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                                                                   EXHIBIT 10.23

                              EMPLOYMENT AGREEMENT


This agreement made as of the 2nd day of January, 2002



BETWEEN:

                         ALDERWOODS GROUP SERVICES INC.

                                                                 (the "Company")

                                      -And-

                                KENNETH A. SLOAN

                                                               (the "Executive")



WHEREAS:

      The Company is a wholly-owned subsidiary of Alderwoods Group, Inc.
      ("AGI"), a Delaware corporation that is the holding entity for a corporate
      group engaged in the operation of funeral homes, insurance and cemeteries
      in Canada, the United States and England; and

      The Company and the Executive wish to enter into a written Employment
      Agreement which will provide the Executive with an incentive to continue
      in his position as Senior Vice President, Chief Financial Officer of the
      Company for the term of this Agreement.

IN CONSIDERATION of the mutual covenants contained herein, the parties agree as
follows:

DEFINITIONS

1.    "CHANGE IN CONTROL" means any one of the following events that occurs
      during the term of this Agreement other than pursuant to a plan of
      reorganization submitted by AGI and confirmed by the U.S. Bankruptcy
      Court:

      a)    the acquisition by any individual, entity or group (a "Person") of
            beneficial ownership of 30% or more of the combined voting power of
            the then-outstanding Voting Stock (as defined below) of AGI;
            provided, however, that the following acquisitions will not
            constitute a Change in Control: (1) any issuance of Voting Stock of
            AGI directly from AGI that is approved by the Incumbent Board (as
            defined below), (2) any acquisition by AGI of Voting Stock of AGI,
            (3) any acquisition of Voting Stock of AGI by any employee benefit
            plan (or related trust) sponsored or maintained by AGI or any
            subsidiary of AGI, or (4) any acquisition of Voting Stock of AGI by
            any Person pursuant to a Business Combination (as defined below)
            that would not constitute a Change in Control;

      b)    the consummation of a reorganization, amalgamation, merger or
            consolidation, a sale or other disposition of all or substantially
            all of the assets of AGI, or any other transaction (each, a


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            "Business Combination") in which all or substantially all of the
            individuals and entities who were the beneficial owners of Voting
            Stock of AGI immediately prior to such Business Combination
            beneficially own, directly or indirectly, immediately following such
            Business Combination less than 40% of the combined voting power of
            the then outstanding shares of Voting Stock of the entity resulting
            from such Business Combination;

      c)    individuals who, as of the Effective Date, constitute the Board of
            Directors of AGI (the "Incumbent Board") cease for any reason to
            constitute at least a majority of the Board; provided, however, that
            any individual becoming a Director subsequent to such Effective Date
            whose election, or nomination for election by AGI's stockholders,
            was approved by a vote of at least two-thirds of the Directors then
            comprising the Incumbent Board (either by a specific vote or by
            approval of the proxy statement of AGI in which such person is named
            as a nominee for director, without objection to such nomination)
            will be deemed to have been a member of the Incumbent Board, but
            excluding, for this purpose, any such individual whose initial
            assumption of office occurs as a result of an actual or threatened
            election contest with respect to the election or removal of
            Directors or other actual or threatened solicitation of proxies or
            consents by or on behalf of a Person other than the Board; or

      d)    the approval by the stockholders of AGI of a complete liquidation or
            dissolution of AGI, except pursuant to a Business Combination that
            would not constitute a Change in Control.

2.    "CONSTRUCTIVE DISCHARGE" means the termination of the Executive's
      employment by the Executive following the occurrence of one or more of the
      following events (regardless of whether any other reason, other than Just
      Cause, exists for the termination of Executive's employment):

      a)    the geographic relocation of the Executive's place of employment by
            the Company by more than 50 miles from Toronto, Ontario;

      b)    any material reduction by the Company in the Executive's job duties
            or responsibilities;

      c)    any material reduction by the Company in the Executive's level of
            compensation or benefits;

      d)    any adverse change by the Company or AGI to the Executive's title or
            function;

      e)    harassment by a representative or affiliate of the Company; or

      f)    any circumstance in which the Executive was induced by the actions
            of the Company to terminate his employment other than on a purely
            voluntary basis.

