Exhibit 10 (iii)(a)

Employment  Agreement among Registrant,  Engine Acquisition  Corporation and the
following executive officers:

1.       Saul L. Basch
2.       William A. Kerr
3.       R. Kevin Price
4.       Robert C. Walker

<PAGE>



                              EMPLOYMENT AGREEMENT


     AGREEMENT by and between HSB Group, Inc., a Connecticut  corporation having
its principal executive offices in Hartford, Connecticut, (the "Company") Engine
Acquisition  Corporation,  a Delaware corporation,  for itself and its corporate
parent, American International Group, Inc. ("Merger Sub") and __________________
(the "Executive") dated as of the _____ day of ________________, 2000

     The Company,  Merger Sub and American International Group, Inc., a Delaware
corporation  ("AIG") have  determined  that it is in the best interests of their
respective  shareholders  to assure  that the  Company  will have the  continued
dedication  of the  Executive  pending the merger of the Company and Merger Sub,
(the "Merger")  pursuant to the Agreement and Plan of Merger between AIG, Merger
Sub and the Company dated as of August 17, 2000 (the "Merger  Agreement") and to
provide the successor  entity after the Merger with  continuity  of  management.
Therefore,  in order to accomplish these objectives,  the Executive,  Merger Sub
and the Company desire to enter into this Agreement.

                  NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Effective  Date.  The "Effective  Date" shall mean the effective date of
the Merger,  provided the  Executive is employed by the Company on that date. As
of the  Effective  Date,  the  prior  Employment/Severance  Agreement  effective
_____________,  as amended  ___________________  ("Former Employment Agreement")
between the Executive and the Company shall  terminate and become null and void.
Upon any termination of the transactions  contemplated by the Merger  Agreement,
this Agreement will be inapplicable and, provided, further, that if Executive is
not employed by Merger Sub immediately  after the Effective Date, this Agreement
will be inapplicable.

     2. Employment  Period.  The Company hereby agrees to continue to employ the
Executive  for the period  commencing  on the  Effective  Date and ending on the
fourth  anniversary of such date (the  "Employment  Period"),  and the Executive
hereby agrees to continue in the employ of the Company  subject to the terms and
conditions of this Agreement.



<PAGE>

     3. Terms of Employment.

          a. Position and Duties.

               i. During the Employment Period, the Executive shall serve Merger
          Sub in the same capacity he is currently  serving the Company with the
          appropriate authority,  duties and responsibilities  attendant to such
          position or in such other comparable  positions as the board of Merger
          Sub (the "Board") may reasonably request. Any references to Merger Sub
          herein shall include reference to any successor thereto.

               ii. During the  Employment  Period,  and excluding any periods of
          vacation  and sick  leave to which  the  Executive  is  entitled,  the
          Executive agrees to devote substantially all of his attention and time
          during  normal  business  hours to the  business  and  affairs  of the
          Company and, to the extent necessary to discharge the responsibilities
          assigned to the Executive hereunder, to use the Executive's reasonable
          best   efforts   to   perform    faithfully   and   efficiently   such
          responsibilities.  During  the  Employment  Period  it shall  not be a
          violation of this Agreement for the Executive to (A) serve, with prior
          approval of the Board,  on corporate,  civic or  charitable  boards or
          committees  and  (B)  manage  personal  investments,  so  long as such
          activities do not significantly  interfere with the performance of the
          Executive's   responsibilities  as  an  employee  of  the  Company  in
          accordance with this Agreement.

          b. Compensation.

               i.  Annual  Base  Salary.   During  the  Employment  Period,  the
          Executive  shall receive an annual base salary  ("Annual Base Salary")
          of at least  $_________.  Such Annual Base Salary  shall be subject to
          periodic review by the Board for increases in its sole discretion.

               ii. Annual Bonus.  During the  Employment  Period,  the Executive
          shall be paid an annual cash bonus in  accordance  with  Merger  Sub's
          performance based bonus program ("Annual Bonus");  provided,  however,
          that the bonus  award for 2001 as a  percentage  of Annual Base Salary
          and the  corresponding  target  levels shall be those  utilized in the
          annual  incentive  plan that was  applicable  to the Executive for the
          year 2000 and the applicable  performance  targets shall be based on a
          formula  relating to the operating plan similar to the one established
          for 2000 as agreed between Richard H. Booth and the Board.  The Annual
          Bonus  shall  be  paid  in  accordance  with  Merger  Sub's  customary
          practices.



