EXHIBIT 10.18


                        EMPLOYMENT CONTINUATION AGREEMENT


THIS AGREEMENT between Alexander & Alexander Services Inc., a Maryland
corporation (the "Company"), and ________________ (the "Executive"), dated as of
this 16th day of February 1996.


                              W I T N E S S E T H :


         WHEREAS, the Company has employed the Executive in an officer position
and has determined that the Executive holds an important position with the
Company;

         WHEREAS, the Company believes that, in the event it is confronted with
a situation that could result in a change in ownership or control of the
Company, continuity of management will be essential to its ability to evaluate
and respond to such situation in the best interests of shareholders;

         WHEREAS, the Company understands that any such situation will present
significant concerns for the Executive with respect to his financial and job
security;

         WHEREAS, the Company desires to assure itself of the Executive's
services during the period in which it is confronting such a situation, and to
provide the Executive certain financial assurances to enable the Executive to
perform the responsibilities of his position without undue distraction and to
exercise his judgment without bias due to his personal circumstances;

         WHEREAS, to achieve these objectives, the Company and the Executive
desire to enter into an agreement providing the Company and the Executive with
certain rights and obligations upon the occurrence of a Change of Control or
Potential Change of Control (as defined in Section 2);

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:

          1. Operation of Agreement. (a) Effective Date. The effective date
of this Agreement shall be the earlier of the date on which a Potential Change
of Control or Change of Control occurs (the "Effective Date"), 




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provided that if the Executive is not employed by the Company, or is employed
but on a disability leave of absence, on the Effective Date, this Agreement
shall be void and without effect.

               (b) Termination of Agreement Following a Potential Change of
Control. Notwithstanding Section 1(a), in the event the Effective Date occurs
upon a Potential Change of Control, this Agreement shall cease to be effective
upon (i) a good faith determination by the Board of Directors of the Company
("Board") that the events giving rise to a Potential Change of Control will not
result in the occurrence of a Change of Control or (ii) receipt by the Company
of a written notice from the Executive, given after the first anniversary of the
occurrence of a Potential Change of Control (but prior to the occurrence of a
Change of Control), that he wants the Agreement to cease to be effective.
Following such a determination by the Board or receipt of such a notice from the
Executive, neither the Company nor the Executive shall have any obligation to
the other under this Agreement, unless and until it thereafter again becomes
effective by reason of the occurrence of another Potential Change of Control or
any actual Change of Control.

               (c) Employee's Election. At the Employee's election, the rights
and benefits afforded the Employee under the terms and conditions set forth in
this Agreement are in lieu of, and not in addition to, any severance benefits
the Employee may be entitled to receive pursuant to any employment agreement or
arrangement between the Company and the Employee or any severance plan or
arrangement offered by the Company under which the Employee is eligible.

          2. Definitions. (a) Change of Control. For the purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred if:

                  (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, as amended (the "1934 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 Section 13(d)
         and 13(g) of the 1934 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



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         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 cease for any
         reason to constitute at least a majority thereof unless the election,
         or the nomination for the 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;

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 or announced by, the Company or any of it is 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.

                  (b)  Potential  Change of Control.  For the  purposes of this
Agreement,  a Potential  Change ofControl shall be deemed to have occurred if:

                  (i) a Person commences a tender offer (with adequate
         financing) for securities representing at least 20% of the voting power
         of the Company's securities;

                  (ii) the Company  enters into an agreement the  consummation 
         of which would  constitute a Change of Control;

                  (iii)  proxies for the election of  directors  of the
         Company are  solicited by anyone other than the Company; or

                  (iv) any other event occurs which is deemed to be a Potential
         Change of Control by the Board.

