EMPLOYMENT AGREEMENT

 --
                              EMPLOYMENT AGREEMENT

       THIS AGREEMENT, entered into as of the 28th day of July, 1992, by
and between MICHAEL DIAZ (the "Employee") and AMERICAN PRESIDENT
COMPANIES, LTD., a Delaware corporation (the "Company"),

                              W I T N E S S E T H:
                                        
       Whereas the Company is the parent corporation in a group of
affiliated corporations (the "Affiliated Group") which consists of the
Company and all of its direct or indirect subsidiaries;

       Whereas the parties entered into employment agreements as of
March 25, 1987, and March 15, 1988, securing the services of the
Employee for the benefit of the Affiliated Group;

       Whereas the parties wish to continue the services of the Employee
for the benefit of the Affiliated Group upon the terms and conditions
set forth below; and

       Whereas the parties wish to have this Agreement supersede all
prior employment agreements between the Employee and any member of the
Affiliated Group;

               N o w, T h e r e f o r e, in consideration of the mutual
covenants herein contained, the parties agree as follows:
               
       1.  Term of Employment.
       
       (a)  Basic Rule.  The Company agrees to cause the Employee's
employment with the Affiliated Group to continue, and the Employee
agrees to remain in employment with the Affiliated Group, from the date
hereof until the earlier of (i) the first day of the month coinciding
with or next following the Employee's 65th birthday (the "Normal
Retirement Date") or (ii) the date when the Employee's employment
terminates pursuant to Subsections (b), (c) or (d) below.  In no event
shall a transfer (whether voluntary or involuntary) of the Employee from
one member of the Affiliated Group to another member be treated as a
termination of employment for any purpose under this Agreement.

       (b)  Early Termination.  Subject to Sections 6 and 7, the Company
may terminate the Employee's employment with the Affiliated Group by
giving the Employee 30 days' advance notice in writing.  The Employee
may terminate his employment with the Affiliated Group by giving the
Company 30 days' advance notice in writing.  The Employee's employment
shall terminate automatically in the event of his death.  Any waiver of
notice shall be valid only if it is made in writing and expressly refers
to the applicable notice requirement of this Section 1.

       (c)  Cause.  Subject to Section 6, the Company may cause the
Employee's employment with the Affiliated Group to terminate at any time
for Cause by giving the Employee written notice.  For all purposes under
this Agreement, "Cause" shall mean (i) a willful failure by the Employee
to substantially perform his duties hereunder, other than a failure
resulting from the Employee's complete or partial incapacity due to
physical or mental illness or impairment, or (ii) a willful act by the
Employee which constitutes gross misconduct and which is materially
injurious to a member of the Affiliated Group.  No act, or failure to
act, by the Employee shall be considered "willful" unless committed
without good faith and without a reasonable belief that the act or
omission was in such member's best interest.

       (d)  Disability.  Subject to Section 6, the Company may cause the
Employee's employment with the Affiliated Group to terminate for
Disability by giving the Employee 30 days' advance notice in writing.
For all purposes under this Agreement, "Disability" shall mean that the
Employee, at the time notice is given, has been unable to carry out any
of his duties under this Agreement for a period of not less than six
consecutive months as the result of his incapacity due to physical or
mental illness.  In the event that the Employee resumes the performance
of his duties hereunder on a full-time basis before the termination of
his employment under this Subsection (d) becomes effective, the notice
of termination shall automatically be deemed to have been revoked.

       (e)  Termination of Agreement.  This Agreement shall terminate
when all obligations of the parties hereunder have been satisfied.

       2.  Duties and Scope of Employment.
       
       (a)  Position.  The Employee shall hold the position of Executive
Vice President of American President Lines, Ltd. or such other position
or positions with any member of the Affiliated Group as the Company may
from time to time assign to him.

       (b)  Obligations.  During the term of his employment under this
Agreement, the Employee shall devote his full business efforts and time
to the Affiliated Group and shall not render services to any other
person or entity without the prior written consent of the Company's
Chief Executive Officer.  The foregoing, however, shall not preclude the
Employee from engaging in appropriate civic, charitable or religious
activities or from devoting a reasonable amount of time to private
investments which do not interfere or conflict with his responsibilities
under this Agreement.

