Document:

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                                                                   Exhibit 10.14

                              EMPLOYMENT AGREEMENT

AGREEMENT made effective as of the January 17th, 2000 between ESG Re Limited, a
Bermuda company (the "Company"), and it various subsidiaries and Alasdair Davis
("Executive").

WHEREAS, the Company wishes to retain the services of the Executive and
recognises that the Executive's contribution to the growth and success of the
Company will be substantial; and

WHEREAS, the Executive is willing to commit to serve the Company, on the terms
and conditions herein provided.

NOW, THEREFORE, in order to effect the foregoing, the Company and the Executive
wish to enter into an employment agreement on the terms and conditions set forth
below. Accordingly, in consideration of the promises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree to follows:-

1.   EMPLOYMENT

     The Company hereby agrees to employ the Executive, and the Executive hereby
     agrees to be employed by the Company, on the terms and conditions set forth
     herein.

2.   TERM

     The term of the Executive's employment hereunder shall commence as of the
     date hereof and shall continue until the close of business on the third
     anniversary of the date hereof, subject to earlier termination in
     accordance with the terms of this Agreement (the "Term"). The Term shall be
     automatically extended for successive one-year periods thereafter unless
     any of the parties notifies the other in writing of its intention not to so
     extend the Term at least six months prior to the commencement of the next
     scheduled one year extension.

3.   POSITION AND DUTIES

     (a)  TITLE AND DUTIES

          The Executive shall serve as Chief Underwriting Officer of the Company
          and shall have such duties, authority and responsibilities as are
          referenced in Exhibit A as attached to this Agreement. The Executive
          shall report directly to the Chief Executive Officer of the
          Reinsurance Division. The Executive shall devote substantially all of
          Executive's working time and efforts to the business and affairs of
          the Company, at such locations, including Germany, Bermuda, Ireland
          and Toronto and/or as mutually agreed upon by the Executive and the
          Company. The Executive shall not serve as Director or Officer of any
          unaffiliated companies, including but not limited to, any charitable
          organisation or chamber of commerce without the written consent of the
          Company.

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     (b)  OFFICE AND FACILITIES

          The Executive shall be provided with appropriate office and support
          facilities at the Company's offices in Dublin in order for the
          Executive to perform Executive's duties to the Company. The Executive
          shall serve as an Officer of the Company and shall agree to serve on
          other committees of the Company or any other affiliated company,
          without additional compensation, if so requested by the Company.

4.   COMPENSATION

     (a)  BASE SALARY

          During the Term, the Company shall pay to the Executive an annual base
          salary of BPS (pound)120,000. The Executive's base salary shall be
          paid in substantially equal installments on a basis consistent with
          the Company's payroll practices. The Executive's base salary, as in
          effect at any time, is hereinafter referred to as the "Base Salary".
          The Compensation Committee of the Board (the "Compensation Committee")
          shall review the Executive's performance on an annual basis and may
          increase the Executive's Base Salary, in its sole discretion, as it
          deems appropriate.

     (b)  ANNUAL BONUS

          The Compensation Committee may award the Executive an annual bonus, at
          such time and in such amount, as the Compensation Committee, in its
          sole discretion, deems appropriate.

5.   EMPLOYEE BENEFITS

     (a)  BENEFIT PLANS

          The Executive shall be entitled to participate in all employee benefit
          plans, which include worldwide medical, dental and vision coverage, a
          pension plan, perquisite and fringe benefit arrangements of the
          Company made available by the Company to its senior executives,
          subject to, and on the basis consistent with the terms, conditions and
          administration of such plans and arrangements.

     (b)  EXPENSES

                  The Executive shall be entitled to receive prompt
                  reimbursement for all reasonable and customary expenses
                  incurred by the Executive in performing services hereunder
                  including all expenses of travel and living expenses while
                  away from home on business at the request of and in the
                  service of the Company or any of it Affiliates (defined in
                  this Agreement as any company which the Company has a majority
                  share of) and promoting the business of the Company, provided
                  that such expenses are incurred and accounted for in
                  accordance with the policies and procedures established by the
                  Company.

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     (c)  VACATION

          The Executive shall be entitled to vacations and holidays on a basis
          consistent with that offered to other senior executive officers of the
          Company.

6.   TERMINATION OF EMPLOYMENT

     The Company and the Executive may each terminate the Executive's employment
     hereunder during the Term for any reason:-

     (a)  TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE FOR GOOD
          REASON

          If the Company shall terminate the Executive's employment without
          "Cause" (as defined in Section 6(f)(i)(1-6), or if the Executive
          resigns for Good Reason (as defined in Section 6(f)(iii) then, the
          Executive shall be entitled to his Base Salary at the time of the
          termination for the greater of (1) the remainder of the Term, or (2)
          one year, subject to and conditioned upon the Executive's compliance
          with Section 8 hereof. Options held by the Executive will be treated
          as provided for in the applicable Award Agreement.

          Except for the obligations listed in the initial letter of offer, any
          subsequent legal document, other Agreements or benefits plans and as
          expressly provided above, the Company and the Executive will have no
          further obligations to each other hereunder following the Executive's
          termination of employment under the circumstances described in this
          Section 6(a), (other than those under Section 8 of this Agreement
          "Confidentiality").

     (b)  TERMINATION DUE TO NON-RENEWAL OF THE TERM OR DEATH OR DISABILITY

          If the Executive's employment is terminated due to a Non-Renewal of
          the Term by either party to this Agreement or due to the Executive's
          death or disability (as defined in Section 6(f)), the Executive shall
          be entitled to a lump sum cash payment equal to the Executive's Base
          Salary through the date of termination. Options held by the Executive
          will be treated as provided for in the applicable Award Agreement.

          Except for the obligations listed in the initial letter of offer, any
          subsequent legal document, other Agreements or benefit plans and as
          expressly provided above, the Company and the Executive will have no
          further obligations to each other hereunder following the Executive's
          termination of employment under the circumstances described in this
          Section 6(b), (other than those under Section 8 of this Agreement
          "Confidentiality").

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     (c)  TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE OTHER THAN
          FOR GOOD REASON

          If the Executive's employment is terminated by the Company for Cause
          or by the Executive other than for Good Reason, the Executive shall be
          entitled to a lump sum cash payment equal to his Base Salary through
          the date of termination. Options held by the Executive shall be
          treated as provided for in the applicable Award Agreement.

          Except as expressly provided above and in the initial offer letter,
          any subsequent legal document, other Agreements or benefit plans, the
          Company and the Executive will have no further obligations to each
          other hereunder following the Executive's termination of employment
          under the circumstances described in this Section 6(c), other than
          those under Section 8 of this Agreement "Confidentiality").

     (d)  TERMINATION WITHIN ONE YEAR OF A CHANGE IN CONTROL

          If the Company terminates the Executive's employment without cause or
          the Executive terminates employment for good reason within one year
          following a Change in Control, the Executive shall be entitled in
          addition to the compensation otherwise payable upon termination of
          employment pursuant to Section 6(a) above to a lump sum payment which
          when added to the present value of all other benefits or payments
          would equal three times Executive's base amount.

          Following a termination of the Executive's employment with the Company
          after a Change of Control pursuant to this Section 6(d), the Executive
          shall not be required in any manner whatsoever to mitigate any damages
          resulting from such termination. Furthermore the payments referred to
          in this Section 6(d) shall be made regardless of whether the Executive
          seeks or finds employment of any nature whatsoever.