         3. Employment Period. Subject to Section 6 of this Agreement, the
Company agrees to continue the Executive in its employ, and the Executive agrees
to remain in the employ of the Company, for the period (the "Employment Period")
commencing on the Effective Date and ending on the third anniversary of the
Effective Date. Notwithstanding the foregoing, if, prior to the Effective Date,
the Executive is demoted to a substantially lower position than the position
held on the date first set forth above, the Board may declare that this
Agreement shall be without force and effect by written 



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notice delivered to the Executive (i) within 30 days following such demotion and
(ii) prior to the occurrence of a Potential Change of Control or a Change of 
Control. 


          4. Duties. From and after the Effective Date, the Executive agrees to
     devote his full attention during normal business hours to the business and
     affairs of the Company and to use his best efforts to perform faithfully
     and efficiently the duties and responsibilities reasonably commensurate
     with his skills, ability and training assigned to him from time to time by
     the Company, except for (i) time spent in managing his personal, financial
     and legal affairs and serving on corporate, civic or charitable boards or
     committees, in each case only if and to the extent not substantially
     interfering with the performance of such responsibilities, and (ii) periods
     of vacation and sick leave to which he is entitled. It is expressly
     understood and agreed that the Executive's continuing to serve on any
     boards and committees on which he is serving or with which he is otherwise
     associated immediately preceding the Effective Date shall not be deemed to
     interfere with the performance of the Executive's services to the Company.
     During the Employment Period, the Executive's services shall be performed
     at the location where the Executive was employed immediately preceding the
     Effective Date.

          5. Compensation. (a) Base Salary. During the Employment Period, the
     Executive shall receive a base salary at a monthly rate at least equal to
     the monthly salary paid to the Executive by the Company and any of its
     affiliated companies immediately prior to the Effective Date. The base
     salary shall be reviewed at least once each year after the Effective Date,
     and may be increased (but not decreased) at any time and from time to time
     by action of the Board or any committee thereof or any individual having
     authority to take such action in accordance with the Company's regular
     practices. The Executive's base salary, as it may be increased from time to
     time, shall hereafter be referred to as "Base Salary". Neither the Base
     Salary nor any increase in Base Salary after the Effective Date shall serve
     to limit or reduce any other obligation of the Company hereunder.

                         (b) Annual Bonus. During the Employment Period, in
     addition to the Base Salary, for each fiscal year of the Company ending
     during the Employment Period, the Executive shall be afforded the
     opportunity to receive an annual bonus on terms and conditions no less
     favorable to the Executive (taking into account reasonable changes in the
     Company's goals and objectives) than the annual bonus opportunity that had
     been made available to the Executive for the fiscal year ended immediately
     prior to the Effective Date (the "Annual Bonus Opportunity"). Any amount
     payable in respect of the Annual Bonus Opportunity shall be paid as soon as
     practicable following the year for which the amount (or prorated portion)
     is

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earned or awarded, unless electively deferred by the Executive pursuant to any
deferral programs or arrangements that the Company may make available to the
Executive.

                    (c) Long-term Incentive Compensation Programs. During the
Employment Period, the Executive shall participate in all long-term incentive
compensation programs for key executives at a level that is commensurate with
the Executive's participation in such plans immediately prior to the Effective
Date, or, if more favorable to the Executive, at the level made available to the
Executive or other similarly situated officers at any time thereafter.

                    (d) Benefit Plans. During the Employment Period, the
Executive (and, to the extent applicable, his dependents) shall be entitled to
participate in or be covered under the Company's employee benefit programs,
including, but not limited to, all pension, retirement, deferred compensation,
savings, medical, dental, health, disability, group life, accidental death and
travel accident insurance plans and programs of the Company and its affiliated
companies at a level that is commensurate with the Executive's participation in
such plans immediately prior to the Effective Date, or, if more favorable to the
Executive, at the level made available to the Executive or other similarly
situated officers at any time thereafter.

                    (e) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the policies and procedures of the
Company as in effect immediately prior to the Effective Date. Notwithstanding
the foregoing, the Company may apply the policies and procedures in effect after
the Effective Date to the Executive, if such policies and procedures are more
favorable to the Executive than those in effect immediately prior to the
Effective Date.