3.    "EFFECTIVE DATE" has the meaning set forth in the "Fourth Amended Joint
      Plan of Reorganization of Loewen Group International, Inc., Its Parent
      Corporation and Certain of Their Debtor Subsidiaries."

4.    "JUST CAUSE" means willful misconduct or willful neglect of duty by the
      Executive, including, but not limited to, intentional wrongful disclosure
      of confidential or proprietary information of the Company or AGI or any of
      its subsidiaries; intentional wrongful engagement in any competitive
      activity prohibited by paragraph 20; and the intentional material breach
      of any provision of this Agreement.

5.    "SERVICES" has the meaning set forth in the Management Services
      Agreements, dated as of January 2, 2002, by and between the Company and
      AGI and the Company and certain subsidiaries of AGI.

6.    "TERMINATION WITHOUT JUST CAUSE" includes, but is not limited to, any
      unilateral change in the material terms and conditions of the Executive's
      employment.



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7.    "VOTING STOCK" means securities entitled to vote generally in the election
      of directors.

ENTIRE AGREEMENT

8.

      a)    The Executive and the Company agree that this Agreement represents
            the entire agreement between the parties and that any and all prior
            agreements, written or verbal, express or implied, between the
            parties relating to or in any way connected with the employment of
            the Executive by the Company or any related, associated, affiliated,
            predecessor or parent corporations are declared null and void and
            are superseded by the terms of this Agreement. There are no
            representations, warranties, forms, conditions, undertakings, or
            collateral agreements, express, implied or statutory between the
            parties other than as expressly set forth in this Agreement. No
            waiver or modification of this Agreement shall be valid unless in
            writing and duly executed by both the Company and the Executive.

      b)    The Executive acknowledges and agrees that, as of the Effective
            Date, the Key Employee Retention Program will terminate and be of no
            further force or effect with respect to the Executive.

EMPLOYMENT

9.    The Company agrees to employ the Executive, and the Executive agrees to
      be employed by the Company, in the position of Senior Vice President,
      Chief Financial Officer for the term of this Agreement. The Executive
      also agrees that, as part of the Executive's duties, the Executive
      shall occupy and perform the office of Senior Vice President, Chief
      Financial Officer of AGI, on behalf of the Company, for the term of
      this Agreement. As used in this Agreement, the phrase "term of this
      Agreement"  means the period beginning on the Effective Date and ending
      on the earlier of January 2, 2004, or the effective date of the
      termination of Executive's employment. Notwithstanding anything to the
      contrary in this Agreement, paragraph 16(b) shall survive and remain in
      effect following the term of this Agreement.

10.   The Executive agrees that he will at all times faithfully,
      industriously, and to the best of his skill, ability, and talents,
      perform all of the duties required of his position in a manner which is
      in the best interests of the Company and in accordance with the
      Company's objectives, and will devote his full working time and
      attention to these duties. The Executive acknowledges and agrees that
      the duties required of his position include, without limitation, the
      provision of Services on behalf of, and for the account of, the Company.

COMPENSATION

11.

      a)    In consideration for the Executive's continued performance of his
            duties as Senior Vice President, Chief Financial Officer, the
            Executive will receive a base salary of $235,000 U.S. per annum. The
            amount of such salary shall be subject to review and improvement on
            a periodic basis in accordance with Company practice, but in no
            event shall such amount be reduced. The Executive's base salary is
            payable in accordance with the Company's customary payroll practices
            and is subject to deductions required by applicable law.

      b)    The Company shall reimburse the Executive for all reasonable
            expenses incurred by the Executive during the term of this
            Agreement in the course of the Executive performing his duties
            under this Agreement. These reimbursements shall be consistent
            with the Company's policies in effect from time to time with
            respect to travel, entertainment and other reimbursable business
            expenses, subject to the Company's requirements applicable
            generally with respect to reporting and documentation of such
            expenses.

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SHORT TERM INCENTIVE PLAN - ANNUAL BONUS

12.   The Executive will be entitled to participate in a short term incentive
      plan as adopted by the Company from time to time in a manner commensurate
      with his position and level of responsibility with the Company. The bonus
      payable under such plan will be paid in full within 90 days after the end
      of each year.

