RIDLEY EMPLOYMENT AGREEMENT


          This Employment Agreement ("Agreement") is made and entered into by
     and between TEXAS IMPERIAL LIFE INSURANCE COMPANY ("Employer"), a Texas
     life insurance company, and RICHARD M. RIDLEY ("Employee"), an individual
     resident of Beaumont, Jefferson County, Texas.  Employer's "parent" is
     American Capitol Insurance Company, Houston, Texas ("American Capitol" or
     "Parent"), and there are other companies, and may be other companies in
     the future, that are related to Employer by virtue of common ownership
     ("affiliates").

          1.   Employment.  Employer hereby employs Employee to perform the
     duties and render the services hereinafter set forth and Employee hereby
     accepts said employment and agrees to perform and render said duties and
     services faithfully and diligently, all upon the terms and conditions and
     for the term hereinafter set forth.

          2.   Duties.  During the term of this Agreement, Employee will,
     during customary working hours, devote his full time and attention and
     give his best efforts and skill exclusively to the business, progress,
     success, profit, advantage, benefit and interests of Employer and its
     parent, subsidiary and/or affiliated corporations in the capacity of Vice-
     President, Director of Marketing of Employer, and shall diligently perform
     such tasks and services that are in keeping with the job description
     attached hereto as Exhibit A, or other reasonable duties as may be
     assigned to Employee from time to time, all of which duties, tasks, and/or
     services shall be such as are  within the scope of the position for which
     he is employed as indicated by Exhibit A.

          3.   Term.  The term of Employee's employment under this Agreement is
     one (1) year, commencing October 1, 1996.

          4.   Compensation.  As compensation for all services to be rendered
     by Employee in any capacity hereunder, including services as a director or
     officer of Parent or any subsidiary or affiliate of Employer as may be
     properly designated or requested by Employer, Employer shall pay to
     Employee a gross salary in equal semimonthly installments at an annual
     rate of seventy-five thousand dollars ($75,000) per year.  "Gross salary"
     as used herein shall mean the amount of salary before any deductions for
     social security withholding, federal income tax or cost of Employee's
     share of Company benefits exclusive of retirement plan payments by
     Employee, if any, bonuses, if any, and commissions.  In addition to the
     salary compensation as herein provided, Employee shall be entitled to
     commission payments as set forth in Exhibit B attached hereto ("Employee
     Commissions").

          5.   Expenses.  In addition to his base salary as provided in
     paragraph 4, Employee shall be reimbursed for any and all reasonable costs
     and expenses incurred by Employee in performance of his services and
     duties as specified in this Agreement, including, but not limited to,
     reasonable business expenses incurred in connection with travel and
     entertainment. However, unless approved in advance by Employer, such
     expenses must be of the type and amount that are within the established
     practice relating to travel and entertainment expenses usually approved
     from time to time by Employer or Employer's parent for its executive
     officers and employees.  These expenses shall be reimbursed to Employee,
     based on written requests submitted in a mutually acceptable format.  Such
     written requests shall include receipts or other verifiable evidence of 
     the amount and nature of the expenditure for which reimbursement is
     sought.  The expense reimbursements shall be paid to Employee in a regular
     pay period no longer than 30 days following submission for reimbursement.

          6.   Employee Benefit Plans.  During the term of this Agreement,
     Employee shall have the right to participate in each of Employer's benefit
     plans available to employees of Employer.  Parent has provided a specific
     written description of the current benefits for Employee and all other
     employees of Employer.  Such specific description shall be incorporated
     into and made a part of this Agreement and shall be acceptable to
     Employee.  

          7.   Other Benefits.  The compensation and other benefits agreed to
     be paid to Employee by Employer in this Agreement shall not operate in any
     manner as a limitation of any type upon or as a direction, express or
     implied, against the exercise by the Board of Directors of Employer, of
     its power, authority and discretion to grant bonuses or other additional
     direct or indirect benefits or compensation to or on behalf of Employee
     if, in the business judgment of such Board, such action is in the best
     interest of Employer.

