Document:

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                              EMPLOYMENT AGREEMENT

     This Employment Agreement ("Agreement") is entered into between American
General Corporation, a Delaware corporation ("Company") and Richard W. Scott
("Executive"), to be effective as of the Effective Time as hereinafter defined.

     WHEREAS, Western National Corporation ("Western") and Executive have
entered into an Employment Agreement dated February 8, 1994, an Amendment to
Employment Agreement dated December 2, 1994, and a further Amendment to
Employment Agreement dated May 14, 1997 (the "February 8, 1994 Employment
Agreement").

     WHEREAS, contemporaneously herewith, Company, which presently owns certain
of the stock of Western, and a subsidiary of Company, have entered into an
Agreement and Plan of Merger ("Merger Agreement") with Western pursuant to
which Company shall acquire all or substantially all of the stock of Western
through merger (the "Merger").

     WHEREAS, it is an important element of Company's decision to acquire the
stock of Western through such Merger that Executive become employed by Company
and remain employed by Company and provide his personal services to Company in
connection with the operation of Company's and Western's business, the creation
and development of Company's and Western's products and services, and the
marketing of Company's and Western's products and services for at least three
years from the date of such acquisition.

     WHEREAS, during the three year Term of this Agreement, Company shall
disclose to Executive, or place Executive in a position to have access to or
develop, trade secrets or confidential information of Company or Western or
other of Company's subsidiaries or affiliates or their customers or clients;
and/or shall entrust Executive with business opportunities of Company or
Western or other of Company's subsidiaries or affiliates; and/or shall place
Executive in a position to develop business good will on behalf of Company or
Western or other of Company's subsidiaries or affiliates, and there is a need
and desire on the part of Company and Executive to specify the parties' rights
and obligations with respect to the ownership and protection of such
information, opportunities and goodwill.

     WHEREAS, Company is desirous of employing Executive pursuant to the terms
and conditions and for the consideration set forth in this Agreement, and
Executive is desirous of continuing in the employ of Company pursuant to such
terms and conditions and for such consideration, subject to the condition
subsequent that the contemplated Merger shall be consummated.

     WHEREAS, contemporaneously herewith, Company and Executive shall also
enter into a Severance Agreement ("Severance Agreement"). The terms and
conditions of such Severance Agreement are incorporated herein by reference.

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     NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, Company and Executive agree as
follows:

1.   Employment and Duties:

     1.1. Because of the important nature of Executive's personal services with
respect to the operation of Company's business, the creation and development of
Company's products and services, and the marketing of Company's products and
services, Company agrees to employ Executive, and Executive agrees to be
employed by Company, beginning as of forty eight hours after the Effective Time
as defined below and continuing thereafter for a Term of three (3) years (the
"Term"), subject to the terms and conditions of this Agreement.

     1.2. Commencing as of forty-eight hours after the Effective Time, Company
shall employ Executive in a senior executive or officer capacity with Company
or one of its significant subsidiaries with duties consonant with senior
executive status, but Company may assign Executive to different executive
positions and modify Executive's duties and responsibilities. Company may also
assign Executive to a position in which he performs services for other of
Company's subsidiaries or affiliates.

     1.3. Executive agrees to serve in the assigned position and to perform
diligently and to the best of Executive's abilities the duties and services
appertaining to such position as determined by Company, as well as such
additional or different duties and services appropriate to such position which
Executive from time to time may be reasonably directed to perform by Company.
Executive shall at all times comply with and be subject to such policies and
procedures as Company may establish from time to time. Executive shall, during
the period of Executive's employment by Company, devote Executive's full
business time, attention, energy, and best efforts to the business and affairs
of Company. For purposes of this Agreement, full business time shall mean the
normal work week for individuals in comparable executive positions with
Company. Executive may not engage, directly or indirectly, in any other
business, investment, or activity that interferes with Executive's performance
of Executive's duties hereunder, is contrary to the interests of Company, or
requires any significant portion of Executive's business time.

     1.4. Executive acknowledges and agrees that at all times during the
employment relationship Executive owes fiduciary duties to Company, including
but not limited to the fiduciary duties of the highest loyalty, fidelity and
allegiance to act at all times in the best interests of Company, to make full
disclosure to Company of all information that pertains to Company's business
and interests, to do no act which would injure Company's business, its
interests, or its reputation, and to refrain from using for Executive's own
benefit or for the benefit of others any information or opportunities
pertaining to Company's business or interests that are entrusted to Executive
or that he learned while employed by Company. Executive acknowledges and agrees
that upon termination of the employment relationship, Executive shall continue
to refrain from using for his own benefit or the benefit of others any
information or opportunities pertaining to Company's business or interests that
were entrusted to Executive during the employment relationship or that he
learned while employed by Company. Executive agrees that while employed by
Company and thereafter he

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shall not knowingly take any action which interferes with the external
relationships between Company and third parties.

     1.5.  It is agreed that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect Company, or any of
its affiliates, involves a possible conflict of interest. In keeping with
Executive's fiduciary duties to Company, Executive agrees that during the
employment relationship Executive shall not knowingly become involved in a
conflict of interest with Company or its affiliates, or upon discovery thereof,
allow such a conflict to continue. Moreover, Executive agrees that Executive
shall disclose to Company's President any facts which might involve such a
conflict of interest that has not been approved by Company's President. Company
and Executive recognize that it is impossible to provide an exhaustive list of
actions or interests which constitute a "conflict of interest." Moreover,
Company and Executive recognize there are many borderline situations. In some
instances, full disclosure of facts by Executive to Company's President may be
all that is necessary to enable Company or its affiliates to protect their
interests. In others, if no improper motivation appears to exist and the
interests of Company or their affiliates have not suffered, prompt elimination
of the outside interest will suffice. In still others, it may be necessary for
Company to terminate the employment relationship. Company and Executive agree
that Company's determination as to whether a conflict of interest exists shall
be conclusive. Company reserves the right to take such action as, in its
judgment, will end the conflict.

2.    Compensation and Benefits:

     2.1. As compensation for services rendered under this Agreement, Executive
shall receive a base salary of Three Hundred Thousand ($300,000) per year
("Base Annual Salary"), payable in semi-monthly installments in accordance with
Company's standard payroll practice for its salaried employees. Executive's
Base Annual Salary may be increased from time to time based upon his
performance. The amounts of any such salary increases shall be approved by the
Personnel Committee of Company's Board of Directors.

     2.2. The parties recognize that Western will pay Executive his performance
bonus for the calendar year 1997 prior to the consummation of the Merger. In
addition to Base Annual Salary, Executive shall receive for the calendar years
1998, 1999 and 2000, an annual performance bonus in such amount as may be
determined by the Personnel Committee of Company's Board of Directors in its
sole discretion for each year during the Term of this Agreement. Such annual
bonus shall be paid in the March/April time frame of the following year, with
the first such payment in the March/April time frame of 1999 for the calendar
year 1998. It is understood and agreed that the amount of any such bonus shall
be determined based upon a consideration of both (i) the progress and success
of the Company as a whole, and (ii) the personal performance and contributions
made to the success of the Company by Executive. Finally, it is understood and
agreed that there may be years in which the Personnel Committee determines that
no bonus shall be paid.

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     2.3. In the event that, in connection with the Merger, the acceleration of
the vesting of Executive's stock options or restricted stock in Western, or any
payment, award or distribution under the February 8, 1994 Employment Agreement,
or any payment, award or distribution under this Agreement to or for the
benefit of Executive (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest or
penalties, are hereinafter collectively referred to as the "Excise Tax"),
Company shall pay to Executive an additional payment (a "Gross-up Payment") in
an amount such that after payment by Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed on any Gross-up Payment, Executive retains an amount of the
Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and
Executive shall make an initial determination as to whether a Gross-up Payment
is required and the amount of any such Gross-up Payment. Executive shall notify
Company immediately in writing of any claim by the Internal Revenue Service
which, if successful, would require Company to make a Gross-up Payment (or a
Gross-up Payment in excess of that, if any, initially determined by Company and
Executive) within ten days of the receipt of such claim. Company shall notify
Executive in writing at least ten days prior to the due date of any response
required with respect to such claim if it plans to contest the claim. If
Company decides to contest such claim, Executive shall cooperate fully with
Company in such action; provided, however, Company shall bear and pay directly
or indirectly all costs and expenses (including additional interest and
penalties) incurred in connection with such action and shall indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
Company's action. If, as a result of the Company's action with respect to a
claim, Executive receives a refund of any amount paid by Company with respect
to such claim, Executive shall promptly pay such refund to Company. If Company
fails to timely notify Executive whether it will contest such claim or Company
determines not to contest such claim, then Company shall immediately pay to
Executive the portion of such claim, if any, which it has not previously paid
to Executive.

     2.4. While employed by Company, Executive shall be allowed to participate,
on the same basis generally as other executives of Company, in all general
executive benefit plans and programs, including improvements or modifications
of the same, which as of the Effective Time or thereafter are made available by
Company to other of Company's comparable executives. Such benefits plans, and
programs may include, without limitation, medical, health, and dental care,
life insurance, disability protection, and pension plans. Nothing in this
Agreement is to be construed or interpreted to provide greater rights,
participation, coverage, or benefits under such benefit plans or programs than
provided to similarly situated executives pursuant to the terms and conditions
of such benefit plans and programs.

     2.5. Company shall not by reason of this Article 2 be obligated to
institute, maintain, or refrain from changing, amending, or discontinuing, any
of its medical, health, dental, insurance, disability or other benefit plans or
programs, so long as such actions are similarly applicable to covered employees
generally. Unless specifically provided for in a written plan document adopted
by the Board of Directors of Company, none of the benefits or arrangements
described in this Article

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2 shall be secured or funded in any way, and each shall instead constitute an
unfunded and unsecured promise to pay money in the future exclusively from the
general assets of Company.

