<PAGE>   1
                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT


         This Employment Agreement (this "Agreement"), is made and entered into
as of the 1st day of January, 2000 (the "Effective Date"), by and between CGA
Investment Management, Inc., a Delaware corporation (referred to herein as the
"Employer"), and Geoffrey N. Kauffman (the "Employee").

                                    RECITALS

         A. The Employer desires to employ the Employee for a specified term;
and

         B. The Employee is willing to be employed by the Employer upon the
terms and conditions hereinafter set forth.

                  NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter contained, it is covenanted and agreed by
and between the parties hereto as follows:

                                   AGREEMENTS

                  I. POSITION AND DUTIES. The Employer hereby employs the
Employee as the President and Chief Executive Officer of the Employer or in such
other capacity as shall be mutually agreed between the Employee and the
Employer. During the period of the Employee's employment hereunder, the Employee
shall devote the Employee's best efforts and full business time, energy, skills
and attention to the business and affairs of the Employer; provided, however,
that the Employee shall perform on behalf of the Employer only such duties that
in compliance with the Operating Guidelines of CGA Group, Ltd. and Subsidiaries
(as amended and in effect from time to time, the "Operating Guidelines,"). The
Employee's duties and authority shall consist of and include all duties and
authority customarily performed and held by persons holding equivalent positions
with business organizations similar in nature and size to the Employer, as such
duties and authority are, subject to the immediately preceding sentence,
reasonably defined, modified and delegated from time to time by the Board of
Directors of the Employer (the "Board") or that person to whom the Board has
delegated such authority. The Employee shall have the powers necessary to
perform the duties assigned to him, and shall be provided such supporting
services, staff, secretarial and other assistance, office space and
accoutrements as shall be reasonably necessary and appropriate in light of such
assigned duties.
<PAGE>   2
                  II. COMPENSATION. As compensation for the services to be
provided by the Employee, the Employee shall receive the following compensation
and other benefits:

                  A. BASE SALARY. The Employee shall receive an aggregate annual
         minimum base salary ("Base Salary") at the rate of Two Hundred Eighty
         Five Thousand U.S. Dollars ($285,000) payable in installments in
         accordance with the regular payroll practices of the Employer. Such
         Base Salary shall be subject to review annually, commencing on the
         anniversary of the Effective Date and shall be maintained or increased
         during the term hereof in accordance with the Employer's established
         compensation policies.

                  B. BONUSES. The Employee may receive a discretionary annual
         cash bonus ("Annual Bonus"), payable within thirty (30) days after the
         end of each calendar year during which this Agreement is in effect,
         commencing with calendar year 2000, which shall be based upon an annual
         incentive plan approved by the compensation committee of the board of
         directors of CGA Group, Ltd.

                  C. REIMBURSEMENT OF EXPENSES. In accordance with the expense
         reimbursement policies of the Employer, as promulgated and in effect
         from time to time, the Employee shall be reimbursed, upon submission of
         appropriate vouchers and supporting documentation, for all travel,
         entertainment and other out-of-pocket expenses reasonably and
         necessarily incurred by the Employee in the performance of his duties
         hereunder.

                  D. MOVING AND INTERIM LIVING EXPENSES. The Employer shall pay
         all reasonable expenses related to the relocation from Bermuda to New
         York City of the Employee, including packing and shipping the
         Employee's entire household and all furniture, belongings and effects.

                  E. OTHER BENEFITS. The Employee shall be entitled to all
         benefits specifically established for him by the Board or a committee
         thereof and, when and to the extent he is eligible therefor, to
         participate in all plans and benefits generally accorded to employees
         of the Employer, subject to all of the terms thereof, including, but
         not limited to, as applicable, pension, profit-sharing, supplemental
         retirement, stock option, severance, incentive compensation, bonus,
         disability income, split-dollar life insurance, group life, medical and
         hospitalization insurance, and similar or comparable plans, and also to
         perquisites extended to similarly situated senior employees.

                                       2
<PAGE>   3
         Additionally, the Employer shall obtain for the benefit of the
         Employee's estate a term life insurance policy with a value of two
         times the Employee's base salary as presented in Subsection IIA.