          The Company and the Executive confirm that the provisions of this
          Section 6(d) are reasonable and that the total amount payable as
          outlined herein is an amount which has been agreed between them to be
          payable hereunder, or in the alternative is a reasonable preestimate
          of the damages which will be suffered by the Executive in the event of
          a termination within one year of a Change of Control by the Company
          without Cause or by the Executive for Good Reason, and shall not be
          construed as a penalty.

          Following a termination of the Executive's employment after a Change
          of Control as contemplated in this Section 6(d) and upon receipt of
          the payments and benefits referred to in this Section 6(d), the
          Executive hereby agrees to resign form any offices, positions and
          directorships which he may have or may have held in the Company, any
          of its subsidiaries and/or affiliates.

     (e)  NOTICE OF TERMINATION

          Any termination of the Executive's employment by the Company or by the
          Executive (other than termination pursuant to the Executive's death)
          shall be communicated by written Notice of Termination to the other
          party hereto in accordance with Section 11 hereof. If the Company
          terminates the Executive's employment for Cause or if the Executive
          resigns for Good Reason, the "Notice of Termination" shall mean a
          notice which shall indicate the specific termination provision in this
          Agreement relied upon and shall set forth in reasonable detail the
          facts and circumstances claimed to provide a basis for termination of
          the Executive's employment under the provision so indicated. For
          purposes of this Agreement, the date of the Executive's termination of
          employment shall be deemed to be the date as specified in the Notice
          of Termination.

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     (f)  DEFINITIONS - For purpose of this Agreement

          (i)  "Cause" shall mean

               (1)  The Executive's breach of any material term of this
                    Agreement, including, but not limited to, the covenants set
                    forth in Sections 7 and 8 hereof if applicable, provided
                    that the Executive shall have Sixty days to cure the breach
                    of any such material term from the date that Executive is
                    notified in writing by the Company of such a breach.

               (2)  The Executive's failure or refusal to perform duties as
                    provided by Exhibit A hereunder or to perform specific
                    directives of the Company that are consistent with
                    Executive's position as Chief Underwriting Officer of the
                    Company, provided that such directives do not violate any
                    applicable laws or Industry Standards and provided, however,
                    that the Executive shall have Sixty days to cure such
                    breach, failure or refusal to perform from the date that
                    Executive is notified in writing by the Company of such
                    occurrence;

               (3)  Intentional Dishonesty of the Executive which is the cause
                    of a material loss to the Company or any of its Affiliates;

               (4)  Any gross or willful conduct of the Executive specifically
                    intended to cause substantial loss to or theft from the
                    Company or any of the Company's Affiliates;

               (5)  Alcoholism or Abuse of drugs or any controlled substances
                    which interferes with the performance of the Executive's
                    duties and responsibilities under this Agreement; or

               (6)  The Executive is convicted of a felony, whether or not
                    related to the business of the Company, including but not
                    limited to, any felony related to tax evasion, bribery,
                    theft, or political payoffs.

          (ii) "Disability" shall mean the Executive's adjudication as mentally
               incompetent, or mental or physical disability preventing the
               Executive from performing duties under this Employment Agreement
               for a period of 180 consecutive days.

          (iii) "Good Reason" shall include but not be limited to (1) a material
               diminution of the Executive's duties (per Exhibit A as attached)
               or the assignment to the Executive of a title or duties
               inconsistent using the position of Chief Underwriting Officer (2)
               a material reduction in Executive's Base Salary amounting to at
               least 10%, (3) An intentional breach of any applicable law,
               regulation or Industry Standard by the Company, its various
               subsidiaries, Affiliates, agents or other individuals or entities
               performing duties at the direction of the Company including,
               without limitation the employees of the entities listed above
               while acting in the scope of their employment ("Related Parties")
               or the failure of the Company to immediately cure a breach of any
               applicable law, regulation or Industry Standard, upon becoming
               aware of such breach, (4)failure of the Company to comply with
               any material provision of this Agreement.

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          (iv) Definitions

               Change of Control shall mean an event, whereby:

               i    any individual, firm, corporation or other entity, or any
                    group (as defined in Section 13(d)(3) of the Securities
                    Exchange Act of 1934) (the "Act")) becomes, directly or
                    indirectly, the beneficial owner (as defined in the General
                    Rules and Regulations of the Securities and Exchange
                    Commission with respect to Sections 13(d) and 13(g) of the
                    Act) of more than 35% of the then outstanding shares of the
                    Company's capital stock (entitled to vote generally in the
                    election of directors of the Company; or

               ii   the stockholders of the Company approve a definitive
                    agreement for (A) the merger or other business combination
                    of the Company with or into another corporation pursuant to
                    which the stockholders of the Company do not own,
                    immediately after the transaction, more than 50% of the
                    voting power of the corporation that survives and is a
                    publicly owned corporation and not a subsidiary of another
                    corporation, or (B) the sale, exchange or other disposition
                    of all or substantially all of the assets of the Company; or

               iii  during any period of two years or less, individuals who at
                    the beginning of such period constituted the Board of
                    Directors of the Company cease for any reason to constitute
                    at least a majority thereof unless the election or the
                    nomination for election by the stockholders of the Company,
                    of each new director was approved by a vote of at least 75%
                    of the directors then still in office who were directors at
                    the beginning of the period; or

               iv   such other event as the Board of Directors of the Company
                    may designate. PROVIDED HOWEVER, that a "Change of Control"
                    shall not be deemed to have taken place if beneficial
                    ownership is acquired by, or a tender or exchange offer is
                    commenced by, the Company or any of its subsidiaries, any
                    profit-sharing, Employee ownership or other employee benefit
                    plan of the Company or any subsidiary or any trustee of or
                    fiduciary with respect to any such plan when acting in such
                    capacity, or any group comprised solely of such entities.

7.   NON-COMPETITION

     (a)  The Executive acknowledges and recognises the highly competitive
          nature of the business of the Company and its affiliates and
          accordingly agrees as follows:-

          (i)  During the Employment Term and for a period of 18 months
               following the Executive's termination of employment for other
               than Good Reason pursuant to Section 6(c) of this Agreement (the
               "Restricted Period"), the Executive will not, unless the
               Executive is given written permission by the Company, directly or
               indirectly, (i) engage in any business for the Executive's own
               account that competes directly with the business of the Company
               or any of its affiliates that are engaged in the insurance or
               reinsurance business (the "Company

               Affiliates"), (ii) enter the employment of, or render any
               services to, any person engaged in any business that competes
               directly with the business of the Company or the Company
               Affiliates, (iii) acquire a majority financial interest in,

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               or otherwise become actively involved with, any person engaged in
               any business that competes directly with the business of the
               Company or the Company Affiliates, directly or indirectly, as an
               individual, partner, shareholder, officer, director, principal,
               agent, trustee or consultant, or (v) interfere with business
               relationships (whether formed before or after the date of this
               Agreement) of the Company or the Company Affiliates.

          (ii) Notwithstanding anything to the contrary in this Agreement, the
               Executive may, directly own, solely as an investment, securities
               of any person engaged in the business of the Company or the
               Company Affiliates if the Executive (i) is not a controlling
               person of, or a member of a group which controls, such person and
               (ii) does not, directly or indirectly, own more than one share
               less than 5% of any class of securities of such person.

          (iii) During the Restricted Period, the Executive will not, directly
               or indirectly, (i) solicit or encourage any employee of the
               Company or Company Affiliates or (ii) hire any such employee who
               has left the employment of the Company or the Company Affiliates
               to cease to work with the Company or the Company Affiliates any
               consultant then under contract with the Company or the Company
               Affiliates.