<PAGE>


               (iii)  Retention  Bonus. If the Executive is employed with Merger
          Sub on the first  anniversary  of the  Effective  Date,  the Executive
          shall be paid a  retention  bonus equal to the Annual Base Salary (the
          "Retention Bonus"). The Retention Bonus shall be paid within one month
          of such anniversary.

               (iv) Other Employee Benefit Plans.  During the Employment Period,
          except as otherwise  expressly provided herein, the Executive shall be
          eligible to  participate  in all employee  benefit,  welfare and other
          plans,   practices,   policies  and   programs  and  fringe   benefits
          (including,  without limitation,  stock options and other equity based
          compensation  plans) of Merger Sub  (collectively,  "Employee  Benefit
          Plans")  on a basis no less  favorable  than  that  provided  to other
          senior executive  officers of the Company and other similarly situated
          executives of other AIG subsidiaries;  provided, however, that nothing
          shall require Executive's  participation in any Employee Benefit Plans
          in  which   the   participation   of  any   individual   employee   is
          discretionary; provided, further that Merger Sub shall take such steps
          to grandfather  the Executive such that Merger Sub will be required to
          provide   retirement  medical  coverage  to  Executive  on  terms  and
          conditions  no less  favorable  than would have been  available to the
          Executive  upon  retirement  under the  Company's  retirement  medical
          coverage plan as in effect on the date of this Agreement.  Executive's
          prior  service  with the Company  shall be taken into  account for all
          purposes except benefit accruals.

     4. Termination of Employment.

          a. Death or Disability.  The  Executive's  employment  shall terminate
     automatically  upon the Executive's death during the Employment  Period. If
     Merger Sub  determines  in good faith that the  Disability of the Executive
     has occurred  during the Employment  Period  (pursuant to the definition of
     Disability set forth below), it may give to the Executive written notice in
     accordance  with  Section  11(b)  of this  Agreement  of its  intention  to
     terminate  the  Executive's  employment.  In such  event,  the  Executive's
     employment with Merger Sub shall terminate  effective on the 30th day after
     receipt of such notice by the Executive (the "Disability  Effective Date"),
     provided that,  within the 30 days after such receipt,  the Executive shall
     not have returned to full-time  performance of the Executive's  duties. For
     purposes  of this  Agreement,  "Disability"  shall mean the  absence of the
     Executive from the Executive's  duties with Merger Sub on a full-time basis
     for 180  business  days during any  consecutive  twelve  month  period as a
     result of incapacity due to mental or physical  illness which is determined
     to be total and  permanent  by a  physician  selected  by Merger Sub or its
     insurers  and  acceptable  to  the  Executive  or  the  Executive's   legal
     representative.

          b. Cause.  Merger Sub may terminate the Executive's  employment during
     the Employment  Period for Cause.  For purposes of this Agreement,  "Cause"
     shall mean:

               i. the  engaging by the  Executive in gross  misconduct  which is
          materially  and  demonstrably  injurious  to  Merger  Sub  or  illegal
          conduct,

               ii. the conviction of a felony or guilty or nolo  contendere plea
          to a felony by the Executive, or


<PAGE>


               iii. the  continued  failure by the  Executive  to  substantially
          perform the  Executive's  duties with Merger Sub after written  demand
          for  substantial  performance  is  delivered  to the  Executive by the
          Board,  which demand  states a reasonable  period of time within which
          the Executive must correct such failure.