                  F. VACATIONS. The Employee shall be entitled to an annual
         vacation in accordance with the operative vacation policy of the
         Employer in effect from time to time, which vacation shall be taken at
         a time or times mutually agreeable to the Employee and the Employer.

                  G. FULL BENEFIT OF ALLOWANCES. If any of the compensation and
         benefits provided in Subsections D shall be deemed taxable to the
         Employee in the U.S., the Employer shall pay to the Employee that
         additional amount necessary to "gross-up" the payment in question and
         fully subsidize any U.S. tax consequences to the Employee.

                  H. WITHHOLDING. The Employer shall be entitled to withhold,
         from amounts payable to the Employee hereunder, any federal, state or
         local withholding or other taxes or charges which it is from time to
         time required to withhold.

                  I. TAX ASSISTANCE. Until June 1, 2002, the Employer shall
         provide the Employee with reasonable tax assistance, provided by the
         independent accountants and tax counsel regularly engaged by the
         Employer.


                  III. TERM AND TERMINATION

                  A. BASIC TERM. The Employee's employment under this Agreement
shall be for a term of one (1) year commencing as of the Effective Date and
shall automatically extend for one (1) additional year commencing on the first
anniversary of the Effective Date and on each anniversary thereafter, unless
terminated by either party effective as of the last day of the then current
Agreement term by written notice to the effect delivered to the other not less
than one hundred twenty (120) days prior to the anniversary of such Effective
Date.

                  B. VOLUNTARY TERMINATION BY EMPLOYEE. The Employee may
voluntarily terminate this Agreement, at any time, by written notice to that
effect delivered to the Employer not less than thirty (30) days prior to the
effective date of Employee's voluntary termination. Upon Employee's voluntary
termination, Employee shall have no obligations to the Employer other than as
provided for in Sections IV and V hereof, together with an

                                       3
<PAGE>   4
obligation to provide Employee's reasonable transitional assistance to the
Employer for a period of not more than thirty (30) days in connection with
matters for which the Employee was responsible during the term of this Agreement
and which were not concluded prior to Employee's voluntary termination. Upon
Employee's voluntary termination, no Annual Bonus for the year in which such
termination occurs shall be payable to the Employee and no further payments of
any kind shall be due hereunder, except for compensation and benefits accrued as
of the date of such termination.

                  C. PREMATURE TERMINATION WITHOUT CAUSE AND CONSTRUCTIVE
TERMINATION.

                           1. In the event of the termination of the Employee's
         employment under this Agreement prior to the last day of the then
         current term, either (A) by the Employer for any reason other than a
         termination in accordance with the provisions of Subsection IIID, IIIE
         or IIIF or (B) by the Employee by written notice to the Employer given
         within thirty (30) days of Constructive Discharge (as hereinafter
         defined) effective as of thirty (30) days after such notice, then the
         Employer shall: (A) pay the Employee the greater of (x) the Base Salary
         the Employee would have received had he remained employed through the
         end of the then current term of the Agreement and (y) six (6) months of
         Base Salary; and (B) continue to provide coverage for the Employee
         under the medical benefit program maintained by the Employer through
         the remainder of the term of the Agreement (if permitted to do so under
         such program).

                           2. Payments to the Employee under this Subsection
         IIIC will be made in accordance with the regular payroll practices of
         the Employer during the remaining term of this Agreement or, at the
         election of the Employer, such payments may be made in a lump sum.

                           3. For purposes of this Agreement, the Employee shall
         be deemed "Constructively Discharged" if the Employer changes the
         primary employment location of the Employee to a place other than New
         York without the express written consent of the Employee.

                  D. TERMINATION FOR CAUSE. Notwithstanding any other provision
of this Agreement, in the event of the termination of the Employee's employment
under this Agreement for cause, no Annual Bonus for the year in which such
termination occurs shall be payable to the Employee and no further payments
shall be due hereunder except for compensation or benefits accrued as of the
date of such termination. For purposes of this Agreement,

                                       4
<PAGE>   5
"cause" shall mean: (i) a material violation by the Employer, in which the
Employee materially and directly participated, of any law or regulation
respecting the business of the Employer or any affiliate, other than a material
violation which is a direct result of the operation of the Employer and/or its
affiliates in accordance with the Operating Guidelines; (ii) the Employee being
found guilty by a court of competent jurisdiction or a plea of guilty or nolo
contendre to a charge of (A) any felony or (B) an act of dishonesty in
connection with the performance of his duties for the Employer; or (iii) the
willful or negligent failure of the Employee to perform his duties hereunder in
any material respect.

