Document:

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                                                                    Exhibit 10.8

                              EMPLOYMENT AGREEMENT
                              --------------------

            THIS AGREEMENT is made and entered into and as of the 1st day of
September, 1999, by and between Dennis J. O'Leary (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 an executive officer of the Company
having his existing title and duties. During the term hereinafter specified, the
Executive agrees to perform such duties and render such services, consistent
with his current duties and services, as from time to time may be requested of
him by the chief executive officer or the Board of Directors of the Company or
any duly empowered committee thereof (the "Board of Directors") or his current
direct report.

            (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 August 31, 2002.

      3.    Compensation.

            (a) Base Salary. The Company will pay to the Executive during the
term of his employment hereunder a base salary ("Base Salary") of not less than
Executive's annual base salary on September 1, 1999, payable in accordance with
the Company's usual and customary pay procedures. The Base Salary shall be
subject to increase by the Company in its absolute discretion during the term of
the Executive's employment hereunder. Any increase in the base salary shall
become the new Base Salary for all purposes hereof. Notwithstanding the
foregoing, in any year in which the current chief executive officer and the
current chief operating officer of the Company have their base salaries from the
Company and its affiliates reduced, the Executive's Base Salary may be reduced
by a percentage equal to the percentage reduction of base salary of the chief
executive officer or the chief operating officer, whichever is lower, provided
that the reduction of the Executive's Base Salary shall in no case exceed 15% of
his prior year's Base Salary.

            (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 (such percentage to be
his current percentage) as determined by the Company in its discretion.

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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 subsections (a)
and (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 or
                  his direct report, 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;

                  (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; or

                  (iv) an increase in any year in the amount of travel required
                  of the Executive by more than 30% of the average amount of
                  travel required during the previous three years.

            (c) Discharge Without Cause; Resignation. If the Executive is
discharged without "cause" or has 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 August 31,
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 discharge or such resignation, (iii) to pay to the
Executive, within 20 days after the date of such discharge 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 discharge or such
resignation to August 31, 2002, times (B) the sum of Base Salary and the average
bonus paid Executive for the two years immediately prior to the date of such
discharge or such resignation and (iv) to pay the amounts due him under
subsection (c) of Section 3 hereof.

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      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 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 August 31, 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 sum of (A) Base Salary for
                  one year from the date of his death and (B) the average bonus
                  paid Executive for the two years immediately prior to the date
                  of the Executive's death.

                  (ii) In the event of a "total disability" (as currently
                  defined in the Company's existing long-term disability plan),
                  the Executive shall continue to be paid, until the third
                  anniversary of the date of his termination for "disability",
                  his Base Salary and shall receive a bonus, at the time bonuses
                  are paid to other senior executives, in an amount equal to the
                  average bonus paid Executive for the two years immediately
                  prior to the date of the Executive's termination for
                  "disability".

                  (iii) In the event of a "partial disability" (as currently
                  defined in the Company's existing long-term disability plan),
                  the Executive shall continue to be paid, until the third
                  (second, if such termination occurs in 2001, first, if such
                  event occurs in 2002) anniversary of the date of his
                  termination for "disability", his Base Salary and shall
                  receive a bonus, at the time bonuses are paid to other senior
                  executives, in an amount equal to the average bonus paid
                  Executive for the two years immediately prior to the date of
                  the Executive's termination for "disability".

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

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      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.

            (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

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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.

            (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, requests, demands and other communications
hereunder 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

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overnight courier (one day after being sent) to the address shown below, or to
such other address as the applicable party hereto may designate by notice to the
other party given as herein provided:

                  If to the Company, to:

                  Reliance Group Holdings, Inc.
                  55 East 52nd Street
                  New York, New York 10055
                  Attention: Chief Executive Officer

                  If to the Executive to:

                  Dennis J. O'Leary
                  71 Colfax Road
                  Skillman, New Jersey 08558

      9. Complete Understanding. This Agreement constitutes the sole and entire
agreement between the Executive and the Company with respect to the Company's
continued 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. Effect of Any Deferred Compensation Plan. Any amounts of bonus
compensation of the Executive which have been replaced or deferred under any
deferred compensation plan of the Company or its affiliates shall nevertheless
be deemed to be a part of Executive's bonus for purposes of Section 3(b), 4(c),
5(b)(i), 5(b)(ii) and 5(b)(iii) of this Agreement and any amounts of
compensation received by the Executive pursuant to payment of any deferred
compensation plan amounts shall not be deemed a part of the Executive's bonus
for purposes of Section 3(b), 4(c), 5(b)(i), 5(b)(ii) and 5(b)(iii) of this
Agreement.

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

      14. 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.

