Common Stock cannot
be determined pursuant to clause (i) or (ii) above, such price as the Company
shall determine, in good faith. The Company shall issue a certificate or
certificates evidencing the Option Shares as soon as practicable after the
notice and payment is received. The certificate or certificates evidencing the
Option Shares shall be registered in the name of the person or persons so
exercising the Option.

                                    8.3.3. PAYMENT PRICE OF WITHHOLDING TAX. Any
required withholding tax may be paid in cash or with Common Stock in accordance
with Sections 8.3.1. and 8.3.2.

                                    8.3.4. EXCHANGE ACT COMPLIANCE.
Notwithstanding the foregoing, the Company shall have the right to reject
payment in the form of Common Stock if in the opinion of counsel for the
Company, (i) it could result in an event of "recapture" under Section 16(b) of
the Securities Exchange Act of 1934, as amended ("Exchange Act"); (ii) such
shares of Common Stock may not be sold or transferred to the Company; or (iii)
such transfer could create legal difficulties for the Company.

                  9. NONASSIGNABILITY. The Option shall not be assignable or
transferable except by will or by the laws of descent and distribution in the
event of the death of the Director. No transfer of the Option by the Director by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of the will and such other evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.

                  10. COMPANY REPRESENTATIONS. The Company hereby represents and
warrants to the Director that:

                           (i) the Company, by appropriate and all required
                  action, is duly authorized to enter into this Agreement and
                  consummate all of the transactions contemplated hereunder; and

                           (ii) the Option Shares, when issued and delivered by
                  the Company to the Director in accordance with the terms and
                  conditions hereof, will be duly and validly issued and fully
                  paid and non-assessable.

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                  11. DIRECTOR REPRESENTATIONS. The Director hereby represents
and warrants to the Company that

                           (i) he is acquiring the Option and shall acquire the
         Option Shares for his own account and not with a view towards the
         distribution thereof;

                           (ii) he has received a copy of all reports and
         documents required to be filed by the Company with the Commission
         pursuant to the Exchange Act within the last 12 months and all reports
         issued by the Company to its stockholders;

                           (iii) he understands that he must bear the economic
         risk of the investment in the Option Shares, which cannot be sold by
         him or her unless they are registered under the Securities Act of 1933,
         as amended (the "1933 Act") or an exemption therefrom is available
         thereunder and that the Company is under no obligation to register the
         Option Shares for sale under the 1933 Act;

                           (iv) in his position with the Company, he has had
         both the opportunity to ask questions and receive answers from the
         officers and directors of the Company and all persons acting on its
         behalf concerning the terms and conditions of the offer made hereunder
         and to obtain any additional information to the extent the Company
         possesses or may possess such information or can acquire it without
         unreasonable effort or expense necessary to verify the accuracy of the
         information obtained pursuant to clause (ii) above;

                           (v) he is aware that the Company shall place stop
         transfer orders with its transfer agent against the transfer of the
         Option Shares in the absence of registration under the 1933 Act or an
         exemption therefrom as provided herein; and

                           (vi) The certificates evidencing the Option Shares
         shall bear the following legends:

                           "The shares represented by this certificate have been
                           acquired for investment and have not been registered
                           under the Securities Act of 1933. The shares may not
                           be sold or transferred in the absence of such
                           registration or an exemption therefrom under said
                           Act."

                           "The shares represented by this certificate have been
                           acquired pursuant to a Stock Option Agreement, dated
                           as of May 7, 2001, a copy of which is on file with
                           the Company, and may not be transferred, pledged or
                           disposed of except in accordance with the terms and
                           conditions thereof."

                  12. RESTRICTION ON TRANSFER OF OPTION SHARES. Anything in this
Agreement to the contrary notwithstanding, the Director hereby agrees that he or
she shall not sell, transfer by any means or otherwise dispose of the Option

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Shares acquired by him or her without registration under the 1933 Act, or in the
event that they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Director has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.

                  13. MISCELLANEOUS.

                           13.1. NOTICES. All notices, requests, deliveries,
payments, demands and other communications which are required or permitted to be
given under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier,
return receipt requested, postage prepaid to the Company at its principal
executive office and to the Director at his address set forth below, or to such
other address as either party shall have specified by notice in writing to the
other. Notice shall be deemed duly given hereunder when delivered or mailed as
provided herein.

