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EXHIBIT 10
16 February 1996
Mr. Robert S. Kielbas
1610 Galloway Drive
Barrington, IL 60010
Dear Mr. Kielbas:
1. SECONDMENT IN HONG KONG
This letter confirms the terms and conditions of your secondment to the
Intercargo Insurance Company H.K. Limited, the "Away Base Office," as Chief
Executive Officer and President.
2. SECONDMENT PERIOD
The secondment will take place from April 1, 1996, subject to you securing
the appropriate Hong Kong Visas and subject to operational requirements, and
will continue through March 31, 1998. The expression "Secondment Period" in
this letter means the period described herein.
3. TO WHOM RESPONSIBLE
You will be responsible to the Chairman of the Board and President of
Intercargo Corporation in the United States, or to such other official as he
may nominate.
4. EMPLOYMENT
Your employment while in Hong Kong will be by Intercargo Insurance Company
H.K. Limited and your terms and conditions of employment will be as specified
by this letter. It is a condition of secondment that you possess all necessary
residence papers and that you are medically fit to reside in Hong Kong.
5. AWAY BASE REMUNERATION
Your Away Base Salary will be paid in Hong Kong dollars at a rate of
$1,500,000 per annum inclusive of all foreign service and cost of living
allowances. For the avoidance of doubt, you should note that you will not be
reimbursed or indemnified for any Hong Kong tax liabilities arising from your
remuneration or from any non cash benefits which you may receive from the Away
Base Office as a part of your secondment package.
6. HOME BASE
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Your home base salary is not payable under this contract during the
Secondment Period. It will be reviewed on the same basis and at the same time
as if you had remained in the United States, so as to provide a notational U.S.
salary in line with your substantive position. Your home base salary bears no
direct relationship to your away base salary, but certain benefits are
contingent upon it.
7. PENSION
It is intended that you will remain a member of your home base pension
plan. This will be discussed with you under separate cover.
8. FAMILY STATUS
Your family status will be married.
9. FARES AND EXPENSES
At the beginning and end of the Secondment Period, Intercargo Corporation
will bear the cost of fares and other reasonable expenses involved for you and
your dependent family, in traveling between your place of residence in the U.S.
and your place of work in Hong Kong. Upon completion of the Secondment Period,
Intercargo Corporation will bear the cost of the return for you and your
dependent family.
10. LEAVE
Leave will accrue to you during the Secondment Period at the rate of
twenty-five working days per annum.
In addition, Intercargo Insurance Company H.K. Limited will pay return
leave business-class air fares for yourself and your dependent family to the
United States twice per year.
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11. ACCOMMODATION
The Away Base Office shall provide a furnished apartment, including
utilities and telephone expense, suitable for a person of your position in the
business community. Should the cost of accommodations exceed HK $55,000 per
month, inclusive of management lease and government rates, including utilities
and telephone expense, you will be expected to reimburse the Company for such
excess.
I. PROFESSIONAL ADVICE
The Away Base Office will pay up to a reasonable level for the costs of
any necessary professional advice you may need in connection with this
secondment.
13. MEDICAL
You and your dependent family will remain covered under your home base's
private health plan for the Secondment Period.
14. HOURS OF WORK AND REGULATIONS
The hours of work will be those established by the Away Base Office. You
will observe all rules and regulations of the Away Base Office to the extent
that the same are lawful and not inconsistent with the other terms of your
employment as varied by this letter.
15. LAWS OF COUNTRY
While you are in Hong Kong, you will be subject to the laws of that
country, including the laws that relate to personal taxation, and nothing
contained in this letter which may be inconsistent with such laws shall be
binding upon you or upon the Away Base Office.
Any of the provisions of the laws of Hong Kong which relate to employment
there and which are not contained in this letter, shall be deemed to be so
contained and shall be binding upon you and upon the Away Base Office now and
in the future.
16. TERMINATION OF SECONDMENT
Your secondment may be terminated by Intercargo Insurance Company H.K.
Limited at any time and on your return to duty with Intercargo Insurance
Company in the U.S. after the end of the Secondment Period, and after taking
any leave due to you, you will revert to the compensation used as a base for
purposes of the determination of your executive compensation plan in Intercargo
Insurance Company.
17. This contract shall be governed and construed according to the laws of Hong
Kong.
If you are in agreement with the contents of this letter, please sign
below, initial each page, and return the original to me retaining the copy for
your own records.
Very truly yours,
INTERCARGO CORPORATION
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James R. Zuhlke
I accept the above terms and conditions of Secondment.
/s/ Robert S. Kielbas
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Robert S. Kielbas
Dated: February 16, 1996
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RIDER TO SECONDMENT AGREEMENT
THIS RIDER is made this 16th day of February, 1996 by and between Intercargo
Insurance Company H.K. Limited ("Employer") and ROBERT S. KIELBAS ("Employee").
RECITALS
A. The Employer and Employee entered into an employment agreement dated
February 16, 1996 relative to the Employee's employment in Hong Kong (the
"Secondment Agreement").
B. The Employer and Employee wish to amend the terms of the Secondment
Agreement pursuant to the terms of this Rider.
For good and valuable consideration, the receipt of which is hereby
acknowledged, Employer and Employee agree as follows:
1. In the event Employee is subject to any tax liabilities in Hong Kong
unforeseen by Employer and Employee prior to entering into the Secondment
Agreement, Employer agrees to amend the Employee's Away Base Remuneration
so that Employee's remuneration after tax is equivalent to U.S. $150,000.
All other terms of the Secondment Agreement shall remain the same. Where the
terms of this Rider conflict with the terms of the Secondment Agreement, this
Rider shall govern.
INTERCARGO INSURANCE
COMPANY H.K. LIMITED
BY: James R. Zuhlke /s/ Robert S. Kielbas
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ITS: Director ROBERT S. KIELBAS
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AMENDMENT NO. 1
TO SECONDMENT AGREEMENT DATED FEBRUARY 16, 1996
BETWEEN
INTERCARGO INSURANCE COMPANY H.K. LIMITED
AND
ROBERT S. KIELBAS
In lieu of the Company's acquisition or rental of furnishings to satisfy
Company's obligations under Section 11. ACCOMMODATION and in recognition of Mr.
Kielbas' selection of a furnished apartment, Section 11. ACCOMMODATION shall be
amended to read as follows:
11. ACCOMMODATION
The Away Base Office shall provide a furnished apartment,
including utilities and telephone expense, suitable for a person
of your position in the business community. Should the cost of
accommodations exceed HK $60,000 per month, inclusive of
management lease and government rates, including utilities and
telephone expense, you will be expected to reimburse the Company
for such excess.
All other terms of the Secondment Agreement and Rider shall remain the same.
Where the terms of this Amendment conflict with the terms of the Secondment
Agreement and Rider, this Amendment shall govern.
INTERCARGO INSURANCE
COMPANY H.K. LIMITED
BY: James R. Zuhlke /s/ Robert S. Kielbas
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ITS: Director ROBERT S. KIELBAS
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