Any act, or failure to act, based upon authority  given pursuant to a resolution
duly  adopted  by the  Board or upon the  instructions  of the  Chief  Executive
Officer (while the Executive does not serve as such) or based upon the advice of
counsel for Merger Sub shall be conclusively  presumed to be done, or omitted to
be done, by the Executive in good faith and in the best  interests of Merger Sub
and  shall  under no  circumstances  constitute  misconduct.  The  cessation  of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been  delivered to the  Executive a copy of a  resolution  duly
adopted by the affirmative vote of not less than 75% of the entire membership of
the Board  (excluding  the  Executive) at a meeting of the Board called and held
for such purpose (after  reasonable  notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board)  finding that,  in the good faith opinion of the Board,  the Executive is
guilty of the conduct  described in subparagraph  (i), (ii) or (iii) above,  and
specifying the particulars thereof in detail.

          c. Good Reason.  The  Executive's  employment may be terminated by the
     Executive for Good Reason.  For purposes of this  Agreement,  "Good Reason"
     shall mean in the absence of a written consent of the Executive:

               i. the  assignment  to the  Executive  of any  duties  materially
          inconsistent  with the  Executive's  position,  authority,  duties  or
          responsibilities  as  contemplated  by this  Agreement,  or any  other
          action by Merger Sub which  results in a material  diminution  in such
          position,  authority,  duties or responsibilities,  excluding for this
          purpose  an action  not taken in bad  faith and which is  remedied  by
          Merger  Sub  promptly  after  receipt of notice  thereof  given by the
          Executive and further  excluding for this purpose the fact that Merger
          Sub  will  be a  non-publicly  traded  subsidiary  of  AIG  after  the
          Effective Date;

               ii. any  failure by Merger Sub to comply with the  provisions  of
          Section 3 (b) of this Agreement, other than a failure not occurring in
          bad faith and which is remedied by Merger Sub promptly  after  receipt
          of notice thereof given by the Executive;

               iii. any purported  termination by Merger Sub of the  Executive's
          employment otherwise than as expressly permitted by this Agreement;



<PAGE>


               iv. any failure by Merger Sub to comply with and satisfy  Section
          10(c) of this Agreement; or

               (v) any requirement that the Executive (A) be based anywhere more
          than fifty (50) miles from the office where the Executive is currently
          located or (B) travel on Company  business to an extent  substantially
          greater than the Executive's current travel obligations.

          d.  Notice of  Termination.  Any  termination  by Merger Sub or by the
     Executive shall be communicated by Notice of Termination to the other party
     hereto  given in  accordance  with  Section  11(b) 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) to the  extent  applicable,  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 Date of Termination  (as defined below) is other
     than the date of receipt of such notice,  specifies  the  termination  date
     (which  date  shall be not more than  thirty  days after the giving of such
     notice).  The  failure by the  Executive  or Merger Sub to set forth in the
     Notice of  Termination  any fact or  circumstance  which  contributes  to a
     showing of Good Reason or Cause shall not waive any right of the  Executive
     or Merger Sub, respectively,  hereunder or preclude the Executive or Merger
     Sub,  respectively,  from asserting such fact or  circumstance in enforcing
     the Executive's or Merger Sub's rights hereunder.

          e. Date of Termination. "Date of Termination" means if the Executive's
     employment is terminated by Merger Sub other than for Disability, or by the
     Executive,  the date of receipt of the Notice of  Termination  or any later
     date  specified  therein  within  30  days  of  such  notice,  and  if  the
     Executive's employment is terminated by reason of death or Disability,  the
     Date of  Termination  shall be the date of  death of the  Executive  or the
     Disability Effective Date, as the case may be.

     5. Obligations of the Company upon Termination.



<PAGE>


          a. Any Reason.  If,  during the  Employment  Period,  the  Executive's
     employment  is terminated  for any reason,  Merger Sub shall (i) pay to the
     Executive  the   Executive's   Annual  Base  Salary  through  the  Date  of
     Termination to the extent not theretofore paid and any other bonus payments
     for a prior  bonus year that have been  earned but not yet paid and (ii) to
     the  extent  not  theretofore  paid  or  provided,  pay or  provide  to the
     Executive any other amounts or benefits  required to be paid or provided or
     which the Executive is eligible to receive under any plan, program,  policy
     or  practice  or contract  or  agreement  of Merger Sub and its  affiliated
     companies  through the Date of  Termination  and  Executive's  other normal
     post-termination   compensation  and  benefits  (including  payments  under
     retirement and retiree medical  programs),  if any, as such payments become
     due. The payments and benefits provided under Sections 5 (b), 7 and 8 below
     are in addition to the payments required under this Section 5(a).

