<PAGE>


                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is entered into as of the 1st
day of October, 2000 (the "Effective Date"), between HCC INSURANCE HOLDINGS,
INC. (the "Company" or "HCC"), and CHRISTOPHER L. MARTIN ("Executive"),
sometimes collectively referred to herein as the "Parties."

                                    RECITALS:

         WHEREAS, Executive is to be employed by the Company, and, as an
integral part of its management, to participate in the decision-making process
relative to short and long-term planning and policy for the Company;

         WHEREAS, it is the desire of the Company to directly engage Executive
as an officer of the Company, and

         WHEREAS, Executive is desirous of committing himself to serve the
Company on the terms herein provided.

         NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the Parties agree as follows:

         1. TERM. The Company hereby agrees to employ Executive as Vice
President and General Counsel, and Executive hereby agrees to accept such
employment, on the terms and conditions set forth herein, for the period
commencing on the Effective Date and expiring as of 11:59 p.m. on December 31,
2003 (the "Basic Term") (unless sooner terminated as hereinafter set forth).
Subject to the terms of this Agreement, Executive agrees that he shall perform
his duties at the corporate home office of the Company, wherever that may be
located as determined from time to time by the Company.

         2. DUTIES.

               (a) DUTIES AS EMPLOYEE OF THE COMPANY. Executive shall, subject
          to the supervision of the Chief Executive Officer of the Company and
          the Executive Management Committee of HCC ("Executive Committee"),
          have such powers with respect to such management and control as may be
          reasonably incident to the responsibilities incident to Executive's
          title. During normal business hours, Executive shall devote his full
          time and attention to diligently attending to the business of the
          Company. Executive shall not directly or indirectly render any
          services of a business, commercial, or professional nature to any
          other person, firm, corporation, or organization, whether for
          compensation or otherwise, without the prior written consent of the
          Chairman of the Board of HCC. However, Executive shall have the right
          to engage in such activities as may be appropriate in order to manage
          his personal investments so long as such activities do not materially
          interfere or conflict with the performance of his duties to the
          Company hereunder. The conduct of such activity shall not be deemed to

EMPLOYMENT AGREEMENT - PAGE 1
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          materially interfere or conflict with Executive's performance of his
          duties until Executive has been notified in writing thereof and given
          a reasonable period in which to cure the same.

               (b) OTHER DUTIES. If elected, Executive agrees to serve on any
          Committee of HCC and in one or more executive offices of any of HCC's
          direct or indirect subsidiaries (the "Subsidiaries"), provided
          Executive is indemnified for serving in any and all such capacities in
          a manner acceptable to the Company and Executive. If elected,
          Executive agrees that he shall not be entitled to receive any
          compensation for serving in any capacity for the Subsidiaries other
          than the compensation to be paid to Executive by the Company pursuant
          to this Agreement.

         3. COMPENSATION AND RELATED MATTERS.

               (a) BASE SALARY. Executive shall receive a base salary paid by
          the Company at the annual rate of $170,000, during the period
          beginning on the Effective Date payable not less frequently than in
          substantially equal monthly installments. Such base salary shall be
          increased to the annual rate of $195,000 for the year 2002 and
          $220,000 for the year 2003.

               (b) BONUS PAYMENTS. Except as set forth herein, Executive shall
          have no claim of right to any bonus: all such bonuses being in the
          sole and absolute discretion of HCC.

               (c) STOCK OPTIONS. Except as set forth herein, Executive shall
          have no claim of right to any options to purchase stock of the
          Company: all options to purchase stock of HCC being granted in the
          sole and absolute discretion of HCC and subject to the Executive's
          execution of option agreements in a form acceptable to the Executive
          Committee.

               (d) EXPENSES. During the Basic Term, Executive shall be entitled
          to receive prompt reimbursement for all reasonable expenses incurred
          by him in accordance with the policies and procedures established by
          the Executive Committee for the Company's senior executive officers in
          performing services hereunder, provided that Executive properly
          accounts therefor in accordance with the policies of the Company.

