Document:

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                                                                    Exhibit 10.6

                  [LETTERHEAD OF RELIANCE GROUP HOLDINGS, INC.]

                                                               November 22, 1999

Mr. Robert S. Miller
20 Maury Mountain Lane
P.O. Box 4130
Sunriver, Oregon 97707

Dear Steve:

This will confirm that we have reached the following agreements concerning your
employment by Reliance Group Holdings, Inc. ("Reliance"):

1.       You will serve as President of Reliance for a term of up to six months,
         commencing today and ending on the earlier of May 22, 2000 or the
         effective date of a Change of Control of Reliance, i.e. the acquisition
         by a non-affiliate of more than 50% of the outstanding common stock of
         Reliance or substantially all of Reliance's assets (your "Term of
         Employment").

2.       Your principal responsibilities as President will be to assist me and
         the Board of Directors in developing and implementing strategic and
         financial alternatives for Reliance with the goal of maximizing the
         value of Reliance for the shareholders. You will devote your full
         working time during customary business hours and your best efforts to
         the proper performance of your duties hereunder and you will not have
         any other employment (excluding serving as an outside director of
         companies previously disclosed to us) during your Term of Employment.

3.       You will also serve as a Director of Reliance at the pleasure of the
         Board and the shareholders.

4.       During your Term of Employment, you will be paid a salary of one
         million dollars, payable in accordance with Reliance's usual and
         customary pay procedures and subject to appropriate withholding for
         federal, state or local income or other taxes which Reliance determines
         are required to be withheld.

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Mr. Robert S. Miller
November 22, 1999
Page 2

5.       You will be granted a stock option under Reliance's 1999 Stock Option
         Plan for one million shares of Reliance common stock, which will vest
         in full on the earlier of the end of your Term of Employment or the
         effective date of a Change of Control of Reliance.

6.       You will be reimbursed by Reliance for all documented reasonable
         business expenses actually incurred and paid by you during the Term of
         Employment in the performance of your duties to Reliance in accordance
         with the policies of Reliance in effect from time to time.

7.       You will acquaint yourself with and abide by Reliance's corporate
         policies including its Code of Conduct and its policy on the trading of
         securities.

8.       Reliance may terminate you "for cause" in the event of the following:

         (a)      your conviction of a crime;

         (b)      your willful misconduct in connection with the performance of
                  your duties, after a determination by Reliance's Board of
                  Directors that such conduct warrants your termination; or

         (c)      your willful failure to perform specific written directives
                  from Reliance's Board of Directors or Chairman, which
                  directives are consistent with the scope and nature of your
                  responsibilities as President, and failure to cure such
                  failure within five days after written notice thereof.

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Mr. Robert S. Miller
November 22, 1999
Page 3

9.       If you are terminated not "for cause", your Term of Employment will be
         deemed to end and you will be paid the balance of your salary as set
         forth above and your stock options will immediately vest as set forth
         above.

10.      During your Term of Employment and thereafter, you will not disclose,
         directly or indirectly, to any third party any confidential or
         non-public proprietary information pertaining to Reliance or any of its
         affiliates, unless specifically authorized to do so by the Chairman of
         the Board of Reliance. All internal documents pertaining to Reliance or
         its affiliates which are made available to you or prepared or compiled
         by you during your Term of Employment are the exclusive property of
         Reliance and shall be delivered to Reliance upon the termination of
         your Term of Employment, or upon request of the Chairman of the Board
         of Reliance. You will continue to cooperate with Reliance after your
         Term of Employment as to any matter with which you were involved during
         your Term of Employment, and will be reimbursed for any time and
         expenses incurred by you in such cooperation. This paragraph 11 will
         survive the termination of this agreement and your Term of Employment.

11.      This Agreement is intended to be binding on you and Reliance, is to be
         governed by and construed in accordance with the laws of New York, and
         contains our complete agreement with respect to your employment by
         Reliance.

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Mr. Robert S. Miller
November 22, 1999
Page 4

Please indicate your complete agreement to the foregoing by signing a copy of
this letter and returning it to me.

                                                         Sincerely,

                                                         /s/Saul P. Steinberg
                                                         --------------------
                                                         Saul P. Steinberg

SPS:ho'l

AGREED:

/s/ Robert S. Miller
----------------------------
Robert S. Miller<PAGE>
                                                                    Exhibit 10.7

                              EMPLOYMENT AGREEMENT

            THIS AGREEMENT is made and entered into and as of the 29th day of
February, 2000, by and between GEORGE R. BAKER (the "Executive") and RELIANCE
GROUP HOLDINGS, INC., a Delaware corporation having its principal place of
business at Park Avenue Plaza, 55 East 52nd Street, New York, New York 10055
(the "Company").

