ESG RE LTD
EXHIBIT 10.14
<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>2
<FILENAME>a2043063zex-10_14.txt
<DESCRIPTION>EXHIBIT 10.14
<TEXT>

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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.

<PAGE>

     (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.

<PAGE>

     (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").

<PAGE>

     (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.

<PAGE>

     (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.

<PAGE>

          (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,

<PAGE>

               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.

<PAGE>

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.

<PAGE>

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.

<PAGE>

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
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