Document:

EXHIBIT 10(e)

                        QUOTA SHARE REINSURANCE AGREEMENT

                                     between

                          21st CENTURY INSRANCE COMPANY
                   (hereinafter referred to as the "Company")

                                       and

                       AMERICAN INTERNATIONAL GROUP, INC.,
                  (hereinafter referred to as the "Reinsurer")

                                   AS AMENDED

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PREAMBLE

This Agreement replaces that certain agreement dated December 16, 1994 and
substitutes American International Insurance Company as Reinsurer for New
Hampshire Insurance Company and further incorporates Letter of Credit
provisions, effective as of January 1, 1995.

The Reinsurer hereby agrees to reinsure the Company in respect of the Company's
net liability under all policies, contracts and binders of insurance (hereafter
referred to as "policies") issued during the term of this Agreement subject to
the following terms and conditions:

                                    ARTICLE I

TERM
----

This Agreement shall be effective from 12:01 A.M., pacific standard time,
January 1, 1995 and shall remain continuously in force through December 31,
1999. The Reinsurer has the option to renew this Agreement annually for four
additional years by notifying the Company prior to December 31, 1999 or prior to
the expiration date of any renewal.

                                   ARTICLE II

PARTICIPATION
-------------

The Company shall cede and the Reinsurer shall accept 10% of the Company's net
liability for losses on policies incepting during the term of this Agreement. As
consideration, the Reinsurer shall receive a 10% share of the net written
premiums, less ceding commission as described in Article III, generated by such
policies. In the event the Reinsurer elects to renew this Agreement for annual
periods following December 31, 1999 the participation shall be 8% on the first
renewal, 6% on the second renewal, 4% on the third renewal and 2% on the fourth
renewal.

                                   ARTICLE III

COMMISSION
----------

The Reinsurer shall allow the Company a commission of 10.8% of the ceded written
premium for policies with effective dates from January 1, 1995 and through
December 31, 1995. For policies with effective dates in each subsequent
underwriting year, the commission shall be equal to the rate of the Company's
incurred underwriting expenses (as recorded in the Company's statutory
statement) to net written premium for the prior calendar year.

                                   ARTICLE IV

REPORTS AND ACCOUNTS
--------------------

The Company shall furnish within forty-five days after the close of each
calendar quarter an account reflecting the following separately for each
underwriting year:

          A.   Net written premium ceded during the quarter (credited).

          B.   Commission on the ceded premium (debited).

          C.   Net paid losses (debited).

          D.   Net paid adjustment expenses (debited).

          E.   Net outstanding losses.

          F.   Net unearned premium.

               If the balance of A through D is a credit such amount shall be
               remitted with the account. If the balance of A through D is a
               debit, the Reinsurer shall remit such amount within 15 days of

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               receipt of the account. Accounts by line of business shall also
               be provided by the Company including the aforementioned
               information.

                                    ARTICLE V

DEFINITION
----------

Underwriting year shall mean all policies with effective dates from 12:01 A.M.,
pacific standard time, January 1st through December 31st of each calendar year.

Net written premium or net losses or net liability shall mean the gross amount
less deductions for all other reinsurance.

CURRENCY
--------

All premium and loss payments hereunder shall be in United States currency.

                                   ARTICLE VI

ACCESS TO RECORDS
-----------------

The Reinsurer or its duly appointed representatives shall have free access at
all reasonable times to such books and records of those Divisions, Departments
and Branch Offices of the Company which are directly involved with the subject
matter business of this Agreement as shall reflect premium and loss transactions
of the Company for the purpose of obtaining any and all information concerning
this Agreement or the subject matter hereof. All non- public information
provided in the course of the inspection shall be kept confidential by the
Reinsurer as against third parties.

                                   ARTICLE VII

INSOLVENCY
----------

The portion of any risk or obligation assumed by the Reinsurer, when such
portion is ascertained, shall be payable on demand of the Company at the same
time as the Company shall pay its net retained portion of such risk or
obligation, with reasonable provision for verification before payment, and the
reinsurance shall be payable by the Reinsurer on the basis of the liability of
the Company under the contract or contracts reinsured without diminution because
of the insolvency of the Company. In the event of the insolvency of the Company,
this reinsurance shall be payable directly to the Company, or to its liquidator,
receiver, conservator or statutory successor. Immediately upon demand, on the
basis of the liability of the Company without diminution because of the
insolvency of the Company or because the liquidator, receiver, conservator or
statutory successor of the Company has failed to pay all or a portion of any
claim. It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of the Company shall give written notice to the Reinsurer of
the pendency of a claim against the Company which would involve a possible
liability on the part of the Reinsurer, indicating the policy or bond reinsured,
within a reasonable time after such claim is filed in the conservation or
liquidation proceeding or in the receivership. It is further agreed that during
the pendency of such claim the Reinsurer may investigate such claim and
interpose, at its own expense, in the proceeding where such claim is to be
adjudicated, any defense or defenses that it may deem available to the Company
or its liquidator, receiver, conservator, or statutory successor. The expense
thus incurred by the Reinsurer shall be chargeable, subject to the approval of
the Court, against the Company as part of the expense of conservation or
liquidation to the extent of a pro rata share of the benefit which may accrue to
the Company solely as a result of the defense undertaken by the Reinsurer.

                                  ARTICLE VIII

ARBITRATION
-----------

A.   All disputes or differences arising out of the interpretation of this
     Agreement shall be submitted to the decision of two arbitrators, one to be
     chosen by each party, and in the event of the arbitrators failing to agree,
     to the decision of an umpire to be chosen by the arbitrators. The

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     arbitrators and umpire shall be disinterested active or retired executive
     officials of fire or casualty insurance or reinsurance companies or
     Underwriters at Lloyd's, London. If either of the parties fails to appoint
     an arbitrator within one month after being required by the other party in
     writing to do so, or if the arbitrators fail to appoint an umpire within
     one month of a request in writing by either of them to do so, such
     arbitrator or umpire, as the case may be, shall at the request of either
     party be appointed by a Justice of the Supreme Court of the State of New
     York.