      15. 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/ George E. Bello
                                       ----------------------------------
                                    Title: Executive Vice President

                                           /s/ Dennis J. O'Leary
                                    -------------------------------------
                                    Name: Dennis J. O'Leary

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      AMENDMENT, dated as of December 1, 1999, to Employment Agreement (the
"Employment Agreement"), dated as of September 1, 1999, between the executive
whose signature appears below (the "Executive") and Reliance Group Holdings,
Inc., a Delaware corporation (the "Company").

1.    The Company and the Executive wish to amend the Employment  Agreement so
as to protect the Executive from certain uncertainties.

2.    Intending to be legally bound, the Company and the Executive agree that
      Section 4(c) of the Employment Agreement is hereby amended to read in its
      entirety as follows:

      "(c) Discharge Without Cause; Resignation. If the Executive is discharged
      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 the third anniversary of the date of such discharge or
      resignation 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 discharge or such
      resignation, (iii) to pay to the Executive, within 20 days after the date
      of such discharge or such resignation, a lump sum in the amount determined
      by multiplying (A) three (3), times (B) the sum of Base Salary and the
      average bonus paid Executive for the two years immediately prior to the
      date of such discharge or such resignation and (iv) to pay the amounts due
      him under subsection (c) of Section 3 hereof."

3.    In all other respects the Employment Agreement shall remain in full force
      and effect.

4.    This  Amendment  shall be governed by and construed in  accordance  with
      the laws of the State of New York.

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

                                          RELIANCE GROUP HOLDINGS, INC.

                                          By:      /s/ George E. Bello
                                             ----------------------------------
                                             Title: Executive Vice President

                                               /s/  Dennis J. O'Leary
                                            -----------------------------------
                                                      Executive

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                                                        Schedule to Exhibit 10.8

Philip S. Sherman and Paul W. Zeller entered into Employment Agreements with
Reliance Group Holdings, Inc., including the Amendments thereto, which are
identical to Exhibit 10.8 hereto in all material respects.

                                       9<PAGE>

                                                                   Exhibit 10.17

                  TERMINATION OF RELIANCE GROUP HOLDINGS, INC.
                         KEY EMPLOYEE SHARE OPTION PLAN

                                    Preamble

         Reliance Group Holdings, Inc. (the "Sponsor") established the Reliance
Group Holdings, Inc. Key Employee Share Option Plan (the "Plan"), effective as
of the 10th day of December 1997. Pursuant to Article IV of the Plan, the
Sponsor reserved the right to amend or terminate the Plan. As used in this
document, capitalized words and phrases have the meanings set forth in the Plan,
unless the context requires a different meaning.

                                    ARTICLE I
                             Termination of the Plan

         1.1 Termination. Pursuant to Article IV of the Plan, the Sponsor hereby
terminates the Plan, subject to the provisions hereof. Such termination is
binding upon all Employers and Participants, the Compensation Committee, the
Administrative Committee and all other parties in interest.

         1.2 When Termination Takes Effect. The termination of the Plan is
effective as of the date hereof.

         1.3 Exercisability upon Termination. The Sponsor hereby requires all
outstanding Options to be exercised within two years of the date hereof.

                                   ARTICLE II
                               Plan Administration

         2.1 Administration of Plan. The provisions of Article V, Plan
Administration, of the Plan shall continue to apply until such time as there are
no longer any Participants in the Plan.

                                   ARTICLE III
                             Options; Cash Payments

         3.1 Acceleration of Options. Notwithstanding any provisions to the
contrary contained in Options granted in calendar year 2000, all such Options
may be exercised on or after the date hereof.

         3.2 Future Options. Except as provided in the next sentence hereof, no
additional Options shall be granted after the date hereof. The Sponsor shall
issue to each Participant on the first anniversary of the date hereof, an Option
reflecting the dividends and capital gains distributions on outstanding
Designated Property covered by unexercised Options held by such Participant on
such date.

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         3.2 Cash Payments. In light of the required exercise of all outstanding
Options on or prior to the second anniversary of the date hereof, the Sponsor
shall pay to each Participant on the second anniversary of the date hereof, in
cash, the dividends and capital gains distributions on outstanding Designated
Property covered by unexercised Options held by such Participant on the day
immediately preceding the second anniversary of the date hereof.

                                   ARTICLE IV
                                  Miscellaneous

         4.1 Governing law. The construction and operation of this Plan
Termination are governed by the laws of the State of New York.

         4.2 Headings. The headings of Articles, Sections and Subsections are
for reference only and are not to be utilized in construing this Plan
Termination.

         IN WITNESS WHEREOF, Reliance Group Holdings, Inc. has caused this Plan
Termination to be executed by its duly authorized officer and its corporate seal
to be hereunto affixed by authority of its Board of Directors this 1st day of
February, 2000.

                                            RELIANCE GROUP HOLDINGS, INC.

[Corporate Seal]

                                            By: /s/Saul P. Steinberg
                                               -------------------------------
                                                 Chairman of the Board and
                                                 Chief Executive Officer

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