                    (f) Vacation and Fringe Benefits. During the Employment
Period, the Executive shall be entitled to paid vacation and fringe benefits at
a level that is commensurate with the paid vacation and fringe benefits
available to the Executive immediately prior to the Effective Date, or, if more
favorable to the Executive, at the level made available from time to time to the
Executive or other similarly situated officers at any time thereafter.

                    (g) Indemnification. During and after the Employment Period,
the Company shall indemnify the Executive and hold the Executive harmless from
and against any claim, loss or cause of action arising from or out of the
Executive's performance as an officer, director or employee of the Company or
any of its Subsidiaries or in any other capacity, including any fiduciary
capacity, in which the Executive serves at the request of the 


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Company to the maximum extent permitted by applicable law and the Company's
Certificate of Incorporation and By-Laws (the "Governing Documents"), provided
that in no event shall the protection afforded to the Executive hereunder be
less than that afforded under the Governing Documents as in effect immediately
prior to the Effective Date.

                  (h) Office and Support Staff. The Executive shall be entitled
to an office with furnishings and other appointments, and to secretarial and
other assistance, at a level that is at least commensurate with the foregoing
provided to other similarly situated officers.

                  6. Termination. (a) Death, Disability or Retirement. This
Agreement shall terminate automatically upon the Executive's death, termination
due to "Disability" (as defined below) or voluntary retirement under any of the
Company's retirement plans as in effect from time to time. For purposes of this
Agreement, Disability shall mean the Executive's inability to perform the duties
of his position, as determined in accordance with the policies and procedures
applicable with respect to the Company's long-term disability plan, as in effect
immediately prior to the Effective Date.

                  (b) Voluntary Termination. Notwithstanding anything in this
Agreement to the contrary, following a Change of Control the Executive may, upon
not less than 30 days' written notice to the Company, voluntarily terminate
employment for any reason (including early retirement under the terms of any of
the Company's retirement plans as in effect from time to time), provided that
any termination by the Executive pursuant to Section 6(d) on account of Good
Reason (as defined therein) shall not be treated as a voluntary termination
under this Section 6(b).

                  (c) Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" means (i) the
Executive's conviction or plea of nolo contendere to a felony; (ii) an act or
acts of dishonesty or gross misconduct on the Executive's part which result or
are intended to result in material damage to the Company's business or
reputation; or (iii) repeated material violations by the Executive of his
obligations under Section 4 of this Agreement, which violations are demonstrably
willful and deliberate on the Executive's part and which result in material
damage to the Company's business or reputation.

                  (d) Good Reason. Following the occurrence of a Change of
Control, the Executive may terminate his employment for Good Reason. For
purposes of this Agreement, "Good Reason" means the occurrence of any of the
following, without the express written consent of the Executive, after the
occurrence of a Change of Control:



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                  (i) any failure by the Company to comply with any of the
         provisions of Section 5 of this Agreement, other than an insubstantial
         or inadvertent failure remedied by the Company promptly after receipt
         of notice thereof given by the Executive;

                  (ii) the Company's requiring the Executive to be based at any
         office or location more than 35 miles (or such other distance as shall
         be set forth in the Company's relocation policy as in effect at the
         Effective Time) from that location at which he principally performed
         his services immediately prior to the Change of Control, except for
         travel reasonably required in the performance of the Executive's
         responsibilities; or

                  (iii) any failure by the Company to obtain the assumption and
         agreement to perform this Agreement by a successor as contemplated by
         Section 12(b).

                  (e) Notice of Termination. Any termination by the Company for
Cause or by the Executive for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(e).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given, in the case of a termination for Cause, within 10 business days of the
Company's having actual knowledge of the events giving rise to such termination,
and in the case of a termination for Good Reason, within 180 days of the
Executive's having actual knowledge of the events giving rise to such
termination, and 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 the Executive's
employment under the provision so indicated, and (iii) if the termination date
is other than the date of receipt of such notice, specifies the termination date
of this Agreement (which date shall be not more than 15 days after the giving of
such notice). The failure by the Executive to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his rights
hereunder.