          (b) Good  Reason;  Other Than for  Cause.  If,  during the  Employment
     Period,  Merger Sub shall terminate the Executive's  employment  other than
     for Cause, or the Executive shall terminate employment for Good Reason:

               (i) Merger Sub shall pay to the  Executive  in a lump sum in cash
          within 30 days after the Date of  Termination  an amount  equal to the
          product of (x) the sum of the  Executive's  Annual Base Salary and the
          average Annual Bonus paid to the Executive (including as paid for this
          purpose any  compensation  earned but deferred,  whether or not at the
          election  of the  Executive  and  whether or not vested) for the three
          years prior to the Date of  Termination or such shorter number of full
          or partial fiscal years during which the Executive was employed by the
          Company  and/or  Merger  Sub  prior  to the Date of  Termination  (the
          "Average  Annual Bonus") and (y) 3.0 (if the Date of Termination is on
          or before the second  anniversary of the Effective  Date), 2.0 (if the
          Date of Termination is after the second  anniversary  but on or before
          the third  anniversary  of the Effective  Date) or 1.0 (if the Date of
          Termination is after the third anniversary but on or before the fourth
          anniversary  of the  Effective  Date),  provided  that any such amount
          shall be  decreased by the amount of any  Retention  Bonus paid to the
          Executive.

               (ii) for the remainder of the Employment Period, Merger Sub shall
          continue  to provide  insurance,  medical,  dental  and other  welfare
          benefits to the Executive,  his spouse and eligible  dependents on the
          same  basis  as such  benefits  are  then  currently  provided  to its
          employees  ("Welfare  Benefits");  provided that any payments received
          with  respect  to such  Welfare  Benefits  shall be  secondary  to any
          payments made pursuant to other coverage obtained by the Executive.


<PAGE>



     6. Non-exclusivity of Rights.  Except as specifically  provided and subject
to Section 11, nothing in this Agreement  shall prevent or limit the Executive's
continuing  or future  participation  in any plan,  program,  policy or practice
provided by the  Company or any of its  affiliated  companies  and for which the
Executive may qualify,  nor,  subject to Section 11(f),  shall  anything  herein
limit or  otherwise  affect  such  rights as the  Executive  may have  under any
contract  or  agreement  with the  Company or any of its  affiliated  companies.
Amounts which are vested  benefits or which the Executive is otherwise  entitled
to receive  under any plan,  policy,  practice or program of or any  contract or
agreement with the Company or any of its  affiliated  companies at or subsequent
to the Date of  Termination  shall be  payable  in  accordance  with such  plan,
policy,  practice  or program or  contract  or  agreement  except as  explicitly
modified by this  Agreement;  provided that the Executive  shall not be eligible
for severance benefits under any other program or policy of the Company.

     7. No  Mitigation.  In no event shall the  Executive  be  obligated to seek
other  employment  or take any other action by way of  mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement, and such
amounts  shall  not be  reduced  whether  or not  the  Executive  obtains  other
employment.  The Company  agrees to pay, to the fullest  extent  permitted,  all
reasonable legal fees and expenses which the Executive may reasonably incur as a
result of any contest pursued or defended against in good faith by the Executive
regarding the validity or  enforceability  of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement).  Such payments shall be made within 10 business days of the delivery
of Executive's  written request for payment  accompanied by such evidence of the
fees and expenses incurred by Executive as Merger Sub may reasonably request.

