EXHIBIT 10.18


                          Executive Retention Agreement



     THIS AGREEMENT is entered into this 24th day of November,  1997 ("Effective
Date"), by and between PENNCORP  FINANCIAL GROUP,  INC., a Delaware  corporation
("Company") and Charles Lubochinski ("Executive").

          A. The Board of  Directors  of the Company  desires to assure that key
     executives  will devote their  undivided  time and attention to the Company
     without regard to concerns about an involuntary loss of employment  without
     cause,  and to assure the continuity  and  cooperation of management in the
     event of a change in ownership and the continued  attention of Executive to
     his  duties  without  any  distraction  arising  out of  the  circumstances
     surrounding a change or potential change in ownership.

          B.  The  Company  and  Executive  desire  to enter  into an  executive
     retention   arrangement  to  protect   Executive   against  an  involuntary
     termination  of  employment  without  cause,  to recognize  the  additional
     efforts of Executive that may be necessary to assist in and prepare for any
     potential  change in  ownership,  and to encourage  Executive to diligently
     perform his duties and  responsibilities  to ensure a smooth transition for
     any such change in ownership.

     For good and valuable consideration, including the mutual covenants herein,
the parties hereto agree as follows:

     1. Definitions.  The following terms shall have the following  meanings for
purposes of this Agreement.

          "Annual Pay" means the sum of:

               (i) an  amount  equal to the  highest  annual  base  salary  rate
          payable to the  Executive by the Company at any time before or after a
          Change in Control, plus

               (ii) an amount equal to the product of (x) the average percentage
          of base salary paid to the Executive as annual  incentive  bonuses for
          the two immediately  preceding  calendar years,  multiplied by (y) the
          highest  annual  base  salary  rate  payable to the  Executive  by the
          Company at any time before or after a Change in Control.

     The highest  annual base salary rate  payable to the  Executive  within the
last two years was $225,000.

                  "Cause" means:

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                                                                   EXHIBIT 10.18


               (1) for any  termination  prior to the  earlier  of a  Change  in
          Control  or  a  Potential  Change  in  Control,  (i)  a  material  and
          demonstrable   adverse   change  after  the  Effective   Date  in  the
          Executive's  performance of his duties and  responsibilities in effect
          as of the Effective  Date,  other than any changes in  performance  by
          reason of sickness or  disability  of the Executive and any changes in
          Executive's duties and responsibilities made after the Effective Date,
          (ii) willful  misconduct or gross negligence in the performance of, or
          willful  neglect  of,  the  Executive's   duties,   which  has  caused
          demonstrable  and  serious  injury  (monetary  or  otherwise)  to  the
          Company,  (iii)  conviction of the  Executive of a criminal  violation
          involving  fraud,  embezzlement or theft in connection with his duties
          or in the course of his employment  with the Company,  (iv) conviction
          of, or plea of nolo  contendere to, a felony by the Executive,  or (v)
          willful and wrongful damage by Executive to property of the Company or
          any of its affiliates; and

               (2) for any  termination  on or  after a  Change  in  Control  or
          Potential  Change in Control,  the  Executive's  (i)  conviction  of a
          criminal   violation   involving  fraud,   embezzlement  or  theft  in
          connection with his duties or in the course of his employment with the
          Company,  (ii) conviction of, or plea of nolo contendere to, a felony,
          or (iii) willful and wrongful damage to property of the Company or any
          of its affiliates.

     No  act  or  omission  shall  be  considered  "willful"  if  the  Executive
reasonably  believed  such acts or omissions  were in the best  interests of the
Company.

     No act or omission shall  constitute Cause unless the Board of Directors of
the Company  provides to the  Executive  (a)  written  notice  clearly and fully
describing the particular acts or omissions which the Board reasonably  believes
in good faith constitutes Cause and (b) an opportunity, within 30 days following
his receipt of such  notice,  to meet in person with the Board of  Directors  to
explain or defend the alleged acts or omissions relied upon by the Board and, to
the extent practicable, to cure such acts or omissions.  Executive shall further
have the right to contest a determination  of Cause by the Company by requesting
arbitration  on an expedited  basis in accordance  with the terms of Section 5.1
hereof.