                  E. TERMINATION UPON DEATH. If the Employee dies during the
term of this Agreement, payment of any accrued compensation due to the Employee
at the time of death including the bonus payable with respect to the prior
calendar year if death occurs prior to payment of such bonus, shall be made to
such beneficiary as the Employee may designate in writing, or failing such
designation, to the executor, administrator or other representative of his
estate; provided, however, that the Employee's Annual Bonus payable with respect
to the calendar year in which such termination occurs (with such Annual Bonus
calculated based on the bonus(es) payable to the Employee with respect to the
immediately preceding year) shall be payable on a pro rata basis to the date of
the Employee's death. Such payments shall be in addition to any other death
benefits of the Employer for the benefit of the Employee and in full settlement
and satisfaction of all payments provided for in this Agreement.

                  F. TERMINATION UPON DISABILITY. The Employer may terminate the
Employee's employment after the Employee is determined to be disabled under the
then current Employer program if such a program exists at the time the Employee
is disabled. If no such program exists, the Employee will be considered disabled
if the Employee suffers an illness or injury of a potentially permanent nature
which results in the Employee's inability to substantially perform his duties
hereunder as determined by the board of directors of CGA Group, Ltd. for a
period of either six (6) consecutive months, or one hundred and twenty (120)
business days within a consecutive twelve (12) month period. If the Employer
terminates the Employee after it is determined that the Employee is disabled,
the Employer shall pay the Employee the compensation accrued through the date of
the Employee's termination of employment including the bonus payable with
respect to the prior calendar year if the termination occurs prior to payment of
such bonus; provided, however, that the Annual Bonus payable with respect to the
calendar year in which such termination occurs (with such Annual Bonus
calculated based on the bonus(es) payable to Employee with respect to the
immediately preceding year) shall be payable on a pro rata basis

                                       5
<PAGE>   6
to the date of the Employee's termination. In the event of a dispute regarding
the Employee's disability, each party shall choose a physician who together will
choose a third physician to make a final determination. The Employee shall be
entitled to the compensation and benefits provided for under this Agreement for
any period during the term of this Agreement and prior to the establishment of
the Employee's disability. Notwithstanding anything contained in this Agreement
to the contrary, until the date specified in a notice of termination relating to
the Employee's disability, the Employee shall be entitled to return to his
position with the Employer as set forth in this Agreement, in which event no
disability of the Employee will be deemed to have occurred.

                  IV. CONFIDENTIALITY AND LOYALTY. The Employee acknowledges
that during the course of the Employee's employment, the Employee will produce
and have access to material, records, data, trade secrets and information not
generally available to the public regarding the Employer and its subsidiaries
and affiliates (collectively, "Confidential Information"). Accordingly, during
and subsequent to termination of this Agreement, the Employee shall hold in
confidence and not directly or indirectly disclose, use, copy or make lists of
any such Confidential Information, except to the extent that such information is
or thereafter becomes lawfully available from public sources, or such disclosure
is authorized in writing by the Employer, required by a law or any competent
administrative agency or judicial authority, or otherwise as reasonably
necessary or appropriate in connection with the Employee's performance of the
employee's duties hereunder. All records, files, documents and other materials
or copies thereof relating to the Employer's business which the Employee shall
prepare or use shall be and remain the sole property of the Employer, shall not
be removed from the Employer's premises without its written consent other than
in the ordinary course of business, and shall be promptly returned to the
Employer upon termination of the Employee's employment hereunder. The Employee
agrees to abide by the Employer's reasonable policies, as in effect from time to
time, respecting avoidance of interests conflicting with those of the Employer.