     8. Certain Additional Payments by the Company.

          a.  Anything in this  Agreement  to the contrary  notwithstanding  and
     except as set forth  below,  in the event it shall be  determined  that any
     payment  or  distribution  by  Merger  Sub to or  for  the  benefit  of the
     Executive (whether paid or payable or distributed or distributable pursuant
     to the terms of this Agreement or otherwise,  but determined without regard
     to any  additional  payments  required  under this Section 8) (a "Payment")
     would be subject to the excise tax  imposed by Section  4999 of the Code or
     any interest or penalties  are  incurred by the  Executive  with respect to
     such  excise tax (such  excise tax,  together  with any such  interest  and
     penalties,  are hereinafter  collectively referred to as the "Excise Tax"),
     then the Executive  shall be entitled to receive an  additional  payment (a
     "Gross-Up  Payment") in an amount such that after  payment by the Executive
     of all taxes  (including any interest or penalties  imposed with respect to
     such taxes), including, without limitation, any income and employment taxes
     (and any interest and  penalties  imposed with respect  thereto) and Excise
     Tax imposed upon the Gross-Up  Payment,  the 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  8(c),  all  determinations
     required  to be made under this  Section 8,  including  whether  and when a
     Gross-Up  Payment is required and the amount of such  Gross-Up  Payment and
     the assumptions to be utilized in arriving at such determination,  shall be
     made by Merger Sub's  independent  auditors or such other certified  public
     accounting firm reasonably acceptable to the Executive as may be designated
     by  Merger  Sub  (the  "Accounting  Firm")  which  shall  provide  detailed
     supporting  calculations  both to Merger  Sub and the  Executive  within 15
     business  days of the receipt of notice from the  Executive  that there has
     been a  Payment,  or  such  earlier  time as is  requested  by  Merger  Sub
     provided,  however,  that for  purposes  of  determining  the amount of the
     Gross-Up Payment, the Executive shall be deemed to pay federal income taxes
     at the highest  marginal  rate of federal  income  taxation in the calendar
     year in which the Gross-Up  Payment is to be made and state and local taxes
     at the highest  marginal  rate of taxation in the state and locality of the
     Executive's residence on the Date of Termination,  net of maximum reduction
     in federal  income  taxes which could be obtained  from  deduction  of such
     state and local taxes.  All fees and expenses of the Accounting  Firm shall
     be borne solely by Merger Sub. Any Gross-Up Payment, as determined pursuant
     to this Section 8, shall be paid by Merger Sub to the Executive within five
     days of the later of (i) the due date for the  payment of any  Excise  Tax,
     and  (ii)  the  receipt  of  the  Accounting  Firm's   determination.   Any
     determination  by the Accounting  Firm shall be binding upon Merger Sub and
     the Executive. As a result of the uncertainty in the application of Section
     4999 of the Code at the time of the initial determination by the Accounting
     Firm hereunder,  it is possible that Gross-Up  Payments which will not have
     been made by Merger Sub should have been made ("Underpayment"),  consistent
     with the  calculations  required  to be made  hereunder.  In the event that
     Merger Sub exhausts its remedies pursuant to Section 8(c) and the Executive
     thereafter is required to make a payment of any Excise Tax, the  Accounting
     Firm shall determine the amount of the  Underpayment  that has occurred and
     any such  Underpayment  shall be promptly  paid by Merger Sub to or for the
     benefit of the Executive.



<PAGE>


          c. The  Executive  shall notify  Merger Sub in writing of any claim by
     the Internal Revenue Service that, if successful, would require the payment
     by Merger Sub of the Gross-Up Payment.  Such notification shall be given as
     soon as practicable but no later than ten business days after the Executive
     is  informed in writing of such claim and shall  apprize  Merger Sub of the
     nature of such claim and the date on which such  claim is  requested  to be
     paid. The Executive shall not pay such claim prior to the expiration of the
     30-day  period  following  the date on which it gives such notice to Merger
     Sub (or such  shorter  period  ending on the date that any payment of taxes
     with respect to such claim is due). If Merger Sub notifies the Executive in
     writing  prior to the  expiration of such period that it desires to contest
     such claim, the Executive shall:

               i. give Merger Sub any information reasonably requested by Merger
          Sub relating to such claim,