     2.6. Company may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.

3.   Termination of employment prior to expiration of Term and effects of
     such termination:

     3.1. [A] Notwithstanding any other provisions of this Agreement, Company
shall have the right to terminate Executive's employment under this Agreement
at any time prior to the expiration of the Term for cause upon the
determination by Company's Board of Directors or Company's Executive
Termination Review Committee that cause exists for the termination of the
employment relationship. As used in this Section 3.1, the term cause shall mean
[1] misuse, misappropriation or embezzlement by Executive of funds or property
belonging to Company, or his use of alcohol or drugs which interferes with the
performance of his duties hereunder or which compromises the integrity and
reputation of Company, its employees, or its products or services; [2]
Executive's conviction by a court of law, or admission that he is guilty, of a
felony or other crime involving moral turpitude; [3] Executive's absence from
his employment other than as a result of a disability as defined in Section 3.3
hereof, for whatever cause, for a period of more than one (1) month, without
prior written consent from Company; [4] Executive becomes incompetent or is
reasonably unable to undertake and discharge the duties and responsibilities of
his position, other than as a result of a disability as defined in Section 3.3
hereof; or [5] Executive's breach of any provisions of this Agreement, or his
gross negligence, willful malfeasance or fraud or dishonesty in performance of
his services on behalf of Company pursuant to this Agreement. It is expressly
acknowledged and agreed that the decision as to whether cause exists for
termination of the employment relationship by Company is delegated to Company's
Board of Directors or Company's Executive Termination Review Committee for
determination, which decision shall be made in good faith.

     [B] Upon a termination of the employment relationship for cause by Company
prior to expiration of the Term pursuant to this Section, Executive shall be
entitled to receive as a full and final settlement of all obligations of
Company hereunder his pro rata Base Annual Salary through the date of such
termination, but any and all other compensation to which Executive is entitled
under this Agreement and any and all future benefits for which Executive is
eligible under this Agreement shall cease and terminate, including but not
limited to, Executive shall not be entitled to any bonuses or other incentive
compensation, if any, not yet paid to Executive at the date of such
termination. Executive shall not be entitled to any severance payment.
Executive's rights under this Section are Executive's sole and exclusive rights
against Company or its affiliates, and Company's sole and exclusive liability
to Executive under this Agreement, in contract, tort, or otherwise, for any
termination for cause of the employment relationship by Company. Executive
covenants not to lodge any claim, demand, or cause of action against Company
based on termination for cause of the employment relationship for any monies
allegedly due under this Agreement other than those specified in this Section.
If Executive breaches this covenant, Company shall be entitled to recover

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from Executive all sums expended by Company (including costs and attorneys
fees) in connection with such suit, claim, demand, or cause of action.

     3.2. The employment relationship under this Agreement shall terminate
automatically upon Executive's death. Upon a termination of the employment
relationship prior to expiration of the Term because of Executive's death,
Executive's administrators, heirs or legatees shall be entitled to receive
Executive's then-current Base Annual Salary as if Executive's employment (which
shall cease on the date of such death) had continued for the full Term of this
Agreement. Company may, at its option, pay such Base Annual Salary in semi-
monthly installments or in a lump sum discounted to present value at the
discount rate then available to Company through its lenders. Executive's
administrators, heirs or legatees shall also be entitled to any individual
bonuses or any individual incentive compensation awarded but not yet paid to
Executive at the date of such termination but Executive's administrators, heirs
or legatees shall not be entitled to any future individual bonuses or any
individual incentive compensation payments not yet awarded (whether or not
allegedly accrued) as of the date of such termination.

     3.3. The employment relationship under this Agreement shall terminate
automatically upon Executive becoming permanently and totally unable to perform
Executive's duties for Company as a result of any medically determinable
physical or mental impairment as supported by a written medical opinion to the
foregoing effect by a physician selected by Company. Upon such termination of
the employment relationship, Executive shall be paid his pro rata Base Annual
Salary through the date of such termination and Executive shall thereafter be
paid sixty (60%) of his then-current Base Annual Salary on a semi-monthly
basis through the Term of this Agreement as if the employment relationship had
not terminated, reduced by any benefits he may receive under Company's
disability benefit plans. Executive shall also be entitled to any individual
bonuses or any individual incentive compensation awarded but not yet paid to
Executive at the date of such termination but Executive shall not be entitled
to any future individual bonuses or any individual incentive compensation
payments not yet awarded (whether or not allegedly accrued) as of the date of
such termination. For purposes of this Section, disability shall not include
disabilities arising from (a) chronic use of intoxicants, drugs or narcotics,
(b) intentionally self-inflicted injury or intentionally self-induced
sickness, or (c) a proven unlawful act or enterprise on the part of Executive.

     3.4. [A] Notwithstanding any other provisions of this Agreement, Company
shall have the right to terminate Executive's employment under this Agreement
at any time prior to the expiration of the Term for any other reason
whatsoever, including termination without cause, in the sole discretion of
Company's Board of Directors or Company's Executive Termination Review
Committee. Any termination of the employment relationship by Company prior to
the expiration of the Term other than a termination under Section 3.1 for cause
shall be deemed to be a termination without cause pursuant to this Section 3.4.

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     [B] If Company terminates the employment relationship without cause
pursuant to this Section 3.4, Executive's post-employment non-competition
obligation specified in Section 6.1(i) shall extend only to the date upon which
the Term of this Agreement would have otherwise expired.

     [C] Upon termination of the employment relationship by Company prior to
expiration of the Term pursuant to this Section 3.4, Executive shall be
entitled, in consideration of Executive's continuing obligations hereunder
after such termination (including, without limitation, Executive's
non-competition obligations), to receive his then-current Base Annual Salary as
if Executive's employment (which shall cease on the date of such termination)
had continued for the full Term of this Agreement. Company may, at its option,
pay such Base Annual Salary in semi-monthly installments or in a lump sum
discounted to present value at the discount rate then available to Company
through its lenders. Provided that Executive complies with his continuing
obligations hereunder after such termination, Executive shall also be entitled
to performance bonuses for each of the calendar years 1998, 1999 and 2000 as
follows: As to the bonus for calendar year 1998, if such termination of
employment occurs before Company's Personnel Committee awards a bonus for
calendar year 1998, the bonus for calendar year 1998 shall be equal to the
bonus paid by Company (or Western) to Executive for the calendar year 1997. As
to the bonus for calendar year 1999, if such termination of employment occurs
before Company's Personnel Committee awards a bonus for calendar year 1999, the
bonus for calendar year 1999 shall be equal to the average of the bonuses paid
by Company (or Western) to Executive for calendar years 1997 and 1998. As to
the bonus for calendar year 2000, if such termination of the employment
relationship occurs at any time prior to the end of the Term, the bonus for
calendar year 2000 shall be equal to the average of the bonuses paid by Company
(or Western) to Executive for the calendar years 1997, 1998 and 1999.

     [D] Executive shall not be under any duty or obligation to seek or accept
other employment following such termination of the employment relationship and,
subject to Executive complying with his continuing obligations (including
non-competition obligations), the amounts due Executive hereunder shall not be
reduced or suspended if Executive accepts subsequent employment. Executive's
rights under this Section 3.4 are Executive's sole and exclusive rights against
Company, and Company's sole and exclusive liability to Executive under this
Agreement, in contract, tort, or otherwise, for such termination of the
employment relationship by Company. Executive covenants not to lodge any claim,
demand, or cause of action against Company based on such termination of the
employment relationship by Company for any monies allegedly due under this
Agreement other than those specified in this Section 3.4. If Executive breaches
this covenant, Company shall be entitled to recover from Executive all sums
expended by Company (including costs and attorneys fees) in connection with
such suit, claim, demand, or cause of action.

     3.5. [A] Executive shall have the right to terminate the employment
relationship during its Term only for cause, which shall consist only of a
material breach by Company of any material provision of this Agreement which
remains uncorrected for thirty (30) days following written notice of such
breach by Executive to Company.

     [B] If Executive terminates the employment relationship for cause pursuant
to this Section 3.5, Executive's post-employment non-competition obligation
specified in Section 6.1(i) shall extend only to the date upon which the Term
of this Agreement would have otherwise expired.

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     [C] Upon termination of the employment relationship by Executive for cause
prior to expiration of the Term pursuant to this Section 3.5, Executive shall
be entitled, in consideration of Executive's continuing obligations hereunder
after such termination (including, without limitation, Executive's
non-competition obligations), to receive his Base Annual Salary as if
Executive's employment (which shall cease on the date of such termination) had
continued for the full Term of this Agreement. Company may, at its option, pay
such Base Annual Salary in semi-monthly installments or in a lump sum
discounted to present value at the discount rate then available to Company
through its lenders. Executive shall be entitled to bonuses or other incentive
compensation, if any, awarded but not yet paid as of the date of such
termination. Provided that Executive complies with his continuing obligations
hereunder after such termination, Executive shall also be entitled to
performance bonuses for each of the calendar years 1998, 1999 and 2000, even if
no such bonus had been awarded as of the date of such termination, as follows:
As to the bonus for calendar year 1998, if such termination of employment
occurs before Company's Personnel Committee awards a bonus for calendar year
1998, the bonus for calendar year 1998 shall be equal to the bonus paid by
Company (or Western) to Executive for the calendar year 1997. As to the bonus
for calendar year 1999, if such termination of employment occurs before
Company's Personnel Committee awards a bonus for calendar year 1999, the bonus
for calendar year 1999 shall be equal to the average of the bonuses paid by
Company (or Western) to Executive for calendar years 1997 and 1998. As to the
bonus for calendar year 2000, if such termination of the employment
relationship occurs at any time prior to the end of the Term, the bonus for
calendar year 2000 shall be equal to the average of the bonuses paid by Company
(or Western) to Executive for the calendar years 1997, 1998 and 1999.

