EXHIBIT 10.34

                                     FORM OF
                             STOCK OPTION AGREEMENT
                           FOR NON-EMPLOYEE DIRECTORS

       THIS AGREEMENT made  as  of the _____ day of _________ (the "Grant Date")
by  and  between  Everest  Reinsurance   Holdings,   Inc.  (the  "Company")  and
("Optionee").

       WHEREAS,  the  Optionee  is  a   non-employee  member  of  the  Board  of
Directors of the Company (the "Board") who has been granted certain options,  as
set forth herein;

       NOW, THEREFORE,  in  consideration of the foregoing, the mutual covenants
hereinafter set forth and for other good and valuable consideration, the parties
hereto agree as follows:

       1.  DEFINITION OF TERMS

       a.  Change in control of the Company shall be deemed to have occurred if:

           (i)        A tender  offer or  exchange  offer  is made  whereby  the
                      effect  of such  offer  is to take  over and  control  the
                      affairs of the Company,  and such offer is consummated for
                      the ownership of  securities  of the Company  representing
                      twenty-five  percent (25%) or more of the combined  voting
                      power of the Company's then outstanding voting securities.

           (ii)       The  Company  is  merged  or  consolidated   with  another
                      corporation   and,   as  a  result   of  such   merger  or
                      consolidation, less than seventy-five percent (75%) of the
                      outstanding   voting   securities   of  the  surviving  or
                      resulting corporation shall then be owned in the aggregate
                      by the  former  stockholders  of the  Company,  other than
                      affiliates  within the meaning of the Securities  Exchange
                      Act of 1934, as amended (the "Exchange  Act") or any party
                      to such merger or consolidation.

           (iii)      The Company  transfers  substantially all of its assets to
                      another  corporation  or entity that is not a wholly owned
                      subsidiary of the Company.

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           (iv)       Any person (as such term is used in Sections 3 (a) (9) and
                      13  (d)  (3)  of  the  Exchange  Act)  is or  becomes  the
                      beneficial owner, directly or indirectly, of securities of
                      the Company representing twenty-five percent (25%) or more
                      of  the  combined  voting  power  of  the  Company's  then
                      outstanding  securities,  and the effect of such ownership
                      is to take over and control the affairs of the Company.

           (v)        As the result of a tender  offer,  merger,  consolidation,
                      sale of assets, or contested election,  or any combination
                      of such transactions,  the persons who were members of the
                      Board  immediately   before  the  transaction,   cease  to
                      constitute at least a majority thereof.

       b.  Disability  shall  mean  an inability  as determined by  the Board to
           perform  duties  and  services  as  a  director  of  the  Company  by
           reason  of  a  medically  determinable physical or mental impairment,
           supported  by  medical  evidence,  which can  be expected to last for
           a continuous period of not less than six (6) months.

       c.  Fair  Market  Value  shall  mean,  unless otherwise  provided in this
           Agreement,  the  average  of  the  highest  and  lowest sale price of
           the   Company's   Common  Stock   as   reported  on   the   Composite
           Transaction  Tape  of  the  New York Stock Exchange (or on such other
           exchange,  if  any,  on  which  the Stock is traded) on the  relevant
           date,  or  if  no  sale of the Company's Common Stock is reported for
           such  date,  the  next  preceding  day  for which there is a reported
           sale.

       2.  GRANT OF OPTION.  The  Company  hereby  grants  to  the  Optionee the
           option to purchase ___________ shares  of Common Stock of the Company
           (the  "Option") at __________ per share  (the  "Option  Price").  The
           term  of  such  grant shall be ten (10) years commencing on the Grant
           Date  (the  "Term").  These  options  are  subject to the  conditions
           hereinafter  provided.  The Option  is  a  nonstatutory  stock option
           not  intended  to  qualify as an incentive stock option under Section
           422 of the Internal Revenue Code of 1986, as amended.

       3.  EXERCISE OF OPTION.  The Option  may  be exercised only in accordance
           with this Agreement, and not otherwise.


       a.  TIME  OF  EXERCISE  OF  OPTION.  During  its  Term  and  prior to its
           earlier  termination  in   accordance  with   Section   4   of   this
           Agreement,   the   Option  shall  be  exercisable,  in  whole  or  in
           part,   provided  that   the   Optionee  remains  a   member  of  the
           Board, in accordance with the following schedule:

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                  Percent of Award                   Exercisable as of
                  ----------------                   -----------------
                        33.4%                        Date of First Anniversary
                                                     Of the Grant Date

                        33.3%                        Date of Second Anniversary
                                                     Of the Grant Date

                        33.3%                        Date of Third Anniversary
                                                     Of the Grant Date

       Notwithstanding the foregoing, the Option shall  become  immediately  and
fully  vested  and  exercisable  upon (i) the  death  or disability (as  defined
herein)  of the  Optionee  or (ii) upon a change in control of  the  Company (as
defined herein);  provided,  however, in no event, may the Option  be  exercised
after the expiration of the Term.

