Document:

Exhibit 10.2

                                 Execution Copy

         Pursuant  to  Section  14.1  of  the  Stock  Purchase   Agreement  (the
"Agreement"),  dated as of  February  24,  2000,  by and  among  THE  PRUDENTIAL
INSURANCE COMPANY OF AMERICA,  a mutual insurance company domiciled in the State
of New  Jersey  (the  "Seller"),  and  EVEREST  REINSURANCE  HOLDINGS,  INC.,  a
corporation  organized and existing under the laws of the State of Delaware (the
"Purchaser"), the parties hereto hereby agree to amend the Agreement as follows:

1.        Section 1.1 of the Agreement is hereby amended by adding the following
          definitions:

          ""Employee Terminations and Transfer" shall have the meaning specified
          in Section 12.1(a).

          "Guarantee" shall have the meaning specified in Section 9.6.

          "PruPac"  means  Prudential  Property and  Casualty Insurance Company,
          an Indiana corporation and an indirect subsidiary of Seller."

2.        Section 1.1 of the Agreement is hereby amended so that the definitions
          of "Employee," "State  Insurance  Commissioner"  and "State  Insurance
          Commission" read in their entirety as follows:

          ""Employee"  means all  individuals  who are  employed  by the  Seller
          and perform  substantial  work for Gibraltar or who  are  employed  by
          Gibraltar."

          "State  Insurance  Commissioner"   means   each   of   the   Insurance
          Commissioners  of the  States  of  Delaware,  Indiana  and New Jersey,
          as applicable.

          "State  Insurance  Commission"  means  each  of  the  Offices  of  the
          Insurance  Commissioner  of  the  States  of  Delaware,   Indiana  and
          New Jersey, as applicable."

3.        Section 3.1 of the Agreement is hereby amended by adding the following
          paragraph at the end of such Section:

          "(c)  Prupac is  an  insurance company domiciled, validly existing and
          in good  standing  under the laws of the State of  Indiana and has all
          requisite corporate power and authority to execute and deliver the MUF
          Agreement and  the  Additional  Stop-Loss  Agreement,  to  perform its

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          obligations thereunder and to consummate the transactions contemplated
          thereby.  At the  Closing, the execution,  delivery and performance by
          Prupac of  the  MUF Agreement and the Additional  Stop-Loss  Agreement
          and  the  consummation  by  Prupac  of the  transactions  contemplated
          thereby will have been duly and validly authorized by  all  necesssary
          corporate action, and no other  corporate  proceedings  on the part of
          Prupac will be necessary to  authorize  the  execution,  delivery  and
          performance  by Prupac of the MUF Agreement  and  the Additional Stop-
          Loss Agreement or  the  consummation of the transactions  contemplated
          thereby. At the Closing,  the MUF Agreement and the  Additional  Stop-
          Loss  Agreement  will  each  have been duly and validly  executed  and
          delivered  by Prupac and will  constitute  a legal,  valid and binding
          obligation of Prupac,  enforceable against Prupac in  accordance  with
          its terms,  except as such  enforcement may be  limited by bankruptcy,
          insolvency,  moratorium  or  other similar laws  affecting  creditors'
          rights generally and except as rights  to specific enforcement may  be
          limited  by  the  application  of equitable  principles  (whether such
          equitable  principles  are  applied  in  a  proceeding  at  law  or in
          equity)."

4.        Section 3.20  of  the  Agreement  is  hereby  amended  by  adding  the
          following sentence at the end of such Section:

          "Except  as set  forth in Schedule 3.20,  no  consent,  authorization,
          order or approval of, or filing or registration with, any governmental
          authority,  board or other regulatory  body  is  required  for  or  in
          connection with the execution and  delivery of the MUF  Agreement  and
          the Additional Stop-Loss Agreement by Prupac  or the  consummation  by
          Prupac  of  the   transactions  contemplated   thereby,   except   for
          notifications to be given to, and the approval  to be  obtained  from,
          the applicable State Insurance Commissioner."

5.       The first sentence of Section 3.27 of the Agreement is  hereby  amended
         by so that such sentence reads in its entirety as follows:

         "Except for Adam Kenney, there are no employees of Gibraltar."

6.       The  third  sentence of Section 3.27 of the Agreement is hereby amended
         by so that such sentence reads in its entirety as follows:

         "Except for  the  Employee  Terminations  and  Transfer,  the  Seller's
         relationship  with  the  Employees  is  good  and  no labor dispute  or
         disturbance  exists  and,  to  the  knowledge  of  Gibraltar,  none  is
         threatened."

7.       Schedule 3.27 to the Agreement is hereby replaced in  its  entirety  by
         Schedule 3.27 attached to this Amendment.

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8.       Section 5.7(b) of  the  Agreement is hereby amended by inserting in the
         first sentence after the phrase "Seller or  Gibraltar"  the  words  "or
         Prupac."

9.       Section 5.7(c) of the Agreement is hereby  amended  by inserting in the
         first  sentence  after  the  phrase "or by  Gibraltar"  the  words  "or
         Prupac."

10.      Section 9.4 of the  Agreement  is  hereby  amended  so that Section 9.4
         reads in its entirety as follows:

         "9.4 MUF Agreement.  PruPac and Gibraltar shall have  entered  a  quota
         share reinsurance agreement (the "MUF Agreement") substantially  in the
         form of Exhibit C to this Agreement, relating to certain  uncollectible
         MUF  reinsurance  recoveries  and  the  Purchaser  shall or shall cause
         Everest Re to provide  to the Seller Schedule A to the MUF Agreement on
         or before the first  Business Day  following  the  date  on  which  all
         the  conditions  set  forth  in  Articles  IX, X and XI shall have been
         satisfied or waived."

11.      Section 9.5 of the Agreement is here by  amended so  that  Section  9.5
         reads in its entirety as follows:

         "9.5 Additional Stop-Loss Coverage. PruPac  and  Gibraltar  shall  have
         entered into a  proportional  excess of loss reinsurance agreement (the
         "Additional Stop-Loss Agreement") substantially in  the form of Exhibit
         D to this Agreement, relating to the  provision by PruPac of additional
         stop-loss coverage."

12.      Article IX is hereby amended by adding the following Section:

         "9.6  Guarantee  The  Seller  shall  have  executed  and  delivered  to
         Gibraltar a guarantee (the  "Guarantee")  substantially in the form  of
         Exhibit E to this Agreement."

13.      Exhibit C to the Agreement is hereby amended  in its  entirety  by  the
         form of MUF Agreement attached hereto as Exhibit C.

14.      Exhibit D to the Agreement is hereby amended  in  its entirety  by  the
         form of Additional Stop-Loss Agreement attached hereto as Exhibit D.

15.      Exhibit E attached hereto shall be added as Exhibit E to the Agreement.

16.      Section  12.1(a) of the Agreement is hereby amended by inserting in the
         first and second sentence of the second paragraph after the phrase "the

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         MUF Agreement and the  Additional  Stop-Loss  Agreement" the words "and
         the Guarantee" and by adding the following  subsection after subsection
         (ii) and before the first proviso:

         "or (iii) any termination by Seller of the employment of Joanne  Poles,
         Erika Kill, Rosemarie Weisshapp, Felicia Pittman, Marco  Abdelsayed  or
         Michael Rant or transfer by Seller of  the employment  of  Adam  Kenney
         (the "Employee Terminations and Transfer")"

17.      Section 13.1(d) of the Agreement  is  hereby  amended  so  that Section
         13(d) reads in its entirety as follows:

         "(d) By either  the  Purchaser  or the  Seller if the Closing shall not
         have occurred by September 30, 2000; provided,  however, that the right
         to  terminate  this Agreement under this  Section  13.1  shall  not  be
         available to the party whose failure  to fulfill any  obligation  under
         this Agreement has been the cause or shall result in the failure of the
         Closing to occur prior to such date."

18.      Exhibit  A  to  the  Agreement  is  hereby  amended  by  replacing  all
         references  to  "the  MUF  Agreement  and  the   Additional   Stop-Loss
         Agreement"  with a reference to "and the  Guarantee"  and by adding the
         following paragraphs to the end of such Exhibit:

         "5. Prupac is an insurance company domiciled, validly existing  and  in
         good standing  under the laws of the  State  of  Indiana  and  has  all
         requisite corporate power and authority to execute  and deliver the MUF
         Agreement and  the  Additional  Stop-Loss  Agreement,  to  perform  its
         obligations thereunder and to  consummate the transactions contemplated
         thereby.

         6. The  execution  and delivery by Prupac of the MUF Agreement  and the
         Additional  Stop-Loss  Agreement,  the  performance by  Prupac  of  its
         obligations   thereunder  and   the  consummation   by  Prupac  of  the
         transactions contemplated thereby have been duly and validly authorized
         by all necessary  corporate  action  on  the  part of  Prupac.  The MUF
         Agreement  and the Additional  Stop-Loss  Agreement have each been duly
         and validly executed and  delivered  by a duly  authorized  officer  of
         Prupac and constitute a legal, valid and binding  obligation of Prupac,
         enforceable against Prupac in accordance with  its  terms  (subject  to
         applicable bankruptcy, insolvency, fraudulent transfer,  reoganization,
         moratorium or other laws affecting  creditors'  rights  generally  from
         time to time in effect).  The enforceability  of  Prupac's  obligations
         is also subject to general  principles of equity (regardless of whether
         such enforceability is considered in a proceeding in equity or at law).

         7.  All necessary filings or  registrations with  any  governmental  or
         regulatory authority required for the  consummation  by  Prupac  of the

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         transactions contemplated by the MUF Agreement and the Additional Stop-
         Loss Agreement have been duly made, and  all  permits,  authorizations,
         consents  or  approvals  of  any  governmental or  regulatory authority
         required in connection with such transactions have been duly obtained."

19.      The Purchaser hereby consents to the termination by the Seller  of  the
         employment of Joanne Poles, Erika Kill,  Rosemarie  Weisshapp,  Felicia
         Pittman  and  Marco  Abdelsayed and waives any breach of the Agreement,
         including Section 5.1 and  Section  5.3(i),  that may have occurred  in
         connection therewith.  The Purchaser hereby consents to the termination
         by the  Seller  of the employment of Michael Rant and waives any breach
         of the Agreement, including Section  5.1 and Section  5.3(i), that  may
         occur in connection therewith; provided, that  such  termination occurs
         no earlier than five Business Days prior to  the Closing. The Purchaser
         hereby  consents to the  transfer of the employment of Adam Kenney from
         the  Seller  to Gibraltar and  waives  any  breach  of  the  Agreement,
         including  Section 5.1 and Section 5.3(i), that may occur in connection
         therewith;  provided,  that  such  transfer  occurs  not  earlier  than
         immediately prior to the Closing on the Closing Date.

20.      Capitalized terms used  herein  but  not otherwise defined herein shall
         have the meanings given to such terms in the Agreement.

21.      The  provisions  of  the  Agreement, as amended hereby, shall remain in
         full force and effect in accordance with its terms.

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

23.      This  Amendment  may be  executed in two or more  counterparts,  all of
         which shall be considered one and the same agreement,  and shall become
         effective when two or more counterparts have been signed by each of the
         parties and delivered to the other parties,  it being  understood  that
         the parties need not sign the same counterpart.

                                      * * *
<PAGE>
         IN WITNESS WHEREOF,  the  parties  hereto  have  caused  this Amendment
Number 1 to  Stock  Purchase  Agreement  to be executed as of this  8th  day  of
August, 2000.

                            THE PRUDENTIAL INSURANCE
                             COMPANY OF AMERICA

                            By: /S/ DOUGLAS A.  GREGORY
                                    --------------------
                            Name: Douglas A. Gregory
                            Its:  Vice President

                            EVEREST REINSURANCE HOLDINGS, INC.

                            By: /S/ STEPHEN L.  LIMAURO
                                    -------------------
                            Name: Stephen L. Limauro
                            Its:  Senior Vice President and Chief
                                  Financial Officer

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                                                                       EXHIBIT C

                        QUOTA SHARE REINSURANCE AGREEMENT

                  (hereinafter referred to as the "Agreement")

                                     between

               GIBRALTAR CASUALTY COMPANY, a Delaware Corporation

                   (hereinafter referred to as the "Company")

                                       and

   PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, an Indiana Corporation
                  (hereinafter referred to as the "Reinsurer")

       (Both the Company and the Reinsurer collectively are referred to as
                   the "Parties" and individually as "Party")

WHEREAS, The  Prudential  Insurance Company of  America  ("Prudential")  is  the
ultimate parent of the Reinsurer;

WHEREAS  Prudential  and  Everest   Reinsurance   Holdings,   Inc.,  a  Delaware
corporation  ("Holdings"),  have executed a Stock Purchase Agreement dated as of
February  24,  2000 ("Sale  Agreement")  wherein  Holdings  will  purchase  from
Prudential  all issued and  outstanding  shares of the  Company,  a wholly owned
subsidiary of  Prudential,  effective as of the "Closing  Date" set forth in the
Sale Agreement.