                           13.2. PLAN PARAMOUNT; CONFLICTS WITH PLAN. This
Agreement and the Option shall, in all respects, be subject to the terms and
conditions of the Plan, whether or not stated herein. In the event of a conflict
between the provisions of the Plan and the provisions of this Agreement, the
provisions of the Plan shall in all respects be controlling.

                           13.3. SHAREHOLDER RIGHTS. The Director shall not have
any of the rights of a shareholder with respect to the Option Shares until such
shares have been issued after the due exercise of the Option.

                           13.4. WAIVER. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach.

                           13.5. ENTIRE AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof. This Agreement may not be amended except by writing executed by the
Director and the Company.

                           13.6. BINDING EFFECT; SUCCESSORS. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and, to the
extent not prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.

                           13.7. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York (without
regard to choice of law provisions).

                                       5
<PAGE>   6

                           13.8. HEADINGS. The headings contained herein are for
the sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.

                  IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.

Director:                          Ladenburg Thalmann Financial Services Inc.

                                     By:
--------------------------              --------------------------------------
                                        Victor M. Rivas
                                        President and Chief Executive Officer

Address of Director:

                                       6
<PAGE>   7

                                                                       EXHIBIT A

                      FORM OF NOTICE OF EXERCISE OF OPTION

--------------------
      DATE

Ladenburg Thalmann Financial Services Inc.

Attention:  Board of Directors

                      Re:     PURCHASE OF OPTION SHARES

Gentlemen:

             In accordance with my Stock Option Agreement dated as of May 7,
2001 ("Agreement") with Ladenburg Thalmann Financial Services Inc. (the
"Company"), I hereby irrevocably elect to exercise the right to purchase
_________ shares of the Company's common stock, par value $.0001 per share
("Common Stock"), which are being purchased for investment and not for resale.

             As payment for my shares, enclosed is (check and complete
applicable box[es]):

      [ ]    a [personal check] [certified check] [bank check] payable to the
             order of "Ladenburg Thalmann Financial Services Inc." in the sum of
             $_________;

      [ ]    confirmation of wire transfer in the amount of $_____________;
             and/or

      [ ]    [IF PRIOR APPROVAL OF THE COMPANY HAS BEEN OBTAINED,] certificate
             for ____ shares of the Company's Common Stock, free and clear of
             any encumbrances, duly endorsed, having a Fair Market Value (as
             such term is defined in the Company's 1999 Performance Equity Plan)
             of $_________.

             I hereby represent, warrant to, and agree with, the Company that

                  (i) I am acquiring the Option Shares for my own account and
not with a view towards the distribution thereof;

                  (ii) I have received a copy of all reports and documents
required to be filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, within the last 12 months and all
reports issued by the Company to its stockholders;

<PAGE>   8

                  (iii) I understand that I must bear the economic risk of the
investment in the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an exemption
therefrom is available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the 1933 Act;

                  (iv) in my position with the Company, I have had both the
opportunity to ask questions and receive answers from the officers and directors
of the Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional information
to the extent the Company possesses or may possess such information or can
acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;

                  (v) I am aware that the Company shall place stop transfer
orders with its transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom as provided
herein;

                  (vi) my rights with respect to the Option Shares shall, in all
respects, be subject to the terms and conditions of this Company's 1999
Performance Equity Plan and this Agreement; and

                  (vii) the certificates evidencing the Option Shares shall bear
the following legends:

                      "The shares represented by this certificate have been
                      acquired for investment and have not been registered under
                      the Securities Act of 1933. The shares may not be sold or
                      transferred in the absence of such registration or an
                      exemption therefrom under said Act."

                      "The shares represented by this certificate have been
                      acquired pursuant to a Stock Option Agreement, dated as of
                      May 7, 2001, a copy of which is on file with the Company,
                      and may not be transferred, pledged or disposed of except
                      in accordance with the terms and conditions thereof."

             Kindly forward to me my certificate at your earliest convenience.

                                               Very truly yours,

------------------------------         ------------------------------
(Signature)                                     (Address)

------------------------------         ------------------------------
(Print Name)                                    (Address)

                                       ------------------------------
                                          (Social Security Number)

                                       2

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