<PAGE>   1

                                                                    EXHIBIT 10.8

                              EMPLOYMENT AGREEMENT

     This employment agreement (the "Agreement") is made and entered into as of
May 23, 2001 (the "Effective Date") between ODYSSEY RE HOLDING CORP., a Delaware
corporation (the "Company"), and Mr. Michael G. Wacek, an individual residing at
15 Wyngate Road, Greenwich, CT 06830 (the "Executive").

     WHEREAS, The Board of Directors of the Company (the "Board") believes that
it is in the best interests of the Company to (i) ensure that the reasonable
employment, compensation and benefits expectations of the Executive are
satisfied and (ii) induce, encourage and reward the Executive's commitment to
provide continued service, full attention and dedication to the Company and not
to seek or obtain other employment by providing the Executive with the
compensation and benefits arrangements described below during the term provided
for in this Agreement;

     WHEREAS, to accomplish these objectives, the Board has authorized and
directed the Company to enter into this Agreement.

     NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

1.   TERM OF AGREEMENT

     The term of this Agreement shall commence on the Effective Date and shall
continue in effect until the second anniversary of the Effective Date; provided,
however, that the Employment Term (as hereinafter defined) shall automatically
be extended without further action of either party for additional twelve (12)-
month periods unless either party gives written notice to the other party at
least sixty (60) days prior to the expiration of the then-effective term. The
period commencing on the Effective Date and ending on the second anniversary of
the Effective Date, or such later date to which the term shall have been
extended by the Company and the Executive, is hereinafter referred to as the
"Employment Term." In the event that the Company provides the Executive with
written notice of its intention not to extend the Employment Term, such
nonrenewal shall be deemed to be a termination of the Executive's employment by
the Company without Cause for purposes of Section 5.1.1.

2.   EMPLOYMENT AND DUTIES

     2.1  Position.  The Company hereby employs the Executive, and the Executive
agrees to serve, as Executive Vice President of the Company, and President of
the Company's principal operating subsidiary, Odyssey America Reinsurance
Corporation, upon the terms and conditions herein contained as of the Effective
Date.

     2.2  Duties.  The Executive shall perform such other duties and services
for the Company, commensurate with the Executive's position, as may be
designated from time to time by the Board or the Chief Executive Officer of the
Company. It is understood by the parties that the Executive shall be a senior
executive and his principal responsibility shall be the general management and
control of the affairs, operations and assets of the Americas Division of
Odyssey America Reinsurance Corporation and, in conjunction with the Board and
the President and Chief Executive Officer of the Company, the Executive shall
have responsibility overseeing the development of underwriting policies and
objectives and overseeing the activities of underwriters and actuaries of the
Americas Division of Odyssey America Reinsurance Corporation. The Executive
agrees to serve the Company faithfully and to the best of his ability.

     2.3  Exclusive Services.  Except as may otherwise be approved in advance by
the Board, and except during vacation periods and reasonable periods of absence
due to sickness, personal injury or other disability, the Executive shall devote
his full working time throughout the Employment Term to the services required of
him hereunder. The Executive shall render his services exclusively to the
Company during the Employment

                                        1
<PAGE>   2

Term, and shall use his best efforts, judgment and energy to improve and advance
the business and interests of the Company in a manner consistent with the duties
of his position.

     2.4  Reimbursement of Expenses.  The Company shall reimburse the Executive
for reasonable travel and other business expenses incurred by him in the
fulfillment of his duties hereunder upon presentation by the Executive of an
itemized account of such expenditures, in accordance with Company policies.

3.   COMPENSATION

     3.1  Annual Base Salary.  During the Employment Term, the Executive shall
be entitled to receive an annual base salary ("Annual Base Salary") of no less
than $450,000. The Annual Base Salary shall be payable in installments no less
frequently than monthly, and shall be in accordance with the Company's normal
payroll practices.

     3.2  Annual Review.  The Executive's Annual Base Salary shall be reviewed
by the Board, based upon the Executive's performance, not less often than
annually for increases (but may not be decreased). Any increases in Annual Base
Salary effected as a result of such review shall be made by the Board in its
sole discretion.

     3.3  Bonus Plan.  The Board shall adopt a bonus plan (the "Bonus Plan") and
shall establish performance criteria upon which the Executive's bonus shall be
determined. During the Executive's employment under this Agreement, he shall be
entitled to participate in the Bonus Plan, under which he shall be eligible to
receive a target cash bonus of 100% of his Annual Base Salary. Actual bonus
awards may exceed, match or be less than the target bonus as the Executive's
performance or the Company's results warrant. The form of payment and other
terms and conditions of such bonus shall be as determined under the Bonus Plan.

