1
EXHIBIT 10.16
March 27, 1999
Xx. Xxxxxxx Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Dear Xxxx:
The purpose of this letter is to confirm our agreement that upon a
Change in Control (as defined herein) of Intercargo Corporation ("Intercargo"),
Intercargo shall pay you $50,000 upon the earlier of (i) 180 days following such
Change in Control or (ii) your involuntary termination (other than for cause).
Such payment shall not be paid if you voluntarily terminate your employment or
your employment is terminated for cause. Such payment shall be made in a lump
sum within five (5) days of the date such payment becomes payable pursuant to
the terms hereof.
As used in this letter agreement, "cause" means (i) engaged in an act
of dishonesty with respect to Intercargo, including, but not limited to, an act
which directly or indirectly results in your gain or personal enrichment at the
expense of Intercargo or (ii) you willfully and substantially failed to perform
the services requested of you by Intercargo despite at least two written notices
of such failure and reasonable opportunity to cure such failure. As used in this
letter agreement, "Change in Control" means (i) a single entity or group of
affiliated entities acquires more than 50% of Intercargo's outstanding common
stock, (ii) Intercargo is involved in a merger or consolidation so that its
stockholders before the merger or consolidation own less than 50% of the voting
power of the surviving or acquiring corporation, (iii) the liquidation or
dissolution of Intercargo, (iv) the sale of all or substantially all of
Intercargo's assets, or (v) a change in the majority of Intercargo's Board of
Directors during any 24-month period without the approval of the a majority of
directors in office at the beginning of such period. Intercargo reserves the
right in the sole discretion of Intercargo to terminate this letter agreement if
a Change in Control of Intercargo has not occurred prior to June 30, 1999.
This letter supersedes all previous communications and constitutes the
entire understanding between us with respect to any severance obligations of
Intercargo upon a Change in Control. If you are in agreement with the foregoing,
please so indicate by signing the copy of this letter in the space provided
below and returning it to the undersigned.
Very truly yours,
INTERCARGO CORPORATION
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
President and CEO
Accepted and agreed to as of this
18th day of November, 1998
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