               (e) OTHER BENEFITS. Executive shall be entitled to participate in
          or receive benefits under any compensatory employee benefit plan or
          other arrangement made generally available by the Company now or in
          the future to its employees, subject to and on a basis consistent with
          the terms, conditions, and overall administration of such plan or
          arrangement. Nothing paid to Executive under any plan or arrangement
          presently in effect or made available in the future shall be deemed to
          be in lieu of the Base Salary payable to Executive pursuant to
          Paragraph (a) of this Section. The Company shall not make any changes
          in any employee benefit plans or other arrangements in effect on the
          date hereof or subsequently in effect in which Executive currently or
          in the future participates (including, without limitation, each
          pension and retirement plan, supplemental pension and retirement plan,
          savings and profit sharing plan, stock or unit ownership plan, stock
          or unit purchase plan, stock or unit


EMPLOYMENT AGREEMENT - PAGE 2
<PAGE>

          option plan, life insurance plan, medical insurance plan, disability
          plan, dental plan, health and accident plan, or any other similar plan
          or arrangement) that would adversely affect Executive's rights or
          benefits thereunder, unless such change occurs pursuant to a program
          applicable to substantially all employees of HCC.

               (f) VACATIONS. Executive shall be entitled to fifteen (15) days
          paid vacation per year during the Basic Term. There shall be no
          carryover of unused vacation from year to year. For purposes of this
          Paragraph, weekends shall not count as vacation days, and Executive
          shall also be entitled to all paid holidays and personal days given by
          the Company to its senior executive officers.

               (g) PERQUISITES. Executive shall be entitled to receive the
          perquisites and fringe benefits appertaining to an executive officer
          of the Company in accordance with any practice established by the HCC
          Executive Committee.

               (h) PRORATION. Any payments or benefits payable to Executive
          hereunder in respect of any calendar year during which Executive is
          employed by the Company for less than the entire year, unless
          otherwise provided in the applicable plan or arrangement, shall be
          prorated in accordance with the number of days in such calendar year
          during which he is so employed.

         4. TERMINATION.

               (a) DEFINITIONS.

                    (1) "CAUSE" shall mean:

                         (i) Material dishonesty which is not the result of an
                    inadvertent or innocent mistake of Executive with respect to
                    the Company or any of its affiliates or Subsidiaries;

                         (ii) Willful misfeasance or nonfeasance of duty by
                    Executive intended to injure or having the effect of
                    injuring in some material fashion the reputation, business,
                    or business relationships of the Company or any of its
                    affiliates or Subsidiaries or any of their respective
                    officers, directors, or employees;

                         (iii) Material violation by Executive of any material
                    term of this Agreement; or

                         (iv) Conviction of Executive of any felony, any crime
                    involving moral turpitude or any crime other than a
                    vehicular offense which could reflect in some material
                    fashion unfavorably upon the Company or any of its
                    affiliates or Subsidiaries.

EMPLOYMENT AGREEMENT - PAGE 3

<PAGE>

               Executive may not be terminated for Cause unless and until there
               has been delivered to Executive written notice from HCC's
               Executive Committee, supplying the particulars of Executive's
               acts or omissions that the Executive Committee, believes
               constitute Cause, a reasonable period of time (not less than 30
               days) has been given to Executive after such notice to either
               cure the same or to meet with the Executive Committee, on behalf
               of the Board, with his attorney if so desired by Executive, and
               following, which the Executive Committee, on behalf of the Board,
               by action of not less than two-thirds of its members furnishes to
               Executive a written resolution specifying in detail its findings
               that Executive has been terminated for Cause as of the date set
               forth in the notice to Executive.

                    (2) A "DISABILITY" shall mean the absence of Executive from
               Executive's duties with the Company on a full-time basis for 180
               consecutive days, or 180 days in a 365-day period, as a result of
               incapacity due to mental or physical illness which results in the
               Executive being unable to perform the essential functions of his
               position, with or without reasonable accommodation.

                    (3) A "GOOD REASON" shall mean any of the following (without
               Executive's express written consent):

                         (i) A failure by HCC to continue in effect any employee
                    benefit plan in which Executive was participating, or the
                    taking of any action by HCC that would adversely affect
                    Executive's participation in, or materially reduce
                    Executive's benefits under, any such employee benefit plan,
                    unless such failure or such taking of any action adversely
                    affects the employees of HCC generally to the same extent;

                         (ii) Any material breach by the Company of any
                    provision of this Agreement.