          8.   Employee's Disability or Death.
          (a)  (1)  In the event Employee, during the term of this Agreement,
     becomes physically or mentally disabled (as hereinafter defined), Employee
     will be deemed to have resigned as of the commencement of such disability
     unless otherwise agreed to in writing by Employer and Employee, and in
     such event Employer shall continue to pay to Employee all amounts, except
     salary, that may be due from Employer to Employee.
               (2)  For federal income tax purposes, all payments provided for
     in this section, to the extent that they do not represent disability
     benefits provided under an insurance policy premiums for which are paid by
     Employee, are intended to be taxable to Employee and deductible by the
     Employer.
               (3)  "Disability" shall mean the inability, either mental or
     physical, to perform the necessary functions of the Employee's position of
     employment with the Employer, by reason of the illness or incapacity of
     Employee.  Employee shall be deemed to be disabled for the purpose of this
     Agreement if Employer's Parent's Medical Director, after consultation with
     a licensed physician or physicians of Employee's choice, shall determine
     that Employee, whether by reason of accident, illness or mental or
     physical infirmity, is not able to carry on with adequate vigor and
     competence the duties assigned him under this Agreement.  Such
     determination shall be binding on Employer and Employee.
          (b)  Employer and Employee understand and agree that Employer may
     from time to time carry group disability insurance on behalf of Employee,
     premiums for which may be shared by Employer and Employee. Any payments
     made to Employee under such a disability policy shall be in addition to
     Employer's duty to pay any amounts that may be due to Employee as
     hereinabove stated.
          (c)  In the event that Employee shall die during the term of this
     Agreement, the Agreement shall terminate as of the last day of the
     calendar month during which his death shall occur, and Employer shall pay
     to the estate of Employee all amounts due from Employer to Employee,
     including salary to the end of the month in which his death occurred, if
     such date is not the final day of such month.

          9.   Termination.  This Agreement may be terminated by Employer or
     Employee as follows:

          9.1  By Employer.  Without cause, Employer may terminate this 
     Agreement at any time upon not less than sixty (60) days advance written
     notice to Employee. In such event, Employee shall continue to render his
     services at the option of Employer up to the effective date of
     termination, in which case Employer shall continue to pay to Employee
     following the expiration of such sixty (60) day period, all amounts,
     except salary, that may be due from Employer to Employee.  In the event
     Employer does not elect to terminate Employee's services during such sixty
     (60) day period, or a portion thereof, and Employee fails or refuses
     without significant cause (such as disability) to render such services,
     Employer shall not be obligated to pay to Employee any further
     compensation, salary or otherwise.

          9.2  By Employee.  Without cause, Employee may terminate this
     Agreement upon not less than sixty (60) days advance written notice to
     Employer.  In such event, Employee shall continue to render his services
     at the option of Employer up to the effective date of termination, in
     which case Employer shall continue to pay to Employee following the
     expiration of such sixty (60) day period all amounts, except salary, that
     may be due from Employer to Employee.  In the event Employer does not
     elect to terminate Employee's services during such sixty (60) day period,
     or a portion thereof, and Employee fails or refuses without significant
     cause (such as disability) to render such services, Employer shall not be
     obligated to pay to Employee any further compensation, salary or
     otherwise.

          9.3  By Employer.  "For cause," Employer may terminate this Agreement
     by providing Employee written notice to that effect and this Agreement and
     Employee's employment hereunder shall terminate immediately upon receipt
     of such notice by Employee as herein provided.  If termination is "for
     cause," Employee will not be entitled to any further salary or
     compensation or benefits of any kind following the date of such
     termination.  "For cause" shall mean conviction of a crime involving moral
     turpitude or willful misconduct or a substantial neglect of duties which
     in the judgement of the Employer's Board of Directors adversely affects
     the Employer and/or its affiliates.  "For cause" shall also mean any
     occurrence or event which constitutes a breach of this Agreement by
     Employee or Employee's failure to continue to render his services to
     Employer as required under this Agreement.

          9.4  Resignation from Board.  Employee understands and agrees that
     upon submitting or receiving notice of termination of his employment with
     Employer as provided herein, and if Employee is a member of the Board of
     Directors of Employer or any of its affiliates at such time, he shall
     immediately submit in writing to Employer his resignation as a member of
     such Board of Directors.  

