Document:

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                                                                   EXHIBIT 10.22

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                       Liberty American Insurance Company
                             Pinellas Park, Florida
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                     Liberty American Insurance Group, Inc.
              Hereinafter referred to collectively as the "Company"

                          $6,500,000 EXCESS $3,500,000
            FLORIDA ONLY FIFTH EVENT CATASTROPHE REINSURANCE CONTRACT
                          EFFECTIVE: SEPTEMBER 24, 2004
                            REINSURANCE CONFIRMATION

BUSINESS REINSURED

Business classified by the Company as Property business. In force, new and
renewal business.

TERM

Effective September 24, 2004, with respect to losses arising out of loss
occurrences commencing on or after that date, through May 31, 2005 both days
inclusive. Extended expiration in the event a loss occurrence is in progress at
expiration.

TERRITORY

State of Florida and extra territorial limits of the Company's policies.

EXCLUSIONS

See attached.

RETENTION AND LIMIT

100% of $6,500,000 ultimate net loss each loss occurrence excess of $3,500,000
ultimate net loss each loss occurrence, not to exceed $6,500,000 in all during
the term of this Contract.

No claim shall be made under this Contract unless the amount shown as Funds
Otherwise Recoverable for each layer in the attached Schedule A has been paid or
scheduled to be paid under the first layer of the Company's Florida Only Excess
Catastrophe Reinsurance Contract effective June 1, 2004, Section I of the
Company's Underlying Excess Catastrophe and Reinstatement Premium Protection
Contract effective July 1, 2004, the underlying layer and first layer of the
Company's Florida Only Third and Fourth Event Excess Catastrophe Reinsurance
Contract effective September 1, 2004 and the underlying layer and first layer of
the Company's Florida Only Third and Fourth Event Excess Catastrophe Reinsurance
Contract effective September 2, 2004.

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No claim shall be made as respects any one loss occurrence unless at least two
risks insured or reinsured by the Company are involved in such loss occurrence.
For purposes hereof, the Company shall be the sole judge of what constitutes one
risk.

FLORIDA HURRICANE CAT FUND

FHCF inuring to Catastrophe Reinsurance Program. Recoveries deemed in place,
however, the full payout limit may be reduced by prior loss occurrences for
which recoveries were made from the FHCF.

OTHER REINSURANCE

The Company shall carry a 15% quota share reinsurance of its direct personal
lines business, recoveries under which to inure to the benefit of this Contract,
or so deemed.

DEFINITIONS

UNL includes LAE.  See attached.

LOSS OCCURRENCE

No reinstatement same wind event.  See attached.

LOSS NOTICES AND SETTLEMENTS

Individual loss notices and settlements.

PREMIUM

$487,500 payable at inception.

Should the Funds Otherwise Recoverable under the layers referenced in Schedule A
exceed $19,500,000, the Reinsurer shall promptly be due additional premium equal
to 20% of the ultimate net loss subject to the second limit of the underlying
layer and first layer of the Company's Florida Only Third and Fourth Event
Excess Catastrophe Reinsurance Contract effective September 1, 2004 and the
second limit of the underlying layer and first layer of the Company's Florida
Only Third and Fourth Event Excess Catastrophe Reinsurance Contract effective
September 2, 2004, not to exceed $1,300,000. Quarterly recalculations and
remittances until all losses are settled.

LATE PAYMENTS

See attached. Interest penalty based on 6-month United States Treasury Bill
Rate. Interest penalty of less than $100 shall be waived.

OTHER PROVISIONS

Salvage and Subrogation
Offset (BRMA 36D)
Access to Records (BRMA 1D)

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Liability of the Reinsurer
Net Retained Lines (BRMA 32E)
Errors and Omissions (BRMA 14F)
Currency (BRMA 12A)
Taxes (BRMA 50C)
Federal Excise Tax (BRMA 17A)
Reserve Requirements (Evergreen LOC for unearned premium, outstanding
losses/LAE, including all case reserves plus any reasonable amount estimated to
be unreported from known loss occurrences)
Insolvency
Arbitration
Service of Suit
Agency Agreement
Governing Law (State of Florida)
Confidentiality
Severability
Intermediary (BRMA 23A)

ALLOCATION OF FINAL SHARES

The Company shall have the right to review all authorizations and the full
authority to allocate final shares. Such decisions will be at the sole
discretion of the Company and may result in other than a "proportional signdown"
of authorizations. As respects signdowns within the London marketplace, the
final allocation of shares to individual companies or syndicates may not be
proportionate to the original authorizations.

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                                   EXCLUSIONS

This Contract does not apply to and specifically excludes the following:

      1.    Financial Guarantee and Insolvency.

      2.    Nuclear risks as defined in the "Nuclear Incident Exclusion Clause -
            Physical Damage - Reinsurance (U.S.A.)" and "Nuclear Incident
            Exclusion Clause - Physical Damage - Reinsurance (Canada)" attached
            to and forming part of this Contract.

      3.    Loss or damage caused by or resulting from war, invasion,
            hostilities, acts of foreign enemies, civil war, rebellion,
            insurrection, military or usurped power, or martial law or
            confiscation by order of any government or public authority, but
            this exclusion shall not apply to loss or damage covered under a
            standard policy with a standard War Exclusion Clause.

      4.    Loss or liability excluded under the provisions of the "Pools,
            Associations and Syndicates Exclusion Clause" attached to and
            forming part of this Contract.

      5.    All liability of the Company arising by contract, operation of law,
            or otherwise, from its participation or membership, whether
            voluntary or involuntary, in any insolvency fund. "Insolvency fund"
            includes any guaranty fund, insolvency fund, plan, pool,
            association, fund or other arrangement, however denominated,
            established or governed, which provides for any assessment of or
            payment or assumption by the Company of part or all of any claim,
            debt, charge, fee or other obligation of an insurer, or its
            successors or assigns, which has been declared by any competent
            authority to be insolvent, or which is otherwise deemed unable to
            meet any claim, debt, charge, fee or other obligation in whole or in
            part.

      6.    Losses in respect of overhead transmission and distribution lines
            and their supporting structures, other than those on or within 300
            meters (or 1,000 feet) of the insured premises. It is understood and
            agreed that public utilities extension and/or suppliers extension
            and/or contingent business interruption coverages are not subject to
            this exclusion, provided that these are not part of a transmitters'
            or distributors' Policy.

      7.    Accident and Health, Casualty, Fidelity and/or Surety business.

      8.    Pollution and seepage coverages excluded under the provisions of the
            "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and
            forming part of this Contract.

      9.    Notwithstanding any other provision to the contrary within this
            Contract or any amendment thereto, it is agreed that this Contract
            excludes loss, damage, cost or expense directly or indirectly caused
            by, contributed to by, resulting from, or arising out of or in
            connection with any act of terrorism, as defined herein, regardless
            of any other cause or event contributing concurrently or in any
            other sequence to the loss.