                         (iii) Following a Change of Control, but only if within
                    180 days after such Change of Control, there is a material
                    alteration in the nature and status of Executive's title,
                    duties or responsibilities, or the assignment of duties or
                    responsibilities inconsistent with Executive's status,
                    title, duties and responsibilities;

                         (iv) A relocation of the Company's principal executive
                    offices, or of Executive's relocation to any place other
                    than the principal executive offices, exceeding a distance
                    of fifty (50) miles from the Company's current executive
                    office located in Houston, Texas, except for reasonably
                    required travel by Executive on the Company's business; and

                         (v) Any failure by the Company to obtain the assumption
                    and performance of this Agreement by any successor (by
                    merger, consolidation, or otherwise) or assign of the
                    Company.

EMPLOYMENT AGREEMENT - PAGE 4

<PAGE>

                  However, Good Reason shall exist with respect to an above
                  specified matter only if such matter is not corrected by HCC
                  within thirty (30) days of its receipt of written notice of
                  such matter from Executive, and in no event shall a
                  termination by Executive occurring more than one hundred
                  eighty (180) days following the date of the event described
                  above or in the case of a Change of Control, 180 days
                  following the Change of Control be a termination for Good
                  Reason due to such event.

                    (4) "TERMINATION DATE" shall mean the date Executive is
               terminated for any reason pursuant to this Agreement.

                    (5) A "CHANGE OF CONTROL" shall be deemed to have occurred
               if:

                         (i) Any "person" or "group" (within the meaning of
                    Sections 13(d) and 24(d)(2) of the Securities Exchange Act
                    of 1934) other than a trustee or other fiduciary holding
                    securities under an employee benefit plan of the Company
                    becomes the "beneficial owner" (as defined in Rule l3d-3
                    under the Securities Exchange Act of 1934), directly or
                    indirectly, of 50% or more of the Company's then outstanding
                    voting common stock; or

                         (ii) At any time during the period of three (3)
                    consecutive years (not including any period prior to the
                    date hereof), individuals who at the beginning of such
                    period constituted the Board (and any new director whose
                    election by the Board or whose nomination for election by
                    the Company's shareholders were approved by a vote of at
                    least two-thirds of the directors then still in office who
                    either were directors at the beginning of such period or
                    whose election or nomination for election was previously so
                    approved) cease for any reason to constitute a majority
                    thereof; or

                         (iii) The shareholders of the Company approve a merger
                    or consolidation of the Company with any other corporation,
                    other than a merger or consolidation (a) in which a majority
                    of the directors of the surviving entity were directors of
                    the Company prior to such consolidation or merger, and (b)
                    which would result in the voting securities of the Company
                    outstanding immediately prior thereto continuing to
                    represent (either by remaining outstanding or by being
                    changed into voting securities of the surviving entity) more
                    than 50% of the combined voting power of the voting
                    securities of the surviving entity outstanding immediately
                    after such merger or consolidation; or

                         (iv) The shareholders approve a plan of complete
                    liquidation of the Company or an agreement for the sale or
                    disposition by the Company of all or substantially all of
                    the Company's assets.

EMPLOYMENT AGREEMENT - PAGE 5

<PAGE>

          (b) TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON:
     BENEFITS. In the event there is a termination by the Company without Cause,
     or if Executive terminates for Good Reason (a "Termination Event"), this
     Agreement shall terminate, and Executive shall be entitled to the following
     severance benefits:

               (1) For the a period after the Termination Date and for the
          remainder of the Basic Term, Base Salary (as defined in Paragraph
          3(a)), at the rate, and payable quarterly as Executive was being paid
          on the Termination Date.

               (2) If, after a Change of Control, as defined herein, within 180
          days of such Change of Control, there is a termination by the Company
          without Cause or by Executive for Good Reason, any stock options and
          other stock-related grants ("Stock Awards") which Executive has
          received under any of the HCC stock plans shall vest immediately and
          shall be exercisable for thirty (30) days from the date of such
          Termination Event or the remainder of their term, whichever is less.