                  (f) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates during the Employment Period.

                  

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                  7. Obligations of the Company upon Termination. (a) Death 
or Disability. If the Executive's employment is terminated during the 
Employment Period by reason of the Executive's death or Disability, this 
Agreement shall terminate without further obligations to the Executive or the 
Executive's legal representatives under this Agreement other than those 
obligations accrued hereunder at the Date of Termination, and the Company 
shall pay to the Executive (or his beneficiary or estate) (i) the Executive's 
full Base Salary through the Date of Termination (the "Earned Salary"), (ii) 
any vested amounts or benefits owing to the Executive under the Company's 
otherwise applicable employee benefit plans and programs, including any 
compensation previously deferred by the Executive (together with any accrued 
earnings thereon) and not yet paid by the Company and any accrued vacation pay 
not yet paid by the Company (the "Accrued Obligations"), and (iii) any other 
benefits payable due to the Executive's death or Disability under the Company's
plans, policies or programs (the "Additional Benefits").

                  Any Earned Salary shall be paid in cash in a single lump sum
as soon as practicable, but in no event more than 30 days (or at such earlier
date required by law), following the Date of Termination. Accrued Obligations
and Additional Benefits shall be paid in accordance with the terms of the
applicable plan, program or arrangement.

                  (b) Cause and Voluntary Termination. If, during the Employment
Period, the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason following a
Change of Control), the Company shall pay the Executive (i) the Earned Salary in
cash in a single lump sum as soon as practicable, but in no event more than 10
days, following the Date of Termination, and (ii) the Accrued Obligations in
accordance with the terms of the applicable plan, program or arrangement.

                  (c)  Termination  by the Company other than for Cause and  
                       ------------------------------------------------------
Termination by the Executive for GoodReason.
-------------------------------------------

                  (i) Lump Sum Payments. If, during the Employment Period, the
         Company terminates the Executive's employment other than for Cause, or
         following a Change of Control the Executive terminates his employment
         for Good Reason, the Company shall pay to the Executive the following
         amounts:

                  (A)      the Executive's Earned Salary;

                  (B)      an amount equal to the product of (i) the incentive
                           compensation the Executive would have been entitled


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                           to receive under Paragraph 5(b) for the calendar year
                           in which his employment terminates had he remained
                           employed for the entire year and assuming that all
                           targets for such year had been met (the "Target
                           Bonus"), multiplied by (ii) a fraction, the numerator
                           of which is equal to the number of days in the
                           calendar year of the Executive's termination of
                           employment which have elapsed, as of the date of such
                           termination, and the denominator of which is 365 (the
                           "Accrued Bonus");

                  (C)      a cash amount (the "Severance Amount") equal to ____
                           times the sum of

                           (1)      the Executive's annual Base Salary; and

                           (2)      the greater of

                                    (x)   the average of the bonuses payable to
                                          the Executive for the five fiscal
                                          years of the Company (or such lesser
                                          period for which the Executive was
                                          employed, with any bonus payable for
                                          any period of employment of less than
                                          a full fiscal year annualized for the
                                          purposes of this calculation) ending
                                          immediately prior to the Effective
                                          Date; or

                                    (y)   the Target Bonus

                    (D)  a cash amount (the "Incremental Retirement Benefit")
                         equal to the present value, calculated using a discount
                         rate equal to the then prevailing applicable Federal
                         rate as determined under Section 1274(d) of the
                         Internal Revenue Code of 1986, as amended (the "Code"),
                         of the additional retirement benefits (including,
                         without limitation, any pension, retiree life or
                         retiree medical benefits) that would have been payable
                         or available to the Executive under any employee
                         benefit plan qualified under Section 401(a) of the Code
                         and under any supplemental retirement plan or
                         arrangement based on (x) the age and service the
                         Executive would have attained or completed had the
                         Executive continued in the Company's employ until the
                         expiration of the Employment Period and, (y) where
                         compensation is a relevant factor, his pensionable
                         compensation at the Date of Termination; and
                 
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                (E)  the Accrued Obligations. 

