Exhibit 10(iii)(c)       


                           As amended and restated effective January 1, 1998

       THE HSB GROUP, INC. DIRECTORS STOCK AND DEFERRED COMPENSATION PLAN


1. Purposes of the Plan.

The purposes of The HSB Group,  Inc.  Directors Stock and Deferred  Compensation
Plan are:  (a) to attract  and retain  persons  of ability as  directors  of the
Company;   (b)  to  more  closely  align  directors'  interests  with  those  of
shareholders;  and  (c) to  encourage  the  highest  level  of  contribution  by
directors to the  financial  success of the Company by  providing a  significant
portion of their compensation in the form of equity in the Company.


2. Definitions.

"Annual  Award"  shall  mean  the  annual  award  made to a  Director  of  Stock
Equivalent Units or Restricted Stock as determined pursuant to Section 5.

"Board" shall mean the Board of Directors of the Company.

"Cash  Compensation"  shall mean the total of the annual cash  retainer and fees
for  attending  and/or  chairing  any meeting of the Board or a committee of the
Board payable to a Director for any Plan Year.

"Change in Control" shall have occurred for purposes of this Plan if :

         (a) any  "person"  (as  defined  in  Sections  13(d)  and  14(d) of the
         Securities  Exchange  Act of 1934,  as amended (the  "Exchange  Act")),
         other than a trustee or other  fiduciary  holding  securities  under an
         employee  benefit  plan of the Company,  is or becomes the  "beneficial
         owner" (as defined in Rule 13d-3 under the Exchange  Act),  directly or
         indirectly, of securities of the Company representing twenty-five (25%)
         or more of the Company's then outstanding securities;

         (b) during any period  within two (2)  consecutive  years  there  shall
         cease to be a majority of the Board of Directors  comprised as follows:
         individuals who at the beginning of such period constitute the Board of
         Directors  and any new  director(s)  whose  election  by the  Board  of
         Directors or nomination for election by the Company's  shareholders was
         approved by a vote of at least  two-thirds  (2/3) of the directors then
         still in office who  either  were  directors  at the  beginning  of the
         period or whose  election or nomination  for election was previously so
         approved; or

         (c) the  shareholders of the Company approve a merger or  consolidation
         of the Company with any other  corporation,  other than (i) a merger or
         consolidation  which  would  result  in the  voting  securities  of the
         Company  outstanding  immediately prior thereto continuing to represent
         (either by  remaining  outstanding  or by being  converted  into voting
         securities  of the  surviving  entity)  more  than 80% of the  combined
         voting power of voting securities after such merger or consolidation or
         (ii) a merger or consolidation effected to implement a recapitalization
         of the  Company  (or  similar  transaction)  in which no  "person"  (as
         hereinabove  defined)  acquires  more than 25% of the  combined  voting
         power of the Company's then outstanding securities; or

         (d) the  shareholders  of the  Company  approve  (i) a plan of complete
         liquidation of the Company or (ii) the sale or other disposition of all
         or substantially all the Company assets.

"Committee"  shall  mean the  Governance  Committee  of the Board or any  future
committee of the Board performing similar functions.

"Company" shall mean HSB Group, Inc.

"Deferred  Account"  shall mean the account  established  and  maintained  for a
Director under the Plan pursuant to an election made pursuant to Section 8.

"Deferral   Election"   shall  mean  the  election  to  defer  receipt  of  Cash
Compensation in accordance with Section 8.

"Director" shall mean a non-employee director of the Company.

"Dividend Equivalent" shall mean an amount equal to the dividend that would have
been paid with respect to a Stock Equivalent Unit if such unit had constituted a
share of Stock, duly issued and outstanding on the date a dividend is payable on
the Stock.

"Fair Market  Value" shall mean the average of the high and low prices per share
of the  Company's  Stock as  reported by the New York Stock  Exchange  Composite
Transaction  Reporting System (NYSE) on the date for which the Fair Market Value
is being determined,  or if no quotations are available for the Company's Stock,
for the next preceding  date for which such a quotation is available.  If shares
of Company  Stock are not then listed on the NYSE,  Fair  Market  Value shall be
reasonably determined by the Committee in its sole discretion.

"Plan" shall mean The HSB Group, Inc. Directors Stock and Deferred  Compensation
Plan.

"Plan Year" shall mean the calendar year.