               (3) All accrued compensation and unreimbursed expenses through
          the Termination Date. Such amounts shall be paid to Executive in a
          lump sum in cash within thirty (30) business days after the
          Termination Date; and

               (4) Executive shall be free to accept other employment during
          such period, and there shall be no offset of any compensation earned
          by Executive from such other employment during such period against
          payments due Executive under this Section 4.

          (c) TERMINATION IN EVENT OF DEATH: BENEFITS. If Executive's employment
     is terminated by reason of Executive's death during the Basic Term, this
     Agreement shall terminate, without further obligation to Executive's legal
     representatives under this Agreement, other than for payment of all accrued
     compensation, unreimbursed expenses, and the timely payment or provision of
     Other Benefits through the date of death. Such amounts shall be paid to
     Executive's estate or beneficiary, as applicable, in a lump sum in cash
     within ninety (90) business days after the date of death. Additionally,
     Executive's estate or beneficiary shall be vested in such Stock Awards as
     Executive held of the date of Executive's death.

          (d) TERMINATION IN EVENT OF DISABILITY: BENEFITS. If Executive's
     employment is terminated by reason of Executive's Disability during the
     Basic Term, this Agreement shall continue in full force for a period of
     sixty (60) days following such Disability.

          (e) VOLUNTARY TERMINATION BY EMPLOYEE AND TERMINATION FOR CAUSE:
     BENEFITS. Executive may terminate his employment with the Company without
     Good Reason by giving written notice of his intent and stating an effective
     Termination Date at least ninety (90) days after the date of such notice;
     provided, however, that the Company may accelerate such effective date by
     paying Executive through the proposed Termination Date and also vesting
     awards that would have vested but for the acceleration of the proposed
     Termination Date. Upon such a termination by Executive or upon

EMPLOYMENT AGREEMENT - PAGE 6

<PAGE>

     termination for Cause by the Company, this Agreement shall terminate and
     the Company shall pay to Executive all accrued compensation and
     unreimbursed expenses through the Termination Date. Such amounts shall be
     paid to Executive in a lump sum in cash within sixty (60) business days
     after the date of termination. In addition, all unvested options shall
     terminate and all vested options shall terminate thirty (30) days after the
     Termination Date.

          (f) DIRECTOR POSITIONS. Executive agrees that upon termination of
     employment, for any reason, at the request of the Executive Committee of
     the Company, he will immediately tender his resignation from any and all
     Board of Director positions held with the Company and/or any of its
     Subsidiaries and affiliates.

         5. NON-COMPETITION, NON-SOLICITATION, AND CONFIDENTIALITY. Executive
recognizes and agrees that the benefit of not being employed at-will, is
provided in consideration for, among other things, the agreements contained in
this Section. The Company agrees that while employed pursuant to this Agreement,
Executive will be provided with confidential information of Company, specialized
training on how to perform his duties and contact with the Company's customers
and potential customers.

         In consideration of all of the foregoing, Executive agrees as follows:

          (a) NON-COMPETITION DURING EMPLOYMENT. Executive agrees that while
     employed by the Company, he will not compete with the Company or its
     affiliates by engaging in the conception, design, development, production,
     marketing, or servicing of any product or service that is substantially
     similar to the products or services which the Company or its affiliates
     provide, and that he will not work for, in any capacity, assist, or become
     affiliated with as an owner, partner, etc., either directly or indirectly,
     any individual or business which offers or performs services, or offers or
     provides products substantially similar to the services and products
     provided by Company or its affiliates.