          10.  Disclosure of Information.  Employee recognizes and acknowledges
     that he will have possession of and/or access to certain confidential
     information and data of the Employer and/or its affiliates, and that such
     information and data constitutes valuable, special and unique property of
     the Employer whether accumulated or obtained by Employee or otherwise. 
     Employee will not, during or after the term of this Agreement, without the
     prior approval of Employer, voluntarily disclose any such confidential
     information or data to any person or firm, corporation, association or
     other person or entity, or use such confidential information or data for
     any reason or purpose, otherwise than for the benefit of Employer or its
     affiliates.  As used herein, "confidential information and data" means
     information disclosed to, or accumulated or obtained by, Employee or known
     by Employee as a consequence of or through his employment by the Employer
     or its affiliates, not generally known in the life and health insurance 
     industry in which the Employer is engaged, about the products, processes,
     systems and services of Employer and its affiliates, including, but not
     limited to, computer programs and software, identities of and information
     concerning companies or blocks of business that may be available for
     acquisition, lists of policyholders and reinsurers, lists of agents and
     information pertaining to their sales activities, sales volume and/or
     commission levels, sales or marketing information pertaining to funeral
     homes, copies of insurance policies and reinsurance agreements,
     information contained in accounting or actuarial studies or reports
     performed by or at the request of Employer and its affiliates, and
     internal documents relating to policies, procedures, methods or positions. 
     Upon termination of his employment with the Employer, all documents,
     records, lists, notebooks, and similar collections or compilations of such
     confidential information or data, including all copies thereof, then in
     Employee's possession or in the possession of third parties under the
     control of Employee, whether prepared by him or others, will be delivered
     to the Employer by Employee.  The obligations of this Section shall not
     apply to confidential information and data that: (i) at the time of
     Employee's employment by Employer was in the public domain; (ii) is or
     becomes generally available in the public domain other than pursuant to a
     breach by Employee of his obligations under this Section; or (iii)
     Employee can show was acquired, or is acquired after the date of this
     Agreement, from a third party (other than from a third party at the
     Employer's request) and such third party did not obtain such confidential
     information and data from any Employee of Employer subject to or in
     violation of obligations similar to those set forth in this Section.

          11.  No Compete.  In the event of termination of this Agreement by
     either the Employer or Employee, Employee agrees that he will not,
     directly or indirectly, participate in, assist in any way, or solicit, the
     rewriting of any insurance policies or annuities issued by Employer to
     insureds as of the date of termination.  Employee agrees that, for a
     period of eighteen months following the date of termination of this
     Agreement, he shall not, directly or indirectly, for his own benefit or
     for the benefit of any other person or entity, negotiate with, recruit or
     hire, or attempt to negotiate with, recruit or hire, any of the Agents (as
     herein defined) of Employer or its affiliates who are Agents of Employer
     or its affiliates within the four months immediately preceding the date of
     termination of this Agreement, and shall not interfere with Employer's
     business relationship with said Agents.  An "Agent" is any insurance agent
     appointed by Employer to act as such on Employer's behalf but shall not
     include any employee of a funeral home or funeral home affiliate, and such
     employees shall be included herein in the definition of "Protected Funeral
     Home."  A "Protected Funeral Home" shall be any one of the funeral homes
     designated by Employer on a list of funeral homes provided to Employee
     which in the aggregate account for sixty-five percent (65%) of all
     insurance policies sold by employees of such funeral homes for Employer
     during the six  months (or twelve months, as elected by Employer at the
     time of creating the list) immediately preceding the date of termination
     of  this Agreement.  Employee agrees that, for a period of eighteen months
     following the date of termination of this Agreement, he shall not,
     directly or indirectly, for his own benefit or the benefit of any other
     person or entity, negotiate with, recruit or hire, or attempt to negotiate
     with, recruit or hire any employees of a Protected Funeral Home, and shall
     not interfere with Employer's business relationship with any such
     Protected Funeral Home.

          12.  Other Employment.  During the term of this Agreement, Employee
     shall not, without the prior written approval of Employer, seek out,
     engage in, negotiate for or accept any employment, commercial activity or
     enterprise or gainful occupation with any other employer, person or
     entity.  Employee shall report to Employer in writing any offer of
     employment or proposal that Employee enter into negotiations leading to an
     offer of employment received by Employee from any other party, such
     written report to be delivered within five (5) days from the receipt of
     any such offer or proposal.  Notwithstanding anything to the contrary
     herein contained, at any time following ten (10) months from the effective
     date of this Agreement, or at any time after Employee gives notice to
     Employer of termination of this Agreement pursuant to Section 9.2,
     Employee may seek out, negotiate for and accept employment or gainful
     occupation with any other employer, person or entity.