B.   The arbitration proceeding shall take place in the city in which the
     Company's Head Office is located. The applicant shall submit its case
     within one month after the appointment of the court of arbitration, and the
     respondent shall submit its reply within one month after the receipt of the
     claim. The arbitrators and umpire are relieved from all judicial formality
     and may abstain from following the strict rules of law. They shall settle
     any dispute under the Agreement according to an equitable rather than a
     strictly legal interpretation of its terms.

C.   Their written decision shall be provided to both parties within ninety days
     of the close of arbitration and shall be final and not subject to appeal.

D.   Each party shall bear the expenses of his arbitrator and shall jointly and
     equally share with the other the expenses of the umpire and of the
     arbitration.

E.   This Article shall survive the termination of this Agreement.

                                   ARTICLE IX

ERRORS AND OMISSIONS
--------------------

Any inadvertent delay, omission or error shall not relieve either party hereto
from any liability which would attach to it hereunder if such delay, omission or
error had not been made, provided such delay, omission or error is rectified
immediately upon discovery.

                                    ARTICLE X

LOSS & LOSS ADJUSTMENT EXPENSE
------------------------------

The Company alone and at its full discretion shall adjust, settle or compromise
all claims and losses. All such adjustments, settlements, and compromises shall
be binding on the Reinsurer in proportion to its participation. The Company
shall likewise at its sole discretion commence, continue, defend, compromise,
settle or withdraw from actions, suits or proceedings and generally do all such
matters and things relating to any claim or loss as in its judgment may be
beneficial or expedient, and all payments made and costs and expenses incurred
in connection therewith or in taking legal advice therefor shall be shared by
the Reinsurer proportionately. The Reinsurer shall, on the other hand, benefit
proportionately from all reductions of losses by salvage, compromise or
otherwise.

                                   ARTICLE XI

EXTRA CONTRACTUAL OBLIGATIONS
-----------------------------

This Agreement shall protect the Company where the ultimate net loss includes
any extra contractual obligations. The term "extra contractual obligations" is
defined as those liabilities not covered under any other provision of the
Contract and which arise from the handling of any claim on business covered
hereunder, such liabilities arising because of, but not limited to, the
following: failure by the Company to settle within the policy limit, or by
reason of alleged or actual negligence, fraud or bad faith in rejecting an offer
of settlement or in the preparation of the defense or in the trail of any action
against its insured or reinsured or in the preparation of prosecution of an
appeal consequent upon such action. The Reinsurer's liability for extra
contractual obligations shall not exceed their participation of the maximum
limit of liability on the policy from which the extra contractual obligation
arises.

The date on which any extra contractual obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original disaster
and/or casualty. However, this Article shall not apply where the loss has been
incurred due to fraud or a member of the Board of Directors or a corporate
officer of the Company acting individually or collectively or in collusion with
any individual or corporation or any other organization or party involved in the
presentation, defense or settlement of any claim covered hereunder.

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                                   ARTICLE XII

OFFSET
------

Each party hereto shall have, and may exercise at any time and from time to
time, the right to offset any undisputed balance or balances, whether on account
of premiums or on account of losses or otherwise, due from such party to the
other party hereto under this Agreement.

                                  ARTICLE XIII

TERMINATION
-----------

Either party may terminate this Agreement with thirty days' notice in the event
that:

          1.   One party should at any time become insolvent, or suffer any
               impairment of capital, or file a petition in bankruptcy, or go
               into liquidation or rehabilitation, or have a receiver appointed,
               or be acquired or controlled by any other insurance company or
               organization, or

          2.   Any law or regulation of any Federal or any State or any Local
               Government of any jurisdiction in which the Company is doing
               business should render illegal the arrangement made herein, or

          3.   With the agreement of the other party.

In the event of termination, the Reinsurer shall refund to the Company the
applicable unearned premium minus the ceding commission and shall continue to
remain liable for all losses occurring prior to the date of termination.
However, if this Contract shall terminate while a loss occurrence covered
hereunder is in progress, it is agreed that, subject to the other conditions of
this Contract, the Reinsurer is responsible for its proportion of the entire
loss.

                                   ARTICLE XIV

TAX
---

In consideration of the terms under which this Agreement is issued, the Company
undertakes not to claim any deduction of the premium hereon when making tax
returns, other than income or Profits Tax returns, to any State or Territory of
the United States or to the District of Columbia.

                                   ARTICLE XV

LETTER OF CREDIT
----------------

The Reinsurer agrees to provide and maintain in place a Letter of Credit,
acceptable to the Company, for the benefit of the Company equal to its share of
assumed liability which shall include unearned premium reserve, calculated on a
monthly pro rata basis, and outstanding loss and loss adjustment reserve,
including incurred but not reported losses calculated on the basis of the
requirement of the California Department of Insurance and/or other applicable
insurance regulatory agencies.

The initial Letter of Credit shall be provided written 60 days of the first
accounting report submitted to the Reinsurer by the Company in the amount
specified in the preceding paragraph. Subsequent adjustments, when requested by
the Company, shall be made to the Letter of Credit for any subsequent accounts
within 60 days of the submission of such account.

In the event the Letter of Credit and/or requested adjustments are not received
by the due date the Company may withhold amounts due the Reinsurer until such
Letter of Credit is received.

Notwithstanding any other provisions in this agreement the Company may draw on
this Letter of Credit at any time, however only for one or more of the
following:

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          1.   to reimburse the Company for the Reinsurer's share of premiums
               returned to the owners of policies reinsured under the
               reinsurance agreement on account of cancellations of such
               policies,

          2.   to reimburse the Company for the Reinsurer's share of losses paid
               by the Company under the terms and provisions of the policies
               reinsured under the reinsurance agreement,

          3.   to fund an account with the Company in an amount at least equal
               to the deduction, for reinsurance ceded, from the Company's
               liabilities for policies ceded under the agreement. Such amount
               shall include, but not be limited to, amounts for policy
               reserves, claims and losses incurred and unearned premium
               reserves, and

          4.   to pay any other amounts the Company claims are due under the
               reinsurance agreement.

                                   ARTICLE XVI

COUNTERPARTS
------------

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.