     "Change in Control" means (1) any "person" (as such term is used in Section
13(d) of the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"))
becomes the "beneficial  owner" (as determined  pursuant to Rule 13d-3 under the
Exchange Act), 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;  or (2) during any period of two (2)  consecutive
years (not  including  any period  prior to the  execution  of this  Agreement),
individuals  who at the beginning of such period  constitute  the members of the
Company's Board of Directors (the "Board") and any new director,  whose election
to the  Board  or  nomination  for  election  to  the  Board  by  the  Company's
stockholders  was  approved  by a  vote  of at  least  two-thirds  (2/3)  of the
directors then still in office who either were directors at the beginning of the
period or whose  election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board; or

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                                                                   EXHIBIT 10.18


     (3) the Company shall merge with or consolidate into any other corporation,
other than a merger or  consolidation  which would  result in the holders of the
voting securities of the Company  outstanding  immediately prior thereto holding
immediately thereafter securities  representing more than sixty percent (60%) of
the  combined  voting  power of the  voting  securities  of the  Company or such
surviving entity outstanding immediately after such merger or consolidation;  or
(4) the  stockholders of the Company  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 or such a plan is commenced.


     "Code" means the Internal Revenue Code of 1986, as amended.

     "Good  Reason"  means  any  of  the  following  events  occurring,  without
Executive's  prior written  consent  specifically  referring to this  Agreement,
within  three (3) years  following  a Change in Control or  Potential  Change in
Control:

          (1) (A) any  reduction in the amount of  Executive's  annual salary or
          aggregate incentive  compensation  opportunities  (which reduction may
          also  occur  pursuant  to any  assignment  of  performance  goals  and
          corresponding  awards which are  inconsistent  with prior  performance
          goals and awards),  (B) any  significant  reduction  in the  aggregate
          value of  Executive's  benefits as such benefits may be increased from
          time to time (unless such reduction is pursuant to a general change in
          benefits applicable to all similarly situated employees of the Company
          and its  affiliates)  or (C) any  material  and willful  breach by the
          Company of any provision of this  agreement or any written  employment
          agreement with Executive;

          (2) (A)  assignment to Executive of any duties  inconsistent  with his
          status as Senior Vice President-Tax of the Company, (B) the removal of
          Executive  from his  position  as  Senior  Vice  President-Tax  of the
          Company,  (C) the  failure  to retain  Executive  as the  Senior  Vice
          President-Tax  of any  successor  to the  Company  (whether by merger,
          consolidation  or sale or disposition of all or  substantially  all of
          the assets of the Company) or any entity which  directly or indirectly
          owns twenty five percent  (25%) or more of any class of  securities of
          the  Company  or any  successor  to the  Company  (whether  by merger,
          consolidation  or sale or disposition of all or  substantially  all of
          the assets of the Company) or (D) any significant change in the nature
          or status of Executive's duties or responsibilities;

          (3) a  significant  adverse  change  in the  nature  or  scope  of the
          authorities, powers, functions, responsibilities or duties attached to
          the position with the Company which Executive held  immediately  prior
          to the Change in Control;


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                                                                   EXHIBIT 10.18


          (4) (A) transfer of  Executive's  principal  place of  employment to a
          location  more  than 20 miles  from  Executive's  place of  employment
          immediately prior to the Change in Control, provided that the distance
          between the new principal place of employment and Executive's  primary
          residence  is greater  than 10 miles  from the  distance  between  the
          principal  place of employment  prior to such transfer and Executive's
          primary  residence  immediately  prior to the Change in  Control,  (B)
          Executive  is required  to travel  outside of the  continental  United
          States more than four times during any calendar  year or for more than
          10 days in the  aggregate in any calendar year or (C) the Executive is
          required  to travel  outside  the state of the  Executive's  principal
          place of  employment  immediately  prior to the Change in Control  for
          more than 60 days in any calendar year;