          13.  Other Permissible Activities.  Notwithstanding any provision
     herein contained, Employee shall not be prohibited from engaging in non-
     profit, charitable or community activities, investing or trading in stocks
     or bonds or other forms of passive investment for Employee's account or
     family account, or engage in other business activities unrelated to the
     sale of preneed funeral contracts funded by life insurance, so long as
     such activities do not involve the management and/or ownership of a
     business enterprise, are of a passive nature only (such as the management
     of an investment portfolio), do not require a significant amount of time,
     and do not materially interfere with Employee's performance hereunder.

          14.  Miscellaneous.

               14.1  Notices.  Any notices made pursuant to this Agreement
     shall be in writing and shall be deemed to have been duly given on the
     date of delivery if delivered personally (including overnight delivery
     service) or by facsimile transmission to the party to whom notice is give,
     or on the third day after mailing if mailed to the party to whom notice is
     to be given by certified mail, return receipt requested, and properly
     addressed as follows:

          If to Employer:      
     
                         American Capitol Insurance Company
                                   P. O. Box 42814
                                Houston, Texas 77242

                     Attention:  President

                                        -or-

                         American Capitol Insurance Company
                               10555 Richmond Avenue
                                Houston, Texas 77042

                     Attention:  President

                                 FAX:  713-953-7920
    
          If to Employee:

                                  Richard M. Ridley

                        Texas Imperial Life Insurance Company
                                   P. O. Box 7070
                             Beaumont, Texas 77726-1700

                                        -or- 

                                  Richard M. Ridley

                        Texas Imperial Life Insurance Company
                                 4335 Laurel Avenue
                               Beaumont, Texas 77707 
     
                                 FAX:  409-899-1444

          Any party to this Agreement may change the address to which notice is
     to be delivered under this Section by delivering written notice to that
     effect to the other party in accordance with this Section.  Any document
     delivered via facsimile transmission shall be treated as though it is an
     original for all purposes.

               14.2  Amendments.  This Agreement and any attachments
     incorporated by reference constitute the entire agreement between the
     parties and may not be amended, supplemented, waived, or terminated except
     by written instrument executed by the parties.  This Agreement supersedes
     all other agreements on this subject, written or oral, contemporaneous or
     prior.

               14.3  Waiver.  No waiver of any provision of this Agreement
     shall be effective unless in writing signed by the party making such
     waiver and no such waiver shall constitute a waiver of any other provision
     of this Agreement, nor shall such waiver constitute a waiver of any
     subsequent breach of such provision.

               14.4  Binding Effect.  This Agreement shall be binding upon and
     shall inure to the benefit of the parties and their respective successors
     and assigns.  Notwithstanding anything herein to the contrary, this
     Agreement is not assignable by Employee.

               14.5  Governing Law.  The validity, construction, and
     enforcement of this Agreement shall be governed by the laws of the State
     of Texas.  In the event of a dispute concerning this Agreement, the
     parties agree that venue lies in a court of competent jurisdiction in
     Harris County, Texas.

               14.6  Severability.  If any provision of this Agreement is
     declared unenforceable by a court of last resort, such declaration shall
     not effect the validity of any other provisions of this Agreement.

               14.7  Construction.  The headings contained in this Agreement
     are for reference purposes only and shall not affect this Agreement in any
     manner whatsoever.  Whenever required by the context, any gender shall
     include any other gender, the singular shall include the plural, and the
     plural shall include the singular.

               14.8  Time for Performance.  If the time for performance of any
     obligation set forth in this Agreement falls on a Saturday, Sunday, or
     legal holiday, compliance with such obligation on the next business day
     following such Saturday, Sunday or legal holiday shall be deemed
     acceptable.

               14.9  Counterparts.  This Agreement may be executed in multiple
     and/or separate counterparts, each of which shall be deemed an original
     but all of which shall be deemed one instrument.

               14.10  Authorization.  The making and performance by Employer of
     this Agreement have been duly authorized by all necessary corporate
     actions of Employer, and the undersigned representative of Employer is
     fully empowered and authorized to execute this Agreement on its behalf.

          This Agreement is executed to be effective as of October 1, 1996.

                                   EMPLOYER:

                                   TEXAS IMPERIAL LIFE INSURANCE COMPANY


                                   By:  /s/John D.Cornett, President

                                   EMPLOYEE:


                                   /s/Richard M. Ridley