               ii. take such action in connection  with contesting such claim as
          Merger Sub shall  reasonably  request  in  writing  from time to time,
          including,  without  limitation,  accepting legal  representation with
          respect to such claim by an  attorney  reasonably  selected  by Merger
          Sub,

               iii. cooperate with Merger Sub in good faith in order effectively
          to contest such claim, and

               iv. permit Merger Sub to participate in any proceedings  relating
          to such claim;

provided,  however,  that Merger Sub shall bear and pay  directly  all costs and
expenses  (including  additional  interest and penalties) incurred in connection
with such contest and shall  indemnify  and hold the Executive  harmless,  on an
after-tax  basis,  for any Excise  Tax or income or  employment  tax  (including
interest  and  penalties  with  respect  thereto)  imposed  as a result  of such
representation  and payment of costs and  expenses.  Without  limitation  on the
foregoing  provisions  of this  Section  8(c),  Merger  Sub  shall  control  all
proceedings  taken in connection with such contest and, at its sole option,  may
pursue or forgo any and all administrative  appeals,  proceedings,  hearings and
conferences  with the taxing  authority in respect of such claim and may, at its
sole option,  either  direct the  Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible  manner, and the 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
Merger Sub shall determine;  provided,  however,  that if Merger Sub directs the
Executive to pay such claim and sue for a refund,  Merger Sub shall  advance the
amount of such payment to the  Executive,  on an  interest-free  basis and shall
indemnify  and hold the  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 such advance or with respect to any imputed  income with
respect to such advance;  and further provided that any extension of the statute
of  limitations  relating  to  payment  of  taxes  for the  taxable  year of the
Executive  with respect to which such  contested  amount is claimed to be due is
limited solely to such contested  amount.  Furthermore,  Merger Sub's control of
the contest shall be limited to issues with respect to which a Gross-Up  Payment
would be payable  hereunder  and the  Executive  shall 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.

<PAGE>


          d. If,  after the receipt by the  Executive  of an amount  advanced by
     Merger Sub pursuant to Section  8(c),  the  Executive  becomes  entitled to
     receive any refund with respect to such claim, the Executive shall promptly
     pay to Merger Sub the amount of such  refund  (together  with any  interest
     paid or credited  thereon after taxes  applicable  thereto).  If, after the
     receipt by the  Executive  of an amount  advanced by Merger Sub pursuant to
     Section  8(c),  a  determination  is made that the  Executive  shall not be
     entitled to any refund  with  respect to such claim and Merger Sub does not
     notify the  Executive  in writing of its intent to contest  such  denial of
     refund prior to the  expiration of 30 days after such  determination,  then
     such  advance  shall be forgiven and shall not be required to be repaid and
     the amount of such advance shall offset, to the extent thereof,  the amount
     of Gross-Up Payment required to be paid.

     9. Covenants Not to Solicit Company Employees; Confidential Information.

          a.  During  the term of this  Agreement  and for a period  of one year
     after the Date of  Termination  by the  Company  or the  Executive  for any
     reason,  the Executive  further agrees that the Executive shall not, in any
     manner,  directly or  indirectly,  solicit any person who is an employee of
     the Company to apply for or accept employment with any competing  business.
     The term "solicit" as used in this Agreement means any communication of any
     kind whatsoever,  regardless of by whom initiated, inviting, encouraging or
     requesting any person or entity to take or refrain from taking any action.

          b. Executive agrees that, during the term of this Agreement and at all
     times thereafter, he shall continue to hold in a fiduciary capacity for the
     benefit of the Company, all secret or confidential  information,  knowledge
     or data relating to the Company and any other  business or entity in which,
     at any relevant  time,  the Company holds an equity  (voting or non-voting)
     interest equal to or greater than 10% (an "Affiliate") that shall have been
     obtained by Executive  during his  employment  by or  affiliation  with the
     Company or its  Affiliates,  and that shall not be public  knowledge  other
     than by acts of Executive and his representative ("Confidential Material").
     Executive  shall  not,  without  the prior  written  consent  of the [Chief
     Executive Officer] of the Company,  communicate or divulge any Confidential
     Material to anyone other than the Company and those designated by it.