                  IV. NON-SOLICITATION AND NON-COMPETITION COVENANTS.

                           A. RESTRICTIVE COVENANT. The Employee and the
Employer have jointly reviewed the operations of the Employer and have agreed
that the covenants contained in this Section V are an essential ingredient of
this Agreement and are made in consideration for the payment of the amounts
described in Sections II and III hereof. The Employee hereby agrees that, except
with the express prior written consent of the Employer, for a period of one (1)
year after the termination of the

                                       6
<PAGE>   7
Employee's employment with the Employer, with respect to clause (i) below, for
any reason and, with respect to clause (ii) below, for any reason other than a
termination pursuant to Subsection IIIC (the "Restrictive Period"), the Employee
(i) will not (a) solicit employees of the Employer or of any subsidiary or
affiliate of the Employer or (b) solicit clients or customers of the Employer or
of any subsidiary or affiliate of the Employer in respect of any transaction,
matter or business that directly or indirectly competes with any of the
businesses then conducted by the Employer or any of its subsidiaries or
affiliates, and (ii) will not directly or indirectly compete with the business
of the Employer, by directly or indirectly being a shareholder or partner of or
serving as an employee, officer or director of or consultant to, or in any other
capacity with, any person, firm, partnership, corporation, subsidiary, division,
joint venture, trust or other entity, or any division, subsidiary or separate
enterprise of any such entity, which (x) was created during the term of
Employee's employment with the Employer or is expected to be created within a
period of one (1) year after the Employee's termination of employment with the
Employer, and (y) which owns or operates a business which is either: (A) an
insurer or reinsurer of asset backed securities, mortgage backed securities or
commercial mortgage backed securities; or (B) an investment company that is
directly or indirectly owned by, affiliated with, attached to or otherwise
related to an insurer or reinsurer of asset backed securities, mortgage backed
securities or commercial mortgage backed securities; or (C) an investment
advisory firm that is directly or indirectly owned by, affiliated with, attached
to or otherwise related to an insurer or reinsurer of asset backed securities,
mortgage backed securities or commercial mortgage backed securities (the
"Restrictive Covenant"). If the Employee violates the Restrictive Covenant and
the Employer brings legal action for injunctive or other relief, the Employer
shall not, as a result of the time involved in obtaining such relief, be
deprived of the benefit of the full period of the Restrictive Covenant.
Accordingly, the Restrictive Covenant shall be deemed to have the duration
specified in this Subsection VA. computed from the date the relief is granted
but reduced by the time between the period when the Restrictive Period began to
run and the date of the first violation of the Restrictive Covenant by the
Employee. The Restrictive Covenant shall not prohibit the Employee from owning
directly or indirectly capital stock or similar securities which are listed on a
securities exchange or quoted on the National Association of Securities Dealers
Automated Quotation System which do not represent more than five percent (5%) of
the outstanding capital stock of any business similar to that of the Employer's.

                           B. REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The
Employee acknowledges that the restrictions contained in Sections IV and V of
this Agreement are reasonable and necessary for the

                                       7
<PAGE>   8
protection of the legitimate business interests of the Employer, that any
violation of these restrictions would cause substantial injury to the Employer
and such interests, that the Employer would not have entered into this Agreement
with the Employee without receiving the additional consideration offered by the
Employee in binding himself to these restrictions and that such restrictions
were a material inducement to the Employer to enter into this Agreement. In the
event of any violation of these restrictions, the Employer shall be relieved of
all further obligations under this Agreement and shall be entitled to any
rights, remedies or damages available to the Employer under this Agreement or
otherwise at law or in equity. In addition, in the event of any violation or
threatened violation of these restrictions, the Employer shall be entitled to
preliminary and permanent injunctive relief to prevent or restrain any such
violation by the Employee and any and all persons directly or indirectly acting
for the Employee, as the case may be.

                  VI. INTEREST IN ASSETS. Neither the Employee nor the
Employee's estate shall acquire hereunder any rights in funds or assets of the
Employer, otherwise than by and through the actual payment of amounts payable
hereunder; nor shall the Employee or the Employee's estate have any power to
transfer, assign, anticipate, hypothecate or otherwise encumber in advance any
of said payments; nor shall any of such payments be subject to seizure for the
payment of any debt, judgment, alimony, separate maintenance or be transferable
by operation of law in the event of bankruptcy, insolvency or otherwise of the
Employee.