          (iv) During the Restricted Period, the Executive will not, directly or
               indirectly, solicit or encourage to cease to work with the
               Company or the Company Affiliates any consultant then under
               contract with the Company or the Company Affiliates.

     (b)  It is expressly understood and agreed that although the Executive and
          the Company consider the restrictions contained in this Section 7 to
          be reasonable, if a final judicial determination is made by a court of
          competent jurisdiction that the time or territory or any other
          restriction contained in this Agreement is an unenforceable
          restriction against the Executive, the provisions of this Agreement
          shall not be rendered void but shall be deemed amended to apply as to
          such maximum time and territory and to such maximum extent as such
          court may judicially determine or indicate to be enforceable.
          Alternatively, if any court of competent jurisdiction finds that any
          restriction contained in this Agreement is unenforceable, and such
          restriction cannot be amended so as to make it enforceable, such
          finding shall not affect the enforceability of any of the other
          restrictions contained herein.

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8.   CONFIDENTIALITY

     The Executive will not at any time (whether during or after employment with
     the Company) disclose or use for Executive's own benefit or purposes or the
     benefit or purposes of any other person, firm, partnership, joint venture,
     association, corporation or other business organisation, entity or
     enterprise other than the Company and any of their subsidiaries or
     Affiliates, any trade secrets, information, data, or other confidential
     information relating to customers, development programs, costs, marketing,
     trading, investment, sales activities, promotion, credit and financial
     data, financing methods, plans, or the business and affairs of the Company
     or of any subsidiary or affiliate of the Company, PROVIDED that foregoing
     shall not apply to information which is not unique to the Company or any of
     its subsidiaries or alliliates or which is generally known to the industry
     or the public other than as a result of the Executive's breach of this
     covenant. The Executive agrees that upon termination of employment with the
     Company for any reason, he will return to the Company immediately all
     memoranda, books, papers, Plans, information, letters and other data, and
     all copies thereof or therefrom, in any way relating to the business of the
     Company and its affiliates, except that he may retain personal notes,
     notebooks, diaries and reference materials. The Executive further agrees
     that he will not retain or use for Executive's account at any time any
     trade names, trademarks, or other proprietary business designations used or
     owned in connection with the business of the Company or their Affiliates.

9.   EQUITABLE RELIEF

     The Executive acknowledges and agrees that the Company's remedies at law
     for a breach or threatened breach of any of the provisions of Section 7 or
     Section 8 would be inadequate and, in recognition of this fact, the
     Executive agrees that, in the event of such a breach or threatened breach,
     in addition to any remedies at law, the Company, without posting any bond
     or security, shall be entitled to obtain equitable relief in the form of
     specific performance, temporary restraining order, temporary or permanent
     injunction or any other equitable remedy which may then be available.

10.  SUCCESSORS; BINDING AGREEMENT

     (a)  The Company will require any successor (whether direct or indirect, by
          purchase, merger, consolidation or otherwise) to all or a majority of
          the business and/or assets of the Company to expressly assume and
          agree to perform this Agreement in the same manner and to the same
          extent that the Company would be required to perform it if no such
          succession had taken place. As used in this Agreement, "Company" shall
          mean the Company as herein defined and any successor to its business
          and/or assets as aforesaid which executes and delivers the agreement
          provided for in this Section 10 or which otherwise becomes bound by
          all the terms and provisions of this Agreement by operation of law.

     (b)  This Agreement and all rights of the Executive hereunder shall inure
          to the benefit of and be enforceable by the Executive's personal or
          legal representatives, executors, administrators, successors, heirs,
          distributes, devisees and legatees. If the Executive should die while
          any amounts are payable to him hereunder all such amounts unless
          otherwise provided herein, shall be paid in accordance with the terms
          of this Agreement to the Executive's devisee, legatee, or other
          designee or, if there be no such designee, to the Executive's estate.

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11.  NOTICE

     For the purpose of this Agreement, notices, demands and all other
     communications provided for in this Agreement shall be in writing and shall
     be deemed to have been duly given when personally delivered with receipt
     acknowledged or after having been received by certified or registered mail,
     return receipt requested, postage prepaid, addressed as follows:-

                           If to the Executive:

                           32 Radcliff Hall
                           St Johns Road
                           Sandymount
                            Dublin 4
                           Ireland

                           If to the Company:

                           ESG Re Limited
                           16 Church Street
                           Hamilton, HM11
                           Bermuda
                           Attention:  Chief Financial Officer

     Or to such other address as any party may have furnished to the other in
     writing in accordance herewith, except that notices of change of address
     shall be effective only upon receipt.

12.  MISCELLANEOUS

     No provisions of this Agreement may be modified, waived or discharged
     unless such waiver, modification or discharge is agreed to in writing
     signed by the Executive and such officer of the Company as may be
     specifically designated by the Company as the case may be. No waiver by any
     party hereto at any time of any breach by the other party hereto of, or
     compliance with, any condition or provision of this Agreement to be
     performed by such other party shall be deemed a waiver of similar or
     dissimilar provisions or conditions at the same or at any prior or
     subsequent time. The laws of Bermuda without regard to its conflicts of law
     principles shall govern the validity, interpretation, construction and
     performance of this Agreement.

13.  VALIDITY

     The invalidity or unenforceability of any provisions of this Agreement
     shall not affect the validity or enforceability of any other provision of
     this Agreement, which shall remain in full force and effect.

14.  COUNTERPARTS

     This Agreement may be executed in one or more counterpart, each of which
     shall be deemed to be an original but all of which together will constitute
     one and the same instrument.

15.  WITHHOLDING

     The Company may withhold from any amounts payable under this Agreement such
     federal, state and local and foreign taxes as may be required to be
     withheld pursuant to applicable law or regulation.

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16.  ENTIRE AGREEMENT

     This Agreement sets forth the entire agreement of the parties hereto in
     respect of the subject matter contained herein and supersedes all prior
     agreements, promises, covenants, arrangements, communications,
     representations or warranties, whether oral or written, by any officer,
     employee or representative of any party hereto, including any prior
     employment agreements.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and the Executive has hereunto set his hand, effective as of the ____ day of
____ (date).

                           ESG Re Limited

                           By:
                                      ------------------------------------
                                      Name:
                                      Title:

                                      Employee's Name:

                                      ------------------------------------
                                      Alasdair Davis

Ref:  personnel - davis-coe.doc<PAGE>

                                                                   Exhibit 10.15
                              EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made as of January 1, 2001 (the "Effective Date"),
by and between ESG Re Limited, a Bermuda corporation (the "Corporation"), and
John C Head III ("Executive").

The Corporation, on behalf of itself and its shareholders, wishes to retain
Executive as an integral part of the management of the Corporation.

IT IS, THEREFORE, AGREED:

1.    TERM OF AGREEMENT. This Agreement shall be effective as of the Effective
      Date, and shall continue until December 31, 2001, unless earlier
      terminated pursuant to Section 6 or the next sentences (the "Employment
      Period"). The Employment Period may be terminated by either party after
      January 1, 2001, upon thirty (30) days written notice to the other party.
      Except as otherwise stated pursuant to this Employment Agreement, the
      benefits stated in Sections 4C, 4D and 4E shall continue through December
      31, 2001. Notwithstanding anything to the contrary, the Employment Period
      may not be terminated during the pendency of any agreed upon or threatened
      Change of Control. During the period of any agreed upon or threatened
      Change of Control, the Employment Period shall be extended automatically
      without further notice by either party for additional periods of one (1)
      year each at the same Compensation stated in Sections 4A through 4G
      inclusive. If (i) the Employment Agreement is terminated by the
      Corporation and (ii) the Corporation wishes to retain the services of the
      Executive in any capacity, conditional upon termination of the Employment
      Agreement, the Corporation and the Executive shall enter into such
      additional agreements for such services satisfactory to the Corporation
      and the Executive.