13.   The short term incentive plan bonus is subject to the following conditions
      and exceptions:

      a)    In order to qualify for and receive the annual bonus, the Executive
            must be employed by the Company or its successor at the time the
            bonus is paid unless the Executive is terminated (1) without Just
            Cause or (2) by reason of Constructive Discharge in compliance with
            paragraph 17. If the Executive's employment is terminated without
            Just Cause or by reason of Constructive Discharge after the end of
            the year but before the bonus amount is paid, the Executive shall
            receive the bonus for that completed year calculated in accordance
            with terms of the short term incentive plan. The payment shall be
            made by the Company within seven days of the termination and will be
            subject to deductions required by applicable law. If the bonus
            amount has not been determined within seven days of the termination
            it will be paid in full within 90 days of the subject year end.

      b)    If, before the end of a year, the Executive's employment is
            terminated by the Company or its successor without Just Cause, the
            bonus which the Executive will be entitled to receive under
            paragraph 16 for that year will be equal to the Executive's pro rata
            portion of the bonus for the year of termination (for the number of
            days elapsed in the current year), based on the achievement of the
            applicable performance criteria through the date of termination.

STOCK OPTION PLAN

14.   The Executive is eligible for participation in AGI's equity incentive plan
      or plans. Stock options will be granted to the Executive as determined by
      the Board of Directors of AGI.

BENEFITS

15.   The Executive will be eligible to participate in the following benefit
      plans:

      a)    GROUP BENEFITS. The Executive will participate in the Company's
            Group Benefit Plan and any other group perquisites all as in effect
            from time to time.

      b)    VEHICLE ALLOWANCE. The Executive will be entitled to a vehicle
            allowance of $500.00 per month plus operating expenses with no
            allowance for auto insurance coverage.

      c)    CLUB MEMBERSHIP. The Executive will be entitled to the amount of
            $1,000.00 per year for club memberships as directed by the
            Executive.

TERMINATION OF EMPLOYMENT

16.   The parties agree that the Executive's employment under this Agreement may
      be terminated as follows:

      a)    by the Company, without notice of termination or pay in lieu
            thereof, for Just Cause;

      b)    by the Company, not following a Change in Control as set forth in
            paragraph 17 below, at its sole discretion and for any reason other
            than Just Cause upon payment to the Executive in a lump sum, within
            seven days of such termination, of an amount equal to:



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            i)    12 months' base salary; provided, however, that if the
                  Executive's employment is terminated prior to the first
                  anniversary of the Effective Date, he shall be entitled to a
                  lump sum payment in an amount equal to 24 months' base salary;

            ii)   The amount of any unpaid bonus earned by the Executive up to
                  and including the date of termination calculated in accordance
                  with paragraph 13(b); and

            iii)  The amount of any unpaid salary or vacation earned by the
                  Executive up to and including the date of termination.

            Payments  identified in sub paragraphs (i) - (iii) will be subject
            to deductions required by applicable law;

      c)    by the Company for any reason other than Just Cause or by reason of
            Constructive Discharge, following a Change in Control, both in
            compliance with paragraph 17 below; or

      d)    by the Executive, for any reason, upon thirty (30) days advance
            written notice to the Company in which case the Company will have no
            further obligation to the Executive under this Agreement or
            otherwise except to pay the Executive the unpaid portion, if any, of
            the Executive's base salary payable for the period through the date
            of termination of the Executive's employment.

CHANGE IN CONTROL

17.   If a Change in Control occurs and, within two years of the effective date
      of the Change in Control, the Executive's employment is terminated by the
      Company without Just Cause or by reason of Constructive Discharge, the
      Company shall, within seven days of the date of termination, pay to the
      Executive in a lump sum the following payments:

            i)    24 months' base salary;

            ii)   The replacement value of all Executive's benefit coverage,
                  including the full vesting of all stock options (exercised or
                  not) granted to the Executive, and all monies due from the
                  Registered Retirement Savings Plan, following the date of the
                  Executive's termination (such benefit coverage being
                  calculated over 24 months following termination);

            iii)  Two times the amount of incentive pay (in an amount equal to
                  not less than the highest aggregate incentive pay earned by
                  the Executive in any of the three fiscal years immediately
                  preceding the year in which the Change in Control occurred);

            iv)   The amount of any unpaid bonus earned by the Executive for a
                  completed year, calculated in accordance with paragraph 13;
                  and

            v)    The amount of any unpaid salary or vacation earned by the
                  Executive up to and including the date of termination.