     3.4  Restricted Stock Grant.  On or prior to the date of the initial public
offering of the Company's common stock (the "Common Stock"), the Executive shall
be granted shares of restricted Common Stock ("Restricted Shares") in accordance
with the terms and provisions of the Company's 2001 Restricted Share Plan (the
"Restricted Share Plan"), with a fair market value on the date of grant equal to
$400,000. The Restricted Shares shall be subject to the terms and conditions of
the Restricted Share Plan and to such other terms and conditions as may be
specified by the Board.

4.   EMPLOYEE BENEFITS

     4.1  Generally.  The Executive shall, during his employment under this
Agreement, be included to the extent eligible thereunder in all employee benefit
plans, programs or arrangements (including, without limitation, any plans,
programs or arrangements providing for retirement benefits, profit sharing,
disability benefits, health and life insurance, or vacation and paid holidays)
that shall be established by the Company for, or made available to, its senior
executives. This Agreement shall not be construed in any way that reduces the
Executive's benefits under employee benefit plans from their level as of the day
prior to the Effective Date of this Agreement.

     4.2  Indemnification.  In addition to any rights to indemnification to
which the Executive is entitled under the Company's Articles of Incorporation
and Bylaws, the Company shall indemnify the Executive at all times during and
after the term of this Agreement to the maximum extent permitted under the
Delaware General Corporation Law and any successor provision thereof and any
other applicable corporate law, and shall pay the Executive's expenses in
defending any civil action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding, to the maximum extent permitted
under such applicable corporate laws.

5.   TERMINATION OF EMPLOYMENT

     5.1  Termination Without Cause; Resignation With Good Reason; Nonrenewal of
the Employment Term.

                                        2
<PAGE>   3

     5.1.1  General.  (a) Subject to the provisions of Sections 5.1.2 and 5.1.3,
if, prior to the expiration of the Employment Term, the Executive's employment
is terminated by the Company without Cause (as hereinafter defined) or the
Company does not extend the Employment Term pursuant to Section 1 (provided that
the Company does not have grounds to terminate the Executive for Cause at the
time of such nonrenewal), or if the Executive resigns from his employment
hereunder with Good Reason (as hereinafter defined), the Executive shall,
subject to the Executive's execution of a general release of claims against the
Company in a form satisfactory to the Company, be entitled to the following
"Severance Payments":

          (i)  the Company shall continue to pay the Executive the Annual Base
     Salary (at the rate in effect on the date of such termination) for the
     greater of (A) twelve (12) months following his termination of employment
     or (B) the remainder of the Employment Term (such period being referred to
     hereinafter as the "Severance Period"), at such intervals as the same would
     have been paid had the Executive remained in the active service of the
     Company; and

          (ii)  the Company shall pay in cash to the Executive, when the same
     would ordinarily be paid, (A) all amounts accrued in the Bonus Plan by the
     Executive with respect to years preceding the year in which the termination
     of the Executive occurs and (B) a pro-rated bonus under the Bonus Plan in
     an amount equal to the bonus to which the Executive would have been
     entitled for the year of termination had the Executive remained employed
     multiplied by a fraction, the numerator of which is the actual number of
     days that the Executive was employed by the Company during such year and
     the denominator equal to 365 (the "Pro-Rata Bonus").

     (b)  In addition to the Severance Payments, the Executive shall be entitled
to continue to participate during the Severance Period in the medical, dental,
life insurance and disability plans that the Company provides (and continues to
provide) generally to its senior executives (the "Welfare Plans"), provided that
the Executive is entitled to continue to participate in such plans under the
terms thereof. In the event the Executive is precluded for any reason from
continuing his participation in any of the Welfare Plans, the Company shall
provide, or cause to be provided, to the Executive benefits that are
substantially identical to those that the Executive would have been entitled to
receive under such plan(s) had he been eligible to participate therein.

     (c)  In addition to the Severance Payments, only in the event the
Executive's employment is terminated by the Company without Cause or the
Executive resigns from his employment hereunder with Good Reason prior to the
date that the Executive has attained at least five (5) years of Vesting Service,
as determined in accordance with the terms and conditions of the Odyssey America
Reinsurance Corporation Restated Employees Retirement Plan, as may be amended
from time to time (the "Retirement Plan"), the Company shall pay to the
Executive, within thirty (30) business days of such termination, a single sum
cash payment equal to $253,188.