          (5) failure by the Company to obtain the assumption agreement referred
          to in Section 8 of this Agreement  prior to the  effectiveness  of any
          succession  referred to therein,  unless the  purchaser,  successor or
          assignee  referred to therein is bound to perform  this  Agreement  by
          operation of law; or

          (6) the Executive receives notice from any party to an agreement which
          contemplates  a Change in Control  that,  on or after  such  Change in
          Control,  an event  will  occur that will  constitute  Good  Reason as
          described in (1) through (5) above.

     Notwithstanding  the  above,  (i)  the  occurrence  of any  of  the  events
described in (1) through (5) above will not  constitute  Good Reason  unless the
Executive gives the Company  written  notice,  within 90 calendar days after the
Executive  knew or should  have  known of the  occurrence  of any of the  events
described in (1) through (5) above, that such event constitutes Good Reason, and
the  Company  thereafter  fails to cure the event  within the earlier of (x) the
closing  for a Change in Control or (y) thirty  (30) days after  receipt of such
notice,  and  (ii)  the  receipt  of  notice  described  in (6)  above  will not
constitute  Good  Reason  until the  closing  for a Change in  Control  and will
otherwise not  constitute  Good Reason if the  Executive is provided  reasonable
assurances by the Company  prior to such closing that an event  described in (1)
through (5) above is not contemplated on or after a Change in Control.

     "Potential  Change in Control" means the  occurrence of active  discussions
between the Company and a potential purchaser of the Company that contemplates a
transaction  which would result in a Change in Control,  but only if a Change in
Control results within twelve months following such occurrence.

     2. Term.  The term of this  agreement  commences on the Effective  Date and
expires upon the earliest to occur of the following:

          (a)  the Executive's attainment of age 65,

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                                                                   EXHIBIT 10.18


          (b)  the Executive's death, or

          (c)  the Executive's  disability  (within the meaning of the long-term
               disability plan in effect for and applicable to the Executive).

     3. Involuntary Termination Payment and Benefits

     3.1  Involuntary  Termination.  Subject to Section 3.3 below,  in the event
either  (i)  Executive's  employment  with  the  Company  or  its  successor  is
terminated by Executive for Good Reason within three years following a Change in
Control or Potential Change in Control, or (ii) the Executive's  employment with
the  Company or its  successor  is  terminated  by the  Company  without  Cause,
Executive shall be entitled to the following payments and other benefits:

          a. An amount  equal to the sum of (i)  Executive's  accrued and unpaid
          salary,  vacation and personal days as of his date of  termination  of
          employment,  plus (ii) his accrued and unpaid  bonus,  if any, for the
          Company's  prior fiscal year, plus (iii) a pro- rated annual bonus for
          the fiscal year of the Executive's  termination,  which shall be equal
          to the Executive's bonus under the Company's annual bonus plan for the
          preceding fiscal year, and multiplied by a fraction,  the numerator of
          which is the number of days elapsed in such fiscal year to the day his
          employment terminated, and the denominator of which is 365. The amount
          described  in (i) above  shall be paid on the date of the  Executive's
          termination of employment, and the amount or amounts described in (ii)
          and  (iii)  above  shall  be paid on the  earlier  of the  date of the
          Executive's  termination  of  employment or the  respective  date that
          bonuses are otherwise paid under the Company's annual bonus plan.

          b.  Subject  to  Section  3.2  below,  an  amount  equal to two  times
          Executive's Annual Pay ("Termination  Pay").  Termination Pay shall be
          paid on the  earlier of (i)  within ten (10) days after the  Company's
          delivery of written  notice to the  Executive  of his  termination  of
          employment  without  Cause,  (ii)  within  thirty  (30) days after the
          Executive's   delivery  of  written  notice  to  the  Company  of  his
          resignation  for Good Reason (unless  cured),  or (iii) at the closing
          for a Change in Control (the "Payment Date").

          c.  All  unexercisable  options  to  purchase  shares  of stock of the
          Company  that  are  held by the  Executive  shall  immediately  become
          exercisable.

          d. All  restricted  stock of the  Company  and any other  equity-based
          rights  held  by the  Executive  shall  become  fully  vested  and all
          restrictions thereon shall lapse.