       Except  as  provided  in  Section  4  hereof,  the  Option  shall  not be
exercisable in whole or in part unless the Optionee, as of the time the Optionee
exercises the Option, is, and has been at  all  times  since  the  date  of  the
Option,  a member of the Board.  The Option is exercisable  during the  lifetime
of the  Optionee  only by the  Optionee  or  the  Optionee's  guardian  or legal
representative.  In the event of the Optionee's death, the Option is exercisable
by the  executors,  administrators,  heirs or  distributees of the estate of the
deceased Optionee.

       The Option shall not be  exercisable  with  respect to a fractional share
or with respect to the lesser of  fifty (50) shares or the full number of shares
then subject to the Option.  If  a  fraction  share shall become subject to  the
Option by reason of a stock dividend or  otherwise,  the  Optionee  shall not be
entitled to exercise the Option with respect to such fractional shares.

       b.  METHOD  OF  EXERCISE.  To  the  extent  then  exercisable, the Option
           may  only  be   exercised  by  delivery  of  written  notice  of  the
           exercise  to  the  Company  specifying  the  number  of  shares to be
           purchased  and   by  making  payment  in   full  for  the  shares  of
           Common   Stock   being    acquired   thereunder  at   the   time   of
           exercise; such payment shall be made either:

           (i)   in United States dollars by check or bank draft, or

           (ii)  by  tendering to the Company Common Stock shares already  owned
                 for at least six (6) months by the Optionee,  which may include
                 shares received as the result of a prior exercise of an option,
                 and having a fair market value (as defined herein) equal to the
                 cash exercise price applicable to the Option, or
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           (iii) by  a  combination  of  United  States dollars and Common Stock
                 shares as aforesaid.

       If at any time the  Board shall determine,  in its  discretion,  that the
listing,  registration or qualification  of shares upon any national  securities
exchange  or under any state or federal  law,  or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the sale or purchase of shares hereunder, the Option may not be
exercised  in whole or in part  unless  and until  such  listing,  registration,
qualification,  consent or approval  shall have been  effected or  obtained,  or
otherwise  provided for, free of any  conditions  not acceptable to the Board in
the exercise of its reasonable judgment.

The Optionee shall, upon the exercise of the Option,  execute and deliver to the
Company, a written statement,  in form satisfactory to the Company, in which the
Optionee  represents  and warrants  that the Optionee is purchasing or acquiring
the shares acquired  pursuant to the Option for the Optionee's own account,  for
investment only and not with a view to the resale or distribution  thereof,  and
represents and agrees that any subsequent  offer for sale or distribution of any
of such  shares  shall  be made  only  pursuant  to  either  (i) a  registration
statement on an  appropriate  form under the  Securities Act of 1933, as amended
(the "Act"),  which  registration  statement has become effective and is current
with regard to the shares being  offered or sold,  or (ii) a specific  exemption
from the  registration  requirements  of the Act, but in claiming such exemption
the Optionee shall, prior to any offer for sale or sale of such shares, obtain a
prior  favorable  written  opinion,  in form and substance  satisfactory  to the
Company, from counsel for or approved by the Company, as to the applicability of
such exemption thereto.

       The Company may endorse such legend or legends upon the certificates  for
shares  upon  exercise  of  the  Option  and  may  issue  such  "stop  transfer"
instructions  to its  transfer  agent  in  respect  of such  shares  as,  in its
discretion,  it determines to be necessary or appropriate to prevent a violation
of, or to perfect an exemption from, the registration requirements of the Act.

       In the event the Option is  exercised  by the  executors, administrators,
heirs or distributees of the estate of the deceased Optionee,  the Company shall
be under no  obligation  to issue  Common  Stock unless and until the Company is
satisfied  that  the  person  or  persons  exercising  the  Option  are the duly
appointed legal  representative of the deceased  Optionee's estate or the proper
legatees or distributees thereof.