          (b) CONFLICTS OF INTEREST. Executive agrees that while employed by the
     Company, he will not engage, either directly or indirectly, in any activity
     (a "Conflict of Interest") which might adversely affect the Company or its
     affiliates and Subsidiaries, including ownership of a material interest in
     any supplier, contractor, distributor, subcontractor, customer or other
     entity with which the Company or its affiliates and Subsidiaries does
     business or accepting any material payment, service, loan, gift, trip,
     entertainment, or other favor from a supplier, contractor, distributor,
     subcontractor, customer or other entity with which the Company or its
     affiliates or Subsidiaries does business, and that Executive will promptly
     inform the President of the Company as to each offer received by Executive
     to engage in any such activity. Executive further agrees to disclose to the
     Company any other facts of which Executive becomes aware which might in
     Executive's good faith judgment reasonably be expected to involve or give
     rise to a Conflict of Interest or potential Conflict of Interest.

          (c) NON-COMPETITION AFTER TERMINATION. Executive agrees that, at any
     time during the period of two (2) years after the termination of his
     employment with the

EMPLOYMENT AGREEMENT - PAGE 7

<PAGE>

     Company and any of its affiliates and Subsidiaries, he shall not for any
     reason, within any of the markets in which the Company or its affiliates
     has sold products or services or formulated a plan to sell products or
     services into a market during the last twelve (12) months of Executive's
     employment or which the Company or its affiliates enters into within three
     (3) months thereafter, engage in or contribute Executive's knowledge to any
     work which is competitive with or similar to a product, process, apparatus,
     service, or development on which Executive worked or with respect to which
     Executive had access to Confidential Information while employed by the
     Company. Following the expiration of said two (2) year period, Executive
     shall continue to be obligated under the Confidential Information paragraph
     of this Agreement not to use or to disclose Confidential Information of the
     Company or its affiliates and Subsidiaries so long as it shall not be
     publicly available. It is understood that the geographical area set forth
     in this covenant is divisible so that if this clause is invalid or
     unenforceable in an included geographic area, that area is severable and
     the clause remains in effect for the remaining included geographic areas in
     which the clause is valid.

          (d) NON-SOLICITATION OF CUSTOMERS. Executive further agrees that for a
     period of two (2) years after the termination of his employment with the
     Company and any of its affiliates and Subsidiaries, he will not solicit or
     accept any business from any customer or client or prospective customer or
     client with whom Executive dealt or solicited while employed by Company
     during the last twelve (12) months of his employment.

          (e) NON-SOLICITATION OF EMPLOYEES. Executive agrees that for a period
     of two (2) years after the termination of his employment with the Company
     and any of its affiliates and Subsidiaries, he will not either directly or
     indirectly, on his own behalf or on behalf of others, solicit, attempt to
     hire, or hire any person employed by Company to work for Executive or for
     another entity, firm, corporation, or individual.

          (f) CONFIDENTIAL INFORMATION. Executive further agrees that he will
     not, except as the Company may otherwise consent or direct in writing,
     reveal or disclose, sell, use, lecture upon, publish or otherwise disclose
     to any third party any Confidential Information or proprietary information
     of the Company or its affiliates and Subsidiaries, or authorize anyone else
     to do these things at any time either during or subsequent to his
     employment with the Company. This Paragraph shall continue in full force
     and effect after termination of Executive's employment and after the
     termination of this Agreement. Executive's obligations under this Paragraph
     with respect to any specific Confidential Information and proprietary
     information shall cease when that specific portion of the Confidential
     Information and proprietary information becomes publicly known, in its
     entirety and without combining portions of such information obtained
     separately. It is understood that such Confidential Information and
     proprietary information of the Company and its affiliates and Subsidiaries
     include matters that Executive conceives or develops, as well as matters
     Executive learns from other employees of Company or its affiliates and
     Subsidiaries. Confidential Information is defined to include information:
     (1) disclosed to or known by the Executive as a consequence of or through
     his employment with the Company; (2) not generally known outside the
     Company and its affiliates and Subsidiaries; and (3) which relates to any
     aspect of the Company and its


EMPLOYMENT AGREEMENT - PAGE 8

<PAGE>

     affiliates or their business, finances, operation plans, budgets, research,
     or strategic development. "Confidential Information" includes, but is not
     limited to the Company's and its affiliates' and Subsidiaries' trade
     secrets, proprietary information, financial documents, long range plans,
     customer lists, employer compensation, marketing strategy, data bases,
     costing data, computer software developed by the Company or its affiliates,
     investments made by the Company or its affiliates, and any information
     provided to the Company or its affiliates by a third party under
     restrictions against disclosure or use by the Company or others.