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                                                                   EXHIBIT 10.18


          e. A lump sum  payment on the  Payment  Date equal to the  Executive's
          unvested  accrued  benefit  under any  tax-qualified  retirement  plan
          sponsored by the Company.

          f.  Executive  and his  eligible  dependents  shall be entitled  for a
          period  of  three  (3)  years  following  his date of  termination  of
          employment to continued  coverage,  at the cost of the Company,  under
          the Company's  group  health,  dental and life  insurance  plans as in
          effect from time to time (but not any other  welfare  benefit plans or
          any  retirement  plans);  provided that coverage  under any particular
          benefit plan shall  expire with respect to the period after  Executive
          becomes covered under another  employer's plan providing for a similar
          type of benefit.  In the event the  Company is unable to provide  such
          coverage  on  account  of  any  limitations  under  the  terms  of any
          applicable   contract  with  an  insurance   carrier  or  third  party
          administrator,  the Company shall pay Executive an amount equal to the
          cost of such coverage.

     Except as  provided  in  Section  3.2 below,  the  foregoing  payments  and
benefits  shall be in addition to and not in lieu of any payments or benefits to
which  Executive  and his  dependents  may  otherwise  be  entitled to under the
Company's  compensation  and  employee  benefit  plans,  policies or  practices.
Nothing  herein  shall be  deemed to  restrict  the  right of the  Company  from
amending  or  terminating  any such  plan in a manner  generally  applicable  to
similarly situated active employees of the Company and its affiliates,  in which
event  Executive  shall be entitled to participate on the same basis (but at the
cost of the Company) as similarly  situated active executives of the Company and
its affiliates.

     3.2  Offset for Other  Severance  Pay.  There  shall be no  duplication  of
severance pay in any manner. In this regard,  Executive shall not be entitled to
Termination Pay hereunder for more than one position with the Company.  Further,
Termination  Pay  shall  be in lieu  of any  other  payments  in the  nature  of
severance pay to which  Executive has received or will receive from the Company.
Any other arrangement providing severance payments shall be deemed to be amended
to eliminate  any  obligation  for such  payments to be provided  thereunder  to
Executive.  If  Executive  is  entitled  to any  payment  in lieu of  notice  of
termination of employment under Federal,  state or local law,  including but not
limited  to  the  Worker   Adjustment  and  Retraining   Notification  Act,  the
Termination  Pay to which the Executive  would  otherwise be entitled under this
Agreement shall be reduced by the amount of any such payment in lieu of notice.

     3.3 Consulting Services. Notwithstanding Section 3.1 hereof, if the Company
delivers to Executive  notice of his termination of employment  without Cause or
Executive  delivers to the Company  notice of his  resignation  for Good Reason,
Executive shall continue (i) at the Company's election,  in its sole discretion,
as a full-time  employee of the Company for a period up to six months  following
the date of such notice  ("Transition  Period") and (ii) as a part-time,  casual
employee of the Company for a period of one year following the later of the date
of such notice or the last day of the Transition Period  ("Consulting  Period").
During the Transition Period, Executive