                         20TH CENTURY INSURANCE COMPANY

Date: September 13, 1995.  By: William L. Mellick     Title: President
      ------------------       ------------------            ---------

                    AMERICAN INTERNATIONAL INSURANCE COMPANY

Date: 8/8/95               By: J. Ernst Hansen       Title:  President
      ------                   ------------------            ---------

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<PAGE>EXHIBIT 10(f)

                        FORMS OF STOCK OPTION AGREEMENTS

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                          21ST CENTURY INSURANCE GROUP
                        INCENTIVE STOCK OPTION AGREEMENT
                                 PURSUANT TO THE
                             1995 STOCK OPTION PLAN

This Incentive Stock Option Agreement ("Agreement") is made and entered into as
of the Date of Grant indicated below by and between 20th Century Industries, a
California corporation, (the "Company") and the person named below as Optionee.

WHEREAS, Optionee is an employee of the Company and/or one or more of its
"subsidiary corporations," as such term is defined in Section 424(f), of the
Internal Revenue Code (the "Code"); and

WHEREAS, pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), the
committee of the Board of Directors of the Company administering the 1995 Plan
(the "Committee") has approved the grant to Optionee of an option to purchase
shares of the Common Stock of the Company (the "Common Shares"), on the terms
and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set
forth herein, the parties hereto hereby agree as follows:

1.   GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby grants to
     Optionee, and Optionee hereby accepts, as of the Date of Grant indicated
     below, an option (the "Option") to purchase the number of Common Shares
     indicated below (the "Option Shares") at the Exercise Price per share
     indicated below. The Option shall expire at 5:00 p.m., prevailing Pacific
     Time, on the Expiration Date indicated below and shall be subject to all of
     the terms and conditions set forth in the 1995 Plan and this Agreement.

     Optionee: ______________

     Date of Grant: ___________, 199__

     Numbers of shares purchasable: ________ shares

     Exercise Price per share: $_________

     Expiration Date: ___________, 200__

     Vesting Rate: ________vesting

2.   INCENTIVE STOCK OPTION; INTERNAL REVENUE CODE REQUIREMENTS. The Option is
     intended to qualify as an incentive stock option under Section 422 of the
     Code.

3.   ACCELERATION AND TERMINATION OF OPTION.

     (a)  TERMINATION OF EMPLOYMENT.

          (i)  RETIREMENT. In the event that Optionee shall cease to be an
               employee of the Company or any "subsidiary corporation", as
               defined above, (such event shall be referred to herein as the
               "Termination of Employment") by reason of retirement in
               accordance with the Company's then-current retirement practices,
               then the Option shall fully vest with respect to all Option
               Shares upon the date of such Termination of Employment and shall
               terminate no later than the Expiration Date. OPTIONEE UNDERSTANDS
               AND ACKNOWLEDGES THAT, IF SUCH OPTION IS EXERCISED ON OR AFTER
               THE THREE MONTH ANNIVERSARY OF SUCH TERMINATION OF EMPLOYMENT,

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               SUCH OPTION MAY NOT QUALIFY AS AN "INCENTIVE STOCK OPTION" UNDER
               SECTION 422 OF THE CODE AND THAT OPTIONEE SHOULD CONSULT HIS OR
               HER OWN TAX ADVISOR REGARDING ALL CONSEQUENCES ARISING FROM ANY
               SUCH EXERCISE.

          (ii) DEATH OR PERMANENT DISABILITY. If the Termination of Employment
               occurs by reason of the death or Permanent Disability (as
               hereinafter defined) of Optionee, then the Option shall (A) fully
               vest with respect to all Option Shares upon the date of such
               Termination of Employment, (B) be exercisable by Optionee or, in
               the event of death, the person or persons to whom Optionee's
               rights under the Option shall have passed by will or by the
               applicable laws of descent or distribution, and (C) terminate on
               the first anniversary of the date of such Termination of
               Employment. "Permanent Disability" shall mean the inability to
               engage in any substantial gainful activity by reason of any
               medically determinable physical or mental impairment which can be
               expected to result in death or which has lasted or can be
               expected to last for a continuous period of not less than twelve
               (12) months. The Optionee shall not be deemed to have a Permanent
               Disability until proof of the existence thereof shall have been
               furnished to the Committee in such form and manner, and at such
               times, as the Committee may require. Any determination by the
               Committee that Optionee does or does not have a Permanent
               Disability shall be final and binding upon the Company and
               Optionee.

         (iii) OTHER TERMINATION. If the Termination of Employment occurs for
               any reason other than those enumerated in (i) through (ii) of
               this Section 3(a), then (A) the portion of the Option that has
               not vested on or prior to the date of such Termination of
               Employment shall terminate on such date and (B) the remaining
               vested portion of the Option shall terminate on the earlier of
               the Expiration Date or the three (3) month anniversary of the
               date of such Termination of Employment.

     (b)  DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Notwithstanding anything to
          the contrary in this Agreement, if Optionee shall die at any time
          after the Termination of Employment and prior to the Expiration Date,
          then, unless the Termination of Employment had occurred for cause, the
          remaining vested but unexercised portion of the Option shall terminate
          on the earlier of the Expiration Date or the first anniversary of the
          date of such death.

     (c)  ACCELERATION OF OPTION. The Option shall become fully exercisable
          immediately prior to a Change in Control. A Change in Control shall be
          deemed to take place upon the occurrence of any of the following:

          (i)  Any merger or consolidation of the Company with or into any other
               person, as the result of which the holders of the Company's
               Common Shares immediately prior to the transaction shall, on the
               basis of such holdings prior to such transaction, hold less than
               50% of the total outstanding voting stock of the surviving
               corporation immediately upon completion of the transaction.

          (ii) Any sale or exchange of all or substantially all of the property
               and assets of the Company.

         (iii) Any change in a majority of the Board of Directors of the
               Company occurring within a period of two years or less, such that
               a majority of the Board of Directors is comprised of individuals
               who are not "Continuing Directors". For purposes of the
               foregoing, a "Continuing Director" shall be a director (A) who
               was in office at the commencement of such period of two years or
               (B) was elected subsequent to the commencement of such period
               with the approval of not less than a majority of those directors
               referred to in clause (A) who are then in office. Any director
               meeting the qualifications of clause (B) of the previous sentence
               shall, with respect to further determinations after the date of
               such director's election, be deemed a director meeting the
               qualifications of clause (A) of the previous sentence.