       3.  Base Compensation.

       During the term of his employment under this Agreement, the
Employee shall receive as compensation for his services a base salary at
the annual rate of $275,810, or at such higher rate as the Company may
determine from time to time.  Such salary shall be payable in
approximately equal biweekly installments.  Once the Company has
increased such salary, it thereafter shall not be reduced.  (The annual
compensation specified in this Section 3, together with any increases in
such compensation which the Company may grant from time to time, is
referred to in this Agreement as "Base Compensation.")

       4.  Employee Benefits.

       During the term of his employment under this Agreement, the
Employee shall be eligible to participate in the employee benefit plans
and executive compensation programs maintained by the Company, including
(without limitation) pension plans, thrift or profit-sharing plans,
excess-benefit plans, stock purchase, stock option, restricted stock or
phantom stock plans, incentive or other bonus plans, life, disability,
health, accident and other insurance programs, paid vacations and
similar plans or programs, subject in each case to the generally
applicable terms and conditions of the plan or program in question and
to the determinations of any committee administering such plan or
program; provided, however, that the Employee's rights with respect to
severance pay upon termination of employment shall be governed
exclusively by this Agreement, and the Employee shall not be eligible to
participate in any severance plan maintained by the Company.

       5.  Business Expenses.

       During the term of his employment under this Agreement, the
Employee shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with his duties
hereunder.  The Employee shall be reimbursed for such expenses upon
presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.

       6.  Change in Control.

       (a)  Definition.  For all purposes under this Agreement, "Change
in Control" shall mean the occurrence of any of the following events:

              (i)  A change in control required to be reported pursuant
       to Item 6(e) of Schedule 14A of Regulation 14A under the
       Securities Exchange Act of 1934 (the "Exchange Act");
       
              (ii)  A change in the composition of the Company's Board
       of Directors, as a result of which fewer than two-thirds of the
       incumbent directors are directors who either (A) had been
       directors of the Company 24 months prior to such change or (B)
       were elected, or nominated for election, to the Company's Board
       of Directors with the affirmative votes of at least a majority of
       the directors who had been directors of the Company 24 months
       prior to such change and who were still in office at the time of
       the election or nomination; or
       
              (iii)  Any "person" (as such term is used in Sections
       13(d) and 14(d) of the Exchange Act) is or becomes the beneficial
       owner, directly or indirectly, of securities of the Company
       representing 20 percent or more of the combined voting power of
       the Company's then outstanding securities ordinarily (and apart
       from rights accruing under special circumstances) having the
       right to vote at elections of directors (the "Base Capital
       Stock"); provided, however, that any change in the relative
       beneficial ownership of securities of any person resulting solely
       from a reduction in the aggregate number of outstanding shares of
       Base Capital Stock, and any decrease thereafter in such person's
       ownership of securities, shall be disregarded until such person
       increases in any manner, directly or indirectly, such person's
       beneficial ownership of any securities of the Company.
       