          (g) RETURN OF DOCUMENTS, EQUIPMENT, ETC. All writings, records, and
     other documents and things comprising, containing, describing, discussing,
     explaining, or evidencing any Confidential Information, and all equipment,
     components, parts, tools, and the like in Executive's custody or possession
     that have been obtained or prepared in the course of Executive's employment
     with the Company shall be the exclusive property of the Company, shall not
     be copied and/or removed from the premises of the Company, except in
     pursuit of the business of the Company, and shall be delivered to the
     Company, without Executive retaining any copies, upon notification of the
     termination of Executive's employment or at any other time requested by the
     Company. The Company shall have the right to retain, access, and inspect
     all property of Executive of any kind in the office, work area, and on the
     premises of the Company upon termination of Executive's employment and at
     any time during employment by the Company to ensure compliance with the
     terms of this Agreement.

          (h) REAFFIRM OBLIGATIONS. Upon termination of his employment with the
     Company, Executive, if requested by Company, shall reaffirm in writing
     Executive's recognition of the importance of maintaining the
     confidentiality of the Company's Confidential Information and proprietary
     information, and reaffirm any other obligations set forth in this
     Agreement.

          (i) PRIOR DISCLOSURE. Executive represents and warrants that he has
     not used or disclosed any Confidential Information he may have obtained
     from Company or its affiliates prior to signing this Agreement, in any way
     inconsistent with the provisions of this Agreement.

          (j) CONFIDENTIAL INFORMATION OF PRIOR COMPANIES. Executive will not
     disclose or use during the period of his employment with the Company any
     proprietary or Confidential Information or Copyright Works which Executive
     may have acquired because of employment with an employer other than the
     Company or acquired from any other third party, whether such information is
     in Executive's memory or embodied in a writing or other physical form.

          (k) BREACH. Executive agrees that any breach of Paragraphs 5(a), (c),
     (d), (e) or above cannot be remedied solely by money damages, and that in
     addition to any other remedies Company or its affiliates may have, the
     Company shall be entitled to obtain injunctive relief against Executive.
     Nothing herein, however, shall be construed as limiting the Company's right
     to pursue any other available remedy at law or in equity,


EMPLOYMENT AGREEMENT - PAGE 9

<PAGE>

     including recovery of damages and termination of this Agreement and/or any
     payments that may be due pursuant to this Agreement.

          (l) RIGHT TO ENTER AGREEMENT. Executive represents and covenants to
     the Company that he has full power and authority to enter into this
     Agreement and that the execution of this Agreement will not breach or
     constitute a default of any other agreement or contract to which he is a
     party or by which he is bound.

          (m) EXTENSION OF POST-EMPLOYMENT RESTRICTIONS. In the event Executive
     breaches Paragraphs 5(b), (d), or (e) above, the restrictive time periods
     contained in those provisions will be extended by the period of time
     Executive was in violation of such provisions.

          (n) ENFORCEABILITY. The agreements contained in Section 5 are
     independent of the other agreements contained herein. Accordingly, failure
     of the Company to comply with any of its obligations outside of this
     Paragraph do not excuse Executive from complying with the agreements
     contained herein.

          (o) SURVIVABILITY. The agreements contained in Paragraphs 5(c) through
     (g) shall survive the termination of this Agreement for any reason.

         6. ASSIGNMENT. This Agreement cannot be assigned by Executive. The
Company may assign this Agreement only to a successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and assets of the Company provided such
successor expressly agrees in writing reasonably satisfactory to Executive to
assume and perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession and assignment
had taken place. Failure of the Company to obtain such written agreement prior
to the effectiveness of any such succession shall be a material breach of this
Agreement.

         7. BINDING AGREEMENT. Executive understands that his obligations under
this Agreement are binding upon Executive's heirs, successors, personal
representatives, and legal representatives.