Payments identified in paragraphs (i) - (v) will be subject to deductions
required by applicable law. Any termination of employment of the Executive by
the Company or the removal of the Executive from the office or position in the
Company or AGI that occurs (A) not more than 365 days prior to the date on which
a Change in Control occurs and (B) following the commencement of any discussion
with a third party that ultimately results in a Change in Control will be deemed
to be a termination or removal of the Executive after a Change in Control for
purposes of this Agreement.



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CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

18.   In the event that it is determined (as hereinafter provided) that any
      payment (other than the Gross-Up Payments provided for in this
      paragraph 18 and Annex A) or distribution by the Company, AGI or any of
      its affiliates to or for the benefit of the Executive, whether paid or
      payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise pursuant to or by reason of any other agreement,
      policy, plan, program or arrangement, including, without limitation,
      the lapse or termination of any restriction on the vesting or
      exercisability of any benefit under any of the foregoing (a "Payment"),
      would be subject to the excise tax imposed by Section 4999 of the
      United States Internal Revenue Code of 1986, as amended (the "Code")
      (or any successor provision thereto), by reason of being considered
      "contingent on a change in ownership or control," within the meaning of
      Section 280G of the Code (or any successor provision thereto) or to any
      similar tax imposed by U.S. state or local law, or any interest or
      penalties with respect to such tax (such tax or taxes, together with
      any such interest and penalties, being hereafter collectively referred
      to as the "Excise Tax"), then the Executive will be entitled to receive
      an additional payment or payments (collectively, a "Gross-Up Payment").
      The Gross-Up Payment will be in an amount such that, after payment by
      the Executive of all U.S. taxes (including any interest or penalties
      imposed with respect to such taxes), including any Excise Tax imposed
      upon the Gross-Up Payment, the Executive retains an amount of the
      Gross-Up Payment equal to the Excise Tax imposed upon the Payment. For
      purposes of determining the amount of the Gross-Up Payment, the
      Executive will be considered to pay any applicable U.S. federal, state
      and local income taxes at the highest rate applicable to the Executive
      in effect in the year in which the Gross-Up Payment will be made, net
      of the maximum reduction in U.S. federal income tax that could be
      obtained from deduction of such state and local taxes.

19.   The obligations set forth in paragraph 18 will be subject to the
      procedural provisions described in Annex A.

CONFIDENTIAL INFORMATION; COMPETITIVE ACTIVITY

20.   The Executive agrees that he will not, without the prior written
      consent of the Company, during the term of this Agreement or at any
      time thereafter, disclose to any person not employed by the Company, or
      use in connection with engaging in competition with the Company, any
      confidential or proprietary information of the Company. For purposes of
      this Agreement, the term "confidential or proprietary information"
      includes all information of any nature and in any form that is owned by
      the Company and that is not publicly available (other than by
      Executive's breach of this paragraph 20) or generally known to persons
      engaged in businesses similar or related to those of the Company.
      Confidential or proprietary information will include, without
      limitation, the Company's financial matters, customers, employees,
      industry contracts, strategic business plans, product development (or
      other proprietary product data), marketing plans, and all other secrets
      and all other information of a confidential or proprietary nature. The
      foregoing obligations imposed by this paragraph 20 will not apply (i)
      during the Term, in the course of the business of and for the benefit
      of the Company, (ii) if such confidential or proprietary information
      has become, through no fault of the Executive, generally known to the
      public or (iii) if the Executive is required by law to make disclosure
      (after giving the Company notice and an opportunity to contest such
      requirement).