     [D] Executive shall not be under any duty or obligation to seek or accept
other employment following such termination of the employment relationship and,
subject to Executive complying with his continuing obligations (including
non-competition obligations), the amounts due Executive hereunder shall not be
reduced or suspended if Executive accepts subsequent employment. Executive's
rights under this Section 3.5 are Executive's sole and exclusive rights against
Company, and Company's sole and exclusive liability to Executive under this
Agreement, in contract, tort, or otherwise, for any actions or inactions giving
rise to such termination of the employment relationship for cause by Executive.
Executive covenants not to lodge any claim, demand, or cause of action against
Company based on such termination of the employment relationship for cause by
Executive for any monies allegedly due under this Agreement other than those
specified in this Section 3.5. If Executive breaches this covenant, Company
shall be entitled to recover from Executive all sums expended by Company
(including costs and attorneys fees) in connection with such suit, claim,
demand, or cause of action.

     3.6. Termination of the employment relationship shall not terminate those
obligations imposed by this Agreement which are continuing in nature,
including, without limitation, Executive's continuing obligations of
confidence, Executive's continuing obligations with respect to business
opportunities that had been entrusted to Executive by Company during the
employment relationship, and Executive's obligations under Articles 5 and 6.

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4.   Continuation of Employment beyond Term; Termination and Effects of
     Termination:

     4.1.  Should Executive remain employed by Company beyond the expiration of
the Term, such employment shall automatically convert to an at-will
relationship terminable at any time by either Company or Executive for any
reason whatsoever, with or without cause. Upon such termination of the
employment relationship by either Company or Executive for any reason
whatsoever, all future compensation to which Executive is entitled and all
future benefits for which Executive is eligible shall cease and terminate.
Executive shall be entitled to pro rata salary through the date of such
termination. Executive shall also be entitled to bonuses or other incentive
compensation, if any, awarded but not yet paid as of the date of such
termination, but Executive shall not be entitled to any future individual
bonuses or any individual incentive compensation payments not yet awarded
(whether or not allegedly accrued) as of the date of such termination.

5.   Ownership and Protection of Information; Copyrights:

     5.1. All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, and all expressions of ideas, which are
created, conceived, made, developed or acquired by Executive, individually or
in conjunction with others, during Executive's employment by Company (whether
during business hours or otherwise and whether on Company's premises or
otherwise), whether tangible or intangible, which relate to Company's business,
products or services (including, without limitation, all such information
relating to corporate opportunities, insurance or annuity products, research,
financial and sales data, pricing and trading terms, evaluations, opinions,
interpretations, acquisition prospects, the identity of customers or their
requirements, the identity of key contacts within the customer's organizations
or within the organization of acquisition prospects, or marketing and
merchandising techniques, prospective names, and marks) shall be disclosed to
Company. Executive acknowledges that he has heretofore disclosed all such
information, ideas, concepts, improvements, discoveries, and inventions, as
well as all expressions of ideas, to Company.

     5.2. All such information, ideas, concepts, improvements, discoveries, and
inventions identified in Section 5.1 are and shall be the sole and exclusive
property of Company. Moreover, if, during Executive's employment by Company,
Executive creates any work of authorship fixed in any tangible medium of
expression which is the subject matter of copyright (such as videotapes,
written presentations, or acquisitions, computer programs, E-mail, voicemail,
electronic databases, drawings, maps, architectural renditions, models,
manuals, brochures, or the like) relating to Company's business, products, or
services, whether such work is created solely by Executive or jointly with
others (whether during business hours or otherwise and whether on Company's
premises or otherwise), Company, shall be deemed the author of such work if the
work is prepared by Executive in the scope of Executive's employment; or, if
the work is not prepared by Executive within the scope of Executive's
employment but is specially ordered by Company as a contribution to a
collective work, as a part of a motion picture or other audiovisual work, as a
translation, as a supplementary work, as a compilation, or as an instructional
text, then the work shall be considered to be work made for hire and Company,
shall be the author of the work. If such work relating to Company's business,
products, or services is neither prepared by Executive within the scope of

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Executive's employment nor a work specially ordered that is deemed to be a work
made for hire, then Executive hereby agrees to assign, and by these
presents does assign, to Company all of Executive's worldwide right, title, and
interest in and to such work and all rights of copyright therein. Additionally,
all documents drawings, memoranda, notes, records, files, correspondence,
manuals, models, specifications, computer programs, E-mail, voice mail,
electronic databases, maps and all other writings or materials of any type
embodying any of such information, ideas, concepts, improvements, discoveries,
inventions and/or copyrightable expressions are and shall be the sole and
exclusive property of Company. Executive acknowledges that Company is the owner
of all such information, ideas, concepts, improvements, discoveries, inventions
and/or copyrightable expressions that he heretofore created, conceived, made,
developed or acquired while employed by Company.

     5.3. Executive will not, at any time during or after Executive's
employment by Company, make any unauthorized disclosure of any confidential
business information or trade secrets of Company, or make any use thereof,
except in the carrying out of Executive's employment responsibilities
hereunder. As a result of Executive's employment by Company, Executive shall
also from time to time have access to, or knowledge of, confidential business
information or trade secrets of third parties, such as customers, suppliers,
partners, joint venturers, and the like, of Company, Executive also agrees to
preserve and protect the confidentiality of such third party confidential
information and trade secrets to the same extent, and on the same basis, as
Company's confidential business information and trade secrets. Upon termination
of the employment relationship for any reason, Executive promptly shall deliver
to Company all documents and things containing Company trade secrets or
confidential information. Executive may disclose those aspects of Company's
confidential information as Executive has received the written advice of
counsel that such disclosure thereof is necessary under applicable federal,
state, local, or foreign law or other regulations applicable to Executive
(including, without limitation, any confidential information that Executive is
legally compelled to disclose as a result of depositions, interrogatories,
request for documents, subpoenas, civil investigative demands, or similar
processes), provided, however, that Executive has first provided Company with
prompt prior written notice of such requirement so that Company may seek a
protective order or other appropriate remedy and/or waive compliance with the
terms of this Agreement. In the event that such protective order or other
remedy is not obtained, or that Company does not waive compliance with the
provisions hereof, Executive agrees to furnish only that portion of Company's
confidential information which Executive is advised in writing by his counsel
is legally required to be disclosed and to exercise all reasonable efforts to
obtain assurance that confidential treatment will be accorded such confidential
information.

     5.4. Both during the period of Executive's employment by Company and
thereafter, Executive shall assist Company or its nominees, at any time, in the
protection of Company's worldwide right, title, and interest in and to
information, ideas, concepts, improvements, discoveries, and inventions, and
its copyrighted works, including without limitation, the execution of all
formal assignment documents requested by Company or its nominees and the
execution of all lawful oaths and applications for applications for patents and
registration of copyright in the United States and foreign countries.

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     5.5. Executive acknowledges that money damages would not be sufficient
remedy for any breach of this Article 5 by Executive, and Company shall be
entitled to enforce the provisions of this Article 5 by terminating any
payments then owing to Executive under this Agreement and/or to specific
performance and injunctive relief as remedies for such breach or any threatened
breach. Such remedies shall not be deemed the exclusive remedies for a breach
of this Article 5, but shall be in addition to all remedies available at law or
in equity to Company, including the recovery of damages from Executive and his
agents involved in such breach.

6.   Non-Competition and Non-Solicitation Obligations:

     6.1. As part of the consideration for the compensation and benefits to be
paid to Executive hereunder; to protect the trade secrets and confidential
information of Company or its subsidiaries or affiliates or their customers or
clients that have been and will in the future be disclosed or entrusted to
Executive, the business good will of Company or its subsidiaries or affiliates
that has been and will in the future be developed in Executive, or the business
opportunities that have been and will in the future be disclosed or entrusted
to Executive by Company or its subsidiaries or affiliates; and as an additional
incentive for Company to enter into this Agreement, Executive agrees to the
non-competition obligations hereunder: Executive shall not, anywhere in the
United States or any other country in which Company is offering financial
services as of the date of the termination of the employment relationship,
directly or indirectly for himself or for others, (i) in any manner compete
with Company or any subsidiary or affiliate of Company by whom Executive was
employed at any time during the twelve months preceding the termination of the
employment relationship, (ii) solicit or attempt to convert to other financial
service companies providing the same or similar products or services provided
by Company, any customers or policyholders of Company or its subsidiaries or
affiliates; or (iii) solicit for employment or employ any employee of Company.
Except as provided in Article 8, these obligations owed by Executive to Company
shall extend throughout the Term of this Agreement and, except as otherwise
provided in Sections 3.4 or 3.5, for a period of two (2) years following
termination of the employment relationship for whatever reason.

     6.2. Executive understands that the foregoing restrictions may limit
Executive's ability to engage in certain businesses in the areas specified
above during the period provided for above, but acknowledges that Executive
will receive sufficiently high remuneration and other benefits under this
Agreement to justify such restriction. Executive acknowledges that money
damages would not be sufficient remedy for any breach of this Article 6 by
Executive, and Company shall be entitled to enforce the provisions of this
Article 6 by terminating any payments then owing to Executive under this
Agreement and/or to specific performance and injunctive relief as remedies for
such breach or any threatened breach. Such remedies shall not be deemed the
exclusive remedies for a breach of this Article 6, but shall be in addition to
all remedies available at law or in equity to Company, including, without
limitation, the recovery of damages from Executive and Executive's agents
involved in such breach.

     6.3. It is expressly understood and agreed that Company and Executive
consider the restrictions contained in this Article 6 to be reasonable and
necessary to protect the trade secrets and confidential information of Company
or its subsidiaries or affiliates, the business good will of

                                  - Page 11 -
<PAGE>   12
Company or its subsidiaries or affiliates developed in Executive, and/or the
business opportunities disclosed or entrusted to Executive by Company or its
subsidiaries or affiliates. Nevertheless, if any of the aforesaid restrictions
are found to be unreasonable, or overly broad as to geographic area or time, or
otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified so as to be reasonable and enforceable and, as so modified
to be fully enforced.

     6.4. These duties and obligations of Executive specified in this Article 6
are not exclusive. Executive owes Company the duties and obligations agreed to
elsewhere in this Agreement and as are imposed by the law, e.g., the duty to
refrain from tortiously interfering with Company's contractual and business
relationships with others.