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          (iv) Any "person" (as defined in Sections 13(d) and 14(d) of the
               Securities Exchange Act of 1934, as amended (the "Exchange Act"))
               shall become the "beneficial owner" (as defined in Rule 13d-3
               under the Exchange Act), directly or indirectly, of a majority of
               the Company's outstanding Common Stock.

          (v)  the liquidation or dissolution of the Company.

          (vi) any other transaction or reorganization similar to the foregoing
               which in the opinion of the Committee constitutes a "change of
               control" of the nature described in subparagraphs (i) through (v)
               hereof.

4.   ADJUSTMENTS. In the event that the Common Shares are increased, decreased
     or exchanged for or converted into cash, property or a different number or
     kind of securities, or if cash, property or securities are distributed in
     respect of such outstanding Common Shares, in either case as a result of a
     reorganization, merger, consolidation, recapitalization, restructuring,
     reclassification, partial or complete liquidation, stock split, reverse
     stock split or the like, or if substantially all of the property and assets
     of the Company are sold, then, unless the terms of such transaction shall
     provide otherwise, the Option then outstanding shall thereafter be
     exercisable (on substantially the same terms and subject to substantially
     the same conditions as were applicable under such Option) for the number of
     shares or other securities or cash or other property as the holder of such
     Option would have been entitled to receive pursuant to such transaction had
     such holder exercised such Option in full immediately prior to such
     transaction. The Committee shall make appropriate and proportionate
     adjustments in the number and type of shares or other securities or cash or
     other property that may be acquired upon the exercise in full of the
     Option; provided, however, that any such adjustments in the Option shall be
     made without changing the aggregate Exercise Price of the then unexercised
     portion of the Option; provided further that no adjustment shall be made to
     the number of Common Shares that may be acquired to the extent such
     adjustment would result in the Option being treated as other than an
     Incentive Stock Option.

5.   EXERCISE.

     (a)  IN GENERAL. The Option shall be exercisable during Optionee's lifetime
          only by Optionee or by his or her guardian or legal representative,
          and after Optionee's death only by the person or entity entitled to do
          so under Optionee's last will and testament or applicable intestate
          law. The Option may only be exercised by the delivery to the Company
          of a written notice of such exercise pursuant to the notice procedures
          set forth in Section 7 hereof, which notice shall specify the number
          of Option Shares to be purchased, which for any single exercise may
          not be fewer than 100 Option Shares or, if smaller, the number of
          Option Shares then vested and exercisable, (the "Purchased Shares")
          and the aggregate Exercise Price for such shares (the "Exercise
          Price"), together with payment in full of such aggregate Exercise
          Price and any Withholding Liability (as hereinafter defined) in cash.
          At the discretion of the Committee, prior to Termination of Employment
          an Optionee may pay all or a portion of such aggregate Exercise Price
          (but not any Withholding Liability) by borrowing funds from the
          Company in accordance with such policies and procedures as the
          Committee may from time to time establish.

     (b)  LIMITATION ON EXERCISE. Notwithstanding any other provision of this
          Agreement, Optionee shall not be entitled to benefit from the Option
          granted hereunder and shall not be entitled to exercise any rights
          with respect to this Option if such grant or exercise would violate
          any provision of the charter of the Company. Pursuant to the 1995
          Plan, the grant or exercise of an Option in violation of this Section
          5(b) shall be void AB INITIO and shall not be effective to convey any
          rights to Optionee. As a condition to exercise of this Option,
          Optionee will be required to certify to the Company that the
          acquisition of Common Shares pursuant to the exercise of this Option
          will not result in a violation of any provision of the charter of the
          Company. If this Option (or any portion thereof) is not exercisable by

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          virtue of this Section 5(b), then such exercise shall be deferred
          until the earlier of such time, if any, that Optionee becomes entitled
          to exercise this Option or the Expiration Date. This Section 5(b)
          shall not result in an extension of the Expiration Date.

6.   PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to withhold
     an amount on account of any federal, state, or local income tax imposed as
     a result of the exercise of an option granted under this Plan (such amount
     shall be referred to herein as the "Withholding Liability"), the Optionee
     shall pay the Withholding Liability to the Company in full in cash on the
     first date upon which the Company becomes obligated to pay such amount
     withheld to the appropriate taxing authority, and the Company may delay
     issuing the Common Shares pursuant to such exercise until it receives the
     Withholding Liability from the Optionee.

7.   NOTICES. Any notice given to the Company shall be addressed to the Company
     at 6301 Owensmouth Avenue, Suite 700, Woodland Hills, California 91367,
     Attention: Corporate Secretary, or at such other address as the Company may
     hereafter designate in writing to Optionee. Any notice given to Optionee
     shall be sent to the address set forth below Optionee's signature hereto,
     or at such other address as Optionee may hereafter designate in writing to
     the Company. Any such notice shall be deemed duly given when made by hand
     delivery, sent by overnight courier, sent by prepaid certified or
     registered mail or transmitted by facsimile.

8.   STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding anything to
     the contrary in this Agreement, no shares of stock purchased upon exercise
     of the Option, and no certificate representing all or any part of such
     shares, shall be issued or delivered if (a) such shares have not been
     admitted to listing upon official notice of issuance of each stock exchange
     upon which shares of that class are then listed or (b) in the opinion of
     counsel to the Company, such issuance or delivery would cause the Company
     to be in violation of or to incur liability under any federal, state or
     other securities law, or any requirement of any stock exchange listing
     agreement to which the Company is a party, or any other requirement of law
     or of any administrative or regulatory body having jurisdiction over the
     Company.

9.   NONTRANSFERABILITY. Neither the Option nor any interest therein may be
     sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
     transferred in any manner other than by will or the laws of descent and
     distribution.

10.  1995 PLAN. THE OPTION IS GRANTED PURSUANT TO THE 1995 PLAN, AS IN EFFECT ON
     THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE
     1995 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
     THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT,
     OF THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
     INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1995 PLAN, THIS
     AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY
     THE COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1995 PLAN SHALL BE FINAL
     AND BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE
     EXERCISED IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST, SEND A COPY OF
     THE 1995 PLAN, IN ITS THEN CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR
     ENTITY THEN ENTITLED TO EXERCISE THE OPTION.