                    The Earned Salary, Accrued Bonus, Severance Amount and
                    Incremental Retirement Benefit shall be paid in cash in a
                    single lump sum as soon as practicable, but in no event more
                    than 30 days (or at such earlier date required by law),
                    following the Date of Termination. Accrued Obligations shall
                    be paid in accordance with the terms of the applicable plan,
                    program or arrangement.
             

                (ii) Continuation of Benefits. If, during the Employment
         Period, the Company terminates the Executive's employment other than
         for Cause, or following a Change of Control the Executive terminates
         his employment for Good Reason, the Executive (and, to the extent
         applicable, his dependents) shall be entitled, after the Date of
         Termination until the earlier of (1) the third anniversary of the Date
         of Termination (the "End Date") and (2) the date the Executive becomes
         eligible for comparable benefits under a similar plan, policy or
         program of a subsequent employer, to continue participation in all of
         the Company's employee and executive welfare and fringe benefit plans
         (the "Benefit Plans"). To the extent any such benefits cannot be
         provided under the terms of the applicable plan, policy or program, the
         Company shall provide a comparable benefit under another plan or from
         the Company's general assets. The Executive's participation in the
         Benefit Plans will be on the same terms and conditions that would have
         applied had the Executive continued to be employed by the Company
         through the End Date.

                (iii) In the event that the Executive shall in good faith give
         a Notice of Termination for Good Reason and it shall thereafter be
         determined that Good Reason did not exist and independent counsel
         chosen by the Board of Directors of the Company shall have determined
         after appropriate investigation that Good Reason did not exist, the
         employment of the Executive shall, unless the Company and the Executive
         shall otherwise mutually agree, be deemed to have terminated, at the
         date of giving such purported Notice of Termination, by mutual consent
         of the Company and the Executive and the Executive shall be entitled to


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         receive only those payments and benefits which he would have been
         entitled to receive his Earned Salary, Accrued Bonus and Accrued
         Obligations.

                  (d) Discharge of the Company's Obligations. Except as
expressly provided in the last sentence of this Section 7(d), the amounts
payable to the Executive pursuant to this Section 7 (whether or not reduced
pursuant to Section 7(e)) following termination of his employment shall be in



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full and complete satisfaction of the Executive's rights under this Agreement
and any other claims he may have in respect of his employment by the Company or
any of its Subsidiaries. Such amounts shall constitute liquidated damages with
respect to any and all such rights and claims and, upon the Executive's receipt
of such amounts, the Company shall be released and discharged from any and all
liability to the Executive in connection with this Agreement or otherwise in
connection with the Executive's employment with the Company and its
Subsidiaries. Nothing in this Section 7(d) shall be construed to release the
Company from its commitment to indemnify the Executive and hold the Executive
harmless from and against any claim, loss or cause of action arising from or out
of the Executive's performance as an officer, director or employee of the
Company or any of its Subsidiaries or in any other capacity, including any
fiduciary capacity, in which the Executive served at the request of the Company
to the maximum extent permitted by applicable law and the Governing Documents.

                  (e)  Limit on Payments by the Company.

                  (i) Application of Section 7(e). In the event that any amount
         or benefit paid or distributed to the Executive pursuant to this
         Agreement, taken together with any amounts or benefits otherwise paid
         or distributed to the Executive by the Company or any affiliated
         company (collectively, the "Covered Payments"), would be an "excess
         parachute payment" as defined in Section 280G of the Code and would
         thereby subject the Executive to the tax (the "Excise Tax") imposed
         under Section 4999 of the Code (or any similar tax that may hereafter
         be imposed), the provisions of this Section 7(e) shall apply to
         determine the amounts payable to Executive pursuant to this Agreement.