WHEREAS,  Holdings is the parent of Everest Reinsurance Company,  formerly known
as Prudential Reinsurance Company ("Everest Re").

WHEREAS, the Company has, and in the future may have, Uncollectible  Reinsurance
Recoverables, as defined herein, with regard to business reinsured by or through
the Management Underwriting Facility ("MUF"), as defined in the Sale Agreement.

WHEREAS,   the  Company  desires  to  procure   reinsurance   coverage  for  its
Uncollectible Reinsurance Recoverables.

NOW,   THEREFORE,   in  consideration  of  mutual  covenants,   representations,
warranties,  and  agreements  contained  herein and in the Sale  Agreement,  the
Parties agree as follows:

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ARTICLE I - CLASSES OF BUSINESS COVERED

A.       By this  Agreement  and subject to the terms and  conditions  set forth
         below,  the Reinsurer agrees to indemnify the Company for the Company's
         Uncollectible Reinsurance Recoverables,  as defined herein, with regard
         to  business  reinsured  by or through  MUF  respecting  Direct  Excess
         Business and Gibraltar-Sourced Business, as defined herein.

B.       "Uncollectible  Reinsurance  Recoverables", with respect to Reinsurance
         Coverage, is defined as including (i) Uncollected Reinsurance  and (ii)
         Settlement Concessions.

C.       "Reinsurance  Coverage"  is  defined  as any  amount of paid and unpaid
         losses  and  loss  adjustment  expenses  ceded  by  Everest  Re to  MUF
         reinsurers with respect to Direct Excess Business or  Gibraltar-Sourced
         Business,  whether  such amounts were ceded prior to or during the term
         of this Agreement.

D.       "Uncollected  Reinsurance" is defined as Reinsurance  Coverage for paid
         loss and loss adjustment  cessions  relating to Direct Excess Business,
         with  respect to each  company on Schedule A hereto,  that is unpaid by
         the  reinsurer  after  one-hundred-and-eighty  (180) days from the date
         that such paid loss and loss adjustment cessions were due to be paid by
         the reinsurer.

E.       "Settlement Concessions" is defined as the difference,  with respect to
         each company on Schedule A hereto, between the Reinsurance Coverage for
         Direct Excess Business or  Gibraltar-Sourced  Business reinsured by MUF
         and ceded to such company and the amount received from such company.

F.       "Direct Excess Business" is defined as policies, contracts, and binders
         of insurance or reinsurance  ("Policies")  that were  issued by Everest
         Re prior to January 1, 1986.

G.       "Gibraltar-Sourced Business" is defined as Policies that were issued by
         the Company prior to January 1, 1986.

H.       Although  Everest Re rather  than the  Company  has the  direct  ceding
         relationship  with MUF,  solely for purposes of this Agreement and only
         up to the amounts  scheduled in Schedule A hereto,  the Parties  hereby
         deem  any  Uncollectible  Reinsurance  Recoverables  to  belong  to the
         Company and not to Everest Re.

ARTICLE II - COMMENCEMENT AND TERMINATION

A.       This  Agreement  shall  become  effective  on the  Closing  Date.  This
         Agreement will terminate,  with respect to the Reinsurer's  Per-Company
         Sub-Limit of Liability under Article V, on the earlier of (i) two years
         following  the  Reinsurer's  payment of the sub-limit or (ii) the tenth
         anniversary  of Closing Date.  This  Agreement  shall  terminate,  with
         respect to the  Reinsurer's  Aggregate Limit of Liability under Article
         V, on the earlier of (i) two years following the Reinsurer's payment of
         the limit or (ii) the tenth anniversary of the Closing Date.

<PAGE>
B.       Neither Party may terminate this Agreement.

ARTICLE III - TERRITORY

The  territorial  scope  of this  Agreement  shall be  identical  to that of the
Policies.

ARTICLE IV - CONSIDERATION

The consideration for this reinsurance coverage is deemed paid as of the Closing
Date and, with respect to the Reinsurer,  includes,  among other things, certain
operational and other assistance (i) previously provided to the Reinsurer, which
is deemed paid as of the Closing Date,  and (ii) to be provided to the Reinsurer
in connection with this Agreement,  including pursuant to the Keepwell Agreement
between  Prudential  and  the  Reinsurer  of  even  date  herewith.  No  further
consideration shall be due to the Reinsurer.

ARTICLE V - SCHEDULE OF UNCOLLECTIBLE REINSURANCE  RECOVERABLES  AND REINSURER'S
LIMIT OF LIABILITY

Pursuant to the Sale  Agreement,  on or before the first  Business Day following
the date on which all of the  conditions  set forth in Articles IX, X, and XI of
the Sale Agreement have been satisfied or waived, Holdings will cause Everest Re
to provide to the Reinsurer a schedule setting forth all expected  Uncollectible
Reinsurance  Recoverables  ("Schedule A"), which shall be incorporated herein by
reference.  Schedule A shall  identify,  by  reinsurer  name,  (1) the  expected
amounts of Uncollected  Reinsurance  attributable to each reinsurer with respect
to Direct Excess Business and (2) the expected amounts of Settlement Concessions
with respect to Direct Excess Business and  Gibraltar-Sourced  Business.  If the
Company  identifies  a  given  reinsurer  on  Schedule  A with  respect  to both
Uncollected  Reinsurance  and  for  Settlement  Concessions,   then  the  amount
scheduled for  Uncollected  Reinsurance  shall represent only paid loss and loss
adjustment  expense amounts and the amount scheduled for Settlement  Concessions
shall include only unpaid loss and loss adjustment expense amounts.

The Reinsurer shall pay to the Company one hundred percent (100.0%) of up to the
scheduled amount of the Company's  Uncollectible  Reinsurance  Recoverables with
respect  to each  company  listed  on  Schedule  A ("Per  Company  Sub-Limit  of
Liability"),  provided that the Reinsurer's total liability under this Agreement
shall in no event be greater than $8,500,000 ("Aggregate Limit of Liability").

<PAGE>
ARTICLE VI - PAYMENT OF ADVANCES BY REINSURER AND REFUNDS BY COMPANY

Subject  to the  limits  set forth in  Article  V,  pursuant  to  Article IX the
Reinsurer  shall make payments  ("Advances") to the Company in the amount of the
Uncollected  Reinsurance  and  Settlement  Concessions  shown  on the  Company's
statements.

If after  receiving an Advance from the Reinsurer with respect to an Uncollected
Reinsurance amount, the Company actually collects all or a portion of the amount
due from the  reinsurer  identified on Schedule A, then the Company shall pay to
the  Reinsurer  a sum equal to the  amount so  collected  ("Refund"),  up to the
amount of the  corresponding  Advance paid by the  Reinsurer.  Refunds shall not
bear  interest  except as set forth in Article IX (G), and in no event shall the
Reinsurer be entitled to a Refund in an amount  greater  than the  corresponding
Advance.  In the event that a Refund is made to the  Reinsurer,  the Per Company
Sub-Limit  of  Liability  and the  Aggregate  Limit of  Liability  shall each be
replenished  by the amount of such Refund.  No Refunds shall be due for Advances
paid by the Reinsurer with respect to Settlement Concessions.

ARTICLE VII - OTHER REINSURANCE

On or after the Closing  Date,  the Company  shall be  permitted to obtain other
reinsurance,  recoveries  under which  shall inure  solely to the benefit of the
Company,  and all  recoveries  under such other  reinsurance  shall be  entirely
disregarded in applying all of the provisions of this Agreement.

ARTICLE VIII - ORIGINAL CONDITIONS

A.       The  Reinsurer  shall  follow the fortunes of the Company with  respect
         to  settlements  of  any  Reinsurance  Coverage  and  with  respect  to
         Uncollectible Reinsurance Recoverables.

B.       The reinsurance coverage provided under this Agreement shall be subject
         to all interpretations,  modifications, waivers, and alterations of the
         Policies and Reinsurance Coverage.

C.       Nothing herein shall in any manner create any obligations  or establish
         any rights against the Reinsurer in favor of any  third  party  or  any
         person not a Party to this Agreement.

ARTICLE IX - REPORTS AND REMITTANCES

A.       The first  statement of account shall be due to the Reinsurer  from the
         Company on the  anniversary  of the Closing Date.  The first  statement
         only  shall  include  a  charge  for  interest  on  any   Uncollectible
         Reinsurance  Recoverables  due from the  Reinsurer as of the  statement
         date.  Such  interest  charge  shall be  equal to the rate of  interest
         announced  by  Citibank,  N.A.  as its  prime  or  base  rate as of the
         statement  date,  calculated  on the basis of the actual number of days
         elapsed since the Uncollectible Reinsurance Recoverables accrued or the
         Closing      Date,      whichever      is     less,      divided     by
         three-hundred-and-sixty-five  (365) days. Such interest charge shall be
         included  in the Per  Company  Sub-Limit  of  Liability  set  forth  on
         Schedule A.

<PAGE>
B.       Thereafter,  the  Company  shall submit quarterly statements of account
         ("quarterly reports") within forty-five (45) days after the end of each
         calendar quarter.

C.       Such  quarterly  reports shall  be sent by both facsimile  transmission
         and United States Postal Service or any other delivery  service used by
         the Company.

D.       Such quarterly reports shall include information showing, as applicable
         with  respect  to  each  company  listed  on  Schedule  A,  Uncollected
         Reinsurance,  Settlement Concessions,  Advances received, Advances due,
         Refunds due, and unpaid amounts outstanding.

E.       Remittances shall be on a "Net Basis," defined as amounts owed  between
         the Parties under this Agreement.

F.       Remittances,  whether due to the Company  from the  Reinsurer or to the
         Reinsurer from the Company,  shall be due within  forty-five  (45) days
         from  the  date  of  receipt  of the  facsimile  transmission  of  each
         quarterly report.

G.       Failure by the  Reinsurer  or the Company to pay amounts  owed when due
         under this Agreement shall result in imposition of an interest  penalty
         equal to the rate of interest announced by Citibank,  N.A. as its prime
         or base rate as of the due date of any  remittance,  calculated  on the
         basis of the  actual  number of days  elapsed  past the due date of any
         remittance  divided  by  three-hundred-and-sixty-five  (365)  days  and
         payment of other losses, costs, and expenses accrued or incurred by the
         Company or Reinsurer as a result of the other Party's late payment.

ARTICLE X - OFFSET

The  Company  and the  Reinsurer  shall have the right to offset any  balance or
amounts due from one party to the other under this Agreement.

ARTICLE XI - ACCESS TO RECORDS

     A.  The  Company  shall  place  at the  disposal  of the  Reinsurer  at all
         reasonable times, and the Reinsurer will have the right to inspect, all
         books,  records,  and  papers of the  Company  in  connection  with any
         reinsurance coverage hereunder or any claims in connection herewith.

     B.  All  records  reviewed  by the  Reinsurer  are deemed  proprietary  and
         confidential property of the Company.  Further,  unless pursuant to the
         express,  written  permission of the Company,  the Reinsurer  shall not
         disclose the contents of such information to any other person, persons,
         entity,  or entities;  provided,  that the  Reinsurer may disclose such
         information  or portions  thereof in  connection  with any  arbitration
         hereunder  or any legal or  regulatory  process,  or to its  directors,
         officers and employees and the directors, officers and employees of its
         affiliates and to its agents, representatives,  attorneys, accountants,
         auditors, reinsurers (collectively, "the Reinsurer's Representatives"),

<PAGE>
         in each  case,  who have a  legitimate  need to know  such  information
         (which would include, but not be limited to the right to dispute and/or
         assess in  furtherance  of a dispute) and who are informed of and agree
         to be  bound  by the  confidentiality  terms  of  this  Agreement.  The
         Reinsurer shall indemnify and hold harmless the Company for all damages
         resulting  from any  unauthorized  disclosure  by the  Reinsurer or the
         Reinsurer's  Representatives  of  records  obtained  pursuant  to  this
         Article.  Nothing  contained  in this  Agreement  shall be construed to
         prevent the Company from applying to a court of competent  jurisdiction
         for equitable relief including injunction and specific performance as a
         remedy  if the  Reinsurer  or any  of the  Reinsurer's  Representatives
         breach or threaten  to breach any of the  provisions  of this  Article.
         Without prejudice to the rights and remedies otherwise available at law
         or equity to the Company,  it is understood and agreed that the Company
         would be  irreparably  injured by a breach of this Article,  that money
         damages  would not be a sufficient  remedy for any actual or threatened
         breach  of this  Article  by the  Reinsurer  or any of the  Reinsurer's
         Representatives  and that the Company  shall  (without  proof of actual
         damages) be entitled to equitable  relief.  In the event of  litigation
         relating  to  this  Article,  if  a  court  of  competent  jurisdiction
         determines that the Reinsurer or any of the Reinsurer's Representatives
         have breached this Article,  then the Reinsurer shall be liable and pay
         to the Company  the  reasonable  legal fees  incurred by the Company in
         connection with the subject litigation, including any appeal therefrom.