2.    EMPLOYMENT. The Corporation hereby agrees to continue Executive in its
      employ for the Employment Period.

3.    POSITION AND DUTIES.

      A.    As of the date hereof, Executive is employed, and during the
            Employment Period Executive shall continue to be employed as Chief
            Executive Officer of the Corporation, and reports and shall continue
            to report to the Board of Directors of the Corporation (the
            "Board"). Executive shall perform those duties and responsibilities
            inherent in such position, including such duties as the Board shall
            assign. Such duties shall be performed substantially outside of the
            US. Executive agrees to devote such portion (which both Executive
            and the Corporation agree shall be less than 100%) of his business
            time, effort, attention, energies and skills to the business and
            interests of the Corporation as are necessary for the operation of
            the

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            Corporation. During the Employment Period, Executive's position
            (including status, offices, titles and reporting requirements),
            authority, duties and responsibilities shall be consistent with
            those of the Chief Executive Officer of a publicly traded
            corporation, and the Corporation agrees that no individual will
            serve in a capacity or with a title superior to that of Executive,
            and that Executive shall report directly and exclusively to the
            Board.

      B.    Excluding periods of vacation, sick leave and Disability (as
            hereinafter defined) to which Executive is entitled, Executive
            agrees to devote reasonable attention and time during normal
            business hours to the business and affairs of the Corporation and,
            to the extent necessary to discharge the responsibilities assigned
            to Executive hereunder, to use Executive's reasonable best efforts
            to perform faithfully and efficiently such responsibilities.
            Executive may pursue other business activities, in any capacity
            whatsoever, as long as the pursuit of such activities does not
            violate this Agreement or Executive's fiduciary obligations to the
            Corporation. It is expressly understood and agreed that to the
            extent that any such activities have been conducted by Executive
            prior to a Change in Control (as hereinafter defined), the continued
            conduct of such activities (or the conduct or activities similar in
            nature and scope thereto) subsequent to the Change in Control shall
            not thereafter be deemed to interfere with the performance of
            Executive's responsibilities to the Corporation.

4.    COMPENSATION.

      A.    BASE SALARY. During the Employment Period, as consideration for
            services rendered, the Corporation shall pay to Executive a base
            salary of $650,000 payable in twelve equal monthly instalments for
            each year of the Employment Period, as adjusted as described in the
            following sentence ("Base Salary"). During the Employment Period,
            Base Salary shall be reviewed by the Board (or the Compensation
            Committee thereof) at least annually and may be increased at the
            discretion of the Board or the Compensation Committee. Any increase
            in Base Salary shall not serve to limit or reduce any other
            obligation to Executive under this Agreement. Executive's Base
            Salary may not be reduced after any such increase.

      B.    Long Term Incentives.

            (i)   On the Effective Date, the Company will grant to the Executive
                  a Stock Option under the 1997 Stock Option Plan for 375,000
                  shares of Common stock, with an exercise price equal to the
                  fair market value on the date of grant. This award will vest
                  as follows: 50% on January 15, 2002, 25% on January 15, 2003
                  and 25% on January 15, 2004,

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                  regardless of continued employment status on each subsequent
                  vest date. The option will remain exercisable for a 10 year
                  period, regardless of continued employment status.

            (ii)  On the Effective Date, the Company will grant to the Executive
                  a Stock Option under the 1997 Stock Option Plan for 100,000
                  shares of Common stock, with an exercise price equal to the
                  fair market value on the date of grant. This award will be
                  100% vested upon grant and exercisable at any time, in whole
                  or in part, for a 10 year period, regardless of continued
                  employment status.

            (iii) In addition, the Restricted Stock (as defined in the letter
                  agreement between the Corporation and the Executive dated as
                  of September 1, 1999) shall vest as to 87,500 shares of
                  Corporation common stock on each of April 1, 2001; April 1,
                  2002; and April 1, 2003, regardless of whether the Executive
                  is an officer or director of the Corporation on such date.

            (iv)  Upon a Change of Control of the Corporation, all restrictions
                  on any unvested Restricted Stock awards shall lapse
                  immediately and all unvested stock options shall vest
                  immediately.

      C.    BONUS AND INCENTIVE PROGRAMS. Executive shall receive an annual
            bonus in respect of the fiscal year of the Corporation ending
            December 31, 2001, in such amount as shall be determined by the
            Board or by the Compensation Committee of the Board. In addition to
            the Base Salary and bonus payable as hereinabove provided. Executive
            shall be entitled to participate during the Employment Period in all
            incentive programs applicable to other key executives of the
            Corporation.

      D.    WELFARE BENEFIT AND RETIREMENT PLANS. During the Employment Period,
            Executive and/or Executive's family, as the case may be, shall be
            provided with and shall receive employee benefits including, but not
            limited to, medical, dental, prescription, savings, pension and
            retirement plans, which are generally offered to all senior
            executives of the Corporation. The life and disability coverages
            provided to Executive under the terms of the Employment Agreement
            made as of September 1, 1999, between the parties will remain in
            effect during the Employment Period of this Employment Agreement. In
            lieu of such welfare benefit and retirement plan participation,
            Executive may elect annually, at his option, instead to receive a
            cash payment equal to the value of such benefits. Regardless of the
            Base Salary, Executive actually receives in any year of the
            Employment Period, his participation in any employee benefit plans
            offered by the Corporation shall be based on a notional Base Salary
            of $440,000 per year, (the "Notional Base Salary").

                                       3
<PAGE>

            Immediately prior to any Change of Control, any deferred
            compensation arrangements due the Executive (including the amounts
            payable in the trust agreement between ESG Re Ltd and the Bermuda
            Trust Company dated July 17, 2000) shall be immediately vested and
            paid to the Executive.

      E.    OFFICE AND SUPPORT STAFF. During the Employment Period, Executive
            shall be entitled to an office and secretarial and other assistance
            outside of the United States consistent with his position.

      F.    EXPENSES. During the Employment Period, Executive shall be entitled
            to receive prompt reimbursement for all reasonable expenses incurred
            by Executive in the performance of his duties hereunder.

      G.    VACATION. During the Employment Period, Executive shall be entitled
            to the same annual vacation time provided to other senior executives
            of the Corporation.