                  VII. GENERAL PROVISIONS.

                           A. SUCCESSORS; ASSIGNMENT. Neither party hereto may
assign his or its rights or delegate his or its duties under this Agreement
without the prior written consent of the other party; provided, however, that
(i) this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Employer upon any sale of all or substantially all
of the Employer's assets, or upon any merger, consolidation or reorganization of
the Employer with or into any other corporation, all as though such successors
and assigns of the Employer and their respective successors and assigns were the
Employer; and (ii) this Agreement shall inure to the benefit of and be binding
upon the heirs, assigns or designees of the Employee to the extent of any
payments due to them hereunder. As used in this Agreement, the term "Employer"
shall be deemed to refer to any such successor or assign of the Employer
referred to in the preceding sentence.

                           B. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement
constitutes the entire agreement between the parties respecting

                                       8
<PAGE>   9
the subject matter hereof, and supersedes all prior negotiations, undertakings,
agreements and arrangements with respect thereto, whether written or oral.
Except as otherwise explicitly provided herein, this Agreement may not be
amended or modified except by written agreement signed by the Employee and the
Employer.

                           C. ENFORCEMENT AND GOVERNING LAW. The provisions of
this Agreement shall be regarded as divisible and separate; if any of said
provisions should be declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not be affected thereby. This Agreement shall be construed and the legal
relations of the parties hereto shall be determined in accordance with the laws
of the State of New York, without reference to the law regarding conflicts of
law.

                           D. ARBITRATION. The provisions of Subsection VB shall
supersede the provisions of this Subsection VIID in the event of a simultaneous
dispute between the Employer and the Employee so as to afford the Employer with
the remedy of injunctive relief, without the necessity for arbitration. Any
dispute or controversy arising under or in connection with this Agreement or the
Employee's employment by the Employer shall be settled exclusively by
arbitration, conducted by a single arbitrator sitting in New York City, New
York, in accordance with the rules of the American Arbitration Association (the
"AAA") then in effect. The arbitrator shall be selected by mutual agreement
between the Employer and the Employee. However, in the event that the parties
are unable to agree on an arbitrator within a period of one week, the arbitrator
shall be selected by the parties from a list of eleven (11) arbitrators provided
by the AAA, provided that no arbitrator shall be related to or affiliated with
either of the parties. If the parties mutually agree on an arbitrator within ten
(10) days after the list of the proposed arbitrators is received by the parties,
then no later than twenty (20) days after such list is received by the parties,
the parties, or their respective representatives, shall meet at a mutually
convenient location in New York City, New York, or telephonically. At that
meeting, the party who sought arbitration shall eliminate one (1) proposed
arbitrator and then the other party shall eliminate one (1) proposed arbitrator.
The parties shall continue to eliminate names from the list of proposed
arbitrators in this manner until each part has eliminated five (5) proposed
arbitrators. The remaining arbitrator shall arbitrate the dispute. Each party
shall submit, in writing, the specific requested action or decision it wishes to
take, or make, with respect to the matter in dispute, and the arbitrator shall
be obligated to choose one (1) party's specific requested action or decision,
without being permitted to effectuate any compromise position. The party whose
requested action or decision is not selected by the arbitrator shall bear

                                       9
<PAGE>   10
the cost of all counsel, experts or other representatives who are retained by
both parties, together with all costs of the arbitration proceeding, including,
without limitation, the fees, costs and expenses imposed or incurred by the
arbitrator. Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided, however, that the Employee shall be entitled to
seek specific performance of the Employee's right to be paid through the date of
termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.

                           E. WAIVER. No waiver be either party at any time of
any breach by the other party of, or compliance with, any condition or provision
of this Agreement to be performed by the other party, shall be deemed a waiver
of any similar or dissimilar provisions or conditions at the same time or any
prior or subsequent time.

                           F. NOTICES. Notices pursuant to this Agreement shall
be in writing and shall be deemed given when received; and, if mailed, shall be
mailed by United States registered or certified mail, return receipt requested,
postage prepaid; and if to the Employer, addressed to the principal headquarters
of CGA Group, Ltd., attention: President; or, if to the Employee, to the address
set forth below the Employee's signature on this Agreement, or to such other
address as the party to be notified shall have given to the other.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.


CGA Investment                              Geoffrey N. Kauffman
Management, Inc.

By: /s/ Richard A. Price                         /s/ Geoffrey N. Kauffman
   -----------------------                      ------------------------------
   Richard A. Price
   President, CGA Group, Ltd.

                                       10