7.   Condition Subsequent, Effective Time, and Termination of February 8, 1994
     Employment Agreement with Western:

     7.1. Notwithstanding any provision in this Agreement to the contrary, it
is a condition subsequent to the execution and delivery of this Agreement that
the Merger, as such term is defined in the Merger Agreement, must be
consummated. If the Merger Agreement is terminated without consummation of the
Merger, then this Agreement shall be of no further force and effect and shall
be void ab initio.

     7.2. This Agreement shall be effective as of forty-eight (48) hours after
the Effective Time of the Merger, which term shall have the same meaning as
assigned to such term in the Merger Agreement.

     7.3. Executive waives any claim he may have against Western under the
February 8, 1994 Employment Agreement, including but not limited to claims for
future salary, control termination payments, severance allowance, or bonuses.
As of forty eight hours after the Effective Time, any and all prior or existing
employment agreements between Executive and Western shall be canceled and
terminated, including the February 8, 1994 Employment Agreement, and are
replaced and superseded by this Agreement and the accompanying Severance
Agreement.

8.   Conversion of employment relationship to at-will and release of certain
     duties and obligations upon a Change of Control as specified in Severance
     Agreement:

     8.1. Upon the occurrence of a Change of Control as specified in the
Severance Agreement, the employment relationship under this Agreement shall
immediately automatically convert to an at-will relationship terminable by
either Company or Executive at any time for any reason whatsoever, with or
without cause, and Executive is released from his post- employment obligations
specified in Article 6. The economic effect of any subsequent termination of
the employment relationship by Company without cause shall be governed by
Section 4.1. The economic effect of a subsequent termination of the employment
relationship by virtue of Executive's death or disability shall continue to be
governed by Sections 3.2 or 3.3, respectively, through the remainder of what
was the Term of the Agreement. The economic effect of a subsequent termination
of the employment relationship for cause by Company shall continue to be
governed by Section 3.1. The economic effect of any subsequent termination of
the employment relationship by Executive for any reason

                                  - Page 12 -
<PAGE>   13
shall be governed by Section 4.1. In all cases, Executive shall also be
entitled to the benefits of the Severance Agreement, if applicable; however, in
no event is it intended that a termination of the employment relationship
following a Change of Control will result in Executive receiving both
post-employment payments under this Agreement and under the severance
Agreement.

9.   Miscellaneous:

     9.1. For purposes of this Agreement the terms "affiliates" or "affiliated"
means an entity who directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with Company.

     9.2. Western is a third party beneficiary of this Agreement with respect
to certain agreements specified herein that affect the February 8, 1994
Employment Agreement.

     9.3. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

     If to Company:     American General Corporation
                        2929 Allen Parkway
                        Houston, Texas 77019
                        Attention: Corporate Secretary

     If to Executive,   to Richard W. Scott
                        122 Paul Revere
                        Houston, Texas 77024

Either Company or Executive may furnish a change of address to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

     9.4. No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

     9.5. (a) Except for equitable relief as specified in Section 9.6, all
claims, demands, causes of action, disputes, controversies, and other matters
in question arising out of or relating to this Agreement, any provision
hereof, the alleged breach thereof, or in any way relating to the subject
matter of this Agreement involving Executive, Company, and/or their respective
representatives, even though some or all of such claims allegedly are extra-
contractual in nature, whether such claims sound in contract, tort, or
otherwise, at law or in equity, under state or federal law, whether provided by
statute or the common law, for damages or any other relief, shall be resolved
by binding arbitration pursuant to the Federal Arbitration Act in accordance
with the Employment Dispute Resolution Rules then in effect with the American
Arbitration Association. The arbitration

                                  - Page 13 -
<PAGE>   14
proceeding shall be conducted in Houston, Texas. This agreement to arbitrate
shall be enforceable in either federal or state court.

     (b) The enforcement of this agreement to arbitrate and all procedural
aspects of this agreement to arbitrate, including but not limited to, the
construction and interpretation of this agreement to arbitrate, the issues
subject to arbitration (i.e., arbitrability), the scope of the arbitrable
issues, allegations of waiver, delay or defenses to arbitrability, and the
rules governing the conduct of the arbitration, shall be governed by and
construed pursuant to the Federal Arbitration Act and shall be decided by the
arbitrators. In deciding the substance of any such claims, the arbitrators
shall apply the substantive laws of the State of Texas (excluding Texas
choice-of-law principles that might call for the application of some other
state's law); provided, however, it is expressly agreed that the arbitrators
shall have no authority to award treble, exemplary, or punitive damages under
any circumstances regardless of whether such damages may be available under
Texas law, the parties hereby waiving their right, if any, to recover treble,
exemplary, or punitive damages in connection with any such claims. If any party
to this Agreement institutes arbitration to enforce the terms of this
Agreement, the party who prevails in such arbitration, whether plaintiff or
defendant, in addition to the remedy or relief obtained in such arbitration
proceeding shall be entitled to recover its, his, or her expenses incurred in
connection with such arbitration proceeding, including, without limitation,
arbitrators and attorneys fees, and the arbitrators are authorized to so award
such costs and fees.

     (c) The arbitration may be initiated by any party by providing to the
other parties a written notice of arbitration specifying the claims. Within 30
days of the notice of initiation of the arbitration procedure, (1) Executive
shall denominate one arbitrator and (2) Company shall denominate one
arbitrator. The two arbitrators shall select a third arbitrator failing
agreement on which within 60 days of the original notice, either Executive or
Company shall apply to the Senior Active United States District Judge for the
Southern District of Texas, who shall appoint a third arbitrator. While the
third arbitrator shall be neutral, the two party-appointed arbitrators are not
required to be neutral and it shall not be grounds for removal of either of the
two party-appointed arbitrators or for vacating the arbitrators' award that
either of such arbitrators has past or present minimal relationships with the
party that appointed such arbitrator. Evident partiality on the part of an
arbitrator exists only where the circumstances are such that a reasonable
person would have to conclude there in fact existed actual bias and a mere
appearance or impression of bias will not constitute evident partiality or
otherwise disqualify an arbitrator.

     (d) The three arbitrators shall by majority vote resolve all disputes
between the parties. There shall be no transcript of the hearing before the
arbitrators. The arbitrators' decision shall be in writing, but shall be as
brief as possible. The arbitrators shall not assign the reasons for their
decision. The arbitrators shall certify in their award that they have
faithfully applied the terms and conditions of this Agreement and that no part
of their award includes any amount for exemplary or punitive damages. All
proceedings conducted hereunder and the decision of the arbitrators shall be
kept confidential by the parties, e.g., the arbitrators' award shall not be
released to the press or published in any of the various arbitration reporters.
Judgment upon any award rendered in any such arbitration proceeding may be
entered by any federal or state court having jurisdiction.

                                  - Page 14 -
<PAGE>   15

     9.6. In the event of a breach or threatened breach by Executive of any of
the covenants set forth in Sections 5 and 6 hereof, Company shall be entitled
to seek equitable relief, including an injunction, in any court of proper
jurisdiction to maintain the status quo pending the resolution of the dispute
by binding arbitration as provided above. With respect to any such action,
Executive hereby irrevocably submits to the non-exclusive jurisdiction of any
Federal or State court sitting in the City of Houston, Texas, and agrees that
process in any such action shall be valid and effective for all purposes if
served upon in accordance with the notice provisions of Section 9.3 hereof.

     9.7. This Agreement shall be binding upon and inure to the benefit of
Company and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of
Company by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. Executive's rights and obligations under this
Agreement are personal and such rights, benefits, and obligations of Executive
shall not be voluntarily or involuntarily assigned, alienated, or transferred,
whether by operation of law or otherwise, without the prior written consent of
Company.

     9.8. It is a desire and intent of the parties that the terms, provisions,
covenants and remedies contained in this Agreement shall be enforceable to the
fullest extent permitted by law. If any such term, provision, covenant, or
remedy of this Agreement or the application thereof to any person, association,
or entity or circumstances shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
the applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement or the application thereof to any
person, association, or entity or circumstances other than those to which they
have been held invalid or unenforceable, shall remain in full force and effect.

     9.9. Each party to this Agreement acknowledges that no representation,
inducement, promise, or agreement, oral or written, has been made by either
party with respect to such subject matters, which is not embodied herein, and
that no agreement, statement, or promise relating to the employment of
Executive by Company that is not contained in this Agreement shall be valid or
binding. Except as provided in written company policies promulgated by Company
dealing with issues such as securities trading, business ethics, governmental
affairs and political contributions, consulting fees, commissions or other
payments, compliance with law, investments and outside business interests as
officers and executives, reporting responsibilities, and administrative
compliance, and the written benefits, plans, and programs, if any, applicable
to Executive, this Agreement and the accompanying Severance Agreement
constitute the entire agreement of the parties with regard to such subject
matters, and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect to Executive's
employment relationship with Company and the term and termination of such
relationship, and replaces and merges previous agreements and discussions
pertaining to the employment relationship between Company and Executive. Any
modification of this Agreement will be effective only if it is in writing and
signed by each party whose rights hereunder are affected thereby.

                                  - Page 15 -
<PAGE>   16

     IN WITNESS WHEREOF, Company and Executive have duly executed this
Agreement in multiple originals to be effective as provided herein.

                                  AMERICAN GENERAL CORPORATION

                                  By: /S/ ROBERT M. DEVLIN
                                  Name: Robert M. Devlin
                                  Title: Chairman and Chief Executive Officer
                                  This 11th day of September, 1997

                                  /S/ RICHARD W. SCOTT
                                  RICHARD W. SCOTT
                                  This 11th day of September, 1997

                                  - Page 16 -<PAGE>   1

                              (Form with Gross-Up)
                     CHANGE IN CONTROL SEVERANCE AGREEMENT

     THIS Change in Control Severance Agreement ("Agreement") is made effective
as of the 1st day of April, 2000 (the "Effective Date"), between American
General Corporation, a Texas corporation having its principal place of business
in Houston, Texas (the "Company" as hereinafter defined) and _________________
("the Executive").