     (d)  In addition to the Severance Payments, only in the event the
Executive's employment is terminated by the Company without Cause or the
Executive resigns from his employment hereunder with Good Reason on or after the
date that the Executive has attained five (5) years of Vesting Service, as
determined in accordance with the terms and conditions of the Retirement Plan,
the Company shall pay to the Executive, within thirty (30) business days of such
termination, a single sum cash payment represents the Present Value of the
Accrued Benefit (as determined under the terms and conditions of the Retirement
Plan) that he would have been entitled to receive under the Retirement Plan had
he remained employed by the Company for the full fiscal year in which his
termination of employment occurs, which shall be an amount equal to (i) twelve
(12) minus the number of full months that the Executive was employed by the
Company during such fiscal year multiplied by (ii) the monthly Accrued Benefit
that the Executive accrued under the Retirement Plan for the month immediately
preceding the month of his termination of employment (the "Pro-rata Pension
Payment"). Any Pro-rata Pension Payment made pursuant to this Section 5.1.1 (d)
shall be subject to the provisions of Schedule A.

     (e)  Other than as described herein, the Executive shall have no further
right to receive any other payments or benefits after such termination or
resignation of employment under any severance plans, programs, contracts or
arrangements of the Company or any of its subsidiaries or affiliates.
                                        3
<PAGE>   4

     5.1.2  Conditions Applicable to the Severance Period.  If, during the
Severance Period, the Executive materially breaches his obligations under
Section 6, the Company may, upon written notice to the Executive, terminate the
Severance Period and cease to make any Severance Payments or provide any
benefits described in Sections 5.1.1(b), 5.1.1(c) and 5.1.1(d).

     5.1.3  Death During Severance Period.  In the event of the Executive's
death during the Severance Period, payments of Annual Base Salary under Section
5.1.1 shall continue to be made during the remainder of the Severance Period,
and any bonus that the Executive is entitled to receive from the Bonus Plan
shall be paid when the same would ordinarily be paid to the beneficiary
designated in writing for this purpose by the Executive or, if no such
beneficiary is specifically designated, to the Executive's estate.

     5.1.4  Date of Termination.  The date of termination of employment without
Cause shall be the date specified in a written notice of termination to the
Executive. The date of resignation with Good Reason shall be the date specified
in the written notice of resignation from the Executive to the Company;
provided, however, that no such written notice shall be effective unless the
cure period specified in Section 5.1.6 has expired without the Company having
corrected, in all material respects, the event or events subject to cure. If no
date of resignation is specified in the written notice from the Executive to the
Company, the date of termination shall be the first day following the expiration
of such cure period.

     5.1.5  Cause.  For purposes of this Agreement, termination for "Cause"
shall mean termination of the Executive's employment because of:

     (a)  any act or omission that constitutes a material breach by the
Executive of any of his obligations under this Agreement;

     (b)  the willful and continued failure or refusal of the Executive to
substantially perform the duties required of him as an Executive of the Company;

     (c)  any willful and material violation by the Executive of any written law
or regulation applicable to the business of the Company or any of its
subsidiaries or affiliates, or the Executive's conviction of, or a plea of nolo
contendre to, a felony, or any willful perpetration by the Executive of a common
law fraud; or

     (d)  any other willful misconduct by the Executive that is materially
injurious to the financial condition or business reputation of, or is otherwise
materially injurious to, the Company or any of its subsidiaries or affiliates;

provided, however, that if any such Cause relates to the Executive's obligations
under this Agreement, the Company may not terminate the Executive's employment
hereunder unless the Company first gives the Executive notice of its intention
to terminate and of the grounds for such termination, and the Executive has not,
within thirty (30) business days following receipt of such notice, cured such
Cause, or, in the event such Cause is not susceptible to cure within such thirty
(30)-day period, the Executive has not taken all reasonable steps within such
thirty (30)-day period to cure such Cause as promptly as practicable thereafter.