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                                                                   EXHIBIT 10.18


shall be assigned such duties and  responsibilities,  not inconsistent  with his
position,  duties  and  responsibilities  as a senior  executive  officer of the
Company, as the Chief Executive Officer or Board of Directors of the Company may
reasonably and in good faith request, including, but not limited to, ensuring an
orderly transfer of his duties and responsibilities to his successor. During the
Consulting Period,  Executive shall be reasonably  available for consultation by
the Chief  Executive  Officer  and/or  the Board of  Directors  of the  Company;
provided,  however,  that Executive may render such consulting services at times
and in a manner reasonably  convenient to him and his then current employer,  if
any  (including,  but not limited to, by telephone) and shall not be required to
maintain office hours or engage in any business travel. The Company acknowledges
and agrees that Executive  shall have the right to obtain new employment  during
the  Consulting  Period,  Executive's  consulting  services  hereunder  shall be
secondary to any new employment and Executive  shall not be obligated in any way
to disclose  any  propriety  or  non-public  information  regarding  his current
employer.  Executive  shall be entitled for his services  during the  Transition
Period to the same  compensation  and benefits to which he was entitled from the
Company prior to such period.  Executive  shall be paid for his services  during
the Consulting  Period a lump sum in an amount equal to his Annual Pay,  payable
on  the  Payment  Date.   Executive   shall  be  promptly   reimbursed  for  all
out-of-pocket business expenses incurred by the Executive in connection with his
services to the Company during a Transition  Period and the  Consulting  Period,
subject to documentation in accordance with generally applicable policies of the
Company.  To the extent  permitted by  applicable  law,  Executive  shall not be
liable to the  Company  for any  damages  arising  from any act or  omission  of
Executive during a Transition Period and the Consulting Period.

     3.4. No  Mitigation.  The  Executive  shall not be  obligated to secure new
employment,  but shall be obligated to report promptly to the Company any actual
employment  obtained  during  the period for which  employee  benefits  continue
pursuant to Section 3.1.

     4. Excise Taxes.

     a. Anything in this Agreement to the contrary notwithstanding and except as
set forth below,  if it is determined  that any payment or  distribution  by the
Company  to or for  the  benefit  of  Executive  (whether  paid  or  payable  or
distributed  or  distributable  pursuant  to the  terms  of  this  Agreement  or
otherwise,  but determined  without regard to any additional  payments  required
under this Section 4) (a  "Payment")  would be subject to the excise tax imposed
by Section  4999 of the Code,  or any  interest  or  penalties  are  incurred by
Executive  with respect to such excise tax (such excise tax,  together  with any
such interest and penalties,  are  hereinafter  collectively  referred to as the
"Excise Tax"), then Executive shall be entitled to receive an additional payment
("Gross-Up  Payment")  in an amount such that after  payment by Executive of all
taxes (including any interest or penalties  imposed with respect to such taxes),
including,  without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up  Payment,
Executive  retains  an amount of the  Gross-up  Payment  equal to the Excise Tax
imposed upon the  Payments.  Notwithstanding  the  foregoing  provisions of this
paragraph "a", if it is

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                                                                   EXHIBIT 10.18


determined that Executive is entitled to a Gross-Up Payment, but that Executive,
after taking into account the Payments and Gross-Up Payment, would not receive a
net after-tax benefit of at least $25,000 (taking into account both income taxes
and any Excise  Tax) as  compared to the net  after-tax  proceeds  to  Executive
resulting  from an  elimination  of the Gross-Up  Payment and a reduction of the
payments,  in the aggregate,  to an amount (the "Reduced  Amount") such that the
receipt of  Payments  would not give rise to any Excise  Tax,  then no  Gross-Up
Payment shall be made to Executive and the Payments, in the aggregate,  shall be
reduced to the Reduced Amount.