     WHEREAS, the Company considers it essential to the best interests of its
shareholders to foster the continued employment of key management personnel
that are employed by the Company and/or its Affiliates; and

     WHEREAS, the Company's Board of Directors recognize that, as is the case
of many publicly held corporations, the possibility of a change in control
exists and that such possibility, and the uncertainty that it may engender
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its Affiliates and the Company's
shareholders; and

     WHEREAS, the Company's Board of Directors has determined that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's and its Affiliates' management,
including the Executive, to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the possibility of a
change in control.

     NOW, THEREFORE, for and in consideration of the premises and the
respective covenants and obligations specified herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive agree as follows:

1.   Defined terms:

     1.1.      "Additional Payment" shall have the meaning set forth in
Section 4.7.

     1.2. "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Securities Exchange Act of 1934, as amended
from time to time.

<PAGE>   2
     1.3. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Securities Exchange Act of 1934, as amended from time to time.

     1.4. "Board" means the Company's Board of Directors.

     1.5. "Cause" for purposes of this Agreement means only the following
actions or inactions: [i] a willful material misrepresentation by the Executive
pertaining to the business or property of the Company or its Affiliates, [ii]
misappropriation by the Executive of a material aspect of the business or
property of the Company or its Affiliates, [iii] the Executive willfully causes
material damage to the property or business of the Company or its Affiliates,
[iv] willful gross neglect by the Executive to substantially perform the
Executive's duties with the Company or its Affiliates (other than any such
failure resulting from the Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 5.1), [v]
the engaging by the Executive in willful gross misconduct resulting in
demonstrable and material economic harm to the Company or its Affiliates, or
[vi] the Executive's conviction of a felony that either involves moral turpitude
or involves some aspect of the business or property of the Company or its
Affiliates.

     1.6. "Change in Control" shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:

     [A] Any Person is or becomes the Beneficial Owner, directly or indirectly,
     of securities of the Company (not including in the securities beneficially
     owned by such Person any securities acquired directly from the Company or
     its Affiliates) representing thirty percent (30%) or more of the combined
     voting power of the Company's then outstanding securities, excluding any
     Person who becomes such a Beneficial Owner in connection with a
     transaction described in clause (i) of Paragraph C below; or

     [B] The following individuals cease for any reason to constitute a majority
     of the number of directors then serving on the Board: individuals who, on
     the date hereof, constitute the Board and any new director (other than a
     director whose initial assumption of office is in connection with an
     actual or threatened election contest, including but not limited to a
     consent solicitation, relating to the election of directors of the
     Company), whose appointment or election by the Board or nomination for
     election by the Company's shareholders was approved or recommended by a
     vote of at least two-thirds (2/3)

                                       2
<PAGE>   3
     of the directors then still in office who either were directors on the
     date hereof or whose appointment, election or nomination for election was
     previously so approved or recommended; or

     [C] There is consummated a merger or consolidation of the Company or any
     direct or indirect subsidiary of the Company with any other corporation
     [or a share exchange between shareholders of the Company or any direct or
     indirect subsidiary of the Company and another corporation or entity
     pursuant to Article 5.02 (or any successor provision thereto) of the Texas
     Business Corporation Act] other than (i) a merger or consolidation which
     would result in the voting securities of the Company outstanding
     immediately prior to such merger or consolidation continuing to represent
     (either by remaining outstanding or by being converted into voting
     securities of the surviving entity or any parent thereof), in combination
     with the ownership of any trustee or other fiduciary holding securities
     under an employee benefit plan of the Company or any subsidiary of the
     Company, at least fifty-one percent (51%) of the combined voting power of
     the securities of the Company or such surviving entity or any parent
     thereof outstanding immediately 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 is or becomes the
     Beneficial Owner, directly or indirectly, of securities of the Company
     representing thirty percent (30%) or more of the combined voting power of
     the Company's then outstanding securities; or

     [D] The shareholders of the Company approve a plan of complete liquidation
     or dissolution of the Company or there is consummated an agreement for the
     sale or disposition of all or substantially all of the Company's assets,
     other than a sale or disposition by the Company of all or substantially
     all of the Company's assets to an entity, at least fifty-one percent (51%)
     of the combined voting power of the voting securities of which are owned
     by shareholders of the Company in substantially the same proportions as
     their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

                                       3
<PAGE>   4

     1.7. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

     1.8. "Committee" shall mean the Personnel Committee of the Board until six
months prior to the occurrence of a Change in Control and thereafter shall mean
(i) the individuals (not fewer than three in number) who, on the date six
months before a Change in Control, constitute the Personnel Committee of the
Board, plus (ii) in the event that fewer than three individuals are available
from the group specified in clause (i) above for any reason, such individuals
as may be appointed by the individual or individuals so available [including
for this purpose any individual or individuals previously so appointed under
this clause (ii)]; provided, however, that the maximum number of individuals
constituting the Committee shall not exceed five.

     1.9. "Company" means American General Corporation, a Texas corporation,
and, except in determining under Section 1.6 hereof whether any Change in
Control has occurred, shall include any successor to American General
Corporation's business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.

     1.10. "Date of Termination" shall have the meaning specified in
Section 5.1.

     1.11. "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if: (i) as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the
Company for a period of six (6) consecutive months, (ii) a physician agreed
upon by the Executive (or the Executive's legal representative) and the Company
(or, if the parties hereto are unable to agree upon a single physician, a third
physician agreed upon by the two physicians, each of whom has been selected by
either the Executive [or the Executive's legal representative] or the Company)
shall have determined that the Executive will be incapable, due to physical or
mental illness, of substantially performing the Executive's duties and
responsibilities to the Company or its Affiliates, (iii) the Company shall have
given the Executive a Notice of Termination based on Disability, and (iv)
within thirty (30) days after such Notice of Termination is given, the
Executive shall not have returned to the full-time performance of the
Executive's duties.

     1.12. "Good Reason" for termination of the Executive's employment by the
Executive means the occurrence of any one or more of the following, without the
Executive's express written consent, on or after any Change in Control, or
during an

                                       4
<PAGE>   5
applicable Period of Anticipated Change in Control, but, in either case, only
as specified below in Section 4.4:

     1.12.1. A material reduction in the nature or scope of the Executive's
     authorities or duties from the Executive's authorities and duties either
     [i] immediately prior to the date on which a Change in Control occurs or
     [ii] immediately prior to a Period of Anticipated Change in Control during
     which a material reduction in the nature or scope of the Executive's
     authorities or duties occurs at the request of the Person causing the
     Company to be in such Period of Anticipated Change in Control, as the case
     may be.

     1.12.2. A reduction in the Executive's annual base salary as in effect
     either [i] immediately prior to the date on which a Change in Control
     occurs or [ii] immediately prior to a Period of Anticipated Change in
     Control during which the Executive's annual base salary is reduced at the
     request of the Person causing the Company to be in such Period of
     Anticipated Change in Control, as the case may be.

     1.12.3. A diminution in the Executive's eligibility to participate or
     level of participation in bonus, stock option, incentive award and other
     compensation plans which provide opportunities to receive compensation,
     from the greater of: (a) the opportunities provided by the Company
     (including its Affiliates) for other executives with the Company
     (including its Affiliates) with comparable duties or (b) the opportunities
     under any such plans under which the Executive was participating either
     [i] immediately prior to the date on which a Change in Control occurs or
     [ii] immediately prior to a Period of Anticipated Change in Control during
     which the Executive's eligibility or level of participation is diminished
     at the request of the Person causing the Company to be in such Period of
     Anticipated Change in Control, as the case may be.

     1.12.4. A diminution in the Executive's benefits (including but not
     limited to pension, thrift, medical, dental, life insurance, long-term
     disability plans) and perquisites applicable to Executive, from the
     greater of: (a) the employee benefits and perquisites provided by the
     Company (including its Affiliates) to other executives with comparable
     duties with the Company (including its Affiliates) or (b) the employee
     benefits and perquisites to which the Executive was entitled either [i]
     immediately prior to the date on which a Change in Control occurs or [ii]
     immediately prior to a Period of Anticipated Change in Control during
     which the Executive's benefits are reduced at the request of

                                       5
<PAGE>   6
     the Person causing the Company to be in such Period of Anticipated Change
     in Control, as the case may be.

     1.12.5. A change in the location of the Executive's principal place of
     employment by the Company (or its Affiliates) by more than fifty (50)
     miles from the location where the Executive was principally employed
     either [i] immediately prior to the date on which a Change in Control
     occurs or [ii] immediately prior to a Period of Anticipated Change in
     Control during which there occurs the Executive's change of location at
     the request of the Person causing the Company to be in such Period of
     Anticipated Change in Control, as the case may be.

     1.12.6. A determination by the Board that as a result of a Change in
     Control or the occurrence of an event that commences a Period of
     Anticipated Change in Control and a change in circumstances thereafter
     significantly affecting the Executive's position, the Executive is or
     shall be unable to exercise the authorities or duties attached to the
     Executive's position as in effect immediately prior to the date on which
     the Change in Control occurs or will occur.

     1.13.  "Notice of Termination" has the meaning specified in Section 5.1.

     1.14. "Period of Anticipated Change in Control" shall have the following
meaning for the purposes of this Agreement: the Company shall be deemed to be
in a Period of Anticipated Change in Control during the time which commences
when either [a] a Person has submitted a written offer to the Company which, if
accepted by the Company, would result in an agreement the consummation of which
would constitute a Change in Control and/or [b] the Company has entered into a
written signed agreement with a Person the consummation of which would
constitute a Change in Control. The Period of Anticipated Change in Control
ends when the Company either rejects such written offer or terminates, cancels
or consummates such agreement. There may be more than one period of time in
which the Company is in a Period of Anticipated Change in Control.