"Restricted  Stock"  shall mean  shares of Stock  awarded  to a  Director  under
Section 7 of the Plan and subject to the terms and  conditions  set forth in the
Plan.

"Stock" shall mean the common stock of the Company.

"Stock Equivalent Unit" shall mean the right to receive the Fair Market Value of
a share of Stock in the form of cash or  Stock as  elected  in  accordance  with
Section 10 hereof and subject to the conditions set forth in the Plan.

3. Administration of the Plan.

The Plan shall be administered by the Committee as defined herein. The Committee
is authorized to interpret the Plan and shall adopt  guidelines for carrying out
the Plan as it may deem appropriate.  Decisions of the Committee shall be final,
conclusive and binding upon all parties concerned,  unless otherwise  determined
by the Board of Directors.

4. Stock Subject to the Plan.

Subject  to the  provisions  of Section 12 of the Plan,  the  maximum  number of
shares of Stock  which may be  delivered  to  Directors  under the Plan shall be
100,000.  Any shares of Stock  covered by a  Restricted  Stock  award  which are
subsequently  forfeited or withheld to cover tax withholding  shall be deemed to
have not been delivered for purposes of determining the maximum number of shares
of Stock available for delivery under the Plan.

5. Annual Awards

Annual Awards for the 1997 Plan Year were made to all participating Directors in
the form of Stock  Equivalent  Units.  For the 1998 and  subsequent  Plan Years,
Annual  Awards shall be made in the form of  Restricted  Stock,  however,  if an
award would be currently  taxable to a Director based on the laws of the country
under which the awards payable  hereunder would be taxed, such Director's Annual
Award  will be made in the  form of  Stock  Equivalent  Units.  Awards  of Stock
Equivalent  Units and  Restricted  Stock are made subject to the  provisions  of
Articles 6 and 7, respectively.

6. Award of Stock Equivalent Units.

If a Director's  Annual Award for a Plan Year is to be made in the form of Stock
Equivalent  Units,  as of the  last  day of such  Plan  Year,  an award of Stock
Equivalent  Units  shall  be made to such  Director  in an  amount  equal to 550
multiplied  by a fraction  where the  numerator is the number of full or partial
months within such Plan Year that such  individual  served as a Director and the
denominator  is 12.  In the  event  that such  Director's  service  on the Board
terminates  for  any  reason  prior  to the  end of the  Plan  Year,  as soon as
practicable  following such termination such Director's award will be determined
in accordance  with the formula in the preceding  sentence but as of the date of
such Director's termination.

7. Award of Restricted Stock

(a) If a  Director's  Annual  Award for a Plan Year is to be made in the form of
Restricted  Stock,  as of the last day of such Plan Year, an award of Restricted
Stock shall be made to such  Director in an amount equal to 550  multiplied by a
fraction where the numerator is the number of full or partial months within such
Plan Year that such  individual  served as a Director and the denominator is 12.
In the event that such Director's service on the Board terminates as a result of
any of the circumstances  described in Section 7(c) prior to the end of the Plan
Year, as soon as practicable  following such  termination  such Director's award
will be determined in accordance with the formula in the preceding  sentence but
as of the date of such Director's termination.

(b) Each  Restricted  Stock award  shall be  evidenced  by a written  instrument
delivered to the Director in such form as the  Committee  shall  prescribe.  The
Restricted  Stock  subject to such award shall be  registered in the name of the
Director  and held in escrow by the  Committee  until the  restrictions  on such
shares lapse as described herein.

(c)  Restricted  Stock  awarded  to  a  Director  may  not  be  sold,  assigned,
transferred,  pledged,  hypothecated or otherwise disposed of, except by will or
the laws of descent and  distribution,  prior to the  earliest of the  following
dates: (i) the Director's  death,  disability or retirement from the Board after
reaching age 70; (ii) the  occurrence of a Change in Control of the Company;  or
(iii) the Director's  resignation from the Board in specific  circumstances  (as
determined in accordance with procedures  established by the Committee) with the
consent of a majority of the Board of Directors.

(d) If a Director's service on the Board terminates for reasons other than those
provided in Section 7(c), any shares  remaining  subject to  restrictions  shall
thereupon be forfeited by the Director and  transferred to and reacquired by the
Company  at no cost to the  Company,  and any  Restricted  Stock  credited  to a
Director but not yet awarded pursuant to Section 7(a) shall not be awarded.