      1.    Employment.

            (a) The Company agrees to employ the Executive, and the Executive
agrees to be employed by the Company, as the President and Chief Executive
Officer of the Company. During the term hereinafter specified, the Executive
agrees to perform the duties customarily performed by chief executive officers
of publicly held corporations and to perform such other duties as from time to
time may be reasonably requested of him by the Board of Directors of the Company
or any duly empowered committee thereof (the "Board of Directors").

            (b) During the term of this Agreement, the Executive shall devote
his full working time during customary business hours and his best efforts, and
apply all of his skill and experience, to the proper performance of his duties
hereunder and to the business and affairs of the Company and its subsidiaries.

      2.    Term.  Subject to Sections 4 and 5 hereof,  the term of employment
of the  Executive  hereunder shall be for the period  commencing  on the date
hereof and ending on February 28, 2002.

      3.    Compensation.

            (a) Base Salary. The Company will pay to the Executive during the
term of his employment hereunder a salary ("Base Salary") of not less than the
Executive's annual base salary on the date hereof, payable in accordance with
the Company's usual and customary pay procedures.

            (b) Bonus. For each calendar year of the Company during the term of
the Executive's employment, the Executive shall be eligible to receive a bonus
based on a percentage of his Base Salary for such year (not less than 115%) as
determined pursuant to the Company's existing Executive Bonus Plan (or any other
subsequent executive bonus compensation plan in which the chief executive
officer participates and which has been approved by the stockholders and does
not reduce the Executive's bonus potential below 100% of Base Salary), provided
that, except in the case of the bonus for the calendar year in which this
Agreement terminates in accordance with Section 2 hereof, the Executive has not
"voluntarily resigned" or been terminated for "cause" prior to the time of
payment of the bonus.

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            (c) Reimbursement of Expenses. The Company shall pay or reimburse
the Executive for all reasonable business expenses actually incurred or paid by
the Executive during the term of his employment under this Agreement in the
performance of his services hereunder in accordance with the current policies of
the Company applicable to the Executive, subject to modification from time to
time hereafter, provided that such modification does not significantly and
adversely affect the Executive's payments or reimbursements thereunder. Such
payment or reimbursement shall be made upon presentation of expense statements
or vouchers or such other supporting information as the Company may customarily
require of its senior executives.

            (d) Vacations. The Executive shall be entitled to not less than four
weeks' paid vacation. Vacation shall be taken at times reasonably consistent
with the needs of the Company. Vacation earned for a year but not taken during
that year shall not be paid for nor taken in a subsequent year.

            (e)   Perquisites.  The Executive shall be entitled to such other
perquisites as are currently provided to the Executive.

            (f) Withholding. The Executive acknowledges and agrees that the
Company shall be entitled to withhold from his compensation, or otherwise
provide for, all federal, state or local income or other taxes which the Company
determines are required to be withheld on amounts payable to the Executive
pursuant to this Agreement or otherwise.

      4.    Termination of Employment.

            (a) With or Without Cause; Resignation. The Company shall have the
right to terminate the employment of the Executive with or without "cause" (as
hereinafter defined) and the Executive shall have the right to resign from his
employment by the Company. If (i) the Executive's employment with the Company is
(i) terminated for "cause", or (ii) the Executive has "voluntarily resigned" (as
hereinafter defined) his employment, the Company shall have no further
obligation to the Executive hereunder, except, in the case of clause (ii), to
pay to the Executive the amounts, if any, due him pursuant to subsection (c) of
Section 3 hereof.

            (b) Definitions of Cause and Voluntarily Resigned. For purposes of
this Agreement, "cause" shall mean:

                  (i) conviction of the Executive of a felony, or of any lesser
                  crime or offense involving the property of the Company or any
                  of its subsidiaries or affiliates;

                  (ii) willful misconduct by the Executive in connection with
                  the performance of his duties hereunder, or material and
                  willful breach by him of any of the provisions of this
                  Agreement and failure to cure such misconduct or breach within
                  two (2) weeks after receipt of written notice thereof;

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                  (iii) the Executive's conviction in a court of law of any
                  criminal offense involving moral turpitude under the laws of
                  the United States or any other jurisdiction the laws of which
                  may apply; and

                  (iv) the Executive's willful failure to perform specific
                  written directives of the Board of Directors of the Company,
                  which directives are consistent with the scope and nature of
                  the Executive's existing duties and responsibilities as set
                  forth in Section 1 hereof, and failure to cure such failure
                  within two (2) weeks after receipt of written notice thereof.