            An "act of terrorism" includes any act, or preparation in respect of
            action, or threat of action, designed to influence the government de
            jure or de facto of any nation or any political division thereof, or
            in pursuit of political, religious, ideological, or similar purposes
            to intimidate the public or a section of the public of any nation by
            any person or group(s) of persons, whether acting alone or on behalf
            of or in connection with any organization(s) or government(s) de
            jure or de facto, and which:

                  a.    Involves violence against one or more persons; or

                  b.    Involves damage to property; or

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                  c.    Endangers life other than that of the person committing
                        the action; or

                  d.    Creates a risk to health or safety of the public or a
                        section of the public; or

                  e.    Is designed to interfere with or to disrupt an
                        electronic system.

            This Contract also excludes loss, damage, cost or expense directly
            or indirectly caused by, contributed to by, resulting from, or
            arising out of or in connection with any action in controlling,
            preventing, suppressing, retaliating against or responding to any
            act of terrorism.

            Notwithstanding the above and subject otherwise to the terms,
            conditions, and limitations of this Contract, in respect only of
            personal lines this Contract will pay actual loss or damage (but not
            related cost or expense) caused by any act of terrorism provided
            such act is not directly or indirectly caused by, contributed to by,
            resulting from, or arising out of or in connection with biological,
            chemical, or nuclear pollution or contamination.

      10.   Loss or liability in any way or to any extent arising out of the
            actual or alleged presence or actual, alleged or threatened presence
            of fungi including, but not limited to, mold, mildew, mycotoxins,
            microbial volatile organic compounds or other "microbial
            contamination". This includes:

                  a.    Any supervision, instruction, recommendations, warnings
                        or advice given or which should have been given in
                        connection with the above; and

                  b.    Any obligation to share damages with or repay someone
                        else who must pay damages because of such injury or
                        damage.

            For purposes of this exclusion, "microbial contamination" means any
            contamination, either airborne or surface, which arises out of or is
            related to the presence of fungi, mold, mildew, mycotoxins,
            microbial volatile organic compounds or spores, including, without
            limitation, Penicillium, Aspergillus, Fusarium, Aspergillus Flavus
            and Stachybotrys chartarum.

            Losses resulting from the above causes do not in and of themselves
            constitute an event unless arising out of one or more of the
            following perils, in which case this exclusion does not apply:

                  Fire, lightning, explosion, aircraft or vehicle impact,
                  falling objects, windstorm, hail, tornado, cyclone, hurricane,
                  earthquake, volcano, tsunami, flood, freeze or weight of snow.

            Notice of any claims for mold-related losses must be given by the
            Company to the Reinsurer, in writing, within 24 months after the
            commencement date of the loss occurrence to which such claims
            relate.

      11.   Loss or liability excluded under the provisions of the "Electronic
            Data Endorsement B" (NMA 2915) attached to and forming part of this
            Contract.

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                                   DEFINITIONS

A.    "Ultimate net loss" as used herein is defined as the sum or sums
      (including loss in excess of policy limits, extra contractual obligations
      and loss adjustment expense, as hereinafter defined) paid or payable by
      the Company in settlement of claims and in satisfaction of judgments
      rendered on account of such claims, after deduction of all salvage, all
      recoveries and all claims on inuring insurance or reinsurance, whether
      collectible or not. Nothing herein shall be construed to mean that losses
      under this Contract are not recoverable until the Company's ultimate net
      loss has been ascertained.

B.    "Loss in excess of policy limits" and "extra contractual obligations" as
      used herein shall be defined as follows:

      1.    "Loss in excess of policy limits" shall mean 90.0% of any amount
            paid or payable by the Company in excess of its policy limits, but
            otherwise within the terms of its policy, such loss in excess of the
            Company's policy limits having been incurred because of, but not
            limited to, failure by the Company to settle within the policy
            limits or by reason of the Company's alleged or actual negligence,
            fraud or bad faith in rejecting an offer of settlement or in the
            preparation of the defense or in the trial of any action against its
            insured or reinsured or in the preparation or prosecution of an
            appeal consequent upon such an action.

      2.    "Extra contractual obligations" shall mean 90.0% of any punitive,
            exemplary, compensatory or consequential damages paid or payable by
            the Company, not covered by any other provision of this Contract and
            which arise from the handling of any claim on business subject to
            this Contract, such liabilities arising because of, but not limited
            to, failure by the Company to settle within the policy limits or by
            reason of the Company's alleged or actual negligence, fraud or bad
            faith in rejecting an offer of settlement or in the preparation of
            the defense or in the trial of any action against its insured or
            reinsured or in the preparation or prosecution of an appeal
            consequent upon such an action. An extra contractual obligation
            shall be deemed, in all circumstances, to have occurred on the same
            date as the loss covered or alleged to be covered under the policy.

      Notwithstanding anything stated herein, the amount included in the
      ultimate net loss for any one loss occurrence as respects loss in excess
      of policy limits and extra contractual obligations shall not exceed 25.0%
      of the Company's indemnity loss hereunder arising out of that loss
      occurrence.

      Notwithstanding anything stated herein, this Contract shall not apply to
      any loss in excess of policy limits or any extra contractual obligation
      incurred by the Company as a result of any fraudulent and/or criminal act
      by any officer or director 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.

      If any provision of this paragraph B shall be rendered illegal or
      unenforceable by the laws, regulations or public policy of any state, such
      provision shall be considered void in such state, but this shall not
      affect the validity or enforceability of any other provision of this
      Contract or the enforceability of such provision in any other
      jurisdiction.

C.    "Loss adjustment expense" as used herein shall mean expenses assignable to
      the investigation, appraisal, adjustment, settlement, litigation, defense
      and/or appeal of specific claims, regardless of how such expenses are
      classified for statutory reporting purposes. Loss adjustment expense shall
      include, but not be limited to, declaratory judgments, interest on
      judgments, expenses of outside adjusters, and a pro rata share of the
      salaries and expenses of the Company's field employees according to the
      time occupied adjusting such losses and expenses of the Company's
      officials

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      incurred in connection with the losses, but shall not include office
      expenses or salaries of the Company's regular employees.

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                                  LATE PAYMENTS

A.    The provisions of this Article shall not be implemented unless
      specifically invoked, in writing, by one of the parties to this Contract.

B.    In the event any premium, loss or other payment due either party is not
      received by the intermediary named herein (hereinafter referred to as the
      "Intermediary") by the payment due date, the party to whom payment is due
      may, by notifying the Intermediary in writing, require the debtor party to
      pay, and the debtor party agrees to pay, an interest penalty on the amount
      past due calculated for each such payment on the last business day of each
      month as follows:

      1.    The number of full days which have expired since the due date or the
            last monthly calculation, whichever the lesser, times

      2.    1/365ths of the six-month United States Treasury Bill Rate as quoted
            in The Wall Street Journal on the first business day of the month
            for which the calculation is made; times

      3.    The amount past due, including accrued interest.

      It is agreed that interest shall accumulate until payment of the original
      amount due plus interest penalties have been received by the Intermediary.