                  (ii) Calculation of Benefits. Immediately following delivery
         of any Notice of Termination, the Company shall notify the Executive of
         the aggregate present value of all termination benefits to which he
         would be entitled under this Agreement and any other plan, program or
         arrangement as of the projected Date of Termination, together with the
         projected maximum payments, determined as of such projected Date of
         Termination that could be paid without the Executive being subject to
         the Excise Tax.

                  (iii) Imposition of Payment Cap. If (x) the aggregate value of
         all compensation payments or benefits to be paid or provided to the
         Executive under this Agreement and any other plan, agreement or
         arrangement with the Company exceeds the amount which can be paid to
         the Executive without the Executive incurring an Excise Tax
         and (y) the Executive would receive a greater net-after tax amount
         (taking into account all applicable taxes payable by the Executive,
         including any Excise Tax) by applying the limitation contained in this
         Section 7(e)(iii), then the amounts payable to the Executive under
         this Section 7 shall be reduced (but not below zero) to the maximum
         amount which may be paid hereunder without the Executive becoming
         subject to such an Excise Tax (such reduced payments to be referred to
         as the "Payment Cap"). In the event that Executive receives reduced
         payments and benefits hereunder, Executive shall have the right to
         designate which of the payments and benefits otherwise provided for in
         this Agreement that he will receive in connection with the application
         of the Payment Cap. 


                  (iv) Application of Section 280G. For purposes of determining 
     whether any of the Covered Payments will be subject to the Excise Tax and e
     the amount of such Excise Tax,

                    (A)  such Covered Payments will be treated as "parachute
                         payments" within the meaning of Section 280G of the
                         Code, and all "parachute payments" in excess of the
                         "base amount" (as defined under Section 280G(b)(3) of
                         the Code) shall be treated as subject to the Excise
                         Tax, unless, and except to the extent that, in the good
                         faith judgment of the Company's independent certified
                         public accountants appointed prior to the Effective
                         Date or tax counsel selected by such Accountants (the
                         "Accountants"), the Company has a reasonable basis to
                         conclude that such Covered Payments (in whole or in
                         part) either do not constitute "parachute payments" or
                         represent reasonable compensation for personal services
                         actually rendered (within the meaning of Section
                         280G(b)(4)(B) of the Code) in excess of the "base
                         amount," or such "parachute payments" are otherwise not
                         subject to such Excise Tax, and

                    (B)  the value of any non-cash benefits or any deferred
                         payment or benefit shall be determined by the
                         Accountants in accordance with the principles of
                         Section 280G of the Code.

                  (v) Applicable Tax Rates. For purposes of determining whether
         the Executive would receive a greater net after-tax benefit were the
         amounts payable under this Agreement reduced in accordance with
         Paragraph 7(e)(iii), the Executive shall be deemed to pay:


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                  (A)      Federal income taxes at the highest applicable
                           marginal rate of Federal income taxation for the
                           calendar year in which the first amounts are to be
                           paid hereunder, and

                  (B)      any applicable state and local income taxes at the
                           highest applicable marginal rate of taxation for such
                           calendar year, net of the maximum reduction in
                           Federal incomes taxes which could be obtained from
                           the deduction of such state or local taxes if paid in
                           such year;

         provided, however, that the Executive may request that such
         determination be made based on his individual tax circumstances, which
         shall govern such determination so long as the Executive provides to
         the Accountants such information and documents as the Accountants shall
         reasonably request to determine such individual circumstances.