For purposes of this Agreement, "voluntarily resigned" shall mean the
Executive's decision to no longer serve as an executive officer of the Company,
which decision shall not have resulted from any of the following:

                  (i) a substantial diminution of the Executive's duties without
                  the Executive's written consent;

                  (ii) a demotion in title; or

                  (iii) a relocation or attempted relocation of the Executive
                  without the Executive's written consent to an office outside a
                  25-mile radius of New York City.

            (c) Termination Without Cause; Resignation. If the Executive is
terminated without "cause" or has resigned, but not "voluntarily resigned", the
Company shall have no obligation to the Executive hereunder, except (i) to
continue to provide the Executive with the benefits under the medical and dental
plans of the Company then in effect for senior executives of the Company until
February 28, 2002, at the same charge to the Executive as he would have paid as
an active employee of the Company, (ii) to fully vest all stock option grants
held by the Executive and permit the immediate exercise thereof for a period of
12 months after the date of such termination or such resignation, (iii) to pay
to the Executive, within 20 days after the date of such termination or such
resignation, a lump sum in the amount determined by multiplying (A) the number
of years (including fractional years) remaining from the date of such
termination or such resignation to February 28, 2002, times (B) the sum of Base
Salary and the bonus, if any, paid Executive for the year immediately prior to
the date of such termination or such resignation and (iv) to pay the amounts due
him under subsection (c) of Section 3 hereof.

      5.    Death or Disability.

            (a) Termination. The term of employment of the Executive shall
terminate forthwith in the event of the death of the Executive, and, at the
option of the Company upon written notice to the Executive, in the event that
the Executive shall fail for a period of four consecutive months to render and
perform the services required of him under this Agreement because of
"disability" (as currently defined in the Company's existing long-term
disability plan). Upon a
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termination of the Executive's employment hereunder because of death or
"disability", the Executive shall be entitled to receive and shall be paid as
provided for in subsection (b) of Section 5 hereof and the Company shall have no
further obligation to him hereunder, except (i) to pay to the Executive or his
estate, as the case may be, the amounts, if any, due him pursuant to subsection
(c) of Section 3 hereof and (ii) solely in the case of "disability", to continue
to provide the Executive with the benefits under the medical and dental plans of
the Company then in effect for senior executives of the Company until February
28, 2002, at the same charge to the Executive as he would have paid as an active
employee of the Company.

            (b)   Payments Required.

                  (i) In the event of the death of the Executive, his estate
                  shall be paid, within 20 days after the date of his death, a
                  lump sum in the amount equal to the Base Salary for one year
                  from the date of his death.

                  (ii) In the event of a "partial disability" or a "total
                  disability" (as such terms are currently defined in the
                  Company's existing long-term disability plan), the Executive
                  shall continue to be paid, until February 28, 2002, his Base
                  Salary.

                  (iii) All amounts payable pursuant to clause (ii) of this
                  subsection (b) shall be reduced by amounts paid to the
                  Executive under any of the Company's disability plans.

      6.    Covenant Not to Compete or Interfere; Proprietary Information;
            and Injunctive Relief.

            (a) Limited Covenants Not to Compete or Interfere. Executive
recognizes that a substantial part of the value of a company such as the
Company's resides in the expertise of its employees such as Executive and the
goodwill with its customers which Executive significantly influences, and that
the value of the Company will be significantly diminished if Executive attempts
to compete with the Company or interfere with its activities, or solicit its
clients in contravention of this Section 6. Executive also acknowledges that his
services are unique and special and that his compensation is partially in
consideration of and conditioned upon his not competing with the Company.
Executive agrees that, during the term of his employment and until 12 months
thereafter, Executive will not, directly or indirectly, (i) interfere with,
disrupt or attempt to interfere with or disrupt the relationship, contractual or
otherwise, between the Company and any customer, supplier, lessee, employee,
consultant or subcontractor of the Company, (ii) solicit or sell to any person
or entity who was a customer of the Company during the one-year period prior to
the termination of Executive's employment pursuant to this Agreement any service
or product or related service or product, which is offered, has been offered or
is being proposed to be offered by the Company or its subsidiaries within the
one-year period prior to such solicitations or (iii) hire or attempt to hire
directly or indirectly any non-clerical employee of the Company who was employed
by the Company during the six months preceding the termination of his
employment.

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            (b) Proprietary Information. Executive agrees that all information,
whether or not in writing, of a private, secret or confidential nature relating
to the Company's or any of its affiliates' business, business relationships,
financial affairs or customers (collectively, the "Proprietary Information") is
and shall be the exclusive property of the Company or its affiliates during the
term of his employment and thereafter. Executive shall not, except as required
in the ordinary course of performance of his duties as an employee of the
Company, disclose, or use during the term of his employment and thereafter any
Proprietary Information. By way of illustration but not limitation, Proprietary
Information includes client, customer and supplier lists, data, records,
computer programs, manuals, processes, methods, contacts at or knowledge of
customers or prospective customers of the Company or any of its subsidiaries and
intangible rights which are either developed by Executive during the term of his
employment or to which Executive has access, which development or access was
rendered possible by virtue of Executive's employment.