5.    CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
      Control" shall be deemed to have taken place if:

      A.    Individuals who, on the date hereof, constitute the Board (the
            "Incumbent Directors") cease for any reason to constitute at least a
            majority of the Board, provided that any person becoming a director
            subsequent to the date hereof, whose election or nomination for
            election was approved by a vote of at least two-thirds of the
            Incumbent Directors then on the Board (either by a specific vote or
            by approval of the proxy statement of the Corporation in which such
            person is named as a nominee for director, without written objection
            to such nomination) shall be an Incumbent Director; PROVIDED,
            HOWEVER, that no individual initially elected or nominated as a
            director of the Corporation as a result of an actual or threatened
            election contest with respect to directors or as a result of any
            other actual or threatened solicitation of proxies or consents by or
            on behalf of any person other than the Board shall be deemed to be
            an Incumbent Director;

      B.    Any "Person" (as such term is defined in Section 3(a)(9) of the
            Securities Exchange Act of 1934 (the "Exchange Act") and as used in
            Sections 13(d)(3) and 14(d)(2) of the Exchange Act) (an "Acquiring
            Person") is or becomes a "beneficial owner" (as defined in Rule
            13d-3 under the Exchange Act), directly or indirectly, of securities
            of the Corporation representing 20% or more of the combined voting
            power of the Corporation's then outstanding securities eligible to
            vote for the election of the Board (the "Voting Securities");
            PROVIDED, HOWEVER, that the event described in this paragraph (B)
            shall not be deemed to be a Change in

                                       4
<PAGE>

            Control by virtue of any of the following acquisitions: (i) by the
            Corporation or any subsidiary of the Corporation in which the
            Corporation owns more than 50% of the combined voting power of such
            entity (a "Subsidiary"), (ii) by any employee benefit plan (or
            related trust) sponsored or maintained by the Corporation or any
            Subsidiary, (iii) by any underwriter temporarily holding the
            Corporation's Voting Securities pursuant to an offering of such
            Voting Securities, (iv) pursuant to a Non-Qualifying Transaction (as
            defined in paragraph C immediately below), or (v) pursuant to any
            acquisition by Executive or any group of persons including Executive
            (or any entity controlled by Executive or any group of Persons
            including Executive); Notwithstanding the foregoing, if any Person
            who would otherwise be an Acquiring Person has acquired from
            Executive or from any group of Persons including Executive (or from
            any entity controlled by the Executive or by any group of Persons
            including Executive), after the date of this Agreement, Voting
            Securities of the Corporation constituting 5% or more of the
            combined voting power of the Corporation's then outstanding Voting
            Securities, then no Change of Control shall be deemed to have
            occurred under this Section 5B unless or until such Acquiring Person
            is or becomes the beneficial owner, directly or indirectly, of
            securities of the Corporation representing 50% or more of the
            combined voting power of the Corporation's then outstanding Voting
            Securities.

      C.    The consummation of a merger, consolidation, statutory share
            exchange or similar form of corporate transaction involving the
            Corporation or any of its Subsidiaries that requires the approval of
            the Corporation's stockholders, whether for such transaction or the
            issuance of securities in the transaction (a "Business
            Combination"), unless immediately following such Business
            Combination: (i) more than 50% of the total voting power of (A) the
            corporation resulting from such Business Combination (the "Surviving
            Corporation"), or (B) if applicable, the ultimate parent corporation
            that directly or indirectly has beneficial ownership of 100% of the
            voting securities eligible to elect directors of the Surviving
            Corporation (the "Parent Corporation"), is represented by the
            Corporation's Voting Securities that were outstanding immediately
            prior to such Business Combination (or, if applicable, is
            represented by shares into which the Corporation's Voting Securities
            were converted pursuant to such Business Combination), and such
            voting power among the holders thereof is in substantially the same
            proportion as the voting power of the Corporation's Voting
            Securities among the holders thereof immediately prior to the
            Business Combination, (ii) no Person (other than the employee
            benefit plan (or related trust) sponsored or maintained by the
            Surviving Corporation or the Parent Corporation), is or becomes the
            beneficial owner, directly or indirectly, of 20% or more of the
            total voting power of the outstanding voting securities eligible to
            elect directors of the Parent Corporation (or, if there is no Parent
            Corporation, the Surviving Corporation) and (iii) at least a
            majority of the members of the board of

                                       5
<PAGE>

            directors of the Parent Corporation (or, if there is no Parent
            Corporation, the Surviving Corporation) following the consummation
            of the Business Combination were Incumbent Directors at the time of
            the Board's approval of the execution of the initial agreement
            providing for such Business Combination (any Business Combination
            which satisfies all of the criteria specified in (i), (ii) and (iii)
            above shall be deemed to be a "Non-Qualifying Transaction");

      D.    A sale of all or substantially all of the Corporation's assets;

      E.    The stockholders of the Corporation approve a plan of complete
            liquidation or dissolution of the Corporation; or

      F.    Such other events as the Board may designate.

      Notwithstanding the foregoing, a Change of Control of the Company shall
      not be deemed to occur solely because any person acquires beneficial
      ownership of more than 20% of the Corporation's Voting Securities as a
      result of the acquisition of the Corporation's Voting Securities by the
      Corporation which reduces the number of the Corporation's Voting
      Securities outstanding; PROVIDED, THAT if after such acquisition by the
      Corporation such person becomes the beneficial owner of additional Voting
      Securities of the Corporation that increases the percentage of outstanding
      Voting Securities of the Corporation beneficially owned by such person, a
      Change in Control of the Corporation shall then occur.

6.    TERMINATION: This Agreement shall terminate under the following
      circumstances:

      A.    DEATH OR DISABILITY. This Agreement and the Employment Period shall
            terminate automatically upon Executive's death. The Corporation may
            terminate this Agreement, after having established Executive's
            Disability (pursuant to the definition of "Disability" set forth
            below), by giving to Executive written notice of its intention to
            terminate Executive's employment. In such a case, Executive's
            employment with the Corporation shall terminate effective on the
            180th day after receipt of such notice (the "Disability Effective
            Date"), provided that, within 180 days after such receipt, Executive
            shall not have returned to full performance of Executive's duties.
            For purposes of this Agreement "Disability" means personal injury,
            illness or other cause which, after the expiration of not less than
            180 days after its commencement, renders Executive unable to perform
            his duties with substantially the same level of quality as
            immediately prior to such incident and such disability is determined
            to be total and permanent by a physician selected by the Corporation
            or its insurers and acceptable to Executive or Executive's legal
            representative (such agreement as to acceptability not to be
            withheld unreasonably).

                                       6
<PAGE>

      B.    WITH OR WITHOUT CAUSE. The Corporation may terminate Executive's
            employment with or without "Cause". The Employment Period shall
            immediately end upon a termination by the Corporation with Cause.
            For purposes of this Agreement, "Cause" means (i) the willful and
            continued failure of Executive to perform substantially his duties
            with the Corporation (other than any such failure resulting from
            Executive's incapacity due to physical or mental illness or any such
            failure subsequent to Executive being delivered a Notice of
            Termination without Cause by the Corporation or delivering a Notice
            of Termination for Good Reason to the Corporation) after a written
            demand for substantial performance is delivered to Executive by the
            Board which specifically identifies the manner in which the Board
            believes that Executive has not substantially performed Executive's
            duties and Executive has failed to cure such failure to the
            reasonable satisfaction of the Board within ninety (90) days of his
            receipt of such demand, (ii) the willful engaging by Executive in
            gross misconduct which is demonstrably and materially injurious to
            the Corporation or its affiliates, or (iii) Executive's conviction
            (which conviction is no longer appealable) of, or pleading guilty
            to, a felony involving moral turpitude or the property of the
            Corporation. For purpose of this paragraph B, no act or failure to
            act by Executive shall be considered "willful" unless done or
            omitted to be done by Executive in bad faith and without reasonable
            belief that Executive's action or omission was in the best interests
            of the Corporation or its affiliates. Any act, or failure to act,
            based upon authority given pursuant to a resolution duly adopted by
            the Board or based upon the advice of counsel for the Corporation
            shall be conclusively presumed to be done, or omitted to be done, by
            Executive in good faith and in the best interests of the
            Corporation. Cause shall not exist unless and until the Corporation
            has delivered to Executive, along with the Notice of Termination for
            Cause, a copy of a resolution duly adopted by three-quarters (3/4)
            of the entire Board (excluding Executive if Executive is a Board
            member) at a meeting of the Board called and held for such purpose
            (after reasonable notice to Executive and an opportunity for
            Executive, together with counsel, to be heard before the Board),
            finding that in the good faith opinion of the Board an event set
            forth in clauses (i) and (ii) above has occurred and specifying the
            particulars thereof in detail. The Board must notify Executive of
            any event constituting Cause within ninety (90) days following the
            Board's knowledge of its existence or such event shall not
            constitute Cause under this Agreement.