21.   In addition, during the term of this Agreement and for a period of 12
      months thereafter, the Executive will not, without the prior written
      consent of the Company, which consent will not be unreasonably withheld:

      a)    Engage in any Competitive Activity. For purposes of this Agreement,
            "Competitive Activity" means the Executive's participation in the
            management of any business enterprise if such enterprise engages in
            substantial and direct competition with the Company and such
            enterprise's sales of any product or service competitive with any
            product or service of the Company amounted to 10% of such
            enterprise's net sales for its most recently completed fiscal year
            and if the Company's net sales of said product or service amounted
            to 10% of the Company's net sales for its most recently completed
            fiscal year. "Competitive Activity" will not include (i) the mere
            ownership of securities in any such enterprise and the exercise of
            rights appurtenant thereto or



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            (ii) participation in the management of any such enterprise other
            than in connection with the competitive operations of such
            enterprise.

      b)    On behalf of the Executive or on behalf of any person, firm or
            company, directly or indirectly, attempt to influence, persuade or
            induce, or assist any other person in so persuading or inducing, any
            employee of the Company or any of its subsidiaries to give up, or to
            not commence, employment or a business relationship with the Company
            or any of its subsidiaries.

22.   The Executive and the Company agree that the covenants contained in
      paragraphs 20 and 21 are reasonable under the circumstances, and
      further agree that if, in the opinion of any court of competent
      jurisdiction, any such covenant is not reasonable in any respect, such
      court will have the right, power and authority to excise or modify any
      provision or provisions of such covenants as to the court will appear
      not reasonable and to enforce the remainder of the covenants as so
      amended. The Executive acknowledges and agrees that the remedy at law
      available to the Company for breach of any of his obligations under
      this paragraph 22 would be inadequate and that damages flowing from
      such a breach may not readily be susceptible to being measured in
      monetary terms. Accordingly, the Executive acknowledges, consents and
      agrees that, in addition to any other rights or remedies that the
      Company may have at law, in equity or under this Agreement, upon
      adequate  proof of his violation of any such provision of this
      Agreement, the Company will be entitled to immediate injunctive relief
      and may obtain a temporary order restraining any threatened or further
      breach, without the necessity of proof of actual damage.

23.   For purposes of paragraphs 20, 21 and 22, the term "Company" will also
      include AGI and any subsidiary of AGI.

GENERAL

24.   The parties confirm that the provisions of this Agreement are fair and
      reasonable and that the total compensation and benefits payable under
      paragraphs 16, 17 or 18 are reasonable estimates of the damages which
      would be suffered by the Executive. Any amount paid under paragraphs
      16, 17 or 18 shall be in full satisfaction of all claims whatsoever
      relating to the Executive's employment or for the termination of the
      Executive's employment, including claims for salary, bonus, benefits,
      vacation pay, termination pay and/or severance pay pursuant to the
      Ontario EMPLOYMENT STANDARDS ACT, as amended, including sections 57 and
      58 thereof.

25.   Any payment made to the Executive under paragraphs 16, 17 or 18 of this
      Agreement shall be paid to the Executive by the Company regardless of
      any offer of alternate employment made to the Executive by the Company
      or by any other prospective employer, whether accepted by the Executive
      or not. The Executive will not be required to mitigate any damages
      arising from this Agreement and any amounts and benefits to be provided
      to the Executive hereunder shall not be reduced or set off against any
      amounts earned by the Executive from alternate employment, including
      self-employment, or by other means.

26.   Any payment other than for base salary made to the Executive under this
      Agreement shall be made by way of a lump sum payment or, at the
      Executive's option, in such other manner as he may direct, less deductions
      required by applicable law.

27.   Where the context requires, the singular shall include the plural and the
      plural shall include the singular. Masculine pronouns shall be deemed to
      be read as feminine pronouns and VICE VERSA. Words importing persons shall
      include individuals, partnerships, associations, trusts, unincorporated
      organizations and corporations and VICE VERSA.

28.   The division of this Agreement into paragraphs and the insertion of
      headings are for the convenience of reference only and shall not affect
      the construction or interpretation of this Agreement. The terms "this
      Agreement", "hereof", "hereunder" and similar expressions refer to this
      Agreement only and not to any

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      particular paragraph and include any agreement or instrument supplemental
      or ancillary to the Agreement. References herein to paragraphs are to
      paragraphs of this Agreement unless something in the subject matter or
      context is inconsistent therewith.