      Upon termination of employment, Executive shall promptly return to the
Company all materials and all copies of materials involving any Proprietary
Information in Executive's possession or control. Executive agrees to represent
to the Company that he has complied with the provisions of this Section 6 upon
termination of employment.

            (c) Memoranda, Etc. Executive acknowledges and agrees that all
memoranda, notes, reports, records and other documents made or compiled by
Executive, or made available to Executive during the term of his employment
concerning the business of the Company or any of its affiliates, shall be the
Company's property and shall be delivered to the Company upon the termination of
Executive's employment hereunder or at any other time upon request by the Board
of Directors. Following the expiration or termination of Executive's employment
hereunder, Executive agrees to cooperate, for a period of five (5) years with
respect to legal matters and for a period of one (1) year with respect to all
other matters, with the Company and its affiliates with respect to matters with
which Executive was involved during the term of his employment.

            (d) Survival. The provisions of this Section 6 shall survive the
termination or expiration of this Agreement and Executive's term of employment
hereunder.

            (e) Injunctive Relief. Executive consents and agrees that, if he
violates any of the provisions of this Agreement with respect to
non-interference or confidentiality, the Company would sustain irreparable harm
and, therefore, in addition to any other remedies which the Company may have
under this Agreement or otherwise, the Company shall be entitled to apply to any
court of competent jurisdiction for an injunction restraining Executive from
committing or continuing any such violation of this Agreement, and Executive
shall not object to any such application.

            (f) New or Prospective Employer Notification. Executive agrees that,
prior to the commencement of any new employment with a new employer during the
12-month period following the term of his employment, Executive will notify the
Company of the name and address of such new Company and will furnish such new
employer with a copy of Section 6 of this Agreement. Executive agrees that the
Company may advise any new or prospective employer of Executive of the existence
and terms of Section 6 of this Agreement and furnish such new or prospective
employer with a copy of Section 6 of this Agreement.

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            (g) Challenge To Section 6. Executive agrees that, as a condition
precedent to the commencement or maintenance of any action, suit or proceeding
challenging, directly or collaterally, the validity or enforceability of this
Section 6, or any provision hereof, he will pay the Company an amount equal to
all payments received by him from the Company on and after the date of
termination of his employment. In addition, if Executive shall fail in such
challenge, Executive agrees to reimburse the Company for all costs (including
attorneys fees and expenses) of the Company's defense to such challenge.

      7.    Assignment.

            (a) This Agreement is personal as to the Executive and shall not be
assignable by the Executive.

            (b) This Agreement shall not be assigned by the Company without the
prior written consent of the Executive.

      8. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered
personally (when delivered), sent by registered mail, return receipt requested
(upon confirmation of receipt) or by recognized overnight courier (one day after
being sent) to such address as the Executive or the Company may designate by
notice to the other party.

      9. Complete Understanding. This Agreement constitutes the sole and entire
agreement between the Executive and the Company with respect to the Company's
employment of the Executive and shall not be altered, modified or amended except
by written instrument signed by the party against whom such alteration,
modification or amendment is sought to be enforced. This Agreement does not
alter, amend or modify any rights of the Executive to indemnification under
either the Company's Charter or By-laws or his indemnification agreement with
the Company.

      10. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of and be enforceable by the parties hereto and their respective
heirs, executors, administrators, successors and assigns.

      11. Termination of Agreement. This Agreement (other than the provisions of
Sections 4(c), 5(b) and 6 hereof) shall terminate upon the expiration or
termination, in accordance with the terms hereof, of the Executive's employment
hereunder.

      12.   Governing Law. This  Agreement  shall be governed by and construed
in accordance with the laws of the State of New York.

      13.   Severability.  The  invalidity of all or any part of any provision
of this Agreement  shall not invalidate the remainder of this Agreement or the
remainder  of any  paragraph  which can be given  effect  without such invalid
provision.

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      14.   Paragraph  Headings.  The  paragraph  headings  contained  in this
Agreement are for reference  purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

            IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized representative and the Executive has executed
this Agreement, in each case, as of the day and year first above written.

                                    RELIANCE GROUP HOLDINGS, INC.

                                    By: /s/ Howard E. Steinberg
                                       -------------------------------
                                    Title: Executive Vice President

                                    /s/ George R. Baker
                                    ----------------------------------
                                    Name: George R. Baker

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