     1.15. "Person" has the meaning specified in Section 3(a)(9) of the
Securities Exchange Act of 1934 (as amended from time to time) and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include [i]
the Company or any of its subsidiaries, [ii] a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
Affiliates, [iii] an underwriter temporarily holding securities pursuant to an
offering of such securities, or [iv] a corporation

                                       6
<PAGE>   7
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

2.   This Agreement is not a contract of employment and does not modify the
     at-will nature of the Executive's employment relationship:

     2.1. This Agreement is not an employment agreement. This Agreement shall
not be construed as creating an express or implied contract of employment and
does not modify the nature of the Executive's employment relationship with the
Company or its Affiliates, as the case may be. Except as otherwise agreed in
writing between the Executive and the Company or an Affiliate, the employment
relationship between the Executive and the Company or its Affiliates is
at-will, i.e., the employment relationship may be terminated at any time at the
will of either the Company or the Executive for any reason or no reason at all.

     2.2. Notwithstanding any provision herein to the contrary, except as
provided in Section 4.7, no payments shall be due or payable pursuant to this
Agreement unless [i] the Executive has remained in the employ of the Company or
one of its Affiliates until there occurs, during the Term of this Agreement, a
Change in Control, or there occurs an event that commences a Period of
Anticipated Change in Control, and then [ii] the Executive's employment by the
Company or one of its Affiliates is terminated during the Term of this
Agreement either by the Company or the Executive as specified in Section 4.4.

     2.3. If the Executive is employed not by the Company itself but by one of
the Company's Affiliates, then if, during the Term of this Agreement but prior
to a Change in Control and prior to a Period of Anticipated Change in Control
during which the Person seeking to acquire the Company requests that such
Affiliate be sold or disposed of, the Company sells or otherwise disposes of
such Affiliate whereby the Company no longer owns or controls, directly or
indirectly, at least a majority of the stock having the right to vote for
directors or of the equity interest of such Affiliate, this Agreement shall
automatically terminate thirty days thereafter if the Executive does not within
such thirty day period of time following the sale or other disposition become
an employee of the Company or one of its remaining majority-owned Affiliates.

3.   Term and termination of this Agreement:

     3.1. The Term of this Agreement shall commence on the date hereof and end
on December 31, 2002, unless further extended as hereinafter provided.

                                       7
<PAGE>   8
Commencing on January 1, 2002 and each January 1 thereafter, the Term shall
automatically be extended for one additional year unless, not later than
September 30 of the preceding year, the Company or the Executive shall have
given notice not to extend the Term; provided, however, that if a Change in
Control shall have occurred during the Term, the Term shall expire no earlier
than thirty-six (36) months beyond the month in which such Change in Control
occurred. Moreover, if no Change in Control shall have occurred during the
Term, but the final day of the Term (as it may have been extended pursuant to
the immediately preceding sentence) falls within a Period of Anticipated Change
in Control, the Term of this Agreement shall be automatically extended until
either [i] the Period of Anticipated Change in Control ceases without resulting
in a Change in Control or [ii] if such Period of Anticipated Change in Control
results in a Change in Control, for thirty- six (36) complete calendar months
commencing with the month immediately following the month in which such Change
in Control occurs. Upon expiration of the Term of this Agreement, this
Agreement shall automatically terminate. The termination of this Agreement
under this Section 3.1 shall not under any circumstances constitute an event
which obligates the Company to make payments or to extend benefits to the
Executive pursuant to this Agreement.

     3.2. This Agreement cannot be terminated by the Company prior to the
expiration of its Term except as provided in Section 3.1 or upon either [a] the
death of the Executive or [b] the Company terminating the Executive's
employment based on Disability in accordance with Section 1.11. Upon either
event, this Agreement shall automatically terminate. The termination of this
Agreement because of the death or Disability of the Executive shall not under
any circumstances constitute an event which obligates the Company to make
payments or to extend benefits to the Executive pursuant to this Agreement.
However, in the event that the Executive dies or incurs a Disability after the
Company has become obligated to make payments or extend benefits to the
Executive under Section 4.4 hereof, the death or Disability of the Executive
shall not affect the Executive's right, or the rights of the Executive's heirs,
legatees, executors or administrators, to receive such payments or benefits (if
such benefits are applicable after death or Disability).

4.   Company's obligations to Executive upon Change in Control or during a
     Period of Anticipated Change in Control:

     4.1. After a Change in Control or during a Period of Anticipated Change in
Control, which, in either case, occurs during the Term of this Agreement, if
there occurs any period during which the Executive fails to perform the
Executive's full-time duties with the Company or its Affiliates, as the
case may be, as a result of

                                       8
<PAGE>   9
incapacity due to physical or mental illness, the Company shall pay, or if the
Executive is employed by an Affiliate, cause the Affiliate to pay, the
Executive's full base salary to the Executive at the rate in effect at the
commencement of any such period, together with all compensation and benefits
payable to the Executive under the terms of any compensation or benefit plan,
program or arrangement maintained by the Company during such period, until the
Executive's employment is terminated by the Company or its Affiliate for
Disability or death; provided, however, that such salary payments shall be
reduced by the sum of the amounts, if any, payable to the Executive at or prior
to the time of any such salary payment under disability benefit plans of the
Company or its Affiliates or under the Social Security disability insurance
program, which amounts were not previously applied to reduce any such salary
payment.

     4.2. During the Term of this Agreement, if the Executive's employment
shall be terminated for any reason other than Disability or death following a
Change in Control, or if the Executive's employment shall be terminated during
a Period of Anticipated Change in Control at the request of the Person seeking
to acquire the Company, the Company shall pay, or if the Executive is employed
by an Affiliate, cause the Affiliate to pay, the Executive's full base salary
to the Executive through the Date of Termination at the rate in effect
immediately prior to the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, together with all compensation and benefits payable
to the Executive through the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination or, if more favorable to the
Executive, as in effect immediately prior to the first occurrence of an event
or circumstance constituting Good Reason.

     4.3. In addition, but not in duplication of the benefits provided in
Sections 4.5 and 4.6, the Company shall pay, or cause to be paid, to the
Executive the Executive's post-termination compensation and benefits as such
payments become due. Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the Company's compensation and
benefit plans as in effect immediately prior to the Date of Termination or, in
the case of a termination of the Executive's employment by the Executive for
Good Reason and if more favorable to the Executive, as in effect immediately
prior to the occurrence of the first event or circumstance constituting Good
Reason that is specified in the Executive's Notice of Termination; provided,
however, that the Company shall have the right at any time, even after a Change
in Control, to effect amendments, changes, or modifications to

                                       9
<PAGE>   10
any and all compensation and benefit plans, programs or arrangements that are
not substantial and material.

     4.4. [A] If, during the Term of this Agreement, the Executive's employment
is terminated on or after a Change in Control other than: (a) by the Company or
an Affiliate for Cause, (b) by reason of the Executive's Disability or death,
or (c) by the Executive without Good Reason; then, in addition to the Company's
obligations specified above in Sections 4.1 through 4.3, the Company shall pay,
or if the Executive is employed by an Affiliate, cause the Affiliate to pay,
the Executive the amounts and provide the Executive the benefits described in
Sections 4.5 through 4.11.

     [B] During the Term of this Agreement and notwithstanding any provisions
of Subsection [A] above to the contrary, the Executive's employment shall be
considered to have been terminated under Subparagraph [A] under circumstances
that obligate the Company to pay the Executive the amounts and provide the
Executive the benefits described in Sections 4.5 through 4.11 if the
Executive's employment is terminated by the Company or its Affiliate during a
Period of Anticipated Change in Control (whether or not a Change in Control
ever occurs) and such termination was at the request of a Person who either [i]
had entered into the written signed agreement with the Company the consummation
of which would constitute a Change in Control or [ii] had submitted a written
offer to the Company which, if accepted by the Company, would result in an
agreement the consummation of which would constitute a Change in Control.

     [C] During the Term of this Agreement and notwithstanding any provisions
of Subsection [A] above to the contrary, the Executive's employment shall be
considered to have been terminated under Subparagraph [A] under circumstances
that obligate the Company to pay the Executive the amounts and provide the
Executive the benefits described in Sections 4.5 through 4.11, if: (i) an event
that constitutes Good Reason occurs during a Period of Anticipated Change in
Control; (ii) such event occurs at the request of a Person who either [a] had
entered into the written signed agreement with the Company the consummation of
which would constitute a Change in Control or [b] had submitted a written offer
to the Company which, if accepted by the Company, would result in an agreement
the consummation of which would constitute a Change in Control; (iii) the
Executive notifies the Company in writing as promptly as possible, and no later
than three (3) months after the first event which constitutes Good Reason, of
the Executive's position that an event which constitutes Good Reason occurred
at the request of such Person; (iv) the Period of Anticipated Change in Control
in fact culminates in a Change in Control; and (v) the Executive refrains from
providing a Notice of Termination and continues

                                      10
<PAGE>   11
to perform the Executive's duties and responsibilities until at least sixty
(60) days after a Change in Control occurs as a result of the Person having
entered into the written signed agreement with the Company or having submitted
the written offer to the Company.

     [D] The right of the Executive to terminate employment for Good Reason
under Section [C] hereof is based solely on an event or events constituting
Good Reason that occur during a Period of Anticipated Change in Control. The
right of the Executive to terminate employment for Good Reason under Section
[A] hereof is in addition to the Executive's right to terminate employment for
Good Reason under Section [C] but is based solely on an event or events
constituting Good Reason that occur on or after a Change in Control. The
Executive may give a Notice of Termination under Section [A] immediately the
occurrence of the event or events constituting Good Reason [i.e., there is no
requirement under Section [A] that the Executive refrain from providing a
Notice of Termination and continue to perform the Executive's duties and
responsibilities until at least sixty (60) days after the Change in Control
occurs].