29. All dollar amounts identified in this contract are in U.S. currency.

30.   The parties' respective rights and obligations under paragraphs 16(b), 18,
      19, 20, 21, 22, 34 and 35 will survive any termination or expiration of
      this Agreement or the termination of the Executive's employment for any
      reason whatsoever.

GOVERNING LAWS

31.   This Agreement shall be governed by the laws of the Province of Ontario
      without giving effect to the principles of conflict of laws thereof. Each
      party to this Agreement hereby consents and submits himself or itself to
      the jurisdiction of the courts of the Province of Ontario for the purposes
      of any legal action or proceeding arising out of this Agreement.

SEVERABILITY

32.   All terms and covenants contained in this Agreement are severable and in
      the event that any of them is held to be invalid by any competent court in
      the Province of Ontario, the invalid provision shall be deleted and the
      balance of this Agreement shall be interpreted as if such invalid clause
      or covenant were not contained herein.

CONTINUITY

33.   This Agreement shall be binding upon and enure to the benefit of (i)
      the Executive and his heirs, executors, administrators and legal
      representatives and (ii) the Company, its related corporations,
      affiliates, and associates, and any other entity or organization which
      shall succeed to substantially all or any distinct portion of the
      business, divisions or property of the Company or its related
      corporations, affiliates, and associates, whether by means of
      amalgamation, merger, consolidation, acquisition, and/or sale of all or
      part of the shares or assets of the Company or otherwise, including by
      operation of law or by succession to the business of AGI pursuant to a
      Plan of Reorganization approved by a Bankruptcy Court. In addition, the
      Company will require any such successor expressly to assume and agree,
      by written agreement, to perform this Agreement in the same manner and
      to the same extent the Company would be required to perform if no such
      succession had taken place.

LEGAL ADVICE

34.   The Executive acknowledges that he has obtained or has had an opportunity
      to obtain independent legal advice in connection with this Agreement, and
      further acknowledges that he has read, understands, and agrees to be bound
      by all of the terms and conditions contained herein.

35.   The Company agrees to reimburse the Executive for all reasonable legal
      xepenses incurred in connection with any dispute involving the
      Executive, the Company, its related corporations, affiliates,
      successors, or assigns, or any other third party, as between any of
      them, arising from the validity, interpretation, or enforcement of this
      Agreement or any of its terms, including all reasonable legal expenses
      incurred by the Executive in respect of any action or actions commenced
      by the Executive to obtain, enforce, or retain any right, benefit or
      payment provided for in this Agreement regardless of whether such
      expenses are incurred during the term of the Agreement or after;
      provided that, in regard to such matters, the Executive has not acted
      in bad faith or with no colorable claim of success. However, the
      Company shall not be required to reimburse the Executive for any legal
      costs or expenses in relation to any action commenced by the

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      Company to enforce the confidentiality or non-competition provisions
      hereof and in respect of which in a court of competent jurisdiction the
      Company is the prevailing party for either preliminary or final remedy.

NOTICE

36.   Any demand, notice or other communication to be given in connection with
      this Agreement shall be given by personal delivery, by registered mail or
      by electronic means of communication addressed to the recipient as
      follows:

      TO THE EXECUTIVE:

      Kenneth A. Sloan
      11th Floor, Atria III
      2225 Sheppard Avenue East
      Toronto, Ontario   M2J 5C2

      TO THE COMPANY:

      Alderwoods Group Services Inc.
      11th Floor, Atria III
      2225 Sheppard Avenue East
      Toronto, Ontario   M2J 5C2

      Attention: Senior Vice-President, Legal  & Asset Management

      WITH A COPY TO:

      Alderwoods Group, Inc.
      311 Elm Street
      Suite 1000, First Floor
      Cincinnati, OH  45202

      Attention: Senior Vice-President, Legal & Asset Management or such other
      address, individual or electronic communication as may be designated by
      notice given by either party to the other.

ADDITIONAL

37.   The failure of a party to insist upon strict adherence to any term of this
      Agreement on any occasion shall not be considered a waiver of such party's
      rights or deprive such party of the right thereafter to insist upon strict
      adherence to that term or any other term of this Agreement.