     5.1.6  Good Reason.  For purposes of this Agreement, "Good Reason" shall
mean any of the following (without the Executive's prior written consent):

     (a)  a failure by the Company to pay material compensation due and payable
to the Executive in connection with his employment;

     (b)  a material diminution of the Executive's position, title, authority,
duties or responsibilities as contemplated by Sections 2.1 and 2.2 of this
Agreement;

     (c)  the Company's requiring the Executive to be based at any office or
location outside of Fairfield County, Connecticut or Westchester County, New
York; or

     (d)  a request by the Company that the Executive either (i) violate any
written law or (ii) commit an act that would reasonably be expected to violate
any written law.

provided, however, that no event or condition described in clauses (a), (b) and
(d) of this Section 5.1.6 shall constitute Good Reason unless (i) the Executive
gives the Company written notice of his objection to such
                                        4
<PAGE>   5

event or condition within ninety (90) days of such event or condition, (ii) such
event or condition is not corrected, in all material respects, by the Company
within thirty (30) business days of its receipt of such notice (or, in the event
that such event or condition is not susceptible to correction within such thirty
(30)-day period, the Company has not taken all reasonable steps within such
thirty (30)-day period to correct such event or condition as promptly as
practicable thereafter) and (iii) the Executive resigns from his employment with
the Company not more than thirty (30) business days following the expiration of
the thirty (30)-day period described in the foregoing clause (ii).

     5.2  Termination for Cause.  If, prior to the expiration of the Employment
Term, the Executive's employment is terminated by the Company for Cause, unless
otherwise required by applicable law, the Executive shall be entitled only to
payment of his Annual Base Salary as then in effect through and including the
date of termination. The Executive shall have no further right to receive any
other compensation or benefits, except as determined in accordance with the
terms of the employee benefit plans or programs of the Company.

     5.2.1  Date of Termination.  Subject to the proviso to Section 5.1.5, the
date of termination for Cause shall be the date specified in a written notice of
termination to the Executive.

     5.3  Resignation Without Good Reason.  The Executive may resign his
employment without Good Reason under this Agreement voluntarily by giving one
hundred and eighty (180) days' written notice to the Company of his intention to
resign his employment with the Company without Good Reason. If the Executive
resigns his employment without Good Reason, unless otherwise required by
applicable law, the Executive shall be entitled to payment of his Annual Base
Salary as then in effect through and including the date of his actual
termination of employment. The Executive shall have no further right to receive
any other compensation or benefits, after such termination, except as determined
in accordance with the terms of the employee benefit plans or programs of the
Company.

     5.4  Death or Disability.  In the event the Executive's employment is
terminated by reason of death or Disability (as hereinafter defined), the
Executive (or his estate, as applicable) shall be entitled to (i) his Annual
Base Salary through the date of termination at such intervals as the same would
have been paid had the Executive remained in active service of the Company; (ii)
all amounts accrued in the Bonus Plan by the Executive with respect to years
preceding the year in which the death or Disability occurs; and (iii) the Pro-
Rata Bonus payable with respect to the year in which the death or Disability
occurs. Other benefits shall be determined in accordance with the terms of the
benefit plans maintained by the Company and the Company shall have no further
obligation hereunder. For purposes of this Agreement, "Disability" shall have
the same meaning as under the Company's long-term disability plan applicable to
the Executive.

6.   CONFIDENTIALITY

     6.1  Confidentiality.

     6.1.1  The Executive agrees that all confidential and proprietary
information relating to the business of the Company shall be kept and treated as
confidential both during and after the Employment Term, except as may be
permitted in writing by the Company's Board or as such information is within the
public domain or comes within the public domain without any breach of this
Agreement.

     6.1.2  The phrase "confidential and proprietary information" shall not
include information that (i) is or becomes generally available to the public
other than as a result of a disclosure by, or at the direction of, the Executive
or (ii) becomes available to the Executive on a non-confidential basis from a
source other than the Company or any of its representatives, provided that such
source is not known to the Executive to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to
the Company with respect to such information.

     6.2  Exclusive Property.  The Executive confirms that all confidential
information is and shall remain the exclusive property of the Company. All
business records, papers and documents kept or made by the Executive relating to
the business of the Company shall be and remain the property of the Company.

                                        5
<PAGE>   6

7.   ARBITRATION

     Subject to Section 6.4, any dispute or controversy arising under or in
connection with this Agreement that cannot be mutually resolved by the parties
hereto shall be settled exclusively by arbitration in New York, New York under
the employment arbitration rules of the American Arbitration Association before
a single arbitrator of exemplary qualifications and stature, who shall be
selected jointly by the Company and the Executive, or, if the Company and the
Executive cannot agree on the selection of the arbitrator, shall be selected by
the American Arbitration Association. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The parties hereby agree
that the arbitrator shall be empowered to enter an equitable decree mandating
specific enforcement of the terms of this Agreement.