      C.    WITH OR WITHOUT GOOD REASON. Executive's employment may be
            terminated by Executive with or without Good Reason. The Employment
            Period shall immediately end upon a termination by Executive with or
            without Good Reason. For purposes of this Agreement, "Good Reason"
            means:

                                       7
<PAGE>

            (i)   (a) any change in the duties or responsibilities (including
                  reporting responsibilities) of Executive that is inconsistent
                  in any material and adverse respect with Executive's
                  position(s), duties, responsibilities or status with the
                  Corporation immediately prior to the Effective Date or at any
                  time thereafter (including any material and adverse diminution
                  of such duties or responsibilities), or (b) a material and
                  adverse change in Executive's titles or offices (including his
                  position as Chief Executive Officer) with the Corporation;

            (ii)  any failure by the Corporation to comply with any of the
                  provisions of Section 4 of this Agreement;

            (iii) any purported termination by the Corporation of Executive's
                  employment otherwise than as permitted by this Agreement, it
                  being understood that any such purported termination shall not
                  be effective for any purpose of this Agreement; or

            (iv)  any failure by the Corporation to comply with and satisfy
                  Section 11C of this Agreement by causing any successor to the
                  Corporation to expressly assume and agree to perform this
                  Agreement with Executive, to the full extent set forth in said
                  Section 11C;

      provided that a termination by Executive with Good Reason shall be
      effective only if, within thirty (30) days following the delivery of a
      Notice of Termination for Good Reason by Executive to the Corporation, the
      Corporation has failed to cure the circumstances giving rise to Good
      Reason to the reasonable satisfaction of Executive. For purposes of this
      Section 6C, a good faith determination made by Executive that a "Good
      Reason" for termination has occurred, and has not been adequately cured,
      shall be conclusive and binding.

      D.    EXPIRATION OF THE EMPLOYMENT PERIOD. This Agreement shall terminate
            upon the expiration of the Employment Period.

      E.    NOTICE OF TERMINATION. Any termination by the Corporation with or
            without Cause or by Executive with or without Good Reason shall be
            communicated by Notice of Termination to the other party hereto
            given in accordance with Section 12E of this Agreement. For purposes
            of this Agreement, a "Notice of Termination" means a written notice
            which (i) indicates the specific termination provision in this
            Agreement relied upon, (ii) sets forth in reasonable detail the
            facts and circumstances claimed to provide a basis for termination
            of Executive's employment under the provision so indicated and (iii)
            if the termination date is other than the date or receipt of such
            notice, specifies the proposed termination date.

7.    OBLIGATIONS OF THE CORPORATION UNDER TERMINATION.

                                       8
<PAGE>

      A.    DEATH. If Executive's employment is terminated by reason of
            Executive's death, this Agreement shall terminate without further
            obligations to Executive's legal representatives, other than (i)
            those death benefits provided by the Corporation to which Executive
            is entitled at the date of Executive's death, and (ii) a pro-rata
            Bonus for the Fiscal Year in which such death occurs equal to the
            product of X * Y (such product referred to below as the "Pro-Rata
            Bonus"), where:

            X =   the greater of (a) the largest Bonus paid to the Executive in
                  the two years preceding the date of termination, (b) the Bonus
                  which would have been paid to Executive in respect of the
                  calendar year in which termination occurs if the Corporation
                  attained its budgeted financial performance for such year, as
                  reasonably determined by the Compensation Committee of the
                  Board, and (c) $550,000 (the "Highest Bonus"); and

            Y =   the number of days elapsed in such year preceding the date of
                  termination divided by 365.

      B.    DISABILITY. If Executive's employment is terminated by reason of
            Executive's Disability, this Agreement shall terminate on the
            Disability Effective Date without further obligations to Executive,
            other than (i) those benefits provided by the Corporation to which
            Executive is entitled as of the Disability Effective Date, and (ii)
            the Pro-Rata Bonus.

      C.    CAUSE OR WITHOUT GOOD REASON. If Executive's employment shall be
            terminated (i) by the Corporation with Cause, or (ii) by Executive
            without Good Reason, the Corporation shall pay Executive his Base
            Salary through the date of termination and shall have no further
            obligations to Executive under this Agreement.

      D.    WITHOUT CAUSE OR WITH GOOD REASON. If Executive's employment shall
            be terminated (i) by the Corporation without Cause or (ii) by
            Executive with Good Reason, the Corporation shall pay to Executive
            in a lump sum in cash within three (3) days after the date of
            termination the aggregate of the following amounts:

            a.    to the extent not theretofore paid, Executive's Base Salary
                  through the date of termination plus any Bonus amounts which
                  have become payable and any accrued vacation pay;

            b.    a Pro-Rata Bonus for the Fiscal Year in which the date of
                  termination occurs;

            c.    Executive's Base Salary for the greater of: (x) the reminder
                  of the Employment Period, and (y) one (1) year;

                                       9
<PAGE>

            d.    the Highest Bonus for the greater of: (x) the remainder of the
                  Employment Period, and (y) one (1) year;

            e.    the present lump sum value of benefits which would have
                  accrued under any qualified and nonqualified retirement plan
                  (including any deferred compensation arrangements) of the
                  Corporation in which Executive participates or could
                  participate at the date of termination, had Executive remained
                  employed for the remainder of the Employment Period, assuming
                  that Executive would have continued for such period to earn a
                  Base Salary at the rate of $440,000 per year at the date of
                  termination and be paid the Highest Bonus on each date during
                  such period that the Bonus typically had been paid prior to
                  the date of termination.

      E.    CHANGE IN CONTROL. Upon a threatened Change of Control, the
            Corporation and the Executive shall agree upon a mutually acceptable
            additional lump sum payment.

      In addition, upon a termination or resignation of Executive in accordance
      with Section 7D or E, the Corporation shall continue to provide welfare
      benefits to Executive and his family for the remainder of the Employment
      Period at least equal to those which were being provided to them in
      accordance with Section 4D at any time within the six-month period ending
      on the date of termination, or shall allow Executive to elect instead to
      receive a lump sum cash payment equal to the value of such welfare
      benefits. If Executive elects to continue plan participation for the
      remainder of the Employment Period, to the extent that the benefits
      provided for in this Section 7E are not permissible after termination of
      employment under the terms of the benefit plans of the Corporation then in
      effect, the Corporation shall pay to Executive in a lump sum cash within
      thirty (30) days after the date of termination an amount equal to the
      after-tax cost to Executive of acquiring on a non-group basis, for the
      remainder of the Employment Period, those benefits lost to Executive
      and/or Executive's family as a result of Executive's termination.