ARTICLE XII - ERRORS AND OMISSIONS

Inadvertent delays, errors or omissions in connection with this Agreement or any
transaction  hereunder  shall not relieve  either Party of any  liability  which
would have  attached had such delay,  error or omission not  occurred,  provided
always  that such error or  omission  is  rectified  as soon as  possible  after
discovery.

ARTICLE XIII - SECURITY

A.       If the  Company is or becomes  unable to take  credit in any  financial
         statement  filed  with  its  domiciliary  insurance  regulator  or with
         insurance  regulators  in New Jersey,  California or any other state in
         which it  currently  is  approved  as a surplus  lines  insurer (or any
         successors to said  regulators) for the reinsurance  coverage  provided
         hereunder,  or if Prudential's  Financial  Strength Rating published by
         A.M. Best becomes less than "A-," the  Reinsurer  agrees to fund within
         thirty (30) days from  receipt of notice from the Company  that funding
         is required its share of Uncollectible Reinsurance Recoverables (and to
         replenish such funding from time to time as necessary) by:

         1.   Clean, irrevocable and  nconditional  letters of credit issued and
              confirmed, if confirmation is required by the insurance regulatory
              authorities  involved,  by  a  qualified  United  States financial
              institution acceptable to said insurance regulatory authorities;

<PAGE>
         2.   cash; and/or

         3.   a Trust in compliance with  the  requirements of and acceptable to
              said insurance regulatory authorities.

B.       With regard to funding in whole or in part by letters of credit,  it is
         agreed  that  each  letter of  credit  will be in a form that  would be
         acceptable to the Company's domiciliary insurance regulatory authority,
         will be  issued  for a term of at least  one year and will  include  an
         "evergreen  clause," that  automatically  extends the term for at least
         one additional  year at each  expiration  date unless written notice of
         non-renewal is given to the Company not less than 30 days prior to said
         expiration date. The Company and the Reinsurer  further agree that said
         letters of credit may be drawn upon by the Company or its successors in
         interest at any time,  without  diminution because of the insolvency of
         the Company or the Reinsurer, but only for one or more of the following
         purposes:

         1.   To reimburse itself  for the  Reinsurer's share  of  Uncollectible
              Reinsurance  Recoverables,  unless  paid in cash by the Reinsurer;

         2.   To reimburse itself for the Reinsurer's share of any other amounts
              claimed to be due hereunder, unless paid in cash by the Reinsurer;

         3.   To  fund  a  cash  account in an amount  equal to the  Reinsurer's
              share of Uncollectible Reinsurance Recoverables  funded  by  means
              of a letter of credit that is under non-renewal  notice,  if  said
              letter of credit has not been renewed or replaced by the Reinsurer
              10 days prior to its expiration date;

         4.   To  refund  to  the  Reinsurer  any  sum  in excess of the  actual
              amount  required  to  fund  the Reinsurer's share of Uncollectible
              Reinsurance  Recoverables  and  other  amounts  claimed  to be due
              hereunder, if so requested by the Reinsurer.

C.       In the event the amount drawn by the Company on any letter of credit is
         in excess of the actual  amount  required for B (1), B (3) or B (4), or
         in the case of B (2),  the  actual  amount  determined  to be due,  the
         Company  shall  promptly  return to the  Reinsurer the excess amount so
         drawn.

D.       In the event of funding through a  Trust:

         1.   The  Reinsurer  shall  establish a Trust Account for  the  benefit
              of the Company to fund the amounts receivable under the  Agreement
              in  a  qualified United States  financial  institution  reasonably
              acceptable  to  the  Company  and  to  said  insurance  regulatory
              authorities.

<PAGE>
         2.   The  assets  deposited  into  the  Trust  Account shall  be valued
              according  to  their current  fair market value  and shall consist
              only  of  cash  (United  States  legal  tender),  certificates  of
              deposit  (issued  by  a  United  States bank and payable in United
              States  legal  tender) and  investments of  the  type permitted by
              and  acceptable  to said insurance  regulatory authorities  or any
              combination of  the  above,  provided  that  such  investments are
              issued  by  an institution that  is not the parent,  subsidiary or
              affiliate of either the Reinsurer or the Company;

         3.   The  Reinsurer,  prior  to  depositing  assets  with  the trustee,
              shall  execute  assignments,  endorsements in  blank, or  transfer
              legal title  to  the  trustee of a ll shares,  obligations  or any
              other  assets  requiring  assignments, in  order that the Company,
              or  the  trustee  upon  the  Company's  direction,   may  whenever
              necessary negotiate any such assets without consent  or  signature
              from the Reinsurer or any other entity;

         4.   All  settlements  of account between the Reinsurer and the Company
              shall be in cash or its equivalent;

         5.   The  assets  in  the  trust   account  may  be  withdrawn  by  the
              Company  at  any  time,  notwithstanding  any  other provisions in
              this  Agreement,  and  shall  be  utilized  by  the Company or any
              successor  by  operation  of  law,  including  without  limitation
              any  liquidator,  rehabilitator,  receiver or  conservator of  the
              Company,  for  the  purposes  set  forth in paragraphs  B(1) -B(4)
              above.

ARTICLE XIV - INSOLVENCY

In the  event  of  the  insolvency  of the  Company,  the  reinsurance  coverage
hereunder  shall  be  payable  directly  to the  Company  or to its  liquidator,
receiver, conservator or statutory successor on the basis of the amount of claim
allowed  in the  insolvency  proceeding  without  diminution  by  reason  of the
inability  of the  Company  to pay all or any part of the  claim.  It is agreed,
however,  that the liquidator,  receiver,  conservator or statutory successor of
the Company  shall give  written  notice to the  Reinsurer  of the pendency of a
claim against the Company, indicating the Policy or bond covered hereunder which
claim would involve a possible liability on the part of the Reinsurer,  within a
reasonable  time after such claim is filed in the  conservation  or  liquidation
proceeding or in the  receivership,  and that during the pendency of such claim,
the Reinsurer may investigate such claim and interpose,  at its own expense,  in
the proceeding  where such claim is to be  adjudicated,  any defense or defenses
that  it  may  deem  available  to the  Company  or  its  liquidator,  receiver,
conservator or statutory  successor.  The expense thus incurred by the Reinsurer
shall be chargeable,  subject to the approval of the Court,  against the Company
as part of the expense of  conservation  or  liquidation  to the extent of a pro
rata share of the benefit which may accrue to the Company  solely as a result of
the defense undertaken by the Reinsurer.

<PAGE>
ARTICLE XV - ARBITRATION

A.       Except  with  respect to  disputes  arising  solely out of or solely in
         connection  with Article XI above  (Access to Records),  as a condition
         precedent to any right of action hereunder, in the event of any dispute
         or  difference  of  opinion  hereafter  arising  with  respect  to this
         Agreement,  including its formation and validity, it is hereby mutually
         agreed that such dispute or difference of opinion shall be submitted to
         arbitration.

B.       Except as provided  in  subsections  A. and D. of this  Article or with
         respect to judicial proceedings instituted in aid of arbitration,  this
         Article shall constitute a waiver of the Parties' rights to commence an
         action in any court of competent  jurisdiction in the United States, to
         remove  an  action  to a United  States  District  Court,  or to seek a
         transfer of a case to another court as might  otherwise be permitted by
         the laws of the United States or of any State or other  jurisdiction in
         the United States.

C.       One Arbiter shall be chosen by the Company, the other by the Reinsurer,
         and an Umpire  shall be chosen by the two  Arbiters  before  they enter
         upon arbitration,  all of whom shall be active or retired disinterested
         executive officers of United States domiciled  insurance or reinsurance
         companies.  In the event that  either  Party  should  fail to choose an
         Arbiter within 30 days  following a written  request by the other Party
         to do so, the  requesting  Party may choose two  Arbiters  who shall in
         turn choose an Umpire  before  entering  upon  arbitration.  If the two
         Arbiters  fail to agree upon the  selection of an Umpire within 30 days
         following  their   appointment,   each  Arbiter  shall  nominate  three
         candidates  within  10 days  thereafter,  two of whom the  other  shall
         decline, and the decision shall be made by drawing lots.

D.       The Arbiters and the Umpire ("the  Arbitration  Panel") shall  consider
         this Agreement as an honorable engagement rather than merely as a legal
         obligation,  and they are relieved of all judicial  formalities and may
         abstain from  following the strict rules of law. The majority  decision
         of the  Arbitration  Panel shall be final and binding on both  Parties.
         Judgment  upon the  final  decision  of the  Arbitration  Panel  may be
         entered in any court of competent jurisdiction.

E.       Except as provided in sub-section G. of this Article,  each Party shall
         bear the expense of its own Arbiter, and shall jointly and equally bear
         with the other the expense of the Umpire and of the arbitration. In the
         event that the two Arbiters are chosen by one Party, as above provided,
         the expense of the Arbiters,  the Umpire and the  arbitration  shall be
         equally divided between the two Parties.

F.       Any  arbitration  pursuant to this  Article  shall be  conducted in New
         York,  New York  unless  otherwise  agreed  by the  parties;  provided,
         however,  that the Arbitration Panel may choose to take evidence and/or
         convene a hearing in a place other than New York for the convenience of
         the parties, the witnesses or the Arbitration Panel.

<PAGE>
G.       The Arbitration Panel shall  have the  power to  award costs, expenses,
         and interest to the prevailing Party in an arbitration.

ARTICLE XVI - SERVICE OF SUIT

A.       It is agreed that in the event of the failure of the  Reinsurer  to pay
         any amount  claimed to be due  hereunder  or to  otherwise  perform its
         obligations  hereunder,  the  Reinsurer  will,  at the  request  of the
         Company,   submit  to  the  jurisdiction  of  any  court  of  competent
         jurisdiction  within the State of New Jersey or such other jurisdiction
         within the United States as the Company can select as a forum, and will
         comply with all requirements  necessary to give such court jurisdiction
         and all matters  arising  hereunder  shall be  determined in accordance
         with the law and practice of such court.

B.       Service of process in such suit may be made on the Reinsurer by serving
         the  Commissioner  of Insurance  of the State of New Jersey,  who shall
         forward such process to the Reinsurer in accordance with Article XXI or
         at such  other  address  as the  Reinsurer  shall  advise.  In any suit
         instituted,  the  Reinsurer  will abide by the final  decision  of such
         court.

C.       Further,  pursuant to any statute of any state,  territory, or district
         of the United States of America which makes provisions  therefore,  the
         Reinsurer herein hereby designates the superintendent,  commissioner or
         director of insurance or other  officer  specified  for that purpose in
         the statute,  or his successor or successors in office, as its true and
         lawful  attorney  upon whom may be served  any  lawful  process  in any
         action, suit or proceeding instituted by or on behalf of the Company or
         any beneficiary  hereunder arising out of this Agreement of reinsurance
         and hereby designates the above-named person to whom the said office is
         authorized to mail such process or a true copy thereof.

D.       This Article is not meant to  supersede  Article XV of  this  Agreement
         or override the  obligation  of the parties to arbitrate their disputes
         in accordance with Article XV.

ARTICLE XVII - ENTIRE AGREEMENT

This  Agreement,  the Sale Agreement and the Guaranty,  and any exhibits to such
agreements,  collectively  constitute the entire  agreement  between the Parties
regarding  the subject  matter hereof and  supercede  all prior  agreements  and
understandings,  both  written and oral and do not confer any rights or remedies
to any other party or any other person.

ARTICLE XVIII - AMENDMENTS AND ALTERATIONS

This Agreement shall not be changed,  supplemented,  modified, or amended except
by an endorsement/addendum signed by the Parties and attached hereto.

<PAGE>
ARTICLE XIX - NO WAIVER

No  forbearance  to enforce any provision or right  hereunder  shall be deemed a
waiver thereof, and no waiver of any breach of any term or covenant herein shall
be construed  as a waiver of any other breach of the same,  or any other term or
covenant herein.