11.  FRACTIONAL SHARES. The Company shall not be required to issue a fraction of
     a Common Share in connection with the exercise of the Option. In any case
     where the Optionee would be entitled to receive a fraction of a Common
     Share upon the exercise of the Option, the Company shall instead, upon the
     exercise of the Option, issue the largest whole number of Common Shares

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     purchasable upon exercise of the Option, and pay to the Optionee in cash
     the Fair Market Value (as determined by the Committee) of such fraction of
     a Common Share at the time of exercise of the Option.

12.  STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote, receive
     dividends or be deemed for any purpose the holder of any Option Shares
     until the Option shall have been duly exercised to purchase such Option
     Shares in accordance with the provisions of this Agreement.

13.  EMPLOYMENT RIGHTS. No provision of this Agreement or of the Option granted
     hereunder shall (a) confer upon Optionee any right to continue in the
     employ of the Company or any of its subsidiaries, (b) affect the right of
     the Company and each of its subsidiaries to terminate the employment of
     Optionee, with or without cause, or (c) confer upon Optionee any right to
     participate in any employee welfare or benefit plan or other program of the
     Company or any of its subsidiaries other than the 1995 Plan.

14.  GOVERNING LAW. This Agreement and the Option granted hereunder shall be
     governed by and construed and enforced in accordance with the laws of the
     State of California.

15.  ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
     parties with respect to the matters covered herein and supersedes all prior
     written or oral agreements or 6 understandings of the parties with respect
     to the matters covered herein. Optionee acknowledges that he or she has no
     right to receive any additional options unless and until such time, if any,
     that the Committee, in its sole discretion, may approve the grant thereof,
     and that the Company has not made any representation to the Optionee
     regarding future or additional option grants, or any other option related
     matters. The grant of any options must be in writing.

IN WITNESS WHEREOF, the Company and Optionee have duly executed this Agreement
as of the Date of Grant.

20TH CENTURY INDUSTRIES                    OPTIONEE:

By William L. Mellick, President           Signature _________________________

                                           Street Address ____________________

                                           City, State and Zip Code __________

                                        6
<PAGE>
                             21ST CENTURY INDUSTRIES
                      NON-QUALIFIED STOCK OPTION AGREEMENT
                                 PURSUANT TO THE
                             1995 STOCK OPTION PLAN

This Non-Qualified Stock Option Agreement ("Agreement") is made and entered into
as of the Date of Grant indicated below by and between 20th Century Industries,
a California corporation, (the "Company") and the person named below as
Optionee.

WHEREAS, Optionee is an employee of the Company and/or one or more of its
subsidiaries; and

WHEREAS, pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), the
committee of the Board of Directors of the Company administering the 1995 Plan
(the "Committee") has approved the grant to Optionee of an option to purchase
shares of the Common Stock of the Company (the "Common Shares"), on the terms
and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set
forth herein, the parties hereto hereby agree as follows:

1.   GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby grants to
     Optionee, and Optionee hereby accepts, as of the Date of Grant indicated
     below, an option (the "Option") to purchase the number of Common Shares
     indicated below (the "Option Shares") at the Exercise Price per share
     indicated below. The Option shall expire at 5:00 p.m., prevailing Pacific
     Time, on the Expiration Date indicated below and shall be subject to all of
     the terms and conditions set forth in the 1995 Plan and this Agreement.

     Optionee: ______________

     Date of Grant: _______, 199___

     Numbers of shares purchasable: _________shares

     Exercise Price per share: $________

     Expiration Date: _________, 200___ 1

     Vesting Rate: ___________vesting

2.   NON-QUALIFIED STOCK OPTION. The Option is not intended to qualify as an
     incentive stock option under Section 422 of the Internal Revenue Code (the
     "Code").

3.   ACCELERATION AND TERMINATION OF OPTION.

(a)  TERMINATION OF EMPLOYMENT.

     (i)  RETIREMENT. In the event that Optionee shall cease to be an employee
          of the Company or any "subsidiary corporation", as defined above,
          (such event shall be referred to herein as the "Termination of
          Employment") by reason of retirement in accordance with the Company's
          then-current retirement practices, then the Option shall fully vest
          with respect to all Option Shares upon the date of such Termination of
          Employment and shall terminate no later than the Expiration Date.

     (ii) DEATH OR PERMANENT DISABILITY. If the Termination of Employment occurs
          by reason of the death or Permanent Disability (as hereinafter
          defined) of Optionee, then the Option shall (A) fully

                                        7
<PAGE>
          vest with respect to all Option Shares upon the date of such
          Termination of Employment, (B) be exercisable by Optionee or, in the
          event of death, the person or persons to whom Optionee's rights under
          the Option shall have passed by will or by the applicable laws of
          descent or distribution, and (C) terminate on the first anniversary of
          the date of such Termination of Employment. "Permanent Disability"
          shall mean the inability to engage in any substantial gainful activity
          by reason of any medically determinable physical or mental impairment
          which can be expected to result in death or which has lasted or can be
          expected to last for a continuous period of not less than twelve (12)
          months. The Optionee shall not be deemed to have a Permanent
          Disability until proof of the existence thereof shall have been
          furnished to the Committee in such form and manner, and at such times,
          as the Committee may require. Any determination by the Committee that
          Optionee does or does not have a Permanent Disability shall be final
          and binding upon the Company and Optionee.

    (iii) OTHER TERMINATION. If the Termination of Employment occurs for any
          reason other than those enumerated in (i) through (ii) of this Section
          3(a), then (A) the portion of the Option that has not vested on or
          prior to the date of such Termination of Employment shall terminate on
          such date and (B) the remaining vested portion of the Option shall
          terminate on the earlier of the Expiration Date or the three (3) month
          anniversary of the date of such Termination of Employment.

(b)  DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Notwithstanding anything to the
     contrary in this Agreement, if Optionee shall die at any time after the
     Termination of Employment and prior to the Expiration Date, then, unless
     the Termination of Employment had occurred for cause, the remaining vested
     but unexercised portion of the Option shall terminate on the earlier of the
     Expiration Date or the first anniversary of the date of such death.