       4.  TERMINATION OF OPTION. Except as herein otherwise stated, the Option,
           to the extent not  theretofore  exercised,  shall  terminate upon the
           first to occur of the following:

       a.  the expiration of the term of the Option;

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       b.  the  expiration of three years after the date on which the Optionee's
           service on the Board is terminated, or

       c.  the  expiration of three years after the date on which the Optionee's
           service on the Board is terminated,  if termination is because of the
           Optionee's death or disability (as defined herein).

       5.  RECLASSIFICATION,  CONSOLIDATION  OR   MERGER.   In  the  event  that
           during  the Term of the  Option  there  shall be  any change  in  the
           Company's  outstanding  Common Stock  by reason  of  stock  dividend,
           reverse  split, subdivision,  recapitalization,  merger  (whether  or
           not   the  Company  is  the  surviving  corporation),  consolidation,
           split-up,  combination  or exchange  of  shares,  reorganization,  or
           liquidation,  extraordinary  dividend  payable  in  cash or property,
           and the like, the  number,  class  and  the price of shares of Common
           Stock  subject  to  the Option shall be appropriately adjusted by the
           Board, whose determination shall be conclusive.

       6.  NONTRANSFERABILITY.  The  Optionee's rights  and  interest under this
           Agreement may not  be  assigned  or  transferred  in whole or in part
           either directly or by operation of  law  or  otherwise (except in the
           event of the Optionee's  death, by will or the  laws  of  descent and
           distribution), including, but not by way  of  limitation,  execution,
           levy,  garnishment,  attachment,  pledge,  bankruptcy or in any other
           manner,  and  no  such  right or  interest of any  Optionee  shall be
           subject to any obligation or liability of such Optionee.

       7.  RIGHTS AS A STOCKHOLDER.  The Optionee  shall  have  no voting rights
           or other  rights  of  stockholders  with  respect to shares which are
           subject  to  the  Option, nor shall cash dividends, if any, accrue or
           be  payable  with  respect to any such  shares,  until,  after proper
           exercise of the Option,  such shares  shall  have  been  recorded  on
           the  Company's  official  stockholder  records as  having been issued
           or transferred.

       8.  NO RIGHT  TO  BE  RETAINED AS A DIRECTOR.  Nothing  contained  herein
           shall be construed as giving the Optionee any right to be retained in
           the service of the Company as a director or otherwise.

       9.  EXECUTION.  The Optionee shall have no rights under the Option unless
           and until the  Optionee  shall  have  executed  and  delivered to the
           Company this Agreement.

       10. LIMIT  OF  LIABILITY.  Any  liability  of the Company to the Optionee
           or the Optionee's executors, administrators, heirs, or  distributees,
           as  the  case  may  be,  with  respect  to  an Option shall  be based
           solely  on  the  contractual  obligations  created  by   this  Option
           Agreement.  Neither  the  Company  nor  any   member  of  the  Board,
           nor   any   other   person   participating   in   any   determination
           of   any    question    under    this    Agreement,   or    in    the

<PAGE>
           interpretation,  administration  or  application  of this  Agreement,
           shall have any  liability  to  any  party  for any  action  taken  or
           not taken in connection with this Agreement.

       11. GOVERNING LAW.  This  Agreement shall be governed by and construed in
           accordance with the laws of the State of Delaware.


       12. BINDING EFFECT. This  Agreement  shall inure to the benefit of and be
           binding   upon  the  parties  hereto  and  their  respective   heirs,
           executors, administrators, successors and assigns.

       13. MODIFICATIONS.  No change or modification  of this Agreement shall be
           valid unless it is in writing and signed by the parties hereto.

       14. ENTIRE  AGREEMENT.   This   Agreement   sets   forth   all   of   the
           promises,  agreements,  conditions,  understandings,  warranties  and
           representations,  oral  or  written,  express or implied, between the
           parties hereto with respect to the Option.

       15. NOTICES.  Any  and  all  notices  required herein shall be addressed:
           (i) if to  the  Company,  to the principal  executive office  of  the
           Company;  and  (ii)  if to the Optionee, to the Optionee's address as
           reflected in the records of the Company.

       16. INVALID   OR   UNENFORCEABLE   PROVISIONS.    The    invalidity    or
           unenforceability of any particular  provision of this Agreement shall
           not affect the other  provisions  hereof,  and this  Agreement  shall
           be construed  in all respects as  if  the  invalid  or  unenforceable
           provisions were omitted.


       IN  WITNESS  WHEREOF,  the parties hereto have cause this Agreement to be
executed as of the day and year first above written.

                                   EVEREST REINSURANCE HOLDINGS, INC.

                                   BY: ____________________________________
                                               Joseph V. Taranto



                                       ____________________________________
                                                (Participant)