ARTICLE XX - CONSTRUCTION

This Agreement is the result of arms-length negotiations between the Parties and
has been  prepared  jointly by the  Parties.  In applying and  interpreting  the
provisions  of this  Agreement,  there shall be no  presumption  that either the
Company or the Reinsurer  prepared this Agreement,  or that this Agreement shall
be construed in favor of or against either the Company or the Reinsurer.

ARTICLE XXI - NOTICES

Any notice or other  communication  required or permitted  hereunder shall be in
writing  and  shall  be  delivered  personally,  telegraphed,  telexed,  sent by
facsimile  transmission,  or sent by  certified,  registered  or  express  mail,
postage prepaid, to:

         If to the Reinsurer, to:

         Richard Green,
         Vice President

         Prudential Property and Casualty Insurance Company
         23 Main St., 4th Floor

         Holmdel, NJ  07032
         Phone:  732-946-5082
         Fax:  732-946-5029

         with a copy to:

         Doreen Faga
         President, Gibraltar Operations
         The Prudential Insurance Company of America
         Eisenhower Corporate Center, Building 3
         290 West Mt. Pleasant Avenue
         Livingston, NJ  07039
         Phone: 973-548-5980
         Fax:     973-548-5950

<PAGE>
         If to the Company, to:

         Janet J. Burak

         Senior Vice President and General Counsel
         Everest Reinsurance Holdings
         477 Martinsville Road

         P.O. Box 830
         Liberty Corner, NJ  07938
         Phone: 908-604-3170
         Fax:     908-604-3450

or in each case to such  other  address as a party may  designate  for itself by
like notice to the other party.

ARTICLE XXII - GOVERNING LAW

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

<PAGE>
IN WITNESS  WHEREOF,  the Company,  by its duly authorized  representative,  has
executed this Agreement as of the date undermentioned at:

__________, ____________, this ____________ day of _______________________ 2000.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Reinsurer,  by its duly authorized  representative,  has
executed this Agreement as of the date undermentioned at:

__________, ____________, this ____________ day of _______________________ 2000.

<PAGE>
                                                                       EXHIBIT D

                PROPORTIONAL EXCESS OF LOSS REINSURANCE AGREEMENT

                  (hereinafter referred to as the "Agreement")

                                     between

               GIBRALTAR CASUALTY COMPANY, a Delaware Corporation

                   (hereinafter referred to as the "Company")

                                       and

   PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, an Indiana Corporation
                  (hereinafter referred to as the "Reinsurer")

          (Both the Company and the Reinsurer collectively are referred
                to as the "Parties" and individually as "Party")

WHEREAS,  The  Prudential  Insurance  Company  of  America ("Prudential") is the
ultimate parent of the Reinsurer;

WHEREAS  Prudential  and  Everest   Reinsurance   Holdings,   Inc.,  a  Delaware
corporation  ("Holdings"),  have executed a Stock Purchase Agreement dated as of
February  24,  2000 ("Sale  Agreement")  wherein  Holdings  will  purchase  from
Prudential  all issued and  outstanding  shares of the  Company,  a wholly owned
subsidiary of  Prudential,  effective as of the "Closing  Date" set forth in the
Sale Agreement.

WHEREAS,  as of the  "Closing  Date,"  as  this  term  is  defined  in the  Sale
Agreement,  the Company has outstanding  "Loss Reserves," as defined in the Sale
Agreement,  relating to all Policies, as defined herein, in the amount stated in
the "Closing Date Financial Statement," as defined in the Sale Agreement.

WHEREAS,  the Company  also has  potential  adverse  Loss  Reserves  development
("Adverse  Loss  Development"),  as  defined  herein,  and the  Company  desires
reinsurance coverage for such Adverse Loss Development.

NOW,   THEREFORE,   in  consideration  of  mutual  covenants,   representations,
warranties,  and  agreements  contained  herein and in the Sale  Agreement,  the
Parties agree as follows:

<PAGE>
ARTICLE I - CLASSES OF BUSINESS COVERED

A.            By this  Agreement  and  subject to the terms and  conditions  set
              forth below, the Reinsurer agrees to indemnify the Company for the
              Adverse Loss  Development that may accrue to the Company under all
              policies,  contracts,  and  binders of  insurance  or  reinsurance
              (hereinafter "Policies") issued or renewed by the Company prior to
              the Closing Date.

B.            Adverse Loss Development is defined as the Company's  Ultimate Net
              Loss that is in excess of the Loss Reserves carried by the Company
              at the Closing Date. Subject to the Reinsurer's Limit of Liability
              set forth in Article V hereof,  the Reinsurer  shall reimburse the
              Company  for  the  Adverse  Loss Development  paid by the Company,
              provided that the Company has paid an  amount  equal  to  the Loss
              Reserves carried by  the  Company  at the Closing Date.  Provided,
              however, that this Agreement  shall  not  apply  to the first four
              million dollars  ($4,000,000)  of any  Settlement  Concessions  on
              Gibraltar-Sourced  Business,  as those  terms  are defined  in the
              Quota Share Reinsurance  Agreement  between  the  Parties  ("Quota
              Share Reinsurance Agreement"), in excess of Settlement Concessions
              listed on Schedule A to the Quota Share Reinsurance Agreement.

C.            "Ultimate Net Loss" is defined as the Company's  determination  of
              the sum or sums (including Loss  Adjustment  Expenses,  as defined
              herein)  incurred  by the Company in  settlement  of claims and in
              satisfaction of judgments rendered on account of such claims under
              all Policies,  after  deduction of all  reinsurance  and insurance
              recoveries and  subrogation and salvage  recoveries  collected and
              received by the Company and losses paid prior to the Closing Date.
              Nothing  herein  shall be construed to mean that losses under this
              Agreement are not  recoverable  until the  Company's  Ultimate Net
              Loss has been  ascertained.  Ultimate  Net Loss shall not  include
              Loss in Excess of Policy Limits or Extra  Contractual  Obligations
              (as defined herein) incurred by the Company.

ARTICLE II - COMMENCEMENT AND TERMINATION

A.            This  Agreement  shall  become  effective on the Closing Date  and
              shall continue in force  thereafter  until two (2) years after the
              earlier of  when  (i)  the  Company  settles  all claims under all
              Policies, or (ii) the  Reinsurer  exhausts its Limits of Liability
              as set forth in Article V.

B.            Neither Party may terminate this Agreement.

ARTICLE III - TERRITORY

The  territorial  scope  of this  Agreement  shall be  identical  to that of the
Policies reinsured hereunder.

<PAGE>
ARTICLE IV - CONSIDERATION

The consideration for the reinsurance  coverage is deemed paid as of the Closing
Date and, with respect to the Reinsurer,  includes,  among other things, certain
operational and other assistance (i) previously provided to the Reinsurer, which
is deemed paid as of the Closing Date,  and (ii) to be provided to the Reinsurer
in connection with this Agreement,  including pursuant to the Keepwell Agreement
between  Prudential  and  the  Reinsurer  of  even  date  herewith.  No  further
consideration shall be due to the Reinsurer.

ARTICLE V - REINSURER'S LIMIT OF LIABILITY AND COMPANY'S RETENTION

The Reinsurer  shall pay to the Company an 80% quota share interest of the first
two hundred million dollars  ($200,000,000)  of Adverse Loss Development paid by
the Company, with the Reinsurer's maximum liability under this Agreement limited
to one  hundred  and sixty  million  dollars  ($160,000,000).  The  Company  may
reinsure its 20% quota share  retention in the first two hundred million dollars
($200,000,000)  of Adverse Loss  Development  only with an affiliate  within its
insurance  holding  company  system,  with  `affiliate'  and `insurance  holding
company system' having the meanings set forth under Section 5001 of the Delaware
Insurance  Code.  Such  reinsurance by the Company of any share of its 20% quota
share retention with an affiliate is permissible only if the assuming  affiliate
fully retains and does not further cede or retrocede any share of its assumption
of the 20% quota share  retention,  except to another  affiliate of the Company;
and any  affiliate of the Company  which assumes some share of the Company's 20%
quota  share  retention  under  this  provision  shall  be  subject  to the same
prohibition on ceding or retroceding  any share of the Company's 20% quota share
retention to any person or entity that is not an affiliate of the Company.

ARTICLE VI - LOSS IN EXCESS OF POLICY LIMITS/EXTRA CONTRACTUAL OBLIGATIONS

Ultimate Net Loss shall not include any amounts that the Company pays or is held
liable to pay in excess of its Policy limit,  but otherwise  within the terms of
its Policy  ("Loss in Excess of Policy  Limits"),  or any  punitive,  exemplary,
compensatory or consequential damages ("Extra Contractual Obligations"), because
of  alleged  or  actual  bad  faith or  negligence  on its part in  rejecting  a
settlement within Policy limits, or in discharging its duty to defend or prepare
the  defense  in  the  trial  of  an  action  against  its  policyholder,  or in
discharging  its duty to prepare or prosecute an appeal  consequent upon such an
action, or in otherwise handling a claim under a Policy.

ARTICLE VII - OTHER REINSURANCE

Subject  always to the retention  provision set forth in Article V above,  on or
after  the  Closing  Date,  the  Company  shall be  permitted  to  obtain  other
reinsurance,  recoveries  under which  shall inure  solely to the benefit of the
Company  and all  recoveries  under such  other  reinsurance  shall be  entirely
disregarded  in applying  all of the  provisions  of this  Agreement;  provided,
however,  that the Quota Share Reinsurance  Agreement shall inure to the benefit
of this Agreement.

<PAGE>
ARTICLE VIII - LOSS ADJUSTMENT EXPENSES

Loss  Adjustment  Expenses  shall include both  allocated and  unallocated  loss
expenses and shall be included in the Ultimate Net Loss,  and are defined as all
expenses of the Company,  including  expenses for declaratory  judgment actions,
monitoring of underlying  litigation or claims, and coverage opinions,  incurred
by the Company in the settlement,  investigation,  defense, or adjustment of all
claims under all Policies.

ARTICLE IX - SUBROGATION AND SALVAGE

The  Reinsurer  shall be credited  with  subrogation  and salvage  collected and
received by the Company,  less the actual cost,  excluding salaries and expenses
of  officials  and  employees  of the  Company  respecting  their  time spent on
subrogation and salvage  recoveries and also excluding sums paid to any attorney
as a retainer  in  obtaining  such  reimbursement  or making such  recovery,  on
account of claims and settlements  involving the reinsurance coverage hereunder.
Enforcement of subrogation and salvage rights shall be determined  solely by the
Company.

ARTICLE X - ORIGINAL CONDITIONS

A.            The  Reinsurer  shall  follow  the  fortunes of the Company for it
              Ultimate  Net  Loss  for  all  loss  settlements  and shall pay as
              paid by the Company.

B.            The reinsurance coverage  provided  under  this Agreement shall be
              subject  to  all  interpretations,  modifications,  waivers,   and
              alterations  of  the  Policies;   provided,   however,   that  the
              agreements set forth on Exhibit A  hereto  that are in force as of
              the   Closing   Date  shall  remain,  or  shall  for  purposes  of
              determining  the   parties'  rights  and  obligations  under  this
              Agreement be deemed to have remained,  in force during the term of
              this  Agreement  and shall not be  modified  or  altered, or shall
              for  purposes  of  determining the parties' rights and obligations
              under  this  Agreement  be  deemed  not  to have been  modified or
              altered, during the  term  of  this  Agreement,  unless  otherwise
              mutually agreed by the Parties.

C.            Nothing  herein  shall in  any manner  create any  obligations  or
              establish any rights against the Reinsurer in favor of  any  third
              party or any person not a Party to this Agreement.

ARTICLE XI - REPORTS AND REMITTANCES

A.            The first statement of account shall be due to the Reinsurer  from
              the Company forty-five  (45) days  after  the  close of the  first
              fiscal quarter that includes the Closing Date.

B.            Thereafter,  the  Company  shall  submit  quarterly  statements of
              account  ("quarterly  reports")  within forty-five (45) days after
              the end of each calendar quarter.

<PAGE>
C.            Such   quarterly   reports   shall  be  sent  by   both  facsimile
              transmission  and  United  States  Postal  Service  or  any  other
              delivery service used by the Company.

D.            Such quarterly  reports  shall be in the form  attached  hereto as
              Exhibit B, or in any other  form  mutually  agreed by the Parties.

E.            Remittances  shall  be  on  a "Net Basis," defined as amounts owed
              between the Parties under this Agreement.

F.            Remittances shall be due to the Company from the Reinsurer  within
              forty-five (45) days from the date of  receipt  of  the  facsimile
              transmission of each quarterly report.