C.    The establishment of the due date shall, for purposes of this Article, be
      determined as follows:

      1.    As respects the payment of routine deposits and premiums due the
            Reinsurer, the due date shall be as provided for in the applicable
            section of this Contract. In the event a due date is not
            specifically stated for a given payment, it shall be deemed due 30
            days after the date of transmittal by the Intermediary of the
            initial billing for each such payment.

      2.    Any claim or loss payment due the Company hereunder shall be deemed
            due 10 business days after the proof of loss or demand for payment
            is transmitted to the Reinsurer. If such loss or claim payment is
            not received within the 10 days, interest will accrue on the payment
            or amount overdue in accordance with paragraph B above, from the
            date the proof of loss or demand for payment was transmitted to the
            Reinsurer.

      3.    As respects any payment, adjustment or return due either party not
            otherwise provided for in subparagraphs 1 and 2 of paragraph C
            above, the due date shall be as provided for in the applicable
            section of this Contract. In the event a due date is not
            specifically stated for a given payment, it shall be deemed due 10
            business days following transmittal of written notification that the
            provisions of this Article have been invoked.

      For purposes of interest calculations only, amounts due hereunder shall be
      deemed paid upon receipt by the Intermediary.

D.    Nothing herein shall be construed as limiting or prohibiting a subscribing
      reinsurer from contesting the validity of any claim, or from participating
      in the defense of any claim or suit, or prohibiting either party from
      contesting the validity of any payment or from initiating any arbitration
      or other proceeding in accordance with the provisions of this Contract. If
      the debtor party prevails in an arbitration or other proceeding, then any
      interest penalties due hereunder on the amount in dispute shall be null
      and void. If the debtor party loses in such proceeding, then the interest
      penalty on the amount determined to be due hereunder shall be calculated
      in accordance with the provisions set forth above unless otherwise
      determined by such proceedings. If a debtor party advances payment of any
      amount it is contesting, and proves to be correct in its contestation,
      either in whole or in part, the other party shall reimburse the debtor
      party for any such excess payment made plus interest on the excess amount
      calculated in accordance with this Article.

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E.    Interest penalties arising out of the application of this Article that are
      $100 or less from any party shall be waived unless there is a pattern of
      late payments consisting of three or more items over the course of any
      12-month period.

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                                NON BRMA ARTICLES

LOSS OCCURRENCE

A.    The term "loss occurrence" shall mean the sum of all individual losses
      directly occasioned by any one disaster, accident or loss or series of
      disasters, accidents or losses arising out of one event which occurs
      within the area of one state of the United States or province of Canada
      and states or provinces contiguous thereto and to one another. However,
      the duration and extent of any one "loss occurrence" shall be limited to
      all individual losses sustained by the Company occurring during any period
      of 168 consecutive hours arising out of and directly occasioned by the
      same event, except that the term "loss occurrence" shall be further
      defined as follows:

      1.    As regards windstorm, hail, tornado, hurricane, cyclone, including
            ensuing collapse and water damage, all individual losses sustained
            by the Company occurring during any period of 72 consecutive hours
            arising out of and directly occasioned by the same event. However,
            the event need not be limited to one state or province or states or
            provinces contiguous thereto.

      2.    As regards riot, riot attending a strike, civil commotion, vandalism
            and malicious mischief, all individual losses sustained by the
            Company occurring during any period of 72 consecutive hours within
            the area of one municipality or county and the municipalities or
            counties contiguous thereto arising out of and directly occasioned
            by the same event. The maximum duration of 72 consecutive hours may
            be extended in respect of individual losses which occur beyond such
            72 consecutive hours during the continued occupation of an insured's
            premises by strikers, provided such occupation commenced during the
            aforesaid period.

      3.    As regards earthquake (the epicenter of which need not necessarily
            be within the territorial confines referred to in the introductory
            portion of this paragraph) and fire following directly occasioned by
            the earthquake, only those individual fire losses which commence
            during the period of 168 consecutive hours may be included in the
            Company's "loss occurrence."

      4.    As regards "freeze," only individual losses directly occasioned by
            collapse, breakage of glass and water damage (caused by bursting
            frozen pipes and tanks) may be included in the Company's "loss
            occurrence."

      5.    As regards firestorms, brush fires, and other fires or series of
            fires, irrespective of origin (except as provided in subparagraphs 2
            and 3 above), which spread through trees, grassland or other
            vegetation, all individual losses sustained by the Company which
            occur during any period of 168 consecutive hours within a 100-mile
            radius of any one fixed point selected by the Company may be
            included in the Company's "loss occurrence." However, an individual
            loss subject to this subparagraph cannot be included in more than
            one "loss occurrence."

B.    For all those "loss occurrences," other than those referred to in
      subparagraph 2 of paragraph A above, the Company may choose the date and
      time when any such period of consecutive hours commences, provided that it
      is not earlier than the date and time of the occurrence of the first
      recorded individual loss sustained by the Company arising out of that
      disaster, accident or loss, and provided that only one such period of 168
      consecutive hours shall apply with respect to one event, except for any
      "loss occurrence" referred to in subparagraph 1 of paragraph A above where
      only one such period of 72 consecutive hours shall apply with respect to
      one event, regardless of the duration of the event.

C.    As respects those "loss occurrences" referred to in subparagraph 2 of
      paragraph A above, if the disaster, accident or loss occasioned by the
      event is of greater duration than 72 consecutive hours, then the Company
      may divide that disaster, accident or loss into two or more "loss
      occurrences," provided no two periods overlap and no individual loss is
      included in more than one such period and

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      provided that no period commences earlier than the date and time of the
      occurrence of the first recorded individual loss sustained by the Company
      arising out of that disaster, accident or loss.

D.    No individual losses occasioned by an event that would be covered by 72
      hours clauses may be included in any "loss occurrence" claimed under the
      168 hours provision.

FLORIDA HURRICANE CATASTROPHE FUND

A.    Any loss reimbursement paid or payable to the Company under the Florida
      Hurricane Catastrophe Fund (FHCF) as a result of loss occurrences
      commencing during the term of this Contract shall inure to the benefit of
      this Contract. Further, any FHCF loss reimbursement shall be deemed to be
      paid to the Company in accordance with the reimbursement contract between
      the Company and the State Board of Administration of the State of Florida
      at the full payout level set forth therein and will be deemed not to be
      reduced by any reduction or exhaustion of the FHCF's claims paying
      capacity.

B.    Prior to the determination of the Company's FHCF retention and payout, if
      any, under the reimbursement contract, the Reinsurer's liability hereunder
      will be determined provisionally based on the projected payout, determined
      in accordance with the provisions of the reimbursement contract. Following
      determination of the payout under the reimbursement contract, the ultimate
      net loss under this Contract will be recalculated. If, as a result of such
      calculation, the loss to the Reinsurer in any one loss occurrence is less
      than the amount previously paid by the Reinsurer, the Company shall
      promptly remit the difference to the Reinsurer. If the loss to the
      Reinsurer in any one loss occurrence is greater than the amount previously
      paid by the Reinsurer, the Reinsurer shall promptly remit the difference
      to the Company.