(e) After the shares of Restricted Stock are actually awarded,  Directors shall,
subject to Section  7(c),  possess all  incidents  of ownership of the shares of
Restricted  Stock including the right to receive  dividends with respect to such
shares and to vote such shares. Dividends will be paid to Directors in cash.

8. Election to Defer Receipt of Cash Compensation.

(a) A Director  shall have the right to make on an annual  basis an  election to
defer  payment of all, or a  percentage  of, the total Cash  Compensation  to be
earned during the ensuing Plan Year (a "Deferral Election").  In order to make a
Deferral  Election  pursuant to this Section 8, a Director  shall deliver to the
Corporate  Secretary of the Company no later than the last business day prior to
the commencement of the first Plan Year to which such election relates a written
notice  setting  forth the  percentage of Cash  Compensation  to be deferred and
whether  such cash  should  be (i)  converted  into  Stock  Equivalent  Units in
accordance with  subsection (b) below;  (ii) converted into shares of Restricted
Stock in accordance  with  subsection (c) below;  or (iii) credited as cash to a
Deferred  Account  maintained  for such  Director on the date such  compensation
would  otherwise be paid.  Individuals who become  Directors  during a Plan Year
shall have  thirty  days  following  their  election  or  appointment  to make a
Deferral Election for the remainder of the Plan Year. Any Deferral Election made
pursuant  to this  Section 8 shall  remain in effect for  subsequent  Plan Years
until a new election form is delivered to the Corporate  Secretary in accordance
with this section.

(b) As soon as practicable  following the end of a Plan Year,  each Director who
made a Deferral  Election in the form of Stock Equivalent Units will be credited
as of the  last  day of the  Plan  Year  with the  number  of  units,  including
fractional units, equal to the amount of the Cash  Compensation,  the payment of
which has been deferred,  divided by the Fair Market Value of shares of Stock on
the date such  compensation  would otherwise have been paid. In the event that a
Director's  service on the Board terminates for any reason prior to the end of a
Plan Year, the calculation  referred to in the preceding  sentence shall be made
as soon as practicable following such Director's date of termination.

(c) As soon as practicable  following the end of a Plan Year,  each Director who
made a Deferral  Election in the form of Restricted  Stock will be awarded as of
the last day of the Plan Year the  number of whole  shares of  Restricted  Stock
approximately equal to the amount of the Cash Compensation, the payment of which
has been  deferred,  divided by the Fair Market  Value of shares of Stock on the
date such  compensation  would  otherwise have been paid. Any fractional  number
obtained by dividing  the amount of Cash  Compensation  by the Fair Market Value
will be rounded up or down to the nearest  whole number of shares.  In the event
that a Director's  service on the Board  terminates as a result of circumstances
described  in  Section  7(c) prior to the end of a Plan  Year,  the  calculation
referred  to in the  preceding  sentence  shall  be made as soon as  practicable
following  such  Director's  date of  termination  and payment  shall be made in
shares of Stock.

9. Dividend  Equivalents  Payable on Stock Equivalent Units and Restricted Stock
and Interest Paid on Deferred Cash Accounts.

(a) Dividend  Equivalents  shall be credited on Stock  Equivalent  Units held by
Directors  based upon  dividends  paid on shares of Stock  between the date such
Stock  Equivalent  Units  are  credited  to  Directors  and the  date  they  are
ultimately paid out in accordance with the Plan.

(b) Dividend  Equivalents shall, at the election of the Director,  be either (i)
paid in the  form of cash  as soon as  practicable  following  the end of a Plan
Year; or (ii) converted into Stock  Equivalent Units following the end of a Plan
Year based on the number of Stock  Equivalent  Units  credited  to a  Director's
account,  plus, if  applicable,  the number of shares of Restricted  Stock to be
awarded  pursuant to Section 7 for a Plan Year, as of the dividend  record dates
falling  within such Plan Year  multiplied  by the cash  dividends  (or the fair
market  value of any property  other than cash paid as a dividend)  per share of
Stock payable during such Plan Year divided by the Fair Market Value of Stock on
the last day of the Plan Year.

(c) Dividend  Equivalents  will be payable on Stock  Equivalents  Units  granted
under Section 6 for the Plan Year for which a grant is made in  accordance  with
subsections  (a) and (b) above as though  such Stock  Equivalent  Units had been
granted as of the first day of such Plan Year,  provided however,  such Dividend
Equivalents shall not be credited to a Director until the Stock Equivalent Units
to which they relate are credited to the Director in accordance with Section 6.