(c)  ACCELERATION OF OPTION. The Option shall become fully exercisable
     immediately prior to a Change in Control. A Change in Control shall be
     deemed to take place upon the occurrence of any of the following:

     (i)  Any merger or consolidation of the Company with or into any other
          person, as the result of which the holders of the Company's Common
          Shares immediately prior to the transaction shall, on the basis of
          such holdings prior to such transaction, hold less than 50% of the
          total outstanding voting stock of the surviving corporation
          immediately upon completion of the transaction.

     (ii) Any sale or exchange of all or substantially all of the property and
          assets of the Company.

    (iii) Any change in a majority of the Board of Directors of the Company
          occurring within a period of two years or less, such that a majority
          of the Board of directors is comprised of individuals who are not
          "Continuing Directors". For purposes of the foregoing, a " Continuing
          Director" shall be a director (A) who was in office at the
          commencement of such period of two years or (B) was elected subsequent
          to the commencement of such period with the approval of not less than
          a majority of those directors referred to in clause (A) who are then
          in office. Any director meeting the qualifications of clause (B) of
          the previous sentence shall, with respect to further determinations
          after the date of such director's election, be deemed a director
          meeting the qualifications of clause (A) of the previous sentence.

     (iv) Any "person" (as defined in Sections 13(d) and 14(d) of the Securities
          Exchange Act of 1934, as amended (the "Exchange Act")) shall become
          the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
          Act), directly or indirectly, of a majority of the Company's
          outstanding Common Stock.

                                        8
<PAGE>
     (v)  the liquidation or dissolution of the Company.

     (vi) any other transaction or reorganization similar to the foregoing which
          in the opinion of the Committee constitutes a "change of control" of
          the nature described in subparagraphs (i) through (v) hereof.

4.   ADJUSTMENTS. In the event that the Common Shares are increased, decreased
     or exchanged for or converted into cash, property or a different number or
     kind of securities, or if cash, property or securities are distributed in
     respect of such outstanding Common Shares, in either case as a result of a
     reorganization, merger, consolidation, recapitalization, restructuring,
     reclassification, the property and assets of the Company are sold, then,
     unless the terms of such transaction shall provide otherwise, the Option
     then outstanding shall thereafter be exercisable (on substantially the same
     terms and subject to substantially the same conditions as were applicable
     under such Option) for the number of shares or other securities or cash or
     other property as the holder of such Option would have been entitled to
     receive pursuant to such transaction had such holder exercised such Option
     in full immediately prior to such transaction. The Committee shall make
     appropriate and proportionate adjustments in the number and type of shares
     or other securities or cash or other property that may be acquired upon the
     exercise in full of the Option.

5.   EXERCISE.

(a)  IN GENERAL. The Option shall be exercisable during Optionee's lifetime only
     by Optionee or by his or her guardian or legal representative, and after
     Optionee's death only by the person or entity entitled to do so under
     Optionee's last will and testament or applicable intestate law. The Option
     may only be exercised by the delivery to the Company of a written notice of
     such exercise pursuant to the notice procedures set forth in Section 7
     hereof, which notice shall specify the number of Option Shares to be
     purchased, which for any single exercise may not be fewer than 100 Option
     Shares or, if smaller, the number of Option Shares then vested and
     exercisable, (the "Purchased Shares") and the aggregate Exercise Price for
     such shares (the "Exercise Price"), together with payment in full of such
     aggregate Exercise Price and any Withholding Liability (as hereinafter
     defined) in cash. At the discretion of the Committee, prior to Termination
     of Employment an Optionee may pay all or a portion of such aggregate
     Exercise Price (but not any Withholding Liability) by borrowing funds from
     the Company in accordance with such policies and procedures as the
     Committee may from time to time establish.

(b)  LIMITATION ON EXERCISE. Notwithstanding any other provision of this
     Agreement, Optionee shall not be entitled to benefit from the Option
     granted hereunder and shall not be entitled to exercise any rights with
     respect to this Option if such grant or exercise would violate any
     provision of the charter of the Company. Pursuant to the 1995 Plan, the
     grant or exercise of an Option in violation of this Section 5(b) shall be
     void AB INITIO and shall not be effective to convey any rights to Optionee.
     As a condition to exercise of this Option, Optionee will be required to
     certify to the Company that the acquisition of Common Shares pursuant to
     the exercise of this Option will not result in a violation of any provision
     of the charter of the Company. If this Option (or any portion thereof) is
     not exercisable by virtue of this Section 5(b), then such exercise shall be
     deferred until the earlier of such time, if any, that Optionee becomes
     entitled to exercise this Option or the Expiration Date. This Section 5(b)
     shall not result in an extension of the Expiration Date.

6.   PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to withhold
     an amount on account of any federal, state, or local income tax imposed as
     a result of the exercise of an option granted under this Plan (such amount
     shall be referred to herein as the "Withholding Liability"), the Optionee
     shall pay the Withholding Liability to the Company in full in cash on thE
     first date upon which the Company becomes obligated to pay such amount
     withheld to the appropriate taxing authority, and the Company may delay

                                        9
<PAGE>
     issuing the Common Shares pursuant to such exercise until it receives the
     Withholding Liability from the Optionee.

7.   NOTICES. Any notice given to the Company shall be addressed to the Company
     at 6301 Owensmouth Avenue, Suite 700, Woodland Hills, California 91367,
     Attention: Corporate Secretary, or at such other address as the Company may
     hereafter designate in writing to Optionee. Any notice given to Optionee
     shall be sent to the address set forth below Optionee's signature hereto,
     or at such other address as Optionee may hereafter designate in writing to
     the Company. Any such notice shall be deemed duly given when made by hand
     delivery, sent by overnight courier, sent by prepaid certified or
     registered mail or transmitted by facsimile.

8.   STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding anything to
     the contrary in this Agreement, no shares of stock purchased upon exercise
     of the Option, and no certificate representing all or any part of such
     shares, shall be issued or delivered if (a) such shares have not been
     admitted to listing upon official notice of issuance of each stock exchange
     upon which shares of that class are then listed or (b) in the opinion of
     counsel to the Company, such issuance or delivery would cause the Company
     to be in violation of or to incur liability under any federal, state or
     other securities law, or any requirement of any stock exchange listing
     agreement to which the Company is a party, or any other requirement of law
     or of any administrative or regulatory body having jurisdiction over the
     Company.

9.   NONTRANSFERABILITY. Neither the Option nor any interest therein may be
     sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
     transferred in any manner other than by will or the laws of descent and
     distribution.