G.            Failure  of  a  Party  to  pay  amounts  owed  when due under this
              Agreement shall result in imposition  on that Party of an interest
              penalty equal  to  the  rate of interest  announced  by  Citibank,
              N.A. as  its prime or  base  rate  as  of  the  due  date  of  any
              remittance, calculated on the basis of the  actual number of  days
              elapsed past the due date of  any  remittance  divided  by  three-
              hundred-and-sixty-five (365) days and  payment  of  other  losses,
              costs, and expenses accrued or incurred by the  other  Party as  a
              result of the late payment.

ARTICLE XII - OFFSET

The  Company  and the  Reinsurer  shall have the right to offset any  balance or
amounts due from one Party to the other under this Agreement.

ARTICLE XIII - ACCESS TO RECORDS

A.            The Company shall place at the disposal  of the  Reinsurer  at all
              reasonable  times,  and  the  Reinsurer  will  have  the  right to
              inspect,  all  books,  records,  and  papers  of  the  Company  in
              connection with any  reinsurance  coverage hereunder or any claims
              in connection herewith.

B.            All  records  reviewed  by the  Reinsurer  are deemed  proprietary
              and confidential property of the Company. Further, unless pursuant
              to the express, written  permission of the Company,  the Reinsurer
              shall not  disclose  the contents of such information to any other
              person, persons, entity, or entities; provided, that the Reinsurer
              may disclose such information  or portions  thereof in  connection
              with any arbitration hereunder or any legal or regulatory process,
              or to its directors,  officers  and  employees  and the directors,
              officers  and  employees  of  its  affiliates  and  to its agents,
              representatives,  attorneys,  accountants,  auditors,   reinsurers
              (collectively, "the Reinsurer's Representatives"), in  each  case,
              who have a  legitimate  need to know such information (which would
              include, but not be limited to the right to dispute and/or  assess
              in  furtherance  of  a  dispute) and who are informed of and agree
              to be  bound  by the  confidentiality  terms  of  this  Agreement.
              The  Reinsurer  shall  indemnify and hold harmless the Company for
              all damages  resulting  from any  unauthorized  disclosure  by the

<PAGE>
              Reinsurer or the Reinsurer's Representatives of  records  obtained
              pursuant to this  Article.  Nothing  contained  in this  Agreement
              shall be construed to prevent the Company from applying to a court
              of   competent   jurisdiction   for   equitable  relief  including
              injunction and specific performance as a remedy  if the  Reinsurer
              or any of the Reinsurer's Representatives  breach or  threaten  to
              breach any of the provisions of this Article. Without prejudice to
              the rights and remedies otherwise available at law  or  equity  to
              the Company, it is understood and agreed that  the  Company  would
              be  irreparably  injured by a breach of this Article,  that  money
              damages  would  not  be  a  sufficient  remedy  for  any actual or
              threatened breach of this Article by the  Reinsurer  or any of the
              Reinsurer's Representatives  and that the Company  shall  (without
              proof of actual damages) be entitled to equitable  relief.  In the
              event of litigation relating  to  this  Article,  if  a  court  of
              competent jurisdiction determines that the Reinsurer or any of the
              Reinsurer's Representatives  have breached this Article,  then the
              Reinsurer shall be liable and pay  to the Company  the  reasonable
              legal fees incurred by the Company in  connection with the subject
              litigation, including any appeal therefrom.

ARTICLE XIV - ERRORS AND OMISSIONS

Inadvertent delays, errors or omissions in connection with this Agreement or any
transaction  hereunder  shall not relieve  either Party of any  liability  which
would have  attached had such delay,  error or omission not  occurred,  provided
always  that such error or  omission  is  rectified  as soon as  possible  after
discovery.

ARTICLE XV - SECURITY

A.       If the  Company is or becomes  unable to take  credit in any  financial
         statement  filed  with  its  domiciliary  insurance  regulator  or with
         insurance  regulators  in New Jersey,  California or any other state in
         which it  currently  is  approved  as a surplus  lines  insurer (or any
         successors to said  regulators) for the reinsurance  coverage  provided
         hereunder,  or if Prudential's  Financial  Strength Rating published by
         A.M. Best becomes less than "A-," the  Reinsurer  agrees to fund within
         thirty (30) days from  receipt of notice from the Company  that funding
         is required  its share of Adverse  Loss  Development  (and to replenish
         such funding from time to time as necessary) by:

         1.   Clean, irrevocable and unconditional  letters of credit issued and
              confirmed, if confirmation is required by the insurance regulatory
              authorities  involved,  by  a  qualified  United  States financial
              institution  acceptable to said insurance regulatory authorities;

         2.   cash; and/or

         3.   a  Trust in compliance with the requirements of and  acceptable to
              said insurance regulatory authorities.

<PAGE>
B.       With regard to funding in whole or in part by letters of credit,  it is
         agreed  that  each  letter of  credit  will be in a form that  would be
         acceptable to the Company's domiciliary insurance regulatory authority,
         will be  issued  for a term of at least  one year and will  include  an
         "evergreen  clause," that  automatically  extends the term for at least
         one additional  year at each  expiration  date unless written notice of
         non-renewal is given to the Company not less than 30 days prior to said
         expiration date. The Company and the Reinsurer  further agree that said
         letters of credit may be drawn upon by the Company or its successors in
         interest at any time,  without  diminution because of the insolvency of
         the Company or the Reinsurer, but only for one or more of the following
         purposes:

         1.   To reimburse itself for the Reinsurer's share of paid Adverse Loss
              Development, unless paid in cash by the Reinsurer;

         2.   To reimburse itself for the Reinsurer's share of any other amounts
              claimed to be due hereunder, unless paid in cash by the Reinsurer;

         3.   To  fund  a  cash  account in an amount  equal to the  Reinsurer's
              share  of  Adverse  Loss  Development  funded by means of a letter
              of  credit  that  is  under non-renewal  notice, if said letter of
              credit  has  not  been  renewed  or replaced by the  Reinsurer  10
              days prior to its expiration date;

         4.   To  refund  to  the  Reinsurer  any  sum  in excess of the  actual
              amount  required  to  fund  the Reinsurer's  share of Adverse Loss
              Development  and  other  amounts  claimed to be due hereunder,  if
              so requested by the Reinsurer.

C.       In the event the amount drawn by the Company on any letter of credit is
         in excess of the actual  amount  required for B (1), B (3) or B (4), or
         in the case of B (2),  the  actual  amount  determined  to be due,  the
         Company  shall  promptly  return to the  Reinsurer the excess amount so
         drawn.

D.       In the event of funding through a  Trust:

         1.   The  Reinsurer  shall  establish  a  Trust Account for the benefit
              of  the   Company  to  fund   the  amounts  receivable  under  the
              Agreement  in  a  qualified  United States  financial  institution
              reasonably  acceptable  to  the  Company  and  to  said  insurance
              regulatory authorities.

         2.   The  assets  deposited  into  the Trust  Account  shall  be valued
              according  to  their  current fair  market value and shall consist
              only  of  cash  (United  States  legal  tender),  certificates  of
              deposit  (issued  by  a  United  States bank and payable in United
              States legal  tender)  and  investments of  the  type permitted by
              and  acceptable to  said insurance  regulatory authorities  or any
              combination  of the  above,  provided  that such  investments  are
              issued by  an institution that is  not the  parent, subsidiary  or
              affiliate of either the Reinsurer or the Company;

<PAGE>
         3.   The  Reinsurer,  prior  to  depositing  assets  with  the trustee,
              shall  execute  assignments,  endorsements  in  blank, or transfer
              legal  title  to  the  trustee of all shares,  obligations  or any
              other  assets  requiring  assignments,  in order that the Company,
              or  the  trustee   upon  the  Company's  direction,  may  whenever
              necessary   negotiate  any   such   assets   without  consent   or
              signature from the Reinsurer or any other entity;

         4.   All  settlements  of account between the Reinsurer and the Company
              shall be in cash or its equivalent;

         5.   The  assets  in   the  trust  account  may  be  withdrawn  by  the
              Company at  any  time,  notwithstanding  any  other  provisions in
              this  Agreement,  and  shall  be  utilized  by  the Company or any
              successor  by  operation  of  law,  including  without  limitation
              any  liquidator,  rehabilitator,  receiver  or  conservator of the
              Company,  for  the purposes  set forth  in  paragraphs  B(1) -B(4)
              above.

ARTICLE XVI - INSOLVENCY

In the  event  of  the  insolvency  of the  Company,  the  reinsurance  coverage
hereunder  shall  be  payable  directly  to the  Company  or to its  liquidator,
receiver, conservator or statutory successor on the basis of the amount of claim
allowed  in the  insolvency  proceeding  without  diminution  by  reason  of the
inability  of the  Company  to pay all or any part of the  claim.  It is agreed,
however,  that the liquidator,  receiver,  conservator or statutory successor of
the Company  shall give  written  notice to the  Reinsurer  of the pendency of a
claim against the Company, indicating the Policy or bond covered hereunder which
claim would involve a possible liability on the part of the Reinsurer,  within a
reasonable  time after such claim is filed in the  conservation  or  liquidation
proceeding or in the  receivership,  and that during the pendency of such claim,
the Reinsurer may investigate such claim and interpose,  at its own expense,  in
the proceeding  where such claim is to be  adjudicated,  any defense or defenses
that  it  may  deem  available  to the  Company  or  its  liquidator,  receiver,
conservator or statutory  successor.  The expense thus incurred by the Reinsurer
shall be chargeable,  subject to the approval of the Court,  against the Company
as part of the expense of  conservation  or  liquidation  to the extent of a pro
rata share of the benefit which may accrue to the Company  solely as a result of
the defense undertaken by the Reinsurer.

ARTICLE XVII - ARBITRATION

A.       Except  with  respect to  disputes  arising  solely out of or solely in
         connection with Article XIII above (Access to Records),  as a condition
         precedent to any right of action hereunder, in the event of any dispute
         or  difference  of  opinion  hereafter  arising  with  respect  to this
         Agreement,  including its formation and validity, it is hereby mutually
         agreed that such dispute or difference of opinion shall be submitted to
         arbitration.

<PAGE>
B.       Except as provided  in  subsections  A. and D. of this  Article or with
         respect to judicial proceedings instituted in aid of arbitration,  this
         Article shall constitute a waiver of the Parties' rights to commence an
         action in any court of competent  jurisdiction in the United States, to
         remove  an  action  to a United  States  District  Court,  or to seek a
         transfer of a case to another court as might  otherwise be permitted by
         the laws of the United States or of any State or other  jurisdiction in
         the United States.

C.       One Arbiter shall be chosen by the Company, the other by the Reinsurer,
         and an Umpire  shall be chosen by the two  Arbiters  before  they enter
         upon arbitration,  all of whom shall be active or retired disinterested
         executive officers of United States domiciled  insurance or reinsurance
         companies.  In the event that  either  Party  should  fail to choose an
         Arbiter within 30 days  following a written  request by the other Party
         to do so, the  requesting  Party may choose two  Arbiters  who shall in
         turn choose an Umpire  before  entering  upon  arbitration.  If the two
         Arbiters  fail to agree upon the  selection of an Umpire within 30 days
         following  their   appointment,   each  Arbiter  shall  nominate  three
         candidates  within  10 days  thereafter,  two of whom the  other  shall
         decline, and the decision shall be made by drawing lots.

D.       The Arbiters and the Umpire ("the  Arbitration  Panel") shall  consider
         this Agreement as an honorable engagement rather than merely as a legal
         obligation,  and they are relieved of all judicial  formalities and may
         abstain from  following the strict rules of law. The majority  decision
         of the  Arbitration  Panel shall be final and binding on both  Parties.
         Judgment  upon the  final  decision  of the  Arbitration  Panel  may be
         entered in any court of competent jurisdiction.

E.       Except as provided in sub-section G. of this Article,  each Party shall
         bear the expense of its own Arbiter, and shall jointly and equally bear
         with the other the expense of the Umpire and of the arbitration. In the
         event that the two Arbiters are chosen by one Party, as above provided,
         the expense of the Arbiters,  the Umpire and the  arbitration  shall be
         equally divided between the two Parties.

F.       Any  arbitration  pursuant to this  Article  shall be  conducted in New
         York,  New York  unless  otherwise  agreed  by the  parties;  provided,
         however,  that the Arbitration Panel may choose to take evidence and/or
         convene a hearing in a place other than New York for the convenience of
         the parties, the witnesses or the Arbitration Panel.

G.       The  Arbitration  Panel shall have the power to  award costs, expenses,
         and interest to the prevailing Party in an arbitration.