     4.5. If a termination of the Executive's employment described in Section
4.4 hereof shall have occurred, in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefits otherwise payable to the Executive, the Company shall pay,
or if the Executive is employed by an Affiliate, cause the Affiliate to pay, to
the Executive a lump sum severance payment, in cash, equal to three (3) times
the sum of [i] the Executive's annual base salary as in effect immediately
prior to the Date of Termination or, in the case of a termination of the
Executive's employment by the Executive for Good Reason and if more favorable
to the Executive, as in effect immediately prior to the occurrence of the first
event or circumstance constituting Good Reason that is specified in the
Executive's Notice of Termination, and [ii] the average annual bonus earned by
the Executive pursuant to any annual bonus or annual incentive plan maintained
by the Company or an Affiliate in which the Executive participated in respect
of the three fiscal years ending immediately prior to the fiscal year in which
occurs the Date of Termination or, in the case of a termination of the
Executive's employment by the Executive for Good Reason and if more favorable
to the Executive, the three fiscal years ending immediately prior to the fiscal
year in which occurs the first event or circumstance constituting Good Reason
that is specified in the Executive's Notice of Termination; provided, however,
that if there are fewer than three such bonuses earned by the Executive in the
applicable three-year period, the average annual bonus shall be calculated by
dividing the total amount of the annual bonuses paid by the number of annual
bonuses paid; and provided further that if the

                                      11
<PAGE>   12
Executive has been so recently hired by the Company or an Affiliate that he has
not earned any annual bonus which can be used to calculate an average bonus
pursuant to this provision, he shall be deemed to have earned an average annual
bonus determined by multiplying his applicable base salary by a fraction, the
numerator of which is the total of the average annual bonuses of all employees
of the Company and its Affiliates who have change in control severance
agreements with the Company immediately prior to the Executive's Date of
Termination and the denominator of which is the total of the applicable base
salaries of such employees (as such terms are defined in their respective
change in control severance agreements and determined as if such employees had
been terminated without Cause as of the Executive's Date of Termination).

     4.6. If a termination of the Executive's employment described in Section
4.4 hereof shall have occurred, for the thirty-six (36) month period
immediately following the Date of Termination, the Company shall arrange to
provide the Executive and the Executive's dependents with life, accident,
medical, and dental insurance benefits substantially similar to those provided
to the Executive and to the Executive's dependents immediately prior to the
Date of Termination or, in the case of a termination of the Executive's
employment by the Executive for Good Reason and if more favorable to the
Executive, as in effect immediately prior to the occurrence of the first event
or circumstance constituting Good Reason, at no greater cost to the Executive
than the cost to the Executive immediately prior to such date or occurrence
that is specified in the Executive's Notice of Termination; provided, however,
that the Company shall have the right to effect amendments, changes, or
modifications to any and all benefit plans, programs or arrangements that are
not substantial and material and such amendments, changes or modifications
shall apply to the Executive's benefits. Benefits otherwise receivable by the
Executive pursuant to this Section 4.6 may be reduced to the extent benefits of
the same type are received by or made available to the Executive by a successor
employer during the thirty-six (36) month period following the Executive's
termination of employment (and any such benefits received by or made available
to the Executive shall be reported to the Company by the Executive); provided,
however, that the Company shall reimburse the Executive for the excess, if any,
of the reasonable and necessary cost of such benefits to the Executive over
such cost immediately prior to the Date of Termination or, in the case of a
termination of the Executive's employment by the Executive for Good Reason and
if more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason that is
specified in the Executive's Notice of Termination. As provided in Section 6.2,
the Company may withhold from any payments made or benefits provided pursuant
to

                                      12
<PAGE>   13
this Agreement all federal, State, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.

     4.7. [A] Regardless whether or not a termination of the Executive's
employment described in Section 4.4 shall have occurred, to the extent that any
of the payments or benefits (excluding payments to be made pursuant to this
Section 4.7) received or to be received by the Executive (the "Total Payments")
in connection with a Change in Control or the Executive's termination of
employment (whether or not such payments or benefits are provided pursuant to
the terms of this Agreement or any other plan, arrangement or agreement with
the Company, with any Persons whose actions result in a Change in Control, or
with any Person affiliated with the Company or such Person) will be subject to
the excise tax imposed by Section 4999 of the Code, or any successor provision
of the Code (any such excise tax is referred to in this Section as the "Excise
Tax"), then the benefit or payment shall be increased by an amount (referred to
in this Section as the "Additional Payment") such that the net amount received
by the Executive, after paying any applicable Excise Tax and any federal, State
or local income or FICA taxes on such Additional Payment, shall be equal to the
amount that the Executive would have received if such Excise Tax were not
applicable to the Total Payments.

     [B] For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" [within the meaning of
Section 280G(b)(2) of the Code] unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the Change in Control, the Company's
independent auditor (the "Auditor"), such payments or benefits (in whole or in
part) do not constitute parachute payments, including by reason of Section
280G(b)(4)(A) of the Code; (ii) all "excess parachute payments" within the
meaning of Section 280G(b)(l) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered [within the meaning of Section 280G(b)(4)(B) of the Code] in
excess of the base amount [as the term "base amount" is defined in Section
280G(b)(3) of the Code] allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax; and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Auditor
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Additional Payment, the Executive
shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Additional Payment is
to be

                                      13
<PAGE>   14
made and State and local income taxes at the highest marginal rate of taxation
in the State and locality of the Executive's residence on the Date of
Termination (or if there is no Date of Termination, then on the date on which
the Additional Payment is calculated for purposes of this Section 4.7), net of
the maximum reduction in federal income taxes which could be obtained from
deduction of such State and local taxes.

     [C] In the event that the Excise Tax is finally determined to be less than
the amount taken into account hereunder in calculating the Additional Payment,
the Executive shall repay to the Company, within ten business days immediately
following the date that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Additional Payment attributable to the
amount of such reduction (including the Excise Tax component and the federal,
State and local income and employment tax components of the Additional Payment)
to the extent that such repayment results in a reduction in the Excise Tax and
a dollar-for-dollar reduction in the Executive's taxable income and wages for
purposes of federal, State and local income and employment taxes, plus interest
on the amount of such repayment at 120% of the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder in calculating the Additional
Payment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Additional Payment), the Company shall
make another Additional Payment in respect of such excess (plus any interest,
penalties or additions payable by the Executive with respect to such excess)
within the ten (10) business days immediately following the date that the
amount of such excess is finally determined. The Executive and the Company
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.

     4.8 If a termination of the Executive's employment described in Section
4.4 hereof shall have occurred, the Company shall promptly reimburse to the
Executive all reasonable attorneys fees and expenses necessarily incurred by
the Executive in disputing in good faith any issue with the Company or its
Affiliates pursuant to this Agreement or lodging in good faith any claim,
demand or cause of action against the Company or its Affiliates pursuant to
this Agreement; provided, however, that the Company shall have no obligation to
reimburse the Executive for such attorneys fees and expenses unless the
Executive is the prevailing party as to such dispute, claim, demand or cause of
action.

     4.9 If a termination of the Executive's employment described in Section
4.4 hereof shall have occurred, the Company shall provide the Executive with

                                      14
<PAGE>   15
outplacement services suitable to the Executive's position for a period of nine
months after the Date of Termination or, if earlier, until the first acceptance
by the Executive of an offer of employment.

     4.10 If (i) the Executive is or has been granted stock options, restricted
stock, or other similar equity-based awards, whether before or after the
Effective Date, pursuant to plans, programs or arrangements which provide that
the Executive shall become fully vested upon a Change in Control and (ii) the
definition of change in control in such plans, programs or arrangements does
not provide for vesting upon the occurrence of an event creating a Period of
Anticipated Change in Control, then the following shall apply: The requisite
change in control for purposes of vesting under such plans, programs or
arrangements shall be deemed to have occurred immediately prior to a
termination described in subparagraphs (1) or (2) of this Section 4.10 if
either --

     (1) The Executive's employment is terminated by the Company or an
     Affiliate without Cause (and not for Disability or death) during a Period
     of Anticipated Change in Control (whether or not a Change in Control ever
     occurs) and such termination was at the request of a Person who either [i]
     had entered into the written signed agreement with the Company the
     consummation of which would constitute a Change in Control or [ii] had
     submitted a written offer to the Company which, if accepted by the
     Company, would result in an agreement the consummation of which would
     constitute a Change in Control; or

     (2) During the Term of this Agreement, the Executive's employment is
     terminated as follows: (i) an event that constitutes Good Reason occurs
     during a Period of Anticipated Change in Control; (ii) such event occurs
     at the request of a Person who either [a] had entered into the written
     signed agreement with the Company the consummation of which would
     constitute a Change in Control or [b] had submitted a written offer to the
     Company which, if accepted by the Company, would result in an agreement
     the consummation of which would constitute a Change in Control; (iii) the
     Executive notifies the Company in writing as promptly as possible, and no
     later than three (3) months after the first event which constitutes Good
     Reason, of the Executive's position that an event which constitutes Good
     Reason occurred at the request of such Person; (iv) the Period of
     Anticipated Change in Control in fact culminates in a Change in Control;
     and (v) the Executive shall refrain from providing a Notice of Termination
     and shall

                                      15
<PAGE>   16

     continue to perform the Executive's duties and responsibilities until at
     least sixty (60) days after a Change in Control occurs as a result of the
     Person having entered into the written signed agreement with the Company
     or having submitted the written offer to the Company.

     4.11 The payments provided to the Executive or for the Executive's benefit
in Sections 4.5 and 4.7[A] shall be made not later than the tenth (10) business
day following the Date of Termination; provided, however, that if the amounts
of such payments cannot be finally determined on or before such date, the
Company shall pay to the Executive on such day an estimate of the payments
under Section 4.5, as determined in good faith by the Executive and the
Company, and an estimate of the payments under Section 4.7[A], as determined in
accordance with Section 4.7[A] hereof the estimate in each case to be of the
minimum amount of such payments to which the Executive is clearly entitled, and
shall pay the remainder of such payments [together with interest on the unpaid
remainder (or on all such payments to the extent the Company fails to make such
payments when due) at 120% of the rate provided in Section 1274(b)(2)(B) of the
Code] as soon as the amount thereof can be determined but in no event later
than sixty (60) days after the Date of Termination. In the event that the
amount of the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the tenth (10) business day after demand by the Company.
At the time the payments are made under this Agreement, the Company shall
provide the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations,
including, without limitation, any opinions or other advice the Company has
received from Tax Counsel, the Auditor, or other advisors or consultants and
any such opinions or advice which are in writing shall be attached to the
statement.