C.    If an FHCF reimbursement amount is based on the Company's losses in more
      than one loss occurrence and the FHCF does not designate the amount
      allocable to each loss occurrence, the FHCF reimbursement amount shall be
      prorated in the proportion that the Company's losses in each loss
      occurrence bear to the Company's total losses arising out of all loss
      occurrences to which the FHCF reimbursement applies.

D.    Any reimbursement premiums or emergency assessment paid by the Company
      under the FHCF shall be deemed to be premiums paid for inuring
      reinsurance.

LOSS NOTICES AND SETTLEMENTS

A.    Whenever losses sustained by the Company appear likely to result in a
      claim hereunder, the Company shall notify the Reinsurer, and the Reinsurer
      shall have the right to participate in the adjustment of such losses at
      its own expense.

B.    All loss settlements made by the Company, provided they are within the
      terms of this Contract, shall be binding upon the Reinsurer, and the
      Reinsurer agrees to pay all amounts for which it may be liable upon
      receipt of reasonable evidence of the amount paid (or scheduled to be
      paid) by the Company.

SALVAGE AND SUBROGATION

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to

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enforce its rights to salvage or subrogation relating to any loss, a part of
which loss was sustained by the Reinsurer, and to prosecute all claims arising
out of such rights.

LIABILITY OF THE REINSURER

A.    The liability of the Reinsurer shall follow that of the Company in every
      case and be subject in all respects to all the general and specific
      stipulations, clauses, waivers and modifications of the Company's policies
      and any endorsements thereon. However, in no event shall this be construed
      in any way to provide coverage outside the terms and conditions set forth
      in this Contract.

B.    Nothing herein shall in any manner create any obligations or establish any
      rights against the Reinsurer in favor of any third party or any persons
      not parties to this Contract.

RESERVE REQUIREMENTS

A.    If the Reinsurer is unauthorized in any state of the United States of
      America or the District of Columbia, the Reinsurer agrees to fund its
      share of the Company's ceded United States unearned premium and
      outstanding loss and loss adjustment expense reserves (including all case
      reserves plus any reasonable amount estimated to be unreported from known
      loss occurrences) by:

      1.    Clean, irrevocable and unconditional letters of credit issued and
            confirmed, if confirmation is required by the insurance regulatory
            authorities involved, by a bank or banks meeting the NAIC Securities
            Valuation Office credit standards for issuers of letters of credit
            and acceptable to said insurance regulatory authorities; and/or

      2.    Escrow accounts for the benefit of the Company; and/or

      3.    Cash advances;

      if, without such funding, a penalty would accrue to the Company on any
      financial statement it is required to file with the insurance regulatory
      authorities involved. The Reinsurer, at its sole option, may fund in other
      than cash if its method and form of funding are acceptable to the
      insurance regulatory authorities involved.

B.    If the Reinsurer is unauthorized in any province or jurisdiction of
      Canada, the Reinsurer agrees to fund 115% of its share of the Company's
      ceded Canadian unearned premium and outstanding loss and loss adjustment
      expense reserves (including all case reserves plus any reasonable amount
      estimated to be unreported from known loss occurrences) by:

      1.    A clean, irrevocable and unconditional letter of credit issued and
            confirmed, if confirmation is required by the insurance regulatory
            authorities involved, by a Canadian bank or banks meeting the NAIC
            Securities Valuation Office credit standards for issuers of letters
            of credit and acceptable to said insurance regulatory authorities,
            for no more than 15/115ths of the total funding required; and/or

      2.    Cash advances for the remaining balance of the funding required;

      if, without such funding, a penalty would accrue to the Company on any
      financial statement it is required to file with the insurance regulatory
      authorities involved.

C.    With regard to funding in whole or in part by letters of credit, it is
      agreed that each letter of credit will be in a form acceptable to
      insurance regulatory authorities involved, will be issued for a term of at
      least one year and will include an "evergreen clause," which automatically
      extends the term for at least one additional year at each expiration date
      unless written notice of non-renewal is given to the

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      Company not less than 30 days prior to said expiration date. The Company
      and the Reinsurer further agree, notwithstanding anything to the contrary
      in this Contract, that said letters of credit may be drawn upon by the
      Company or its successors in interest at any time, without diminution
      because of the insolvency of the Company or the Reinsurer, but only for
      one or more of the following purposes:

      1.    To reimburse itself for the Reinsurer's share of unearned premiums
            returned to insureds on account of policy cancellations, unless paid
            in cash by the Reinsurer;

      2.    To reimburse itself for the Reinsurer's share of losses and/or loss
            adjustment expense paid under the terms of policies reinsured
            hereunder, unless paid in cash by the Reinsurer;

      3.    To reimburse itself for the Reinsurer's share of any other amounts
            claimed to be due hereunder, unless paid in cash by the Reinsurer;

      4.    To fund a cash account in an amount equal to the Reinsurer's share
            of any ceded unearned premium and/or outstanding loss and loss
            adjustment expense reserves (including all case reserves plus any
            reasonable amount estimated to be unreported from known loss
            occurrences) funded by means of a letter of credit which is under
            non-renewal notice, if said letter of credit has not been renewed or
            replaced by the Reinsurer 10 days prior to its expiration date;

      5.    To refund to the Reinsurer any sum in excess of the actual amount
            required to fund the Reinsurer's share of the Company's ceded
            unearned premium and/or outstanding loss and loss adjustment expense
            reserves (including all case reserves plus any reasonable amount
            estimated to be unreported from known loss occurrences), if so
            requested by the Reinsurer.

      In the event the amount drawn by the Company on any letter of credit is in
      excess of the actual amount required for C(1), C(2) or C(4), or in the
      case of C(3), the actual amount determined to be due, the Company shall
      promptly return to the Reinsurer the excess amount so drawn.

INSOLVENCY

A.    In the event of the insolvency of one or more of the reinsured companies,
      this reinsurance shall be payable directly to the company or to its
      liquidator, receiver, conservator or statutory successor 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
      indicating the policy or bond reinsured which claim would involve a
      possible liability on the part of the Reinsurer within a reasonable time
      after such claim is filed in the conservation or liquidation proceeding or
      in the receivership, and 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.

B.    Where two or more reinsurers are involved in the same claim and a majority
      in interest elect to interpose defense to such claim, the expense shall be
      apportioned in accordance with the terms of this Contract as though such
      expense had been incurred by the company.

C.    It is further understood and agreed that, in the event of the insolvency
      of one or more of the reinsured companies, the reinsurance under this
      Contract shall be payable directly by the Reinsurer

Page 13

<PAGE>

                                                                 [BENFIELD LOGO]

      to the company or to its liquidator, receiver or statutory successor,
      except as provided by Section 4118(a) of the New York Insurance Law or
      except (1) where this Contract specifically provides another payee of such
      reinsurance in the event of the insolvency of the company or (2) where the
      Reinsurer with the consent of the direct insured or insureds has assumed
      such policy obligations of the company as direct obligations of the
      Reinsurer to the payees under such policies and in substitution for the
      obligations of the company to such payees.