38.   Nothing herein expressed or implied is intended or shall be construed to
      confer upon or give to any person, other than (1) the parties to this
      Agreement, (2) any permitted assignees of the Company and the Executive,
      and (3) AGI, as contemplated by paragraphs 8(b), 9, 10, 14, 20, 21, 22 and
      23, any rights or remedies under or by reason of this Agreement and AGI
      shall be a third party beneficiary of this Agreement.



                                                                    ...CONTINUED




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IN WITNESS WHEREOF the Executive has executed and the Company has caused its
duly authorized representative to execute this Agreement as of the date set
forth on the first page of this Agreement.

                                   ALDERWOODS GROUP SERVICES INC.


                                   By:     /s/     PAUL A. HOUSTON
                                           ------------------------------------

                                   Name:   Paul A. Houston

                                   Title:  President and Chief Executive Officer


WITNESS:
/s/ AZALEA ANGELES                 /s/ KENNETH A. SLOAN
-----------------------------      --------------------------------------------
                                                Kenneth A. Sloan








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                                     ANNEX A

EXCISE TAX GROSS-UP PROCEDURAL PROVISIONS

1.    Subject to the provisions of paragraph 5 of this Annex, all determinations
      required to be made under paragraph 18 of this Agreement and this Annex A,
      including whether an Excise Tax is payable by the Executive and the amount
      of such Excise Tax and whether a Gross-Up Payment is required to be paid
      by the Company to the Executive and the amount of such Gross-Up Payment,
      if any, will be made by a U.S. nationally recognized accounting firm (the
      "National Firm") selected by the Executive in his sole discretion. The
      Executive will direct the National Firm to submit its determination and
      detailed supporting calculations to both the Company and the Executive
      within 30 calendar days after the date of his termination of employment,
      if applicable, and any such other time or times as may be requested by the
      Company or the Executive. If the National Firm determines that any Excise
      Tax is payable by the Executive, the Company will pay the required
      Gross-Up Payment to the Executive within five business days after receipt
      of such determination and calculations with respect to any Payment to the
      Executive. If the National Firm determines that no Excise Tax is payable
      by the Executive with respect to any material benefit or amount (or
      portion thereof), it will, at the same time as it makes such
      determination, furnish the Company and the Executive with an opinion that
      the Executive has substantial authority not to report any Excise Tax on
      his U.S. federal, state or local income or other tax return with respect
      to such benefit or amount. As a result of the uncertainty in the
      application of Section 4999 of the Code and the possibility of similar
      uncertainty regarding applicable U.S. state or local tax law at the time
      of any determination by the National Firm hereunder, it is possible that
      Gross-Up Payments that will not have been made by the Company should have
      been made (an "Underpayment"), consistent with the calculations required
      to be made hereunder. In the event that the Company exhausts or fails to
      pursue its remedies pursuant to paragraph 5 of this Annex and the
      Executive thereafter is required to make a payment of any Excise Tax, the
      Executive will direct the National Firm to determine the amount of the
      Underpayment that has occurred and to submit its determination and
      detailed supporting calculations to both the Company and the Executive as
      promptly as possible. Any such Underpayment will be promptly paid by the
      Company to, or for the benefit of, the Executive within five business days
      after receipt of such determination and calculations.

2.    The Company and the Executive will each provide the National Firm access
      to and copies of any books, records and documents in the possession of the
      Company or the Executive, as the case may be, reasonably requested by the
      National Firm, and otherwise cooperate with the National Firm in
      connection with the preparation and issuance of the determinations and
      calculations contemplated by paragraph 1 of this Annex. Any determination
      by the National Firm as to the amount of the Gross-Up Payment will be
      binding upon the Company and the Executive.

3.    The U.S. federal, state and local income or other tax returns filed by the
      Executive will be prepared and filed on a consistent basis with the
      determination of the National Firm with respect to the Excise Tax payable
      by the Executive. The Executive will report and make proper payment of the
      amount of any Excise Tax, and at the request of the Company, provide to
      the Company true and correct copies (with any amendments) of his federal
      income tax return as filed with the U.S. Internal Revenue Service and
      corresponding state and local tax returns, if relevant, as filed with the
      applicable taxing authority, and such other documents reasonably requested
      by the Company, evidencing such payment. If prior to the filing of the
      Executive's federal income tax return, or corresponding state or local tax
      return, if relevant, the National Firm determines that the amount of the
      Gross-Up Payment should be reduced, the Executive will within five
      business days pay to the Company the amount of such reduction.