ARTICLE XVIII - SERVICE OF SUIT

A.       It is agreed that in the event of the failure of the  Reinsurer  to pay
         any amount  claimed to be due  hereunder  or to  otherwise  perform its
         obligations  hereunder,  the  Reinsurer  will,  at the  request  of the
         Company,   submit  to  the  jurisdiction  of  any  court  of  competent

<PAGE>
         jurisdiction  within the State of New Jersey or such other jurisdiction
         within the United States as the Company can select as a forum, and will
         comply with all requirements  necessary to give such court jurisdiction
         and all matters  arising  hereunder  shall be  determined in accordance
         with the law and practice of such court.

B.       Service of process in such suit may be made on the Reinsurer by serving
         the  Commissioner  of Insurance  of the State of New Jersey,  who shall
         forward such process to the Reinsurer in accordance  with Article XXIII
         or at such other  address as the Reinsurer  shall  advise.  In any suit
         instituted,  the  Reinsurer  will abide by the final  decision  of such
         court.

C.       Further,  pursuant to any statute of any state,  territory, or district
         of the United States of America which makes provisions  therefore,  the
         Reinsurer herein hereby designates the superintendent,  commissioner or
         director of insurance or other  officer  specified  for that purpose in
         the statute,  or his successor or successors in office, as its true and
         lawful  attorney  upon whom may be served  any  lawful  process  in any
         action, suit or proceeding instituted by or on behalf of the Company or
         any beneficiary  hereunder arising out of this Agreement of reinsurance
         and hereby designates the above-named person to whom the said office is
         authorized to mail such process or a true copy thereof.

D.       This Article is not meant to supersede  Article XVII of this  Agreement
         or override the obligation of the parties to arbitrate  their  disputes
         in accordance with Article XVII.

ARTICLE XIX - ENTIRE AGREEMENT

This  Agreement,  the Sale Agreement and the Guaranty,  and any exhibits to such
agreements,  collectively  constitute the entire  agreement  between the Parties
regarding  the subject  matter hereof and  supercede  all prior  agreements  and
understandings,  both  written and oral and do not confer any rights or remedies
to any other party or any other person.

ARTICLE XX - AMENDMENTS AND ALTERATIONS

This Agreement shall not be changed,  supplemented,  modified, or amended except
by an endorsement/addendum signed by the Parties and attached hereto.

ARTICLE XXI - NO WAIVER

No  forbearance  to enforce any provision or right  hereunder  shall be deemed a
waiver thereof, and no waiver of any breach of any term or covenant herein shall
be construed  as a waiver of any other breach of the same,  or any other term or
covenant herein.

<PAGE>
ARTICLE XXII - CONSTRUCTION

This Agreement is the result of arms-length negotiations between the Parties and
has been  prepared  jointly by the  Parties.  In applying and  interpreting  the
provisions  of this  Agreement,  there shall be no  presumption  that either the
Company or the Reinsurer  prepared this Agreement,  or that this Agreement shall
be construed in favor of or against either the Company or the Reinsurer.

ARTICLE XXIII - NOTICES

Any notice or other  communication  required or permitted  hereunder shall be in
writing  and  shall  be  delivered  personally,  telegraphed,  telexed,  sent by
facsimile  transmission,  or sent by  certified,  registered  or  express  mail,
postage prepaid, to:

         If to the Reinsurer, to:

         Richard Green,
         Vice President
         Prudential Property and Casualty Insurance Company
         23 Main St., 4th Floor
         Holmdel, NJ  07032
         Phone: 732-946-5082
         Fax:   732-946-5029

         with a copy to:

         Doreen Faga
         President, Gibraltar Operations
         The Prudential Insurance Company of America
         Eisenhower Corporate Center, Building 3
         290 West Mt. Pleasant Avenue
         Livingston, NJ  07039
         Phone: 973-548-5980
         Fax:   973-548-5950

         If to the Company, to:

         Janet J. Burak
         Senior Vice President and General Counsel
         Everest Reinsurance Holdings
         477 Martinsville Road
         P.O. Box 830
         Liberty Corner, NJ  07938
         Phone: 908-604-3170
         Fax:   908-604-3450

<PAGE>
or in each case to such  other  address as a party may  designate  for itself by
like notice to the other party.

ARTICLE XXIV - GOVERNING LAW

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

IN WITNESS  WHEREOF,  the Company,  by its duly authorized  representative,  has
executed this Agreement as of the date undermentioned at:

_________, ____________, this ____________ day of ________________________ 2000.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Reinsurer,  by its duly authorized  representative,  has
executed this Agreement as of the date undermentioned at:

_________, ____________, this ____________ day of ________________________ 2000.

<PAGE>
                                    EXHIBIT A

Aggregate  Stop  Loss  Retrocession  Agreement  between  Prudential  Reinsurance
Company and Gibraltar Casualty Company (effective 10/6/95)

Quota  Share  Reinsurance  Agreement  issued to  Gibraltar  Casualty  Company by
Prudential  Reinsurance  Company  (dated  May 1, 1985)  (Gibraltar's  cession to
Prudential Reinsurance for MUF eligible business)

Direct Excess Quota Share Reinsurance  Agreement between Prudential  Reinsurance
Company and Gibraltar Casualty Company (effective January 1, 1986)

Quota Share Reinsurance  Agreement between  Prudential  Reinsurance  Company and
Gibraltar Casualty Company ("Med Mal") effective 1/1/89

MUF  Commutation  Agreements  between  Gibraltar  Casualty  Company,  Prudential
Reinsurance Company and various MUF participants executed between 1985 and 1987,
the "MUF Buybacks"
<PAGE>
                                                                       EXHIBIT E

                               GUARANTEE AGREEMENT

                                     BETWEEN

                   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

                                  ("GUARANTOR")

                                       AND

                           GIBRALTAR CASUALTY COMPANY

                                 ("BENEFICIARY")

                            DATED AS OF _______, 2000

<PAGE>
                                TABLE OF CONTENTS

                                                                            Page

Section 1.  Definitions........................................................1

Section 2.  Guaranty...........................................................2
        2.1 Guaranteed Obligations.............................................2
        2.2 Nature of Obligations..............................................2

Section 3. Character of Obligations............................................3
        3.1 Obligations Not Affected...........................................3
        3.2 Waiver by Guarantor................................................3
        3.3 Reinstatement......................................................3

Section 4. Rights of Third Parties.............................................4

Section 5.  Representations and Warranties.....................................4
        5.1 Due Incorporation, etc.............................................4
        5.2 Due Authorization..................................................4
        5.3 Consents; No Conflicts.............................................4
        5.4 Access to Information..............................................5
        5.5 Solvency...........................................................5

Section 6. Miscellaneous.......................................................5
        6.1 Expenses...........................................................5
        6.2 Amendment..........................................................5
        6.3 Notices............................................................5
        6.4 Waivers............................................................5
        6.5 Counterparts.......................................................6
        6.6 Successors and Assigns.............................................6
        6.7 Further Assurances.................................................6
        6.8 Severability.......................................................6
        6.9 Entire Understanding...............................................6
        6.10 Applicable Law....................................................6
        6.11 Headings..........................................................6
        6.12 Term..............................................................6

<PAGE>
                               GUARANTEE AGREEMENT
                               -------------------

         This GUARANTEE AGREEMENT is made as of the ____ day of ______, 2000, by
and between THE  PRUDENTIAL  INSURANCE  COMPANY OF AMERICA,  a New Jersey mutual
insurance company  ("Guarantor"),  and GIBRALTAR  CASUALTY  COMPANY,  a Delaware
corporation (together with its successors and assigns, "Beneficiary").

                              W I T N E S S E T H:

         WHEREAS,  Guarantor and Everest Reinsurance Holdings,  Inc., a Delaware
corporation  ("Everest"),  are parties to that certain Stock Purchase Agreement,
dated as of February 24, 2000, as amended by Amendment  No. 1 thereto,  dated as
of July,  2000,  pertaining  to the sale by  Guarantor  of all of the issued and
outstanding  shares of  capital  stock of  Beneficiary  to Everest  (the  "Stock
Purchase Agreement");

         WHEREAS,  it is a condition  to the  consummation  of the  transactions
contemplated  by the Stock Purchase  Agreement that  Beneficiary  and Prudential
Property and Casualty Insurance Company,  an Indiana corporation and an indirect
subsidiary  of  Guarantor  ("Prupac"),  enter  into,  as of the date  hereof,  a
proportional excess of loss reinsurance  agreement and a quota share reinsurance
agreement (collectively, the "Prupac Reinsurance Agreements"); and

         WHEREAS,  it  is  a  further  condition  to  the  consummation  of  the
transactions  contemplated by the Stock Purchase  Agreement that Guarantor enter
into this Agreement.

         NOW  THEREFORE,  in  consideration  of the foregoing and other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, Guarantor and Beneficiary hereby agree as follows:

Section 1.  DEFINITIONS

         When  used  herein,  the  following  terms  shall  have  the  following
meanings:

         "Guaranteed Agreements" means the Prupac Reinsurance Agreements (as any
of them may be amended from time to time).

         "Obligor" means Prupac and its successors and assigns.

         Capitalized  terms used but not defined  herein shall have the meanings
given to such terms in the Stock Purchase Agreement.

<PAGE>
Section 2.  GUARANTY

         2.1  GUARANTEED  OBLIGATIONS.  (a)  Guarantor  hereby  irrevocably  and
unconditionally  guarantees  to  Beneficiary  the prompt  payment of all amounts
payable as and when the same shall become due and payable at any time by Obligor
under,  and the full and  prompt  performance  by the  Obligor of each and every
agreement, covenant, indemnity and obligation of Obligor under and in accordance
with the terms of, the  Guaranteed  Agreements,  in each case  however  created,
arising or evidenced, whether direct or indirect, primary or secondary, absolute
or contingent, joint or several, and whether now or hereafter existing or due or
to become due.

         (b) Guarantor hereby agrees that if for any reason (including,  without
limitation, the liquidation, dissolution,  receivership, insolvency, bankruptcy,
assignment  for  the  benefit  of  creditors,  reorganization,   composition  or
readjustment of, or other similar proceedings  affecting the status,  existence,
assets or obligations of, Obligor)  Obligor shall fail fully and promptly to pay
any amount  payable at any time under any of the  Guaranteed  Agreements  as and
when the same shall become due and payable,  or if Obligor shall fail to perform
and discharge any agreement,  covenant, indemnity or obligation of Obligor under
any of the  Guaranteed  Agreements,  then Guarantor (i) in the event of any such
failure  to make  payment  of any  amount,  shall  promptly  pay such  amount to
Beneficiary  and (ii) in the event of any failure to perform and  discharge  any
such agreement, covenant, indemnity or obligation, shall promptly cause the same
to be performed and discharged.

         (c)  The  amounts  payable  by  (including,   without  limitation,  any
penalties or default amounts),  and the agreements,  covenants,  indemnities and
obligations  of,  Obligor  hereby   guaranteed  are   hereinafter   referred  to
collectively as the "Guaranteed  Obligations"  and individually as a "Guaranteed
Obligation."

2.2 NATURE OF OBLIGATIONS. This Agreement shall constitute a guaranty of payment
when  due and of  performance  when  due and not of  collection,  and  Guarantor
specifically agrees that it shall not be necessary, and that Guarantor shall not
be entitled to require,  before or as a condition of enforcing  the liability of
Guarantor  under this  Agreement  or  requiring  payment or  performance  of the
Guaranteed Obligations by Guarantor hereunder,  or at any time thereafter,  that
any  Person:  (a) file  suit or  proceed  to obtain  judgment  or assert a claim
against  Obligor  or any  other  Person  that may be liable  for any  Guaranteed
Obligation;  (b) make any other effort to obtain  payment or  performance of any
Guaranteed  Obligation  from  Obligor or any other Person that may be liable for
such Guaranteed  Obligation;  (c) foreclose  against or seek to realize upon any
security now or hereafter existing for any Guaranteed  Obligation;  (d) exercise
or assert any other  right or remedy to which such  Person is or may be entitled
in connection  with any Guaranteed  Obligation or any security or other guaranty
therefor;  or (e) assert or file any claim  against the assets of Obligor or any
other Person liable for any Guaranteed Obligation.