10.  1995 PLAN. THE OPTION IS GRANTED PURSUANT TO THE 1995 PLAN, AS IN EFFECT ON
     THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE
     1995 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
     THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT,
     OF THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
     INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1995 PLAN, THIS
     AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY
     THE COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1995 PLAN SHALL BE FINAL
     AND BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE
     EXERCISED IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST, SEND A COPY OF
     THE 1995 PLAN, IN ITS THEN CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR
     ENTITY THEN ENTITLED TO EXERCISE THE OPTION.

11.  FRACTIONAL SHARES. The Company shall not be required to issue a fraction of
     a Common Share in connection with the exercise of the Option. In any case
     where the Optionee would be entitled to receive a fraction of a Common
     Share upon the exercise of the Option, the Company shall instead, upon the
     exercise of the Option, issue the largest whole number of Common Shares
     purchasable upon exercise of the Option, and pay to the Optionee in cash
     the Fair Market Value (as determined by the Committee) of such fraction of
     a Common Share at the time of exercise of the Option.

12.  STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote, receive
     dividends or be deemed for any purpose the holder of any Option Shares
     until the Option shall have been duly exercised to purchase such Option
     Shares in accordance with the provisions of this Agreement.

13.  EMPLOYMENT RIGHTS. No provision of this Agreement or of the Option granted
     hereunder shall (a) confer upon Optionee any right to continue in the
     employ of the Company or any of its subsidiaries, (b) affect the right of

                                       10
<PAGE>
     the Company and each of its subsidiaries to terminate the employment of
     Optionee, with or without cause, or (c) confer upon Optionee any right to
     participate in any employee welfare or benefit plan or other program of the
     Company or any of its subsidiaries other than the 1995 Plan.

14.  GOVERNING LAW. This Agreement and the Option granted hereunder shall be
     governed by and construed and enforced in accordance with the laws of the
     State of California.

15.  ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
     parties with respect to the matters covered herein and supersedes all prior
     written or oral agreements or understandings of the parties with respect to
     the matters covered herein. Optionee acknowledges that he or she has no
     right to receive any additional options unless and until such time, if any,
     that the Committee, in its sole discretion, may approve the grant thereof,
     and that the Company has not made any representation to the Optionee
     regarding future or additional option grants, or any other option related
     matters. The grant of any options must be in writing.

16.  IN WITNESS WHEREOF, the Company and Optionee have duly executed this
     Agreement as of the Date of Grant.

20TH CENTURY INDUSTRIES             OPTIONEE:

By William L. Mellick, President    Signature __________________________________

                                    Street Address _____________________________

                                    City, State and Zip Code ___________________

                                       11
<PAGE>
                             20TH CENTURY INDUSTRIES
                   NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
                                 PURSUANT TO THE
                             1995 STOCK OPTION PLAN

This Nonemployee Director Stock Option Agreement ("Agreement") is made and
entered into as of the Date of Grant indicated below by and between 20th Century
Industries, a California corporation, (the "Company") and the person named below
as Optionee.

WHEREAS, Optionee is a nonemployee director ("Nonemployee Director") of the
Company; and

WHEREAS, pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), an
option to purchase shares of the Common Stock of the Company (the "Common
Shares") has been granted to Optionee on the terms and conditions set forth
herein;

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set
forth herein, the parties hereto hereby agree as follows:

1.   GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby grants to
     Optionee, and Optionee hereby accepts, as of the Date of Grant indicated
     below, an option (the "Option") to purchase the number of Common Shares
     indicated below (the "Option Shares") at the Exercise Price per share
     indicated below. The Option shall expire at 5:00 p.m., prevailing Pacific
     Time, on the Expiration Date indicated below and shall be subject to all of
     the terms and conditions set forth in the 1995 Plan and this Agreement.

     Optionee: ____________________

     Date of Grant: _____________, 199__

     Numbers of shares purchasable: ______________shares

     Exercise Price per share: $_________

     Expiration Date: _____________, 200__

     Vesting Rate: _________shares on__

2.   NONQUALIFIED STOCK OPTION. The Option is not intended to qualify as an
     incentive stock option under Section 422 of the Internal Revenue Code (the
     "Code").

3.   EXPIRATION AND TERMINATION OF OPTION.

(a)  EXPIRATION OF OPTION. The Option shall expire upon the first to occur of
     the following:

     (i)  the first anniversary of the date upon which the Optionee shall cease
          to be a Nonemployee Director as a result of death or Permanent
          Disability;

     (ii) the 90th day after the date upon which the Optionee shall cease to be
          a Nonemployee Director for any reason other than death or Permanent
          Disability;

    (iii) the tenth anniversary of the Date of Grant of the Option. For
          purposes of this paragraph, "Permanent Disability" shall mean the
          inability to engage in any substantial gainful activity by reason of
          any medically determinable physical or mental impairment which can be
          expected to result in death or which has lasted or can be

                                       12
<PAGE>
          expected to last for a continuous period of not less than twelve (12)
          months. The Optionee shall not be deemed to have a Permanent
          Disability until proof of the existence thereof shall have been
          furnished to the Committee in such form and manner, and at such times,
          as the Committee may require. Any determination by the Committee that
          Optionee does or does not have a Permanent Disability shall be final
          and binding upon the Company and Optionee.

(c)  TERMINATION OF OPTION. The Option shall terminate upon the first to occur
     of the following:

     (i)  the dissolution or liquidation of the Company;

     (ii) A reorganization, merger or consolidation of the Company as a result
          of which the outstanding securities of the class then subject to such
          outstanding Nonemployee Director Options are exchanged for or
          converted into cash, property and securities not issued by the Company
          (or any combination thereof) unless the terms of such reorganization,
          merger or consolidation provide otherwise; or

    (iii) the sale of substantially all of the property and assets of the
          Company.