ARBITRATION

A.    As a condition precedent to any right of action hereunder, any dispute or
      difference between the Company and any Reinsurer relating to the
      interpretation or performance of this Contract, including its formation or
      validity, or any transaction under this Contract, whether arising before
      or after termination, shall be submitted to arbitration.

B.    If more than one reinsurer is involved in the same dispute, all such
      reinsurers shall constitute and act as one party for purposes of this
      Article provided that communication shall be made by the Company to each
      of the reinsurers constituting the one party, and provided, however, that
      nothing therein shall impair the rights of such reinsurers to assert
      several, rather than joint, defenses or claims, nor be construed as
      changing the liability of the Reinsurer under the terms of this Contract
      from several to joint.

C.    Upon written request of any party, each party shall choose an arbitrator
      and the two chosen shall select a third arbitrator. If either party
      refuses or neglects to appoint an arbitrator within 30 days after receipt
      of the written request for arbitration, the requesting party may appoint a
      second arbitrator. If the two arbitrators fail to agree on the selection
      of a third arbitrator within 30 days of their appointment, the Company
      shall petition the American Arbitration Association to appoint the third
      arbitrator. If the American Arbitration Association fails to appoint the
      third arbitrator within 30 days after it has been requested to do so,
      either party may request a justice of a court of general jurisdiction of
      the state in which the arbitration is to be held to appoint the third
      arbitrator. All arbitrators shall be active or retired officers of
      insurance or reinsurance companies, or Lloyd's London Underwriters, and
      disinterested in the outcome of the arbitration. Each party shall submit
      its case to the arbitrators within 30 days of the appointment of the third
      arbitrator.

D.    The parties hereby waive all objections to the method of selection of the
      arbitrators, it being the intention of both sides that all the arbitrators
      be chosen from those submitted by the parties.

E.    The arbitrators shall have the power to determine all procedural rules for
      the holding of the arbitration including but not limited to inspection of
      documents, examination of witnesses and any other matter relating to the
      conduct of the arbitration. The arbitrators shall interpret this Contract
      as an honorable engagement and not as merely a legal obligation; they are
      relieved of all judicial formalities and may abstain from following the
      strict rules of law. The arbitrators may award interest and costs. Each
      party shall bear the expense of its own arbitrator and shall share equally
      with the other party the expenses of the third arbitrator and of the
      arbitration.

F.    The decision in writing of the majority of the arbitrators shall be final
      and binding upon both parties. Judgment may be entered upon the final
      decision of the arbitrators in any court having jurisdiction. The
      arbitration shall take place in Pinellas Park, Florida, unless otherwise
      mutually agreed between the Company and the Reinsurer.

G.    This Article shall remain in full force and effect in the event any other
      provision of this Contract shall be found invalid or non-binding.

H.    All time limitations stated in this Article may be amended by mutual
      consent of the parties, and will be amended automatically to the extent
      made necessary by any circumstances beyond the control of the parties.

Page 14

<PAGE>

                                                                 [BENFIELD LOGO]

AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the
first named company shall be deemed the agent of the other reinsured companies
for purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.

GOVERNING LAW

This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Florida exclusive of the rules with
respect to conflicts of law, except as to rules with respect to credit for
reinsurance in which case the applicable rules of all states shall apply.

CONFIDENTIALITY

The Reinsurer, except with the express prior written consent of the Company,
shall not directly or indirectly, communicate, disclose or divulge to any third
party, any knowledge or information that may be acquired either directly or
indirectly as a result of the inspection of the Company's books, records and
papers. The restrictions as outlined in this Article shall not apply to
communication or disclosures that the Reinsurer is required to make to its
statutory auditors, retrocessionaires, legal counsel, arbitrators involved in
any arbitration procedures under this Contract or disclosures required upon
subpoena or other dully-issued order of a court or other governmental agency or
regulatory authority.

SEVERABILITY

If any provision of this Contract should be invalid under applicable laws, the
latter shall control but only to the extent of the conflict without affecting
the remaining provisions of this Contract.

SERVICE OF SUIT

(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities. This
Article is not intended to conflict with or override the parties' obligations to
arbitrate their disputes in accordance with the Arbitration Article)

A.    It is agreed that in the event the Reinsurer fails to pay any amount
      claimed to be due hereunder, the Reinsurer, at the request of the Company,
      will submit to the jurisdiction of any court of competent jurisdiction
      within the United States. Nothing in this Article constitutes or should be
      understood to constitute a waiver of the Reinsurer's rights to commence an
      action in any court of competent jurisdiction in the United States, to
      remove an action to a United States District Court, or to seek a transfer
      of a case to another court as permitted by the laws of the United States
      or of any state in the United States.

B.    Further, pursuant to any statute of any state, territory or district of
      the United States which makes provision therefore, the Reinsurer hereby
      designates the party named in its Interests and Liabilities Agreement, or
      if no party is named therein, the Superintendent, Commissioner or Director
      of Insurance or other officer specified for that purpose in the statute,
      or his successor or successors in office, as its true and lawful attorney
      upon whom may be served any lawful process in any action, suit or
      proceeding instituted by or on behalf of the Company or any beneficiary
      hereunder arising out of this Contract.

Page 15

<PAGE>

                                                                 [BENFIELD LOGO]

                                   SCHEDULE A

                          $6,500,000 EXCESS $3,500,000
            FLORIDA ONLY FIFTH EVENT CATASTROPHE REINSURANCE CONTRACT
                          EFFECTIVE: SEPTEMBER 24, 2004

                                    issued to

                     Liberty American Insurance Group, Inc.
                             Pinellas Park, Florida

<TABLE>
<CAPTION>
      LAYER         REINSURER'S PER OCCURRENCE LIMIT   COMPANY'S RETENTION    FUNDS OTHERWISE RECOVERABLE
-----------------   --------------------------------   -------------------    ---------------------------
<S>                 <C>                                <C>                    <C>
Underlying Excess             $ 3,500,000                   $3,500,000                $14,000,000
   First Excess               $13,000,000*                  $7,000,000                $12,000,000
                              ------------                                            -----------
                              $ 6,500,000                                             $26,000,000
</TABLE>

*$3,000,000 part of $10,000,000 per occurrence applicable to Funds Otherwise
Recoverable under the first excess layer.

Page 16Exhibit 10.1 

SNAP-ON INCORPORATED

COMBINED INCENTIVE STOCK OPTION AND NON-QUALIFIED STOCK OPTION 
AGREEMENT WITH VESTING
PROVISIONS 

        THIS
COMBINED INCENTIVE STOCK OPTION AND NON-QUALIFIED STOCK OPTION AGREEMENT, dated the [ ]
day of [Month], [YEAR], is granted by SNAP-ON INCORPORATED (the “Company”) to
[Name] (the “Optionee”) pursuant to the Company’s 2001 Incentive Stock and
Awards Plan (the “Plan”). 