                                       2
<PAGE>
Section 3.  CHARACTER OF OBLIGATIONS

         3.1 OBLIGATIONS NOT AFFECTED.  The obligations of Guarantor pursuant to
Section 2.1 shall be continuing  and  irrevocable,  absolute and  unconditional,
primary and  original,  immediate  and not  contingent  and shall remain in full
force and effect without  regard to and shall not be released,  discharged or in
any way affected by any  circumstance or condition  (other than the defense that
the Guaranteed  Obligations  are not due and payable or required to be performed
and  discharged or the defense of payment or performance by Obligor or any other
Person that may be liable for any  Guaranteed  Obligation).  Should any money or
performance  due or  owing  under  this  Agreement  not be  recoverable  from or
performed by Guarantor due to any reason,  then, in any such case, such money or
performance shall  nevertheless be recoverable from or performed by Guarantor as
though Guarantor were the principal  obligor in respect thereof and not merely a
guarantor and shall be paid or performed by Guarantor forthwith.

         3.2 WAIVER BY GUARANTOR.  Except as herein otherwise expressly provided
or  as  may  be  required  by  applicable  law,  Guarantor  hereby expressly and
irrevocably waives  diligence,  demand for  payment,  filing of claims  with any
court,  any  proceeding  to  enforce  any  provision  of  any  of the Guaranteed
Agreements,  notice of acceptance of this  Agreement,  notice of the creation of
any  liabilities  of  Obligor  or  any other Person, notice of nonpayment of any
Guaranteed Obligation, any right to require a proceeding  first  against Obligor
or any other Person,  whether  to marshall any assets or to exhaust any security
for  the  performance  of  the  obligations  of Obligor or any  other  Person or
otherwise,  any diligence in collection or protection of or realization upon any
Guaranteed Obligation, any obligation  hereunder or any collateral  security for
any  of  the foregoing,  any right of  protest,  presentment,  notice or  demand
whatsoever, all claims of waiver, release,  surrender, alteration or compromise,
and all defenses (other than the  defense  that the  Guaranteed  Obligations are
not due  and  payable or  required  to  be  performed  and  discharged  and  the
defense  of  payment  or  performance by Obligor or any other Person that may be
liable for any Guaranteed  Obligation),  set-offs,  counterclaims,  recoupments,
reductions, limitations, impairments or terminations,  whether arising hereunder
or otherwise.  Guarantor  agrees  that  no payment made by it or for its account
pursuant to this Agreement  shall  entitle it, by subrogation,  indemnification,
exoneration,  contribution, reimbursement or otherwise to any payment by Obligor
or any other Person or from  or  out of any  property  of  Obligor  or any other
Person  unless and until all  Guaranteed  Obligations are fully and finally paid
and performed,  and Guarantor  hereby  expressly  waives,  to the fullest extent
possible, and shall not exercise, rights or remedies it has or may in the future
have with  respect to any of the  foregoing  unless  and  until  all  Guaranteed
Obligations are fully and finally paid and performed.

         3.3  REINSTATEMENT.  Guarantor  agrees  that  this  Agreement  shall be
automatically  reinstated  if  and to the extent that for any reason any payment
or performance by or on behalf of Obligor,  or  any  other  Person that may have
paid a Guaranteed  Obligation,  is  rescinded  or rendered incomplete or must be
otherwise restored by the  Beneficiary, whether as a result  of any  proceedings
in bankruptcy or reorganization or otherwise.

                                       3
<PAGE>
Section 4.  RIGHTS OF THIRD PARTIES

         This Agreement is made for the benefit of, and shall be enforceable by,
Beneficiary  and its  successors  and  assigns  to the  extent  of its  interest
hereunder.  This  Agreement  shall not be  construed  to create any right in any
Person other than Beneficiary and its successors and assigns or to be a contract
in whole or in part for the benefit of any Person other than Beneficiary and its
successors and assigns.

Section 5.  REPRESENTATIONS AND WARRANTIES

         Guarantor hereby represents and warrants to Beneficiary as set forth in
this Section 5.

         5.1 DUE INCORPORATION, ETC.  Guarantor  is  a  mutual insurance company
domiciled, validly  existing and in good standing under the laws of the State of
New Jersey and has all requisite  corporate  power and  authority to own,  lease
and operate its  properties  and to carry on its business as they are now owned,
leased and operated.  Guarantor  is licensed or qualified to do business  and is
in good standing as a foreign entity in each  jurisdiction  where (a) the nature
of the properties owned,  leased or operated by it or the businesses  transacted
by  it  require  such  licensing or  qualification  and (b) the failure to be so
licensed,  qualified  or in good standing  would  adversely  affect  Guarantor's
ability to perform its obligations hereunder or would materially  and  adversely
affect Guarantor.

         5.2 DUE AUTHORIZATION.  Guarantor has all requisite corporate power and
authority  to execute and deliver this Agreement and to perform its  obligations
hereunder and to consummate the transactions contemplated hereby. The execution,
delivery  and performance by Guarantor of this Agreement and the consummation by
Guarantor  of  the  transactions  contemplated hereby have been duly and validly
authorized  by  all  necessary  corporate  proceedings  and  no  other corporate
proceedings on the part of Guarantor are necessary  to authorize the  execution,
delivery and performance by Guarantor of  this  Agreement  or  the  consummation
of  the  transactions  contemplated  hereby.  This  Agreement  has been duly and
validly executed and delivered by Guarantor and  constitutes a legal,  valid and
binding  obligation of Guarantor,  enforceable  against  Guarantor in accordance
with  its  terms,  except  as such  enforceability may be limited by bankruptcy,
insolvency,  moratorium  or similar laws affecting  creditors'  rights generally
and except as rights to specific  enforcement  may be limited by the application
of  equitable  principles  (whether  such  equitable principles are applied in a
proceeding at law or in equity).

         5.3 CONSENTS;  NO  CONFLICTS.   No  consent,  authorization,  order  or
approval  of,  or filing  or  registration  with,  any  governmental  authority,
board  or other regulatory  authority  is  required  for or in  connection  with
the  execution,  delivery and performance by Guarantor of this Agreement and the
consummation of  the  transactions  contemplated  hereby,  except those  already
duly obtained or made.  The  execution, delivery and performance by Guarantor of
this   Agreement  and  the  consummation   by   Guarantor  of  the  transactions
contemplated hereby do not and will not, with or without the giving of notice or
the passage  of  time,  or  both, (a) violate  any  provision  of the  Governing
Instruments  of  Guarantor, (b) violate,  result in a breach of or  constitute a

                                       4
<PAGE>
default  under  or  give  rise  to a right of termination or cancellation of, or
accelerate the performance  required  by  any  terms of, as the case may be, any
contract,  lease,  license,  mortgage,  note,  permit  or  instrument  to  which
Guarantor is a party or by which any of its assets are bound,  (c)  violate  any
law,  regulation,  judgment,  order,  writ,  injunction  or decree of any court,
governmental  body  (domestic  or  foreign)  or  administrative  agency  of  any
jurisdiction applicable to Guarantor or (d) require  the  consent or approval of
any  third parties; other than, in the case of (b)  and  (d),  such  violations,
breaches,  defaults,  terminations,  cancellations and accelerations which would
not, in the aggregate,  reasonably be expected to have a Material Adverse Effect
on Guarantor.

         5.4  ACCESS  TO  INFORMATION.  Guarantor  now  has  and  will  continue
to  have  independent  means  of  obtaining  such  information   concerning  the
affairs, financial condition  and  business of Obligor as  Guarantor  desires to
obtain.  Except  as  set forth in the Stock Purchase Agreement,  no party hereto
shall have any duty or  responsibility  to  provide  Guarantor  with any  credit
or other information  concerning the affairs, financial condition or business of
Obligor  or  other  Persons  that  may  come into its possession.  Guarantor has
executed  this  Agreement  based solely on its own  knowledge and  investigation
of Obligor and other Persons and their financial condition.

         5.5  SOLVENCY.  The  execution, delivery and  performance  by Guarantor
of this Agreement will not render Guarantor insolvent, nor is it being  made  in
contemplation of Guarantor's  insolvency.  Guarantor does not have  unreasonably
small capital with which to carry on its business.

Section 6.  MISCELLANEOUS.

         6.1 EXPENSES.  Guarantor shall pay to or reimburse Beneficiary for, and
agrees to indemnify and hold harmless  Beneficiary  from and against,  all costs
and expenses,  including,  without  limitation,  reasonable  attorneys' fees and
disbursements,  incurred  by  Beneficiary  in  connection  with  enforcing  this
Agreement  or any of its  rights  hereunder.  In  the  event  of any  litigation
involving  Guarantor and Beneficiary in connection with this Agreement,  a court
of  applicable  jurisdiction  may award  reimbursement  of  attorneys'  fees and
disbursements   to  either   Guarantor  or   Beneficiary  as  such  court  deems
appropriate.

         6.2 AMENDMENT.  This Agreement may be amended, modified or supplemented
but only in writing signed by Guarantor and Beneficiary.

         6.3 NOTICES.  Any notice, request, instruction  or other document to be
given hereunder by a party hereto or a Beneficiary shall be in writing and shall
be deemed to have been given (a) when  received if given in person or by courier
or  a  courier  service,  (b) on  the  date  of  transmission  if sent by telex,
facsimile  or  other  wire  transmission  (receipt  confirmed) or  (c) three (3)
business  days  after  being  deposited  in  the mail,  certified or registered,
postage prepaid.  Notice  shall  be  given  as  set  forth in the Stock Purchase
Agreement.

         6.4  WAIVERS.  The failure of a party hereto or any  Beneficiary at any
time or times to require performance of any provision  hereof shall in no manner
affect its right at a later time to enforce the same. No delay in exercising any

                                       5
<PAGE>
right  shall  operate  as  a  waiver  or impair such right. No single or partial
exercise of  any right shall preclude any other or further  exercise  thereof or
the exercise of any other right.  No waiver by a party hereto or any Beneficiary
of  any  condition  or of any breach of any term,  covenant,  representation  or
warranty  contained  in  this  Agreement  shall  be effective unless in writing,
and no waiver in any one or more  instances shall be deemed to be a  further  or
continuing waiver of any such condition or breach in other instances or a waiver
of any other condition or breach  of any  other  term,  covenant, representation
or warranty.

         6.5 COUNTERPARTS.  This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

         6.6  SUCCESSORS  AND  ASSIGNS.  This  Agreement  shall be binding  upon
Guarantor  and its  successors  and  permitted  assigns  and shall  inure to the
benefit of, and may be enforced by,  Beneficiary and its successors and assigns;
provided,  that no assignment of any of the rights or  obligations  of Guarantor
under  this  Agreement  shall be made by  Guarantor  without  the prior  written
consent of Beneficiary.

         6.7 FURTHER ASSURANCES.  Guarantor will, at  Guarantor's  expense,  do,
execute,  acknowledge  and  deliver  all  and every such  further  acts,  deeds,
agreements,  instruments  and  assurances  as  may  be  reasonably  necessary or
appropriate  in  order  to  protect the right, title and interest of Beneficiary
hereunder.

         6.8 SEVERABILITY.  If any  provision  of this  Agreement  shall be held
invalid,  illegal or unenforceable,  the validity, legality or enforceability of
the other provisions  hereof  shall not be  affected  thereby,  and there  shall
be deemed  substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.

         6.9 ENTIRE UNDERSTANDING.  This  Agreement,  together  with  the  Stock
Purchase Agreement and the Guaranteed Agreements, set forth the entire agreement
and  understanding  of  the  parties  hereto with respect to the subject  matter
hereof   and  supersede  any  and   all  prior   agreements,  arrangements   and
understandings among the parties relating to the subject matter hereof.

         6.10 APPLICABLE LAW.  This Agreement shall be governed by and construed
and enforced in accordance with the internal laws  of  the  State  of  New  York
without giving effect to the principles of conflicts of law thereof.

         6.11  HEADINGS.  The headings of Sections  have  been  included  herein
for  convenience  only and shall not constitute a part of this Agreement for any
other purpose.  References  in this Agreement  to  Sections  are to  Sections of
this Agreement unless otherwise indicated.

         6.12 TERM.  Subject  to reinstatement as set forth in Section 3.3, this
Agreement  shall  be in effect  until  payment  and  performance  in full of all
Guaranteed Obligations.
                                      * * *

                                       6
<PAGE>
IN WITNESS  WHEREOF,  the parties  have signed this  Agreement on the date first
written above.

                            THE PRUDENTIAL COMPANY OF
                            AMERICA

                            By:
                            Name:
                            Title:

                            GIBRALTAR CASUALTY COMPANY

                            By:
                            Name:
                            Title:

                                       7Exhibit 10.4
                        PEOPLES STATE BANK

           SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
                            BASIC PLAN

 1. PURPOSE

    The purpose of the Senior Management Incentive Compensation Plan
    (the Plan) is to maximize the achievement of the Bank's objectives
    by providing incentives and awards to those senior-level executives
    who attain and sustain consistently high levels of performance which
    exceed normal expectations and which contribute to the success and
    profitability of the Bank.  The Plan is designed to support the key
    goals and objectives of the Bank.