8.    NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
      limit Executive's continuing or future participation in any benefit,
      bonus, incentive or other plan or program provided by the Corporation or
      any of its affiliated companies and for which Executive may qualify, nor
      shall anything herein limit or otherwise affect such rights as Executive
      may have under any stock option or other agreements with the Corporation
      or any of its affiliated companies. Amounts which are vested benefits or
      which Executive is otherwise entitled to receive under any plan or program
      of the Corporation or any of its affiliated companies at or subsequent to
      the date on which Executive's employment is terminated shall be payable in
      accordance with such plan or program. Anything herein to the contrary
      notwithstanding, if Executive becomes entitled to payments

                                       10
<PAGE>

      pursuant to Section 7D or E hereof, the Executive agrees to waive payments
      under any severance plan or program of the Corporation.

9.    NONDISCLOSURE: NONSOLICITATION.

      A.    Executive shall not, without the Corporation's prior written
            consent, disclose or use any non-public confidential information of
            or relating to the Corporation, whether disclosed to or learned by
            Executive during the course of his employment or otherwise, so long
            as such information is not publicly known or available, except for
            such disclosures as are required by law or in connection with
            Executive's performance of services to the Corporation hereunder.
            Executive further agrees that he shall not make any statements at
            any time that disparage the reputation of the Corporation or any of
            its affiliates. For purposes of this Section 9, the term "affiliate"
            of the Corporation includes the Board, any and all Committees of the
            Board (the "Committees") and any and all individual members of
            either the Board or any of the Committees, in their capacity as
            such, and any employee or officer of the Corporation.

      B.    Executive hereby covenants and agrees that, during the Employment
            Period, he shall not attempt to influence, persuade or induce, or
            assist any other person in so influencing, persuading or inducing,
            any employee or customer of the Corporation to give up, or to not
            commence, employment or a business relationship with the
            Corporation.

      C.    Executive acknowledges and agrees that the remedy at law available
            to the Corporation for breach of any of his obligations under
            Section 9A or B of this Agreement would be inadequate, and that
            damages flowing from such a breach may not readily be susceptible to
            being measured in monetary terms. Accordingly, Executive
            acknowledges, consents and agrees that, in addition to any other
            rights or remedies which the Corporation may have at law, in equity
            or under this Agreement, upon adequate proof of his violation of any
            provision of Section 9 of this Agreement, the Corporation shall be
            entitled to immediate injunctive relief and may obtain a temporary
            order restraining any threatened or further breach, without the
            necessity of proof of actual damage.

      D.    Executive acknowledges and agrees that the covenants set forth in
            Section 9A and B of this Agreement are reasonable and valid in
            geographical and temporal scope and in all other respects. If any of
            such covenants or such other provisions of this Agreement are found
            to be invalid or unenforceable by a final determination of a court
            of competent jurisdiction (i) the remaining terms and provisions
            hereof shall be unimpaired and (ii) the invalid or unenforceable
            term or provision shall be deemed replaced by a term or provision
            that is valid and enforceable and

                                       11
<PAGE>

            that comes closest to expressing the intention of the invalid or
            unenforceable term or provision.

10.   CERTAIN ADDITIONAL PAYMENTS BY THE CORPORATION.

      A.    If it is determined (as hereafter provided) that any payment or
            distribution by the Corporation to or for the benefit of Executive,
            whether paid or payable or distributed or distributable pursuant to
            the terms of this Agreement or otherwise pursuant to or by reason of
            any other agreement, policy, plan, program or arrangement, including
            without limitation any stock option, stock appreciation right or
            similar right, or the lapse or termination of any restriction on or
            the vesting or exercisability of any of the foregoing (a "Payment"),
            would be subject to the excise tax imposed by Section 4999 of the
            Internal Revenue Code of 1986, as amended (the "Code") (or any
            successor provision thereto) or to any similar tax imposed by state
            or local law, or any interest or penalties with respect to such
            excise tax (such tax or taxes, together with any such interest and
            penalties, are hereafter collectively referred to as the "Excise
            Tax"), then Executive will be entitled to receive an additional
            payment or payments (a "Gross-Up Payment") in an amount such that,
            after payment by Executive of all taxes (including any interest or
            penalties imposed with respect to such taxes), including any Excise
            Tax, imposed upon the Gross-Up payment, Executive retains an amount
            of the Gross-Up Payment equal to the Excise Tax imposed upon the
            Payments.

      B.    Subject to the provisions of Section 10F hereof, all determinations
            required to be made under this Section 10, including whether an
            Excise Tax is payable by Executive and the amount of Excise Tax and
            whether a Gross-Up Payment is required and the amount of such
            Gross-Up Payment, will be made by a firm of certified public
            accountants nationally recognized in the United States (the
            "Accounting Firm") selected by Executive in his sole discretion.
            Executive will direct the Accounting Firm to submit its
            determination and detailed supporting calculations to both the
            Corporation and Executive within 15 calendar days after the date of
            the Change in Control or the Date of Executive's termination of
            employment, if applicable, and any other such time or times as may
            be requested by the Corporation or Executive. If the Accounting Firm
            determines that any Excise Tax is payable by Executive, the
            Corporation will pay the required Gross-Up Payment to Executive
            within five business days after receipt of such determination and
            calculations. If the Accounting Firm determines that no Excise Tax
            is payable by Executive, it will, at the same time as it makes such
            determination, furnish Executive with an opinion that he has
            substantial authority not to report any Excise Tax on his federal,
            state, local income or other tax return. Any determination by the
            Accounting Firm as to the amount of the Gross-Up Payment will be
            binding upon the Corporation and Executive. As a result of the
            uncertainty in the application

                                       12
<PAGE>

            of Section 4999 of the Code (or any successor provision thereto) and
            the possibility of similar uncertainty regarding applicable state or
            local tax law at the time of any determination by the Accounting
            Firm hereunder, it is possible that Gross-Up Payments which will not
            have been made by the Corporation should have been made (an
            "Underpayment"), consistent with the calculations required to be
            made hereunder. In the event that the Corporation exhausts or fails
            to pursue its remedies pursuant to Section 10F hereof and Executive
            thereafter is required to make a payment of any Excise Tax,
            Executive will direct the Accounting Firm to determine the amount of
            the Underpayment that has occurred and to submit its determination
            and detailed supporting calculations to both the Corporation and
            Executive as promptly as possible. Any such Underpayment will be
            promptly paid by the Corporation to, or for the benefit of,
            Executive within five business days after receipt of such
            determination and calculations.

      C.    The Corporation and Executive will each provide the Accounting Firm
            access to and copies of any books, records and documents in the
            possession of the Corporation or Executive, as the case may be,
            reasonably requested by the Accounting Firm, and otherwise
            co-operate with the Accounting Firm in connection with the
            preparation and issuance of the determination contemplated by
            Section 10B hereof.

      D.    The federal, state and local income or other tax returns filed by
            Executive will be prepared and filed on a consistent basis with the
            determination of the Accounting Firm with respect to the Excise Tax
            payable by Executive. Executive will make proper payment of the
            amount of any Excise Tax. If prior to the filing of Executive's
            federal income tax return, or corresponding state or local tax
            return, if relevant, the Accounting Firm determines that the amount
            of the Gross-Up Payment should be reduced, Executive will within
            five business days pay to the Corporation the amount of such
            reduction.

      E.    The fees and expenses of the Accounting Firm for its services in
            connection with the determinations and calculations contemplated by
            Sections 10B and D hereof will be borne by the Corporation. If such
            fees and expenses are initially advanced by Executive, the
            Corporation will reimburse Executive the full amount of such fees
            and expenses within five business days after receipt from Executive
            of a statement therefore and reasonable evidence of his payment
            thereof.