        WHEREAS,
the Company believes it to be in the best interests of the Company, its subsidiaries and
its stockholders for its officers and other key employees to obtain or increase their
stock ownership interest in the Company so that they will have a greater incentive to work
for and manage the Company’s affairs in such a way that its shares may become more
valuable; and 

        WHEREAS,
the Optionee is employed by the Company or one of its subsidiaries as an officer or other
key employee and has been selected by the Committee to receive an option; 

        NOW,
THEREFORE, in consideration of the premises and of the services to be performed by the
Optionee, the Company and the Optionee hereby agree as follows: 

        1.
OPTION GRANT  

        Subject
to the terms of this Agreement and the Plan, the Company grants to the Optionee an option
to purchase a total of [#] shares of Common Stock of the Company at a price of [$] per
share divided as follows: 

        (a)              A
portion of this option to purchase [#] shares of Common Stock is intended to
          qualify as an “incentive stock option” within the meaning of Section
          422 of the Internal Revenue Code of 1986, as amended (the “Code”).  

        (b)              The
remaining portion of this option to purchase [#] shares of Common Stock is not intended
to qualify as an “incentive stock option” within           the meaning of
Section 422 of the Code, which this Agreement refers to as           “non-qualified”.  

        2.
TIME OF EXERCISE  

        Subject
to the termination provisions of paragraphs 3, 4 and 5, and provided that the Optionee is
an employee of the Company or one of its subsidiaries on such date, 

        (a)              the
Optionee may purchase [#] of the incentive option shares on or after           [Date] [and
may purchase an additional [#] of the incentive option shares           on or after
[Date]]; and  

        (b)              the
Optionee may purchase [#] of the non-qualified option shares on or after           [Date] [and
may purchase an additional [#]of the non-qualified           option shares on or
after [Date]].  

If the Optionee terminates employment
from the Company and its subsidiaries, only those option shares for which the right to
purchase has accrued as of the date of such termination may be purchased after such
termination (subject to the provisions of paragraphs 3, 4 and 5). If the Optionee takes an
unpaid leave of absence, then the Committee may defer the dates on which the Optionee may
first purchase the option shares to take into account such leave of absence. 

        3.
 TERMINATION OF OPTION  

            A.                 INCENTIVE
STOCK OPTION 

        The
Optionee may not exercise the portion of this option that is intended to qualify as an
incentive stock option after, and this portion of the option will terminate without notice
to the Optionee on, the earlier of: 

        (a)              Three
(3) months after the date of the termination of the Optionee’s           employment
from the Company and its subsidiaries for any reason other than for           Cause or
due to Disability or death;  

        (b)              On
the date the Company or one of its subsidiaries terminates the           Optionee’s
employment for Cause;  

        (c)              Twelve
(12) months after the date of the termination of the Optionee’s           employment
from the Company and its subsidiaries by reason of death or           Disability; or  

        (d)              Ten
(10) years from the date of this Agreement.  

2 

            B.
NON-QUALIFIED STOCK OPTION  

        The
Optionee may not exercise the portion of this option that is non-qualified after, and this
portion of the option will terminate without notice to the Optionee on, the earlier of: 

        (a)              Six
(6) months after the date of the Optionee’s termination of employment           from
the Company and its subsidiaries for any reason other than for Cause or due           to
Disability, death or Retirement;  

        (b)              The
date the Company or one of its subsidiaries terminates the Optionee’s
          employment for Cause;  

        (c)              Twelve
(12) months after the date of termination of the Optionee’s           employment
from the Company and its subsidiaries by reason of death or           Disability;  

        (d)              Ten
(10) years after the Optionee terminates employment from the Company and its
          subsidiaries on account of Retirement; or  

        (e)     Ten
(10) years from the date of this Agreement. 

        For
purposes of this paragraph 3, termination shall occur at 11:59 P.M. (Central Time) on the
applicable date described above, except that if the Optionee is terminated for Cause,
termination shall occur immediately at the time of such termination. 

        The
Company is under no obligation, whatsoever, to update, remind or notify Optionee of any
expiration date prior to the expiration of the options, regardless of whether Company
provides an update to Optionee or any other Plan Participant. 

        If
the Company divests a subsidiary, division or other business unit, then the Committee will
have the discretion to determine whether or not such divestiture of a subsidiary, division
or other business unit results in termination of the Optionee’s employment from the
Company and its subsidiaries for purposes of this Agreement, which discretion the
Committee may exercise on a case by case basis. 

        In
addition, if the Optionee takes a military, sick leave or other bona fide leave of absence
from the Company and its subsidiaries, the Optionee will be considered to have terminated
employment from the Company and its subsidiaries on the later of (i) the 91st
day of such leave, or (ii) the last day that the Optionee’s right to reemployment
following the end of such leave is guaranteed by law or contract with the Company or a
subsidiary. 

3 

        4.
TERMINATION FOR CAUSE  

        If
the Company or one of its subsidiaries terminates the Optionee’s employment for
Cause, then the Committee may determine that any exercises of this option within the six
(6) month period prior to such termination will be deemed of no force and effect and the
Committee may pursue any remedy or proceeding available to compel the Optionee to return
to the Company any profits the Optionee realized (directly or indirectly) from exercising
this option during such period. 

        5.
DETRIMENTAL ACTIVITY 

        (a)              If,
within one (1) year after the Optionee’s termination of employment from
          the Company and its subsidiaries, the Company becomes aware that the Optionee
          had engaged in activity prior to his or her termination that would have
          constituted Cause for termination had the Company known of such activity, then
          the Committee may re-characterize the Optionee’s termination as a
          termination for Cause and/or may redetermine the date of such termination. In
          such an event, the Optionee’s right to exercise this option will be
          terminated as of the Optionee’s deemed date of termination for Cause.  

        (b)              If,
within three (3) months after the Optionee’s termination of employment
          from the Company and its subsidiaries, the Company becomes aware that the
          Optionee has engaged in Detrimental Activity subsequent to his or her
          termination, then the Committee may determine that the Optionee’s right to
          exercise this option will be terminated as of the date the Optionee engaged in
          the Detrimental Activity.  

        (c)              If
the Optionee exercised this option during the period beginning six (6) months
          before the deemed date of termination for Cause in accordance with (a) above,
or           the date the Optionee engaged in Detrimental Activity in accordance with (b)
          above, and ending on the date of the Committee’s determination, then such
          exercise will be deemed of no force and effect and the Committee reserves its
          right to pursue any remedy or proceeding available to compel the Optionee to
          return to the Company any profits the Optionee realized (directly or
indirectly)           from exercising this option during such period.  

        (d)              If
an allegation of Detrimental Activity by the Optionee is made to the           Committee,
then the Optionee’s ability to exercise this option will be           suspended for
the period the Committee determines to permit the Committee to           investigate the
allegation.  

        (e)              Notwithstanding
any other provision hereof, the provisions of this Section 5           shall be null and
void and of no effect upon the occurrence of a Change of           Control (as defined in
the Plan).  