(d) Dividend Equivalents will be payable on Restricted Stock to be granted under
Section 7 for the Plan Year for which an Annual  Grant is to be made  based upon
dividends  paid on shares of Stock for such Plan Year as though such  Restricted
Stock had been granted as of the first day of such Plan Year,  provided however,
such Dividend  Equivalents  shall not be credited to a Director until the shares
of Restricted Stock to which they relate are actually awarded to the Director in
accordance with Section 7. Dividend Equivalents credited under this Section 9(d)
shall be payable in accordance with Section 9(b).

(e) Dividend  Equivalents  will be payable on Stock  Equivalent  Units  credited
pursuant  to a  Deferral  Election  pursuant  to  Section 8 in  accordance  with
subsections  (a) and (b) above as though  such Stock  Equivalent  Units had been
credited to a Director on the date the Cash  Compensation  to which the Deferral
Election relates would otherwise have been paid, provided however, such Dividend
Equivalents  shall  not be  credited  to a  Director's  account  until the Stock
Equivalent Units to which they relate are credited to the Director in accordance
with Section 8.

(f) Dividend  Equivalents will be payable on shares of Restricted Stock credited
but not yet actually awarded pursuant to a Deferral Election pursuant to Section
8,  based  upon  dividends  paid on shares of Stock  between  the date such Cash
Compensation  to which the Deferral  Election  relates would otherwise have been
paid and the date the shares of Restricted Stock are actually awarded,  provided
however, such Dividend Equivalents shall not be credited to a Director's account
until the shares of Restricted  Stock to which they relate are actually  awarded
to the Director in  accordance  with Section 8.  Dividend  Equivalents  credited
under this Section 9(f) shall be payable in accordance with Section 9(b).

(g) At the end of each Plan Year, and at the time of payment of any amounts held
in a  Deferred  Account,  interest  at the rate of the  average of the yields at
issuance of five-year Treasury Notes issued during the prior twelve-month period
plus 1% shall be credited to each Deferred  Account on the average daily balance
held in such accounts for the preceding Plan Year or portion thereof.

10. Time and Form of Payment.

(a) Payment in  settlement of Stock  Equivalent  Units and any amounts held in a
Deferred  Account  will  commence  as soon as  practicable  after  the  date the
Director  ceases to be a member of the Board,  unless,  with  respect to amounts
held in a Deferred Account, a Director has specified an alternate date in his or
her Deferral Election.

(b) Payment in  settlement of Stock  Equivalent  Units and any amounts held in a
Deferred  Account  will be made in a lump sum or, if elected  by a  Director  at
least  one year  prior to the date  such  Director  ceases to be a member of the
Board, in a specified  number (not to exceed ten) of annual  installments.  Such
election  may be  modified  or revoked by the  Director,  provided  that no such
modification  or revocation  will be given effect unless it is made prior to the
date specified in the preceding sentence.

(c)  Amounts  held in a  Deferred  Account  shall  be paid  in  cash  and  Stock
Equivalent  Units held by a Director  shall be paid in an  equivalent  number of
shares of Stock unless prior to the  commencement of payment,  a Director elects
to receive a cash payment in lieu of shares of Stock. Such cash payment shall be
equal to the Fair Market Value of the shares on the date such Director ceases to
be a  member  of the  Board,  or in the  case of an  installment  election  made
pursuant to  subsection  (b) above,  on the  anniversary  date of such date with
respect to the installment then payable.

(d) The Company  shall  deliver to the  Director all of the shares of Stock that
were awarded to the Director as  Restricted  Stock within 30 days  following the
lapse of restrictions as described in Section 7(c).

(e)  Whenever a  fractional  share would  otherwise  be required to be issued in
accordance  with the terms of this  Section  10, the Fair  Market  Value of such
fractional share shall be paid in cash.

11. Payment in the Event of Death.

(a) In  the  event  of a  Director's  death,  any  shares  of  Restricted  Stock
previously  awarded shall vest as described in Section 7(c),  payment of amounts
credited to such Director's  Deferred  Account shall be paid in cash and payment
of Stock  Equivalent  Units shall be made in the form previously  elected by the
Director,  provided  that  if no such  election  had  been  made  prior  to such
Director's  death,  payment  shall be made in  shares  of Stock  except  for any
fractional share the Fair Market Value of which shall be paid in cash.