     b.  Subject  to the  provisions  of  paragraph  "c" of this  Section 4, all
determinations  required to be made under this Section 4, including  whether and
when a Gross-Up  Payment is required and the amount of such Gross-Up Payment and
the assumptions to be used in arriving at such determination, shall be made by a
certified  public  accounting  firm  selected  by  the  Company  and  reasonably
acceptable  to Executive  (the  "Accounting  Firm"),  which shall be retained to
provide  detailed  supporting  calculations  both to the Company  and  Executive
within 15 business days of the receipt of notice from  Executive  that there has
been a Payment,  or such earlier  time as is requested by the Company.  All fees
and expenses of the  Accounting  Firm shall be paid solely by the  Company.  Any
Gross-Up Payment, as determined pursuant to this Section 4, shall be paid by the
Company to  Executive  within  five (5) days of the  receipt  of the  Accounting
Firm's determination.  Any determination by the Accounting Firm shall be binding
upon  the  Company  and  Executive.  As a  result  of  the  uncertainty  in  the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting  Firm hereunder,  it is possible that Gross-Up  Payments which
will not have been made by the Company  should have been made  ("Underpayment"),
consistent with the calculations  required to be made hereunder.  If the Company
exhausts its remedies  pursuant to paragraph "c" of this Section 4 and Executive
thereafter is required to make a payment of any Excise Tax, the Accounting  Firm
shall  determine the amount of the  Underpayment  that has occurred and any such
Underpayment  shall be  promptly  paid by the  Company to or for the  benefit of
Executive.

     c.  Executive  shall  notify  the  Company  in  writing of any claim by the
Internal  Revenue Service that, if successful,  would require the payment by the
Company of the Gross-Up  Payment.  Such  notification  shall be given as soon as
practicable but no later than ten (10) business days after Executive is informed
in  writing of such claim and shall  apprise  the  Company of the nature of such
claim and the date on which  such  claim is  requested  to be paid or  appealed.
Executive  shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period  ending on the date that any payment of taxes with  respect to such claim
is due). If the Company notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive shall:

          (a) give the  Company  any  information  reasonably  requested  by the
     Company relating to such claim,


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                                                                   EXHIBIT 10.18


          (b) take such action in connection  with contesting such claims as the
     Company shall reasonably  request in writing from time to time,  including,
     without  limitation,  accepting legal  representation  with respect to such
     claim by an attorney reasonably selected by the Company,

          (c) cooperate  with the Company in good faith in order to  effectively
     contest such claim, and

          (d) permit the Company to participate in any  proceedings  relating to
     such claim;

provided,  however,  that the Company  shall bear and pay directly all costs and
expenses  (including  additional  interest and penalties) incurred in connection
with such  contest  and  shall  indemnify  and hold  Executive  harmless,  on an
after-tax  basis,  for any  Excise  Tax or income tax  (including  interest  and
penalties with respect thereto) imposed as a result of such  representation  and
payment of costs and expenses. Without limitation on the foregoing provisions of
this  paragraph  "c",  the  Company  shall  control  all  proceedings  taken  in
connection  with such contest  and, at its sole option,  may pursue or forgo any
and all administrative appeals,  proceedings,  hearings and conferences with the
taxing  authority in respect of such claim and may, at its sole  option,  either
direct  Executive  to pay the tax claimed and sue for a refund or to contest the
claim in any permissible  manner, and Executive agrees to prosecute such contest
to a determination  before any  administrative  tribunal,  in a court of initial
jurisdiction  and  in  one or  more  appellate  courts,  as  the  Company  shall
determine;  provided, however, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive,  on an interest-free basis, and shall indemnify and hold Executive
harmless,  on an after-tax  basis,  from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance;  and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable  year of Executive  with  respect to which such  contested
amount  is  claimed  to be due is  limited  solely  to  such  contested  amount.
Furthermore,  the  Company's  control of the contest  shall be limited to issues
with  respect  to which a  Gross-Up  Payment  would be  payable  hereunder,  and
Executive shall be entitled to settle or contest,  as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

     d. If, after the receipt by Executive of an amount  advanced by the Company
pursuant to  paragraph  "c" of this  Section 4,  Executive  becomes  entitled to
receive any refund with respect to such claim,  Executive  shall (subject to the
Company's  complying with the  requirements  of paragraph "c" of this Section 4)
promptly  pay to the  Company  the  amount  of such  refund  (together  with any
interest paid or credited thereon after taxes applicable thereto).  If after the
receipt by Executive of an amount advanced by the Company  pursuant to paragraph
"c" of this  Section  4, a  determination  is made that  Executive  shall not be
entitled  to any refund  with  respect to such  claim and the  Company  does not
notify Executive in writing of its intent to contest such denial of refund prior
to the expiration of 30 days after such  determination,  then such advance shall
be forgiven and