                  (vi) Adjustments in Respect of the Payment Cap. If the
         Executive receives reduced payments and benefits under this Section
         7(e) (or this Section 7(e) is determined not to be applicable to the
         Executive because the Accountants conclude that Executive is not
         subject to any Excise Tax) and it is established pursuant to a final
         determination of a court or an Internal Revenue Service proceeding (a
         "Final Determination") that, notwithstanding the good faith of the
         Executive and the Company in applying the terms of this Agreement, the
         aggregate "parachute payments" within the meaning of Section 280G of
         the Code paid to the Executive or for his benefit are in an amount that
         would result in the Executive being subject an Excise Tax and the
         Executive would still be subject to the Payment Cap under the
         provisions of Section 7(e)(iii), then the amount equal to such excess
         parachute payments shall be deemed for all purposes to be a loan to the
         Executive made on the date of receipt of such excess payments, which
         the Executive shall have an obligation to repay to the Company on
         demand, together with interest on such amount at the applicable Federal
         rate (as defined in Section 1274(d) of the Code) from the date of the
         payment hereunder to the date of repayment by the Executive. If this
         Section 7(e) is not applied to reduce the Executive's entitlements
         under this Section 7 because the Accountants determine that the
         Executive would not receive a greater net-after tax 

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          benefit by applying this Section 7(e) and it is established pursuant
          to a Final Determination that, notwithstanding the good faith of the
          Executive and the Company in applying the terms of this Agreement, the
          Executive would have received a greater net after tax benefit by
          subjecting his payments and benefits hereunder to the Payment Cap,
          then the aggregate "parachute payments" paid to the Executive or for
          his benefit in excess of the Payment Cap shall be deemed for all
          purposes a loan to the Executive made on the date of receipt of such
          excess payments, which the Executive shall have an obligation to repay
          to the Company on demand, together with interest on such amount at the
          applicable Federal rate (as defined in Section 1274(d) of the Code)
          from the date of the payment hereunder to the date of repayment by the
          Executive. If the Executive receives reduced payments and benefits by
          reason of this Section 7(e) and it is established pursuant to a Final
          Determination that the Executive could have received a greater amount
          without exceeding the Payment Cap, then the Company shall promptly
          thereafter pay the Executive the aggregate additional amount which
          could have been paid without exceeding the Payment Cap, together with
          interest on such amount at the applicable Federal rate (as defined in
          Section 1274(d) of the Code) from the original payment due date to the
          date of actual payment by the Company.

                  8. Non-exclusivity of Rights. Except as expressly provided
herein, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its affiliated companies and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company or any of its affiliated companies, including
employment agreements or stock option agreements. Amounts which are vested
benefits or which the Executive is otherwise entitled to 
receive under any plan or program of the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan or
program.

                  9. No Offset; No Mitigation. The Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others whether by
reason of the subsequent employment of the Executive or otherwise.

                  10. Legal Fees and Expenses. If the Executive asserts any
claim in any contest (whether initiated by the Executive or by the Company) as
to the validity, enforceability or interpretation of any provision of this
Agreement, the Company shall pay the Executive's legal expenses (or cause such
expenses to be paid) including, without limitation, his reasonable 



<PAGE>


          attorney's fees, on a quarterly basis, upon presentation of proof of
          such expenses in a form acceptable to the Company, provided that the
          Executive shall reimburse the Company for such amounts, plus simple
          interest thereon at the 90-day United States Treasury Bill rate as in
          effect from time to time, compounded annually, if the Executive shall
          not prevail, in whole or in part, as to at least one material issue as
          to the validity, enforceability or interpretation of any provision of
          this Agreement.

                    11. Confidential Information; Noncompetition and
          Nonsolicitation. By and in consideration of the salary and benefits to
          be provided by the Company hereunder, including the severance
          arrangements set forth herein, the Executive agrees that:

              (a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, (i) obtained by the Executive during
his employment by the Company or any of its affiliated companies and (ii) not
otherwise public knowledge (other than by reason of an unauthorized act by the
Executive). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.

              (b)  [This section is intentionally omitted.]

              (c) Nonsolicitation of Employees. During the Employment Period and
for 180 days year following the termination of the Employment Period, Executive
will not, directly or indirectly, induce any employee of the Company or any of
its subsidiaries to terminate employment with such entity, and shall not,
directly or indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ or offer employment to any person who is or was
employed by the Company or a subsidiary thereof.

                  (d) Company Property. Except as expressly provided herein,
promptly following the Executive's termination of employment, the Executive
shall return to the Company all property of the Company and all copies thereof
in the Executive's possession or under his control.