4.    The fees and expenses of the National Firm for its services in connection
      with the determinations and calculations contemplated by paragraph 1 of
      this Annex will be borne by the Company. If such fees and expenses are
      initially paid by the Executive, the Company will reimburse the Executive
      the full amount of such fees and expenses within five business days after
      receipt from the Executive of a statement therefor and reasonable evidence
      of his payment thereof.


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5.    The Executive will notify the Company in writing of any claim by the U.S.
      Internal Revenue Service or any other U.S. taxing authority that, if
      successful, would require the payment by the Company of a Gross-Up
      Payment. Such notification will be given as promptly as practicable but no
      later than 10 business days after the Executive actually receives notice
      of such claim and the Executive will further apprise the Company of the
      nature of such claim and the date on which such claim is requested to be
      paid (in each case, to the extent known by the Executive). The Executive
      will not pay such claim prior to the expiration of the 30-calendar-day
      period following the date on which he gives such notice to the Company or,
      if earlier, the date that any payment of amount with respect to such claim
      is due. If the Company notifies the Executive in writing prior to the
      expiration of such period that it desires to contest such claim, the
      Executive will:

                  (A) provide the Company with any written records or documents
      in his possession relating to such claim reasonably requested by the
      Company;

                  (B) take such action in connection with contesting such claim
      as the Company reasonably requests in writing from time to time,
      including, without limitation, accepting legal representation with respect
      to such claim by an attorney competent in respect of the subject matter
      and reasonably selected by the Company;

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

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

      PROVIDED, HOWEVER, that the Company will bear and pay directly all costs
      and expenses (including interest and penalties) incurred in connection
      with such contest and will indemnify and hold harmless the Executive, on
      an after-tax basis, for and against any Excise Tax or income or other tax,
      including interest and penalties with respect thereto, imposed as a result
      of such representation and payment of costs and expenses. Without limiting
      the foregoing provisions of this paragraph 5, the Company will control all
      proceedings taken in connection with the contest of any claim contemplated
      by this paragraph 5 and, at its sole option, may pursue or forego any and
      all administrative appeals, proceedings, hearings and conferences with the
      taxing authority in respect of such claim (provided, however, that the
      Executive may participate therein at his own cost and expense) and may, at
      its option, either direct the Executive to pay the tax claimed and sue for
      a refund or contest the claim in any permissible manner, and the 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 determines; PROVIDED, HOWEVER, that
      if the Company directs the Executive to pay the tax claimed and sue for a
      refund, the Company will advance the amount of such payment to the
      Executive on an interest-free basis and will indemnify and hold the
      Executive harmless, on an after-tax basis, from any Excise Tax or income
      or other tax, including interest or penalties with respect thereto,
      imposed with respect to such advance; and PROVIDED FURTHER, HOWEVER, that
      any extension of the statute of limitations relating to payment of taxes
      for the taxable year of the Executive with respect to which the contested
      amount is claimed to be due is limited solely to such contested amount.
      Furthermore, the Company's control of any such contested claim will be
      limited to issues with respect to which a Gross-Up Payment would be
      payable hereunder and the Executive will 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.

6.    If, after the receipt by the Executive of an amount advanced by the
      Company pursuant to paragraph 5 of this Annex, the Executive receives any
      refund with respect to such claim, the Executive will (subject to the
      Company's complying with the requirements of such paragraph 5) promptly
      pay to the Company the amount of such refund (together with any interest
      paid or credited thereon after any taxes applicable thereto). If, after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to paragraph 5 of this Annex, a determination is made that the Executive
      is not entitled to any refund with respect to such claim and the Company
      does not notify the Executive in writing of its intent to contest such
      denial or refund prior to the expiration of 30 calendar days after such
      determination, then such advance will be forgiven and will not be required
      to be repaid and the amount of any such advance will offset, to the


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<PAGE>

      extent thereof, the amount of Gross-Up Payment required to be paid by the
      Company to the Executive pursuant to paragraph 18 of this Agreement and
      this Annex A.
























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