4 

        6.
EXERCISE PROCEDURES 

        (a)    
                    The Optionee may exercise this option in whole or in part only with
respect to                     any shares for which the right to exercise shall have
accrued pursuant to                     paragraph 2 and only so long as paragraphs 3 and
5 do not prohibit such                     exercise.  

        (b)    
                    This option may be exercised by delivering a written notice of option
exercise                     to the Company’s Human Resources Department at Kenosha,
Wisconsin,                     accompanied by payment of the purchase price and such
additional amount (if any)                     determined by the Human Resources
Department as necessary to satisfy the                     Company’s tax withholding
obligations, and such other documents or                     representations as the
Company may reasonably request to comply with securities,                     tax or
other laws then applicable to the exercise of the option. Delivery may be
                    made in person, by nationally-recognized delivery service that
guarantees                     overnight delivery, or by facsimile. A notice of option
exercise that the Human                     Resources Department receives after the date
of termination (as provided in                     paragraph 3) shall be null and void.  

        (c)    
                    The Optionee may pay the purchase price in one or more of the
following forms:  

	 	        i.
                    a check payable to the order of the Company for the purchase price of
the shares                     being purchased; or  

	 	        ii.
                    delivery of shares of Common Stock (including by attestation) that
the Optionee                     has owned for at least six (6) months and that have a
Fair Market Value                     (determined on the date of delivery) equal to the
purchase price of the shares                     being purchased; or  

	 	        iii.
                    delivery (including by facsimile) to the Human Resources Department
of the                     Company at Kenosha, Wisconsin, of an executed irrevocable
option exercise form                     together with irrevocable instructions, in a
form acceptable to the Company, to                     a broker-dealer to sell or margin
a sufficient portion of the shares of Common                     Stock issuable upon
exercise of this option and deliver the sale or margin loan                     proceeds
directly to the Company to pay for the exercise price.  

        (d)    
                    The Optionee may satisfy any tax withholding obligation of the
Company arising                     from the exercise of this option, in whole or in
part, by paying such tax                     obligation in cash or by check made payable
to the Company, or by electing to                     have the Company withhold shares of
Common Stock having a Fair Market Value on                     the date of exercise equal
to the amount required to be withheld, subject to                     such rules as the
Committee may adopt. In any event, the Company reserves the                     right to
withhold from any compensation otherwise payable to the Optionee such
                    amount as the Company determines is necessary to satisfy the Company’s
tax                     withholding obligations arising from the exercise of this option.  

5 

        7.
DEFINITIONS 

        (a)              “Cause” means
termination of employment as a result of (i) the failure           of the Optionee to
perform or observe any of the terms or provisions of any           written employment
agreement between the Optionee and the Company or its           subsidiaries or, if no
written agreement exists, the gross dereliction of the           Optionee’s duties
with respect to the Company or any of its subsidiaries,           as applicable; (ii) the
failure of the Optionee to comply fully with the lawful           directives of the Board
of Directors of the Company or its subsidiaries, as           applicable, or the officers
or supervisory employees to whom the Optionee is           reporting; (iii) the Optionee’s
dishonesty, misconduct, misappropriation of           funds, or disloyalty or
disparagement of the Company, any of its subsidiaries,           or its management or
employees; (iv) engaging in Detrimental Activity prior to           termination of
employment, or (v) other proper cause determined in good faith by           the
Committee. Notwithstanding the foregoing, if the Optionee is subject to a
          written agreement with the Company or any of its subsidiaries that contains a
          definition of “Cause” that is different from the definition provided
          in this paragraph, then the definition of “Cause” in such other
          agreement shall apply in lieu of the definition provided in this paragraph.  

        (b)              “Detrimental
Activity” means activity that the Committee determines in           its sole
discretion to be detrimental to the interests of the Company or any of           its
subsidiaries, including but not limited to situations where the Optionee:           (i)
divulges trade secrets of the Company or its subsidiaries, proprietary data           or
other confidential information relating to the Company or any subsidiary or           to
the business of the Company or any subsidiary, (ii) enters into employment           with
a competitor under circumstances suggesting that such Optionee will be           using
unique or special knowledge gained as a Company or subsidiary employee to
          compete with the Company or any subsidiary, (iii) uses information obtained
          during the course of his or her prior employment for his or her own purposes,
          such as for the solicitation of business in competition with the Company, (iv)
          is determined to have engaged (whether or not prior to termination due to
          Retirement) in either gross misconduct or criminal activity harmful to the
          Company, or (v) takes any action that harms the business interests, reputation,
          or goodwill of the Company and/or its subsidiaries.  

        (c)              “Disability” means
permanently and totally disabled within the meaning           of section 22(e)(3) of the
Internal Revenue Code of 1986, as amended.  

        (d)              “Retirement” means
termination of employment from the Company and its           subsidiaries on or after
satisfying the early or normal retirement age and           service conditions specified
in the retirement policy or retirement plan of the           Company or one of its
subsidiaries applicable to such Optionee as in effect at           the time of such
termination.  

        8.
OPTION AS COLLATERAL 

        The
Optionee may not assign or mortgage this option, or pledge this option as any type of
security or collateral. Any attempted assignment, mortgage or pledge of this option in
violation of this paragraph 8 will be null and void and have no legal effect. 

6 

        9.
NON-TRANSFERABILITY; DEATH  

            A.
INCENTIVE STOCK OPTION  

The following provisions apply only
to the portion of this option intended to qualify as an incentive stock option: 

                (i)                 Except
as the Committee otherwise provides, the Optionee may not transfer this           option
other than by will or the laws of descent and distribution, and only the
          Optionee may exercise this option during his or her lifetime. However, if the
          Committee determines that the Optionee is unable to exercise this option as a
          result of incapacity or Disability, then the Committee may permit the
          Optionee’s guardian or an individual who has obtained an appropriate power
          of attorney to exercise this option on behalf of the Optionee. In such an
event,           neither the Committee nor the Company will be liable for any losses
resulting           from such exercise or from the disposition of shares acquired upon
such           exercise.  

                (ii)                 If
the Optionee dies while this option is outstanding, then the Optionee’s
          estate or the person to whom this option passes by will or the laws of descent
          and distribution may exercise this option in the manner described in paragraph
          6, but only within a period of (A) twelve (12) months after the Optionee’s
          death or (B) ten (10) years from the date of this Agreement, whichever period
is           shorter. In such event, this option shall continue to be subject to the same
          terms and conditions as were applicable immediately prior to the Optionee’s
          death, provided that for purposes of this Agreement, the term           “Optionee” as
used in paragraphs 8, 10, 11, 12, 13 and 14 shall be           deemed to refer to the
person(s) who has(ve) the right to exercise the option           after the Optionee’s
death. The Company disclaims any obligation to provide           notice to any person who
has the right to exercise this option of circumstances           triggering termination
of this option.  