5.   Termination procedures; resolution of disputes; arbitration; and no duty to
     mitigate:

     5.1 After a Change in Control or during a Period of Anticipated Change in
Control, and in either case, during the Term of this Agreement, any purported
termination of the Executive's employment (other than the death of the
Executive) shall be communicated by a written notice of termination from one
party to the other in accordance with Section 6.6 (the "Notice of
Termination"). The Notice of Termination shall specify the termination
provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive's employment pursuant to this Agreement. The date of
termination ("Date of Termination") of the Executive's employment

                                      16
<PAGE>   17
pursuant to this Agreement shall be [i] if the Executive's employment is
terminated for Disability, thirty (30) days after the Notice of Termination is
given, and [ii] if the Executive's employment is terminated pursuant to this
Agreement for any other reason, the date specified in the Notice of Termination
[which, in the case of termination by the Company or an Affiliate shall not be
less than thirty (30) days, except in the case of termination for Cause, which
may be immediate, and, in the case of a termination by the Executive, shall not
be less than fifteen (15) days nor more than sixty (60) days, from the date
such Notice of Termination is given].

     5.2 All claims by the Executive for payments or benefits under this
Agreement shall be in writing, shall set forth the specific reasons for the
basis of the Executive's claim and the specific provisions of this Agreement
relied upon, shall be submitted to the Committee, and shall be decided by the
Committee. Any denial by the Committee of a claim for payments or benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Committee shall afford a reasonable opportunity
to the Executive for a review of the decision denying a claim and shall further
allow the Executive to file with the Committee, within sixty (60) days after
notification by the Committee that the Executive's claim has been denied, a
request that the Committee re-consider its decision. Upon receipt of such a
request, the Committee shall reconsider its decision and notify the Executive
of the Committee's decision on reconsideration.

     5.3 [A] Any further dispute or controversy arising under or in connection
with this Agreement and all claims, demands, causes of action, disputes,
controversies, and other matters in question arising out of or relating to this
Agreement, any provision hereof, the alleged breach thereof, or in any way
relating to the subject matter of this Agreement involving the Executive, the
Company, its Affiliates, and/or their respective representatives, even though
some or all of such claims allegedly are extra-contractual in nature, whether
such claims sound in contract, tort, or otherwise, at law or in equity, under
state or federal law, whether provided by statute or the common law, for
damages or any other relief, shall be resolved by binding arbitration pursuant
to the Federal Arbitration Act in accordance with the Employment Dispute
Resolution Rules then in effect with the American Arbitration Association. The
arbitration proceeding shall be conducted in Houston, Texas. This agreement to
arbitrate shall be enforceable in either federal or state court.

     [B] The enforcement of this agreement to arbitrate and all procedural
aspects of this agreement to arbitrate, including but not limited to, the
construction and interpretation of this agreement to arbitrate, the issues
subject to arbitration (i.e.,

                                      17
<PAGE>   18
arbitrability), the scope of the arbitrable issues, allegations of waiver,
delay or defenses to arbitrability, and the rules governing the conduct of the
arbitration, shall be governed by and construed pursuant to the Federal
Arbitration Act and shall be decided by the arbitrators. In deciding the
substance of any such claims, the arbitrators shall apply the substantive laws
of the State of Texas (excluding Texas choice-of-law principles that might
call for the application of some other state's law); provided, however, it is
expressly agreed that the arbitrators shall have no authority to award treble,
exemplary, or punitive damages under any circumstances regardless of whether
such damages may be available under Texas law, the parties hereby waiving their
right, if any, to recover treble, exemplary, or punitive damages in connection
with any such claims. The arbitrators are authorized to award attorneys and
fees and expenses as authorized in this Agreement.

     [C] The arbitration may be initiated by any party by providing to the
other party a written notice of arbitration specifying the claims. Within 30
days of the notice of initiation of the arbitration procedure, the Executive
shall denominate one arbitrator and the Company shall denominate one
arbitrator. The two arbitrators shall select a third arbitrator failing
agreement on which within 60 days of the original notice, either the Executive
or the Company shall apply to the Senior Active United States District Judge
for the Southern District of Texas, who shall appoint a third arbitrator. While
the third arbitrator shall be neutral, the two party-appointed arbitrators are
not required to be neutral and it shall not be grounds for removal of either of
the two party-appointed arbitrators or for vacating the arbitrators' award that
either of such arbitrators has past or present minimal relationships with the
party that appointed such arbitrator. Evident partiality on the part of an
arbitrator exists only where the circumstances are such that a reasonable
person would have to conclude there in fact existed actual bias and a mere
appearance or impression of bias will not constitute evident partiality or
otherwise disqualify an arbitrator.

     [D] The three arbitrators shall by majority vote resolve all disputes
between the parties. There shall be no transcript of the hearing before the
arbitrators. The arbitrators' decision shall be in writing, but shall be as
brief as possible. The arbitrators shall not assign the reasons for their
decision. The arbitrators shall certify in their award that they have
faithfully applied the terms and conditions of this Agreement and that no part
of their award includes any amount for exemplary or punitive damages. All
proceedings conducted hereunder and the decision of the arbitrators shall be
kept confidential by the parties, e.g., the arbitrators' award shall not be
released to the press or published in any of the various arbitration reporters.
Judgment upon any award rendered in any such arbitration proceeding may be
entered by any federal or state court having jurisdiction.

                                      18
<PAGE>   19

     5.4 If during the Term of this Agreement the Executive's employment
terminates under conditions that require the Company to make payments or extend
benefits pursuant to Section 4.4, the Executive is not required to seek other
employment or to attempt in any way to reduce the amounts payable to the
Executive under Section 4.4 (other than an obligation to incur no more than
reasonable and necessary attorneys fees). Further, the amount of any payment or
benefit required pursuant to this Agreement (other than pursuant to Section
4.6) shall not be reduced or offset by any compensation or benefit that may be
earned by the Executive as a result of employment by another employer after
termination of the Executive's employment hereunder by the Company or its
Affiliates, by retirement benefits, or against any amount claimed to be owed by
the Executive to the Company unless such amount is evidenced by a promissory
note or contract signed by the Executive.

6.   Miscellaneous:

     6.1 The applicable law and the forum for resolution of any disputes
arising out of this Agreement are specified in the agreement to arbitrate
contained in Section 5.3.

     6.2 The Company may withhold from any payments made or benefits provided
pursuant to this Agreement all federal, State, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.

     6.3 Except as provided in Sections 4.4[C] and 4.10(2) no failure by either
party hereto at any time to give notice of any breach by the other party of, or
to require compliance with, any condition or provision of this Agreement shall
be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.

     6.4 This Agreement shall be binding upon and inure to the benefit of the
Company and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of the
Company by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. In addition to the obligations imposed by law upon
any successor to the Company, the Company shall 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 expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain

                                      19
<PAGE>   20
such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms as the
Executive would be entitled to hereunder if the Executive were to terminate the
Executive's employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.

     6.5 The Executive's rights and obligations pursuant to this Agreement are
personal to the Executive and such rights, benefits, and obligations of the
Executive shall not be voluntarily or involuntarily assigned, alienated, or
transferred, whether by operation of law or otherwise, without the prior
written consent of the Company, except through a transfer by testament or by
the laws of descent or distribution upon the death of the Executive. In the
event of any attempted assignment or transfer contrary to this Section 6.5, the
Company shall have no liability to pay any amount so attempted to be assigned
or transferred. This Agreement shall be enforceable against the Executive and
the Executive's personal and legal representatives, heirs, legatees, executors
and administrators.

     6.6 For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

If to the Company:       American General Corporation
                         2929 Allen Parkway
                         Houston, Texas 77019
                         Attention: General Counsel

     If to the Executive, to the Executive's last known address on the records
of the Company.

Either the Company or the Executive may furnish a change of address to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

     6.7 It is a desire and intent of the parties that the terms, provisions,
covenants and remedies contained in this Agreement shall be enforceable to the
fullest extent permitted by law. If any such term, provision, covenant, or
remedy of this Agreement or the application thereof to any person, association,
or entity or

                                      20
<PAGE>   21
circumstances shall, to any extent, be construed to be invalid or unenforceable
in whole or in part, then such term, provision, covenant, or remedy shall be
construed in a manner so as to permit its enforceability under the applicable
law to the fullest extent permitted by law. In any case, the remaining
provisions of this Agreement or the application thereof to any person,
association, or entity or circumstances other than those to which they have
been held invalid or unenforceable, shall remain in full force and effect.

     6.8 Each of the Company and the Executive acknowledges that no represen-
tation, inducement, promise, or agreement, oral or written, express or implied,
has been made by the other with respect to the subject matters of this Agreement
which are not expressed in this Agreement. Except for benefit and compensation
plans and grant documents thereunder that contain express change in control
provisions, this Agreement constitutes the entire agreement of the parties with
regard to the Company's Change in Control obligations to the Executive;
terminates any prior severance agreements, including the existing Severance
Agreement between the Company and the Executive; and replaces and merges
previous agreements and discussions pertaining to the Company's Change in
Control obligations to Executive. No modification or amendment of this Agreement
will be effective unless such modification or amendment is in writing and signed
by the party whose rights are affected thereby.

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
to be effective as of the Effective Date stated above.

                                        AMERICAN GENERAL
                                        CORPORATION

                                        By:
                                           ---------------------------

                                        EXECUTIVE

                                         By:
                                           ---------------------------

                                      21

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