      F.    Executive will notify the Corporation in writing of any claim by the
            Internal Revenue Service that, if successful, would require the
            payment by the Corporation of a Gross-Up Payment. Such notification
            will be given as promptly as practicable but no later than 10
            business days after Executive actually receives notice of such claim
            and Executive will further apprise the Corporation of the nature of
            such claim and the date on which such claim

                                       13
<PAGE>

            is requested to be paid (in each case, to the extent know by
            Executive). Executive will not pay such claim prior to the earlier
            of (i) the expiration of the 30-calendar-day period following the
            date on which he gives such notice to the Corporation and (ii) the
            date that any payment of amounts with respect to such claim is due.
            If the Corporation notifies Executive in writing prior to the
            expiration of such period that it wishes to contest such claim,
            Executive will:

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

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

            (iii) co-operate with the Corporation in good faith in order
                  effectively to contest such claim; and

            (iv)  permit the Corporation to participate in any proceedings
                  relating to such claim;

            PROVIDED, HOWEVER, that the Corporation will bear and pay directly
            all costs and expenses (including interest and penalties) incurred
            in connection with such contest and will indemnify and hold harmless
            Executive, on an after-tax basis, for and against any Excise Tax or
            income tax, including interest and penalties with respect thereto,
            imposed as a result of such representation and payment of costs and
            expenses. Without limiting the foregoing provisions of this Section
            10F, the Corporation will control all proceedings taken in
            connection with the contest of any claim contemplated by this
            Section 10F and, at its sole option, may pursue or forego any and
            all administrative appeals, proceedings, hearings and conferences
            with the taxing authority in respect of such claim (provided that
            Executive may participate therein at his own cost and expense) and
            may, at its option, either direct Executive to pay the tax claimed
            and sue for a refund or contest the claim in any permissible manner,
            and Executive agrees to prosecute such contest to a determination
            before any administrative tribunal, in a court of initial
            jurisdiction and in one or more appellate courts, as the Corporation
            will determine; provided, however, that if the Corporation directs
            Executive to pay the tax claimed and sue for a refund, the
            Corporation will advance the amount of such payment to Executive on
            an interest-free basis and will indemnify and hold Executive
            harmless, on an after-tax basis, from any Excise Tax or income tax,
            including interest or penalties with respect thereto, imposed with
            respect to

                                       14
<PAGE>

            such advance; and PROVIDED FURTHER, HOWEVER, that any extension of
            the statute of limitations relating to payment of taxes for the
            taxable year of Executive with respect to which the contested amount
            is claimed to be due is limited solely to such contested amount.
            Furthermore, the Corporation's control of any such contested claim
            will be limited to issues with respect to which a Gross-Up Payment
            would be payable hereunder and Executive will be entitled to settle
            or contest, as the case may be, any other issue raised by the
            Internal Revenue Service or any other taxing authority.

      G.    If, after the receipt by Executive of an amount advanced by the
            Corporation pursuant to Section 10F hereof, Executive receives any
            refund with respect to such claim, Executive will (subject to the
            Corporation's complying with the requirements of Section 10F hereof)
            promptly pay to the Corporation the amount of such refund (together
            with any interest paid or credited thereon after any taxes
            applicable thereto). If, after the receipt by Executive of an amount
            advanced by the Corporation pursuant to Section 10F hereof, a
            determination is made that Executive will not be entitled to any
            refund with respect to such claim and the Corporation does not
            notify Executive in writing of its intent to contest such denial or
            refund prior to the expiration of 30 calendar days after such
            determination, then such advance will be forgiven and will not be
            required to be repaid and the amount of such advance will be offset,
            to the extent thereof, the amount of Gross-Up Payment required to be
            paid pursuant to this Section 10.

11.   SUCCESSORS.

      A.    This Agreement is personal to Executive and without the prior
            written consent of the Corporation shall not be assignable by
            Executive otherwise than by will or the laws of descent and
            distribution. This Agreement shall inure to the benefit of and be
            enforceable by Executive's legal representatives.

      B.    This Agreement shall inure to the benefit of and be binding upon the
            Corporation and its successors.

      C.    The Corporation will require any successor (whether direct or
            indirect, by purchase, merger, consolidation or otherwise) to all or
            substantially all of the business and/or assets of the Corporation
            to expressly assume and agree to perform this Agreement in the same
            manner and to the same extent that the Corporation would be required
            to perform it if no such succession had taken place. As used in this
            Agreement, "Corporation" shall mean the Corporation as hereinbefore
            defined and any successor to its business and/or assets as aforesaid
            which assumes and agrees to perform this Agreement by operation of
            law, or otherwise.

                                       15
<PAGE>

13.   MISCELLANEOUS.

      A.    This Agreement shall be governed by and construed in accordance with
            the laws of Bermuda without reference to principles of conflict of
            laws. The parties hereto agree that exclusive jurisdiction of any
            dispute regarding this Agreement shall be the courts located in New
            York, New York. The Corporation shall directly pay the fees and
            expenses of counsel and other experts retained by Executive in
            enforcing this Agreement, as they may be incurred, provided that
            Executive shall be required to reimburse the Corporation for any
            amounts so paid unless at least one matter in dispute is decided in
            favor of Executive.

      B.    In the event of any termination of Executive's employment hereunder,
            Executive shall be under no obligation to seek other employment or
            otherwise mitigate the obligations of the Corporation under this
            Agreement, and there shall be no offset against amounts due
            Executive under this Agreement on account of amounts purportedly
            owing by Executive to the Corporation. Any amounts due to Executive
            under this Agreement upon termination of employment are considered
            to be reasonable by the Corporation and are not in the nature of a
            penalty.

      C.    The captions of this Agreement are not part of the provisions hereof
            and shall no force or effect.

      D.    This Agreement may not be amended or modified otherwise than by a
            written agreement executive by the parties hereto or their
            respective successors and legal representatives.

      E.    All notices and other communications hereunder shall be in writing
            and shall be given by hand delivery to the other party or by
            registered or certified mail, return receipt requested, postage
            prepaid, or by facsimile or nationally recognized overnight courier
            service, addressed as follows:

            IF TO EXECUTIVE:

                            John C Head III
                            1330 Avenue of the Americas - 12th Floor
                            New York, NY 10619-5402
                            Facsimile: 212-315-0520

                                       16
<PAGE>

            IF TO THE CORPORATION:

                            ESG Re Limited
                            C/o European Specialty Insurance (Ireland) Limited
                            2nd Floor
                            12/13 Exchange Place
                            IFSC Dublin 1, Ireland
                            Attention:  General Counsel
                            Facsimile:  353-1-675-0280

            or to such other address as either party shall have furnished to the
            other in writing in accordance herewith. Notice and communications
            shall be effective when actually received by the addressee.

      F.    The invalidity or unenforceability of any provision of this
            Agreement shall not affect the validity or enforceability of any
            other provision of this Agreement.

      G.    The Corporation may withhold from any amounts payable under this
            Agreement such Federal, state or local taxes as shall be required to
            be withheld pursuant to any applicable law or regulation.

      H.    This Agreement contains the entire understanding of the Corporation
            and Executive with respect to the subject matter hereof.

      IN WITNESS WHEREOF, Executive has hereunto set his hand and the
      Corporation has caused this Agreement to be executed in its name on its
      behalf, all as of the day and year first above written.

                                      -----------------------
                                      John C Head III

                                      ESG Re Limited

                                      By: /s/ Margaret L Webster
                                      Title: Chief Administrative Officer
                                                & Company Secretary

                                       17

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