 2. GENERAL DESCRIPTION

    Incentive awards are based on individual and organization-wide
    contributions to performance as measured by critical operating
    ratios, including selected financial ratios, percentage of loan
    growth, percentage of deposit growth, and overall profitability.  At
    the same time, the Plan provides annual goals which will help the
    Bank achieve its strategic goals, as well as provide a performance
    review and measurement system.

    The incentive formulas are constructed to provide awards consistent
    with the increase in profits to the Bank.  The incentive formulas
    are designed to provide a level of performance award that is
    competitive with comparable levels of performance in other
    institutions, to assist the Bank in retaining and motivating key
    executives, and to ensure the Bank's continued growth and
    profitability.

    The incentive awards are to be supplemental compensation in the form
    of cash paid on an annual basis.  The Plan is established in
    addition to regular salary and benefits programs.  The Plan presumes
    an equitable base compensation system and a competitive benefits
    program.
                                  1
 3. ADMINISTRATION

    The Board of Directors of the Bank has the responsibility to
    definitions  interpret, administer, and amend the Plan.

    Matters before the Board shall be decided based upon the vote of a
    majority of the entire Board.  Bank officers who are members of the
    Board shall not be entitled to vote on matters relating to the
    eligibility for and/or determination of their own incentive
    compensation award.

    Prior to the beginning of each fiscal year, the Board shall review
    and revise, if deemed advisable, the operating rules for
    implementing the Plan for the coming fiscal year.
<PAGE>
    Computation of incentive awards will be performed by senior
    management and reviewed by the Board.

    The Board may deem to exclude extraordinary occurrences which
    could impact the incentive awards, either positively or negatively,
    but are, by their nature, outside the significant influence of Plan
    participants.  The actions of the Board as to the interpretation,
    construction, and administration of the Plan shall be final and
    binding for all parties, including the Bank and its employees.

 4. PARTICIPANTS

    Eligibility for participation in the Plan shall be limited to those
    individuals approved by the Board of Directors who, in the judgment
    of the President and the Board of Directors, are responsible for
    directing functions which have a significant bearing on the growth
    and profitability of the Bank.

    Prior to the beginning of each plan year, participants may be added
    or deleted at the discretion of the Board.

 5. DEFINITIONS

    For the purpose of determining the amount of the incentive
    compensation awards under the Operating Rules, the following
    definitions shall apply:
                                  2
     <circle> PERFORMANCE MEASUREMENT FACTORS - Those key operating
 ratios, plus other pertinent measures of total Bank performance, on
 which the participants will be evaluated.  These factors include:

     -NET OPERATING INCOME - After-tax net income adjusted for
      extraordinary items.

     -NET INTEREST MARGIN RATIO - Interest income minus interest expense
      divided by average earning assets.

     -LOAN GROWTH PERCENTAGE - The average percentage increase or
      decrease in the dollar amount of loans outstanding by the Bank as
      compared with the previous year.

     -DEPOSIT GROWTH PERCENTAGE - The average percentage increase or
      decrease in the dollar amount of deposits in the Bank less public
      funds and state deposits as compared with the previous year.

     -NON-INTEREST INCOME RATIO - The dollar amount of non-interest
      income adjusted for extraordinary items divided by average assets.

     -SALARY AND BENEFITS EXPENSE RATIO - The dollar amount of salary
      expense plus other personnel expense, not including accrued
      incentive compensation divided by average assets.

     -OTHER OVERHEAD EXPENSES RATIO - The dollar amount of total
      overhead expenses minus salary and benefits expenses divided by
      average assets.

     -COMMERCIAL PAST DUE PERCENTAGE - The average of the four quarterly
      past due percentages on commercial loans.
<PAGE>
     -INSTALLMENT PAST DUE PERCENTAGE - The average of the four
      quarterly past due percentages on installment loans.

     -REAL ESTATE PAST DUE PERCENTAGE - The ave age of the four
      quarterly past due percentages on real estate loans.

     -EARNING ASSETS RATIO - The average dollar amount of total earning
      assets divided by the average dollar amount of total assets.

     -NET CHARGE-OFFS - Net charged-off divided by average total loans
      outstanding not including student loans.
                                  3
     -NON-INTEREST BEARING DEPOSIT RATIO - The year-to-date average
      dollar amount of non-interest bearing demand deposits divided by
      the average dollar amount of total deposits.

     -SPECIFIC OBJECTIVES - The specific goals and objectives which are
      established for certain participants.

     <circle> THRESHOLD PERFORMANCE - The minimum or maximum performance
 level for each factor below or above which no award will be given;
 also, the minimum overall performance level for a single performance
 ratio chosen to show overall profitability, currently net operating
 income.

     <circle> INCENTIVE FACTOR WEIGHTING - A percentage for each of the
 incentive factors for each participating position which is used to
 modify the basic incentive percentage to reflect the relative
 importance of the factor to that position.

     <circle> POSITION LEVEL MULTIPLIERS - A multiplier used to
 recognize the impact that each senior-level officer has on overall Bank
 performance.

     <circle> DISCRETIONARY / INDIVIDUAL PERFORMANCE ADJUSTMENT - A
 multiplier which allows the Board some subjective discretion in the
 determination of the final incentive award for each participant.

     <circle> EXTRAORDINARY OCCURRENCES - Those events which, in the
 opinion of the Board of Directors, are outside the significant
 influence of Plan participants and would, by their inclusion, cause a
 significant unintended effect, positive or negative, on the Bank's
 operating and financial performance results.

 6. INCENTIVE COMPUTATION - GENERAL PROCEDURES

    The general formula for converting overall Bank results into
    individual incentive awards is as follows:

     <circle> Incentive dollars for a participant for the plan year
 equals:

      -The base annual salary of the participant,

      -Times the percentage base award,
<PAGE>
      -Times the sum of the basic formula percentage for each
       performance measure applicable to the participant's position,
                                  4
      -Times the "Position Level Multiplier,"
      -Times the "Individual Performance Adjustment."

    No incentive awards will be granted for a fiscal year, regardless
    of performance on individual factors, if the Bank's Net Operating
    Income is less than an approved minimum for that fiscal year.  In
    addition, threshold performance levels are established for each
    performance measurement factor.  Performance minimums and
    threshold performance levels are described in the Operating
    Rules.

    The calculation of the incentive compensation award may also
    include a discretionary incentive award adjustment (noted above
    as the "Individual Performance Adjustment").

 7. PAYMENT OF INDIVIDUAL INCENTIVE COMPENSATION AWARDS

    When the Bank's year-end financial results are known, participants
    will receive the incentive payment determined by evaluating their
    performance for the year using the formula established for their
    position.  The award will be paid by February 1 following the plan
    year-end or earlier if final numbers or specific projections are
    available.  Applicable withholding of taxes will be deducted from
    each payment.

 8. PARTIAL PAYMENTS:  TERMINATION OF EMPLOYMENT / NEW HIRES

    In the event of termination of employment through retirement or
    death, the employee shall be considered to have earned one-twelfth
    of the annual incentive compensation award of a particular year for
    each full month of employment in the fiscal year of his/her
    retirement or death.

    If a participant dies, any unpaid incentive awards shall be paid to
    the estate, or designated beneficiary, in one lump sum.

    Participants may not be added to the Plan after June 1 of the plan
    year.

    If an individual becomes a new participant prior to June 1 during
    the plan year, the incentive compensation award will be earned on
    the basis of one-twelfth of the annual incentive compensation for
    each full month of participation.

    In all other cases of termination, the employee forfeits any unpaid
    awards.
                                  5
 9. INCENTIVE COMPENSATION OPERATING RULES

    As of the beginning of each fiscal year, the Board shall review and
    revise, if deemed advisable, the operating rules of the Plan for the
    year then beginning.  The Operating Rules shall include the
    following:
<PAGE>
      a. Identification of employees selected under Paragraph 4 for
         participation in the Plan.

      b. Position level multipliers, performance measurement factors and
         weightings for determining the amount of the incentive
         compensation awards for the fiscal year then beginning.

      c. Other administrative and procedural rules which the Board
         considers appropriate.

    After approval by the Board of Directors, Bank management shall, as
    soon as practical, inform each of the participants under the Plan of
    the Operating Rules for the fiscal year then beginning.

 10.PERFORMANCE PROGRESS REPORTING

    The Bank's President, or his designee, will be responsible for
    written quarterly reporting to the Board of Directors of Bank
    performance during the course of the year. This data is to be made
    available to the Board within 30 days of its date of availability.

 11.AMENDMENT OR TERMINATION OF PLAN

    The Board of Directors may modify, amend, or terminate this Plan at
    any time effective at the end of a fiscal year.  The modification,
    amendment, or termination of the Plan shall in no way affect a
    participant's right to unpaid incentive compensation awards for the
    year prior to termination or modification.
                                  6
           SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
                          OPERATING RULES

 1. GENERAL

    The following Senior Management Incentive Compensation Plan
    Operating Rules will be in effect during 2000 and until
    revised.  These Operating Rules are subject to change by the Board
    of Directors.  It is anticipated, however, that the rules will be
    revised only when significant changes occur in the Bank's operations
    which interrupt the basic continuity of the Plan.

 2. PARTICIPANT INCENTIVE PERFORMANCE MEASURES AND WEIGHTINGS

    Exhibit A lists the Plan participants, position level multipliers,
    performance measurement factors, and weightings for each participant
    for each performance measure.

 3. INCENTIVE FORMULAS

    The performance measures and weightings, including projected data
    used for calculating the individual incentive compensation awards,
    are shown in Exhibits B through D.  Exhibit E shows the projected
    incentive compensation at various levels of net operating income.

 4. THRESHOLD PERFORMANCE LEVELS

    Thresholds of performance have been established for each performance
<PAGE>
    measure and are included in each incentive formula.

    IN ADDITION TO THE INDIVIDUAL PERFORMANCE MEASUREMENT FACTOR
    THRESHOLDS, A MINIMUM NET OPERATING INCOME OF $3,217,319 MUST BE
    ATTAINED FOR THE INCENTIVE YEAR 2000 BEFORE ANY INCENTIVE AWARD CAN
    BE MADE, REGARDLESS OF INDIVIDUAL PERFORMANCE RESULTS.

    Exhibits F through S detail the historical data used for calculating
    each performance measure.  The threshold level is the percentage or
    dollar amount below or above which no award will be made for that
    factor.
                                  7
 5. INDIVIDUAL PERFORMANCE ADJUSTMENTS

    Individual performance adjustments may be used to adjust an
    individual incentive award upward as far as 1.50 times the
    extended award for contributions exceeding the average level in the
    judgment of management and/or the Board of Directors.

 6. EFFECTIVE DATE

 This Plan is effective January 1, 2000.
                                  8
<PAGE>
                                                             Exhibit A
<TABLE>
<CAPTION>
                Senior Management Incentive Compensation Plan
        Participants, Performance Measurement Factors, and Weightings

 Salary

                             Net        Net                       Non-      and        Other
                          Operating  Interest  Loan    Deposit  interest  Benefits   Overhead
                           INCOME    MARGIN   GROWTH   GROWTH   INCOME    EXPENSE    EXPENSES
 <S>                         <C>       <C>     <C>      <C>      <C>       <C>          <C>
 Chief Executive Officer     30        15        5       5        5        10           10

 Senior Financial Officer    15        20        0       0        5        10           10

 Senior Commercial Officer   10        15       15       5       10         5            5

 Senior Retail Officer       10        15       10      10       10         5            5

 Senior Operations Officer   15        10        0       0       15        15           25

 Senior Credit Officer       15        15        0       5        5         5           10
</TABLE>
<TABLE>
<CAPTION>
                                                  Real                       Non-
                                                 Estate              Net   Interest
                          Commercial Installment  Past    Earning  Charge- Bearing    Specific
                           PAST DUE   PAST DUE    DUE     ASSETS    OFFS   DEPOSITS  OBJECTIVES  TOTAL
 <S>                         <C>       <C>       <C>       <C>      <C>       <C>        <C>      <C>
 Chief Executive Officer      5         0         0         5        0         0         10       100%

 Senior Financial Officer     0         0         0        15        0        10         15       100%

 Senior Commercial Officer   10         0         0         5        5         5         10       100%

 Senior Retail Officer        0         5         5         5        5         5         10       100%

 Senior Operations Officer    0         0         0        10        0         0         10       100%

 Senior Credit Officer        5         5         5        10       10         0         10       100%
</TABLE>

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