         8. NOTICES. All notices pursuant to this Agreement shall be in writing
and sent certified mail, return receipt requested, addressed as set forth below,
or by delivering the same in person to such party, or by transmission by
facsimile to the number set forth below. Notice deposited in the United States
Mail, mailed in the manner described hereinabove, shall be effective upon
deposit. Notice given in any other manner shall be effective only if and when
received:

                  If to Executive:                  Christopher C. Martin, Esq.

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

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

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


EMPLOYMENT AGREEMENT - PAGE 10
<PAGE>

                  If to Company:                    HCC Insurance Holdings, Inc.
                                                    13403 Northwest Freeway
                                                    Houston, Texas  77040
                                                    Attn:  President

                  with a copy (which shall          Arthur S. Berner, Esq.
                  not constitute notice) to:        Haynes and Boone, LLP
                                                    1000 Louisiana, suite 4300
                                                    Houston, Texas  77002
                                                    Fax: (713) 236-5652

         9. WAIVER. No waiver by either party to this Agreement of any right to
enforce any term or condition of this Agreement, or of any breach hereof, shall
be deemed a waiver of such right in the future or of any other right or remedy
available under this Agreement.

         10. SEVERABILITY. If any provision of this Agreement is determined to
be void, invalid, unenforceable, or against public policy, such provisions shall
be deemed severable from the Agreement, and the remaining provisions of the
Agreement will remain unaffected and in full force and effect.

         11. ARBITRATION. In the event any dispute arises out of Executive's
employment with or by the Company, or separation/termination therefrom, whether
as an employee or as a consultant, which cannot be resolved by the Parties to
this Agreement, such dispute shall be submitted to final and binding
arbitration. The arbitration shall be conducted in accordance with the National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association ("AAA"). If the Parties cannot agree on an arbitrator, a list of
seven (7) arbitrators will be requested from AAA, and the arbitrator will be
selected using alternate strikes with Executive striking first. The cost of the
arbitration will be shared equally by Executive and Company. Arbitration of such
disputes is mandatory and in lieu of any and all civil causes of action and
lawsuits either party may have against the other arising out of Executive's
employment with Company, or separation therefrom. Such arbitration shall be held
in Houston, Texas.

         12. ENTIRE AGREEMENT. The terms and provisions contained herein shall
constitute the entire agreement between the parties with respect to Executive's
employment with Company during the time period covered by this Agreement. this
Agreement replaces and supersedes any and all existing, Agreements entered into
between Executive and the Company relating generally to the same subject matter,
if any, and shall be binding upon Executive's heirs, executors, administrators,
or other legal representatives or assigns.

         13. MODIFICATION OF AGREEMENT. this Agreement may not be changed or
modified or released or discharged or abandoned or otherwise terminated, in
whole or in part, except by an instrument in writing signed by the Executive and
an officer or other authorized executive of Company.

         14. UNDERSTAND AGREEMENT. Executive represents and warrants that he has
read and understood each and every provision of this Agreement, and Executive
understands that he has


EMPLOYMENT AGREEMENT - PAGE 11
<PAGE>

the right to obtain advice from legal counsel of choice, if necessary and
desired, in order to interpret any and all provisions of this Agreement, and
that Executive has freely and voluntarily entered into this Agreement.

         15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas (irrespective of its choice of
law principles).

         16. JURISDICTION AND VENUE. With respect to any litigation regarding
this Agreement, Executive agrees to venue in the state or federal courts in
Harris County, Texas, and agrees to waive and does hereby waive any defenses
and/or arguments based upon improper venue and/or lack of personal jurisdiction.
By entering into this Agreement, Executive agrees to personal jurisdiction in
the state and federal courts in Harris County, Texas.

                            [SIGNATURE PAGE FOLLOWS]



EMPLOYMENT AGREEMENT - PAGE 12

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         IN WITNESS WHEREOF, the Parties have executed this Agreement in
multiple copies, effective as of the date first written above.