8.   MISCELLANEOUS

     8.1  Communications.  All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or on the fifth business day after mailed if
delivered personally or mailed by registered or certified mail (postage prepaid,
return receipt requested) to the party at the following addresses (or at such
other address for a party as shall be specified by like notice, except that
notices of changes of address shall be effective upon receipt):

     If to the Company:

     Odyssey Re Holdings Corp.
     140 Broadway, 39th floor
     New York, NY 10005
     Tel: (212) 978-4700
     Fax: (203) 965-7995
     Attention: General Counsel

     If to the Executive:

     Mr. Michael G. Wacek
     15 Wyngate Road
     Greenwich, CT 06830
     Tel: (203) 977-8002
     Fax: (203) 940-8183

     8.2  Waiver of Breach; Severability.  The waiver by the Executive or the
Company of a breach of any provision of this Agreement by the other party hereto
shall not operate or be construed as a waiver or any subsequent breach by either
party. The parties hereto recognize that the laws and public policies of various
jurisdictions may differ as to the validity and enforceability of covenants
similar to those set forth herein. It is the intention of the parties that the
provisions hereof be enforced to the fullest extent permissible under the laws
and policies of each jurisdiction in which enforcement may be sought, and that
the unenforceability (or the modification to conform to such laws or policies)
of any provisions hereof shall not render unenforceable, or impair, the
remainder of the provisions hereof. Accordingly, if at the time of enforcement
of any provision hereof a court of competent jurisdiction holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope, or geographic area
reasonable under such circumstances will be substituted for the stated period,
scope or geographical area and that such court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and
geographical area permitted by law.

     8.3  Assignment; Successors.  No right, benefit or interest hereunder shall
be assigned, encumbered, charged, pledged, hypothecated or be subject to any
setoff or recoupment by the Executive. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the Company.

     8.4  Entire Agreement.  This Agreement represents the entire agreement of
the parties regarding the matters contemplated herein, and shall supersede any
and all previous contracts, arrangements or

                                        6
<PAGE>   7

understandings between the Company and the Executive, if any. This Agreement may
be amended at any time by mutual written agreement of the parties hereto.

     8.5  Other Severance Benefits.  The Executive hereby agrees that in
consideration for the payments to be received under this Agreement, the
Executive waives any and all rights to any payments or benefits under any
severance plans, programs, contracts or arrangements of the Company or any of
its subsidiaries or affiliates.

     8.6  Withholding.  The payment of any amount pursuant to this Agreement
shall be subject to applicable withholding and payroll taxes, and such other
deductions as may be required under the Company's employee benefit plans, if
any.

     8.7  Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.

     8.8  Headings.  The headings in this Agreement are for convenience only and
shall not be used to interpret or construe any of its provisions.

     8.9  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

                                        7
<PAGE>   8

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and the Executive has executed this Agreement as of
the day and year first above written.

                                          Mr. Michael G. Wacek


                                          By: /s/ MICHAEL G. WACEK


                                          --------------------------------------


                                          ODYSSEY RE HOLDINGS CORP.


                                          By: /s/ DONALD L. SMITH


                                          --------------------------------------

                                          Donald L. Smith
                                          General Counsel and Corporate
                                          Secretary

                                        8
<PAGE>   9

                                   SCHEDULE A

     If a Pro-rata Pension Payment is payable to the Executive under this
Agreement, the Company shall pay to the Executive an additional amount (the
"Gross Up Amount") in cash, equal to the aggregate amount of all income and
employment taxes imposed on the Executive under the laws of any federal, state
or local government or taxing authority by reason of the payment of the Pro-rata
Pension Payment and the Gross Up Amount.

     For purposes of determining the Gross Up Amount, the Executive shall be
deemed to be taxed at the highest marginal rate under all local, state and
federal income tax laws applicable to the Executive for the year in which the
Pro-rata Pension Payment is paid. The Company will pay the Gross Up Amount to
the Executive coincident with the Pro-rata Pension Payment.

     All calculations under this Schedule A shall be made by the Company's
outside auditors (the "Accounting Firm"). The Company shall pay all fees and
expenses of the Accounting Firm. The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to the
Company and the Executive within five (5) business days after the Company's
payment of the Pro-rata Pension Payment. The determination by the Accounting
Firm shall be conclusive and binding upon all parties.

                                        9