                  (e) Injunctive Relief and Other Remedies with Respect to
Covenants. Executive acknowledges and agrees that the covenants and obligations
of Executive with respect to noncompetition, nonsolicitation,


<PAGE>


confidentiality and Company property relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which adequate
remedies are not available at law. Therefore, Executive agrees that the Company
shall be entitled to an injunction, restraining order or such other equitable
relief (without the requirement to post bond) restraining Executive from
committing any violation of the covenants and obligations contained in this
Paragraph 11. These injunctive remedies are cumulative and are in addition to
any other rights and remedies the Company may have at law or in equity. In
connection with the foregoing provisions of this Paragraph 11, Executive
represents that his economic means and circumstances are such that such
provisions will not prevent him from providing for himself and his family on a
basis satisfactory to him. In no event, however, shall an asserted violation of
the provisions of this Section 11 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.

                    12. Successors. (a) This Agreement is personal to the
          Executive and, without the prior written consent of the Company, shall
          not be assignable by the Executive otherwise than by will or the laws
          of descent and distribution. This Agreement shall inure to the benefit
          of and be enforceable by the Executive's legal representatives.

                  (b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.

                    13. Miscellaneous. (a) Applicable Law. This Agreement shall
          be governed by and construed in accordance with the laws of the State
          of New York, applied without reference to principles of conflict of
          laws.

                    (b) Arbitration. Except to the extent provided in Section 
11(e), any dispute or controversy arising under or in connection with this 
Agreement shall be resolved by binding arbitration. The arbitration shall be 
held in New York, New York and except to the extent inconsistent with this 
Agreement, shall be conducted in accordance with the Expedited Employment 
Arbitration Rules of the American Arbitration Association then in effect at
the time of the arbitration, and otherwise in accordance with principles 
which would be applied by a court of law or equity. The arbitrator shall be 
acceptable to both the Company and the Executive. 




<PAGE>

If the parties cannot agree on an acceptable arbitrator, the dispute shall be 
heard by a panel of three arbitrators, one appointed by each of the parties and
the third appointed by the other two arbitrators.

                  (c) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

                  (d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters referred to
herein. No other agreement relating to the terms of the Executive's employment
by the Company, oral or otherwise, shall be binding between the parties unless
it is in writing and signed by the party against whom enforcement is sought.
There are no promises, representations, inducements or statements between the
parties other than those that are expressly contained herein. The Executive
acknowledges that he is entering into this Agreement of his own free will and
accord, and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.

                  (e) Notices. 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,
addressed as follows:

       If to the Executive:                 at the  home  address  of the  
                                            Executive  noted on the  records  
                                            of the Company
                                        

       If to the Company:                   Alexander & Alexander Services
                                            1185 Avenue of the Americas
                                            New York, New York

                                     Attn.: Corporate Secretary

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) Tax Withholding. The Company shall 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.

                  (g) Severability; Reformation. In the event that one or more
of the provisions of this Agreement shall become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby. In the



<PAGE>

event that any of the provisions of any of Section 11 are not enforceable
in accordance with its terms, the Executive and the Company agree that such
Section shall be reformed to make such Section enforceable in a manner which
provides the Company the maximum rights permitted at law.



                  (h) Waiver. Waiver by any party hereto of any breach or
default by the other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived. No waiver of any provision of this
Agreement shall be implied from any course of dealing between the parties hereto
or from any failure by either party hereto to assert its or his rights hereunder
on any occasion or series of occasions.

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

                  (j)  Captions.  The captions of this  Agreement are not part 
of the  provisions  hereof and shall have no force or effect.



<PAGE>



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


                                    ALEXANDER & ALEXANDER SERVICES INC.



                             ------------------------------------------
                             Frank G. Zarb
                             Chairman of the Board,
                             President and Chief Executive Officer


WITNESSED:




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




                                        EXECUTIVE:


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


WITNESSED:


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