(b)  Payment  shall be made as soon as  practicable  following  the death of the
Director in a single lump sum to the  beneficiary  designated  in writing by the
Director, of if no designation was made, to the person legally entitled thereto,
as  designated  under  the  will of the  Director,  or to such  heir or heirs as
determined under the laws of intestacy of the Director's domicile.

12. Adjustments in the Event of Change in Common Stock of the Company.

In the  event  that  there is any  change  in the  Stock by  reason of any stock
dividend,  stock split,  combination of shares,  exchange of shares, warrants or
rights  offering  to  purchase  Stock at a price  below its fair  market  value,
reclassification,  recapitalization,  merger,  consolidation,  spin-off or other
change in capitalization, appropriate adjustment shall be made in the number and
kind of shares or other property  subject to the Plan and the number and kind of
shares or other property credited to the Directors under the Plan, and any other
relevant  provisions of the Plan by the Committee,  whose determination shall be
binding and conclusive on all persons.

13. Change in Control.

In the event of a Change  in  Control,  the  following  shall  occur on the date
thereof  (the  "Change in Control  Date"):  (i) the last day of the then current
Plan Year shall be deemed to occur on the Change in Control Date;  (ii) pursuant
to Sections 5, 6, 7 and 8,  Directors  shall be credited  with Stock  Equivalent
Units or awarded shares of Stock, as if for this purpose  Directors'  service as
Directors  ceased on the Change in Control Date;  (iii) Dividend  Equivalents on
Stock  Equivalent  Units and Restricted  Stock,  including  those credited under
clause  (ii),  and  interest  on any  Deferred  Accounts  shall be  credited  in
accordance  with  Section  9;  and (iv) the  Company  shall  pay a lump sum cash
payment in settlement of the amount of cash credited to each Director's Deferred
Account and the number of Stock Equivalent Units then credited to such Director,
including cash and Stock Equivalent Units credited  pursuant to clauses (ii) and
(iii)  above.  For  purposes  of the  preceding  sentence,  the  amount  of cash
delivered in payment of Stock Equivalent Units shall equal such units multiplied
by the  greater of (i) the highest  Fair Market  Value per share of Stock at any
time  during  the 60-day  period  preceding  the  Change in Control  and (ii) if
applicable,  the price of a share of Stock  which is paid or offered to be paid,
by any person or entity,  in connection  with the transaction  constituting  the
Change in Control.

14. Rights with respect to Stock Equivalent Units.

Except to the extent  otherwise set forth in the Plan,  Directors shall not have
any of the rights of a shareholder  with respect to the Stock  Equivalent  Units
credited to them.

15. General Restrictions.

(a) No shares of Stock shall be issued under the Plan prior to compliance by the
Company,  to the  satisfaction  of its  counsel,  with any  applicable  law. The
Company  shall not be obligated to, but may in its  discretion,  take any action
under applicable  federal or state law (including  registration or qualification
of the Plan or the Stock) necessary for compliance  therewith in order to permit
the issuance of shares hereunder.

(b) The Company may impose such restrictions on the sale or other disposition of
shares of Stock  issued  under  the Plan as it deems  necessary  to comply  with
applicable securities laws.

16. Withholding.

The  Company may defer  making  payment or delivery of shares of Stock under the
Plan  until  satisfactory  arrangements  have been made for the  payment  of any
Federal,  state or local  income taxes  required to be withheld  with respect to
such payment or delivery,  including  without  limitation by the  withholding of
shares that would  otherwise  be so  delivered,  by  withholding  from any other
payment due to the Director, or by a cash payment to the Company by a Director.

17. No Right to Nomination for Reelection.

Nothing in the Plan shall be deemed to create any  obligation on the part of the
Board to nominate any Director for reelection by the Company's  shareholders  or
to limit the rights of the shareholders to remove any Director.

18. Amendment and Termination of the Plan.

The  Board may at any time  amend or  terminate  the Plan,  in whole or in part,
however,  no amendment or  termination  shall  without the written  consent of a
Director, reduce the Director's rights with respect to awards previously granted
hereunder or any fees  previously  earned the payment of which has been deferred
pursuant to the terms of the Plan.

19. Governing Law.

The Plan and all actions taken  thereunder shall be construed in accordance with
and governed by the laws of the State of Connecticut.