            B.
NON-QUALIFIED STOCK OPTION  

The following provisions apply only
to the portion of this option that is non-qualified: 

                (i)                 Except
as provided in paragraph 9.B(iii), or as the Committee otherwise           provides, the
Optionee may not transfer this option other than by will or the           laws of descent
and distribution, and only the Optionee may exercise this option           during his or
her lifetime. However, if the Committee determines that the           Optionee is unable
to exercise this option as a result of incapacity or           Disability, then the
Committee may permit the Optionee’s guardian or an           individual who has
obtained an appropriate power of attorney to exercise this           option on behalf of
the Optionee. In such an event, neither the Committee nor           the Company will be
liable for any losses resulting from such exercise or from           the disposition of
shares acquired upon such exercise.  

                (ii)                 If
the Optionee dies while this option is outstanding, then the Optionee’s
          estate or the person to whom this option passes by will or the laws of descent
          and distribution may exercise this option in the manner described in paragraph
          6, but only within a period of (A) twelve (12) months after the Optionee’s
          death or (B) ten (10) years from the date of this Agreement, whichever period
is           shorter.  

7 

                (iii)                 The
Optionee may transfer this option to (A) his or her spouse, children or
          grandchildren   (“Immediate Family Members”); (B) a trust or trusts
for the exclusive benefit of such Immediate Family Members; or (C) a partnership in which
such Immediate Family Members are the only partners. The transfer will be effective only
if the Optionee receives no consideration for such transfer. Subsequent transfers of the
transferred option are prohibited except transfers to those persons or entities to which
the Optionee could have transferred this option or transfers otherwise in accordance with
this paragraph 9.B.  

        Following
any transfer (whether voluntarily or pursuant to will or the law of descent and
distribution) under this paragraph 9.B, this option shall continue to be subject to the
same terms and conditions as were applicable immediately prior to such transfer, provided
that for purposes of this Agreement, the term “Optionee” as used in paragraphs
8, 10, 11, 12, 13 and 14 shall be deemed to refer to the transferee. The Company disclaims
any obligation to provide notice to any person who has the right to exercise this option
of circumstances triggering termination of this option. 

        10.
REGISTRATION  

        If
the Company is advised by its counsel that shares deliverable upon exercise of this option
are required to be registered under the Securities Act of 1933 (“Act”) or any
applicable state or foreign securities laws, or that delivery of the shares must be
accompanied or preceded by a prospectus meeting the requirements of that Act or such state
or foreign securities laws, then the Company will use its best efforts to effect the
registration or provide the prospectus within a reasonable time following the
Company’s receipt of written notice of option exercise relating to this option, but
delivery of shares by the Company may be deferred until the registration is effected or
the prospectus is available. The Optionee shall have no interest in shares covered by this
option until certificates for the shares are issued. 

        11.
ADJUSTMENTS AND CHANGE OF CONTROL  

        The
number and type of shares subject to this option and the option price may be adjusted, or
this option may be assumed, cancelled or otherwise changed, in the event of certain
transactions, as provided in Section 12 of the Plan. Upon a change of control, as defined
in the Plan, the Optionee shall have the rights specified in Section 12 of the Plan. 

8 

        12.
AMENDMENT OR MODIFICATION  

        Except
as provided in paragraph 11, no term or provision of this Agreement may be amended,
modified or supplemented orally, but only by an instrument in writing signed by the party
against which or whom the enforcement of the amendment, modification or supplement is
sought. 

        13. LIMITED
INTEREST 

        (a)              The
Optionee has no rights as a stockholder as a result of the grant of the           option
until this option is exercised, the exercise price and applicable           withholding
taxes are paid, and the shares issued.  

        (b)              The
grant of this option does not confer on the Optionee any right to continue           as
an employee, nor interfere in any way with the right of the Company or any of
          its subsidiaries to terminate the Optionee at any time.  

        (c)              The
grant of this option shall not affect in any way the right or power of the
          Company or any of its subsidiaries to make or authorize any or all adjustments,
          recapitalizations, reorganizations, or other changes in the Company’s or
          any subsidiary’s capital structure or its business, or any merger,
          consolidation or business combination of the Company or any subsidiary, or any
          issuance or modification of any term, condition, or covenant of any bond,
          debenture, debt, preferred stock or other instrument ahead of or affecting the
          Common Stock or the rights of the holders of Common Stock, or the dissolution
or           liquidation of the Company or any subsidiary, or any sale or transfer of all
or           any part of its assets or business or any other Company or subsidiary act or
          proceeding, whether of a similar character or otherwise.  

        14. LIMITS
ON INCENTIVE STOCK OPTIONS 

        To the
extent that the aggregate Fair Market Value of the Common Stock in respect of which the
portion of this option that is intended to qualify as an “incentive stock
option” is exercisable for the first time by the Optionee during a single calendar
year (determined as of the date of this Agreement), plus the aggregate Fair Market Value
of any shares of Common Stock subject to incentive stock options previously granted to the
Optionee by the Company or any subsidiary (determined as of their respective dates of
grant) that are exercisable for the first time by the Optionee during a single calendar
year, exceeds one hundred thousand dollars ($100,000), such portion of this option as to
any such excess shall be considered a non-qualified stock option in addition to the
portion of this option that is non-qualified as contemplated by paragraph 1(b). 

9 

        15.
ACTION OR PROCEEDING; SUBJECT TO PLAN  

        The
Company may require that any legal action or proceeding with respect to the Plan or this
option be determined in a bench trial. 

        THE
OPTIONEE ACKNOWLEDGES RECEIPT OF A COPY OF THE PLAN. ALL PARTIES ACKNOWLEDGE THAT THIS
OPTION IS GRANTED UNDER AND PURSUANT TO THE PLAN, WHICH SHALL GOVERN ALL RIGHTS,
INTERESTS, OBLIGATIONS, AND UNDERTAKINGS OF BOTH THE COMPANY AND THE OPTIONEE. ALL
CAPITALIZED TERMS NOT OTHERWISE DEFINED IN THIS OPTION SHALL HAVE THE MEANINGS ASSIGNED TO
SUCH TERMS IN THE PLAN. 

        OPTIONEE
HEREBY ACKNOWLEDGES THAT IT IS OPTIONEE’S RESPONSIBILITY TO EXERCISE THE OPTIONS
PRIOR TO THEIR EXPIRATION. OPTIONEE FURTHER ACKNOWLEDGES THAT COMPANY IS UNDER NO
OBLIGATION, WHATSOEVER, TO UPDATE, REMIND OR NOTIFY OPTIONEE OF ANY EXPIRATION DATE PRIOR
TO THE EXPIRATION OF THE OPTIONS, REGARDLESS OF WHETHER COMPANY PROVIDES AN UPDATE TO
OPTIONEE OR ANY OTHER PLAN PARTICIPANT. 

        16.
COUNTERPARTS 

        This
Agreement may be executed in one or more counterparts, each of which will be deemed to be
an original but all of which together will constitute one and the same instrument. 

        IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer and the Optionee has executed this Agreement all as of the day and date
first above written. 

		SNAP-ON INCORPORATED
	

 	By_____________________________________
	

 	_______________________________________
		[Optionee]
	

 	_______________________________________
	 	Social Security Number

10

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