<PAGE>


          c. Executive acknowledges that any material violation of the foregoing
     covenants  in Section 9 could  cause the  Company  irreparable  harm and he
     agrees that the Company shall be entitled to injunctive relief  restraining
     Executive from actual or threatened breach of such covenants, and that if a
     bond is  required  to be  posted in order for the  Company  to secure  such
     relief, said bond need only be in a nominal amount. Subject to Section 9(d)
     below,  the right of the  Company  to seek  injunctive  relief  shall be in
     addition to any other remedies  available to the Company with respect to an
     alleged or threatened breach.

          d. Nothing in Section 9 hereof shall be construed to adversely  affect
     the rights that the Company would possess in the absence of the  provisions
     of such sections.

          e. The  provision  by the  Company of the  compensation  and  benefits
     described  under this agreement,  as applicable,  hereunder are conditioned
     upon  Executive's  compliance with the terms described under this Agreement
     and the execution,  non-revocation  and honoring of a release of claims and
     covenant not to sue in favor of the Company with respect to the obligations
     of the Company under the Former Employment  Agreement,  which release shall
     be in the form generally used by the Company for such purposes.

          f. The terms and  provisions  of this  Section  9 are  intended  to be
     separate and divisible  provisions and if, for any reason,  any one or more
     of them is held to be invalid or  unenforceable,  neither the  validity nor
     the  enforceability  of any other provision of this Agreement shall thereby
     be affected. The parties hereto acknowledge that the potential restrictions
     on  the  Executive's  future  employment  imposed  by  this  Section  9 are
     reasonable in both duration and geographic scope and in all other respects.
     If for any  reason  any  court of  competent  jurisdiction  shall  find any
     provisions of this Section 9 unreasonable  in duration or geographic  scope
     or otherwise, the Executive and the Company agree that the restrictions and
     prohibitions  contained  herein shall be  effective  to the fullest  extent
     allowed under applicable law in such jurisdiction.

          g. The parties  acknowledge  that this  Agreement  would not have been
     entered into and the  benefits  described in Sections 3 or 5 would not have
     been promised in the absence of the Executive's promises under this Section
     9.

          (h) Use of the term  Company  in this  Section  9 shall  also  include
     Merger Sub, AIG and their subsidiaries.

     10. 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 and assigns.



<PAGE>


          c. The Company 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 Company to assume  expressly 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
     hereinbefore  defined and any  successor to its business  and/or  assets as
     aforesaid.

     11. Miscellaneo+us.

          a. This  Agreement  shall be governed by and  construed in  accordance
     with the laws of the State of New York,  without reference to principles of
     conflict  of  laws.  The  captions  of this  Agreement  are not part of the
     provisions hereof and shall have no force or effect. 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.

          b. 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 address written below  Executive's name on the
signature page of this Agreement

                           If to the Company:

                           American International Group, Inc.
                           70 Pine St.
                           New York, New York

                           Telecopy Number:  (212)-425-2175
                           Attention:  Ernest Patrikis, Esq.

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.

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

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



<PAGE>


          e. The  Executive's  or the  Company's  failure to insist  upon strict
     compliance  with any  provision of this  Agreement or the failure to assert
     any right the  Executive  or the  Company  may have  hereunder,  including,
     without limitation,  the right of the Executive to terminate employment for
     Good Reason pursuant to Section 4(c)(i)-(v) of this Agreement, shall not be
     deemed to be a waiver of such provision or right or any other  provision or
     right of this Agreement.

          f. From and after the Effective  Date this Agreement  shall  supersede
     any other  employment  agreement  between the parties  with  respect to the
     subject matter hereof.

     IN WITNESS  WHEREOF,  the Executive has hereunto set the  Executive's  hand
and, pursuant to the authorization from its Board of Directors,  the Company has
caused  these  presents to be executed in its name on its behalf,  all as of the
day and year first above written.


                     -------------------------------------
       Name
                     -------------------------------------
                     -------------------------------------
                     -------------------------------------
                     (Address)

                     HSB GROUP, INC.

        By

                     Title:

                     MERGER SUB, INC.

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