EXECUTIVE                                   COMPANY

                                            HCC INSURANCE HOLDINGS, INC.
Name:    /s/CHRISTOPHER L. MARTIN
       ----------------------------
         Christopher L. Martin              By:      /s/ STEPHEN L. WAY
                                                --------------------------------
                                                         Stephen L. Way
                                                         Chairman

Dated:   10/03/00                           Dated:       10/03/00
      ------------------------------              ------------------------------



EMPLOYMENT AGREEMENT - PAGE 13

<PAGE>





                               AMENDMENT NO. 1 TO

                              EMPLOYMENT AGREEMENT

         This AMENDMENT NO. 1 (the "Amendment") is entered into as of the 1st
day of January, 2002 (the "Effective Date") between HCC Insurance Holdings, Inc.
(the "Company" or "HCC") and Christopher L. Martin ("Executive"), sometimes
collectively referred to herein as (the "Parties")

                                    RECITALS:

         WHEREAS, Executive has entered into an Employment Agreement dated as of
the 1st day of October, 2000; and

         WHEREAS, it is the desire of the Company and the Executive to amend the
Employment Agreement as set forth below;

         NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the Parties agree as follows:

         1. In addition to any perquisites to which Executive is otherwise
entitled pursuant to the Employment Agreement, effective as of the Effective
Date, as set forth in the Amendment, Executive shall be entitled to a car
allowance in the amount of $750 per month. In addition, Executive shall receive
a corporate membership at The Houstonian. Dues for such membership shall be paid
by the Company.

         2. The definition of "Change of Control" set forth in Paragraph 4(a)(5)
shall be amended by deleting in its entirety subparagraph (ii).

         3. The provisions of Paragraphs (4)(c) and 4(d) shall be deleted in
their entirety and replaced with the following:

              (c)  TERMINATION IN EVENT OF DEATH: BENEFITS. If Executive's
employment is terminated by reason of Executive's death during the Basic Term,
this Agreement shall terminate without further obligation to Executive's legal
representatives under this Agreement, other than for payment of all accrued
compensation, unreimbursed expenses, the timely payment or provision of Other
Benefits through the date of death. Such amounts shall be paid to Executive's
estate or beneficiary, as applicable, in a lump sum in cash within ninety (90)
days after the date of death. In addition, Executive's legal representatives
shall receive, at the same time as if Executive were still an employee,
Executive's Base Salary for the lesser of one (1) year or the date this
Agreement would otherwise have terminated. With respect to the provision of
Other Benefits, the term Other Benefits as used in this Paragraph 4(c) shall
include, without limitation, and Executive's estate and/or beneficiaries shall
be entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company to the estates and beneficiaries of other


EMPLOYMENT AGREEMENT - PAGE 14

<PAGE>

executive level employees of the Company under such plans, programs, practices,
and policies relating to death benefits, if any, as in effect with respect to
other executives and their beneficiaries at any time during the 120-day period
immediately preceding the date of death. Additionally, all Stock Awards shall be
vested immediately and shall be exercisable for the later of one year after the
date of such vesting or the remaining term of such option.

              (d)  TERMINATION IN EVENT OF DISABILITY: BENEFITS. If
Executive's employment is terminated by reason of Executive's Disability during
the Basic Term, this Agreement shall terminate but the Company shall continue to
pay the Base Salary for a period of three (3) months and thereafter shall make
such additional payment for the Term so that the after tax effect of Executive's
compensation is the same as before the Disability. Executive shall, not be
entitled to any subsequent cash or stock bonuses. In addition, all outstanding
Stock Awards shall vest immediately upon such termination due to Disability and
shall be exercisable for one year after the date of such vesting. Executive's
Benefits shall continue to the end of the Basic Term.

         Except as set forth herein, the terms of the Employment Agreement,
shall remain in full force and effect.

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EMPLOYMENT AGREEMENT - PAGE 15

<PAGE>



         IN WITNESS WHEREOF, the Parties have executed this Agreement in
multiple copies, effective as of the Effective Date.

EXECUTIVE                                   COMPANY

                                            HCC Insurance Holdings, Inc.


/s/ CHRISTOPHER L. MARTIN                    By: /s/ JOHN N. MOLBECK
--------------------------------                --------------------------------
Christopher L. Martin                               John N. Molbeck,
                                                    President

Dated:  January 21, 2002                    Dated:  January 21, 2002
      ------------------------------              ------------------------------












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EMPLOYMENT AGREEMENT - PAGE 16