4.   ADJUSTMENTS. In the event that the Common Shares are increased, decreased
     or exchanged for or converted into cash, property or a different number or
     kind of securities, or if cash, property or securities are distributed in
     respect of such outstanding Common Shares, in either case as a result of a
     reorganization, merger, consolidation, recapitalization, restructuring,
     reclassification, partial or complete liquidation, stock split, reverse
     stock split or the like, or if substantially all of the property and assets
     of the Company are sold, then, unless such event shall cause the Option to
     terminate pursuant to this Agreement or the terms of such transaction shall
     provide otherwise, the Option then outstanding shall thereafter be
     exercisable (on substantially the same terms and subject to substantially
     the same conditions as were applicable under such Option) for the number of
     shares or other securities or cash or other property as the holder of such
     Option would have been entitled to receive pursuant to such transaction had
     such holder exercised such Option in full immediately prior to such
     transaction. The Committee shall make appropriate and proportionate
     adjustments in the number and type of shares or other securities or cash or
     other property that may be acquired upon the exercise in full of the
     Option.

5.   EXERCISE.

(a)  IN GENERAL. The Option shall be exercisable during Optionee's lifetime only
     by Optionee or by his or her guardian or legal representative, and after
     Optionee's death only by the person or entity entitled to do so under
     Optionee's last will and testament or applicable intestate law. The Option
     may only be exercised by the delivery to the Company of a written notice of
     such exercise pursuant to the notice procedures set forth in Section 7
     hereof, which notice shall specify the number of Option Shares to be
     purchased, which for any single exercise may not be fewer than 100 Option
     Shares or, if smaller, the number of Option Shares then vested and
     exercisable, (the "Purchased Shares") and the aggregate Exercise Price for
     such shares (the "Exercise Price"), together with payment in full of such
     aggregate Exercise Price and any Withholding Liability (as hereinafter
     defined) in cash.

(b)  LIMITATION ON EXERCISE. Notwithstanding any other provision of this
     Agreement, Optionee shall not be entitled to benefit from the Option
     granted hereunder and shall not be entitled to exercise any rights with
     respect to this Option if such grant or exercise would violate any
     provision of the charter of the Company. Pursuant to the 1995 Plan, the
     grant or exercise of an Option in violation of this Section 5(b) shall be
     void AB INITIO and shall not be effective to convey any rights to Optionee.
     As a condition to exercise of this Option, Optionee will be required to
     certify to the Company that the acquisition of Common Shares pursuant to
     the exercise of this Option

                                       13
<PAGE>
     will not result in a violation of any provision of the charter of the
     Company. If this Option (or any portion thereof) is not exercisable by
     virtue of this Section 5(b), then such exercise shall be deferred until the
     earlier of such time, if any, that Optionee becomes entitled to exercise
     this Option or the Expiration Date. This Section 5(b) shall not result in
     an extension of the Expiration Date.

6.   PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to withhold
     an amount on account of any federal, state, or local income tax imposed as
     a result of the exercise of an option granted under this Plan (such amount
     shall be referred to herein as the "Withholding Liability"), the Optionee
     shall pay the Withholding Liability to the Company in full in cash on the
     first date upon which the Company becomes obligated to pay such amount
     withheld to the appropriate taxing authority, and the Company may delay
     issuing the Common Shares pursuant to such exercise until it receives the
     Withholding Liability from the Optionee.

7.   NOTICES. Any notice given to the Company shall be addressed to the Company
     at 6301 Owensmouth Avenue, Suite 700, Woodland Hills, California 91367,
     Attention: Corporate Secretary, or at such other address as the Company may
     hereafter designate in writing to Optionee. Any notice given to Optionee
     shall be sent to the address set forth below Optionee's signature hereto,
     or at such other address as Optionee may hereafter designate in writing to
     the Company. Any such notice shall be deemed duly given when made by hand
     delivery, sent by overnight courier, sent by prepaid certified or
     registered mail or transmitted by facsimile.

8.   STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding anything to
     the contrary in this Agreement, no shares of stock purchased upon exercise
     of the Option, and no certificate representing all or any part of such
     shares, shall be issued or delivered if (a) such shares have not been
     admitted to listing upon official notice of issuance of each stock exchange
     upon which shares of that class are then listed or (b) in the opinion of
     counsel to the Company, such issuance or delivery would cause the Company
     to be in violation of or to incur liability under any federal, state or
     other securities law, or any requirement of any stock exchange listing
     agreement to which the Company is a party, or any other requirement of law
     or of any administrative or regulatory body having jurisdiction over the
     Company.

9.   NONTRANSFERABILITY. Neither the Option nor any interest therein may be
     sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
     transferred in any manner other than by will or the laws of descent and
     distribution.

10.  1995 PLAN. THE OPTION IS GRANTED PURSUANT TO THE 1995 PLAN, AS IN EFFECT ON
     THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE
     1995 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
     THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT,
     OF THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
     INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1995 PLAN, THIS
     AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY
     THE COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1995 PLAN SHALL BE FINAL
     AND BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE
     EXERCISED IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST, SEND A COPY OF
     THE 1995 PLAN, IN ITS THEN CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR
     ENTITY THEN ENTITLED TO EXERCISE THE OPTION.

11.  FRACTIONAL SHARES. The Company shall not be required to issue a fraction of
     a Common Share in connection with the exercise of the Option. In any case
     where the Optionee would be entitled to receive a fraction of a Common
     Share upon the exercise of the Option, the Company shall instead, upon the

                                       14
<PAGE>
     exercise of the Option, issue the largest whole number of Common Shares
     purchasable upon exercise of the Option, and pay to the Optionee in cash
     the Fair Market Value (as determined by the Committee) of such fraction of
     a Common Share at the time of exercise of the Option.

12.  STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote, receive
     dividends or be deemed for any purpose the holder of any Option Shares
     until the Option shall have been duly exercised to purchase such Option
     Shares in accordance with the provisions of this Agreement.

13.  GOVERNING LAW. This Agreement and the Option granted hereunder shall be
     governed by, construed and enforced in accordance with the laws of the
     State of California.

14.  ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
     parties with respect to the matters covered herein and supersedes all prior
     written or oral agreements or understandings of the parties with respect to
     the matters covered herein. Optionee acknowledges that he or she has no
     right to receive any additional options except as provided in the 1995
     Plan. The grant of any options must be in writing.

IN WITNESS WHEREOF, the Company and Optionee have duly executed this Agreement
as of the Date of Grant.

20TH CENTURY INDUSTRIES                     OPTIONEE:

By William L. Mellick, President

                                       15
<PAGE>

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