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                                                                   EXHIBIT 10.18


shall not be required to be repaid and the amount of such advance  shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

     5. Claims.

     5.1  Arbitration  of  Claims.  Company  and  Executive  agree to  settle by
arbitration  any  dispute  or  controversy   arising  in  connection  with  this
Agreement,  whether or not such dispute  involves a plan subject to the Employee
Retirement Income Security of 1974, as amended ("ERISA"). Such arbitration shall
be conducted on an expedited  basis in accordance with the rules of the American
Arbitration Association before a panel of three arbitrators sitting in Bethesda,
Maryland.  The award of the arbitrators  shall be final and  nonappealable,  and
judgment  may be entered  on the award of the  arbitrators  in any court  having
proper  jurisdiction.  All  expenses of such  arbitration  shall be borne by the
Company in accordance with Section 5.2 hereof.

     5.2 Payment of Legal Fees and Costs. The Company agrees to pay as incurred,
to the full extent permitted by law, all legal fees and expenses which Executive
may  reasonably  incur as a result of any  contest  (regardless  of the  outcome
thereof) by the Company, Executive or others of any action taken pursuant to the
terms of this Agreement,  or of the validity or enforceability  of, or liability
under, any provision of this Agreement,  or any guarantee of performance thereof
(including  as a result of any contest by Executive  about the amount of payment
pursuant to this  Agreement),  plus in each case interest on any delayed payment
at the  applicable  federal rate  provided for in Section  7872(f)(2)(A)  of the
Code.

     5.3 Agent for  Service  of Legal  Process.  Service of legal  process  with
respect to a claim under this Agreement  shall be made upon the General  Counsel
of the Company.

     6. Tax Withholding. All payments to the Executive under this Agreement will
be subject to the withholding of all applicable employment and income taxes.

     7.  Severability.  In the  event  that any  provision  or  portion  of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining  provisions of this  Agreement  shall be unaffected  thereby and shall
remain in full force and effect.

     8.  Successors.  This  Agreement  shall be  binding  upon and  incur to the
benefit of the Company  and any  successor  of the  Company.  The  Company  will
require any successor to all or substantially  all of the business and/or assets
of the Company to expressly  assume and agree to perform  this  Agreement in the
same manner and to the same extent that the Company would be required to perform
if no succession had taken place.

     9. Entire Agreement.  Except for compensation and employee benefit plans or
programs maintained by the Company from time to time, this Agreement constitutes
the entire

                                       10

<PAGE>


                                                                   EXHIBIT 10.18

agreement  between the parties hereto with respect to the subject matter hereof.
This Agreement may not be modified in any manner except by a written  instrument
signed by both the Company and the Executive.

     10.  Notices.  Any notice required under this Agreement shall be in writing
and shall be delivered by certified mail return receipt requested to each of the
parties as follows:

                           To the Executive:

                           Charles Lubochinski
                           3 Bethesda Metro Center
                           Bethesda, MD  20814

                           To the Company:

                           PennCorp Financial Group, Inc.
                           745 Fifth Avenue
                           New York, New York  10151
                           Attn:  Chief Executive Officer

     11.  Governing Law. The provisions of this Agreement  shall be construed in
accordance of the laws of the state of Delaware,  except to the extent preempted
by ERISA.

     IN WITNESS  WHEREOF,  the  Executive  and the Company  have  executed  this
Agreement as of the date and year first above written.

                                  PENNCORP FINANCIAL GROUP, INC.



                                  /s/ Steven W. Fickes
                                  --------------------
                                  Name:    Steven W. Fickes
                                  Title:   President and Chief Financial Officer



                                  /s/ Charles Lubochinski
                                  --------------------
                                  Charles Lubochinski


                                       11