       (b)  Severance Payment.  If, (i) during the term of this
Agreement and at any time after the occurrence of a Change in Control, a
member of the Affiliated Group terminates the Employee's employment for
any reason or no reason, or (ii) during the term of this Agreement and
within one year after a Change in Control, the Employee resigns as a
result of a material change in his responsibilities or the relocation of
his place of employment by more than 20 miles from Oakland, California,
or (iii) during the term of this Agreement and within the 30-day period
commencing one year after the occurrence of a Change in Control, the
Employee resigns his employment for any reason, then the Employee shall
be entitled to receive a severance payment from the Company (the
"Severance Payment").  The Severance Payment shall be made in a lump sum
not less than 31 days nor more than 60 days following the date of the
employment termination and shall be in an amount determined under
Subsection (c) below.  The Severance Payment shall be in lieu of any
further payments to the Employee and any further accrual of benefits
under Sections 3 and 4 with respect to periods subsequent to the date of
the employment termination and any termination benefits under Section 7.
The foregoing notwithstanding, in the event of the Employee's
termination or resignation as provided in Clauses (i) or (ii) of this
Subsection (b), the Employee may elect to receive, in lieu of the
Severance Payment, all of the termination benefits described in Section
7, as if his termination or resignation were a termination without
Cause.  In the event of the Employee's resignation as provided in Clause
(iii) of this Subsection (b), the Employee may elect to receive, in lieu
of the Severance Payment, the termination benefits described in
Subsections 7(b) and (c), as if his resignation were a termination
without Cause; provided, however, that the Continuation Period to be
counted as employment shall be determined by substituting "18 months
after the date of such employment termination" for Clause (i) of
Subsection 7(a), and the insurance coverage provided during the
Continuation Period pursuant to Subsection 7(c) shall be limited to
medical, dental and life insurance plans.  The Employee shall advise the
Company of his election in writing within 30 days after his resignation
or after receiving the Company's notice of termination.

       (c)  Amount.  The amount of the Severance Payment shall be equal
to the product of the following:

               (i)  142.5 percent of the Employee's monthly rate of Base
       Compensation, as in effect on the date of the employment
       termination; times
               
               (ii)  The lesser of (A) 36 months or (B) the number of
       months between the date of the employment termination and the
       Employee's Normal Retirement Date; provided, however, that in the
       event of the Employee's resignation as provided in Clause (iii)
       of Subsection (b) above, the amount of the Severance Payment
       shall be determined by substituting "18 months" for Clause (A).
       For this purpose, a partial month shall be counted as the
       appropriate fraction of a full month.
               
       (d)  Incentive Programs.  If, during the term of this Agreement,
a Change in Control occurs with respect to the Company, the Employee
shall become fully vested in all awards heretofore or hereafter granted
to him under all stock option, stock appreciation rights, restricted
stock, phantom stock or similar plans maintained by the Company, any
contrary provisions of such plans notwithstanding.

       (e)  No Mitigation.  The Employee shall not be required to
mitigate the amount of any payment contemplated by this Section 6
(whether by seeking new employment or in any other manner), nor shall
any such payment be reduced by any earnings that the Employee may
receive from any other source.

       7.  Involuntary Termination Without Cause.

       (a)  Continuation Period.  In the event that, during the term of
this Agreement, a member of the Affiliated Group terminates the
Employee's employment for any reason other than Cause or Disability or
for no reason, the Employee shall be entitled to receive all of the
payments and benefit coverage described in the succeeding subsections of
this Section 7.  Such payments and benefit coverage shall continue for
the period commencing on the date when the employment termination is
effective and ending on the earliest of (i) 36 months after the date of
such employment termination, (ii) the Employee's Normal Retirement Date
or (iii) the date of the Employee's death (the "Continuation Period").
Any other provision of this Agreement notwithstanding, if the Employee
is entitled and elects to receive a severance payment pursuant to
Section 6, then no payments or benefit coverage shall be provided to the
Employee under this Section 7.

       (b)  Base Compensation.  During the Continuation Period, the
Employee shall receive biweekly payments of 142.5 percent of his
biweekly rate of Base Compensation, as in effect on the date of the
employment termination.

       (c)  Insurance Coverage.  During the Continuation Period, the
Employee (and, where applicable, his dependents) shall be entitled to
continue participation in all insurance or similar plans maintained by
the Company, including (without limitation) life, disability, health and
accident insurance programs, as if he were still an employee of the
Company.  Where applicable, the Employee's salary for purposes of such
plans shall be deemed to be equal to his Base Compensation.  To the
extent that the Company finds it impossible to cover the Employee under
its group insurance policies during the Continuation Period, the Company
(at its own expense) shall provide the Employee with the same level of
coverage under individual policies.

       (d)  Incentive Programs.  The Continuation Period shall be
counted as employment with the Affiliated Group for purposes of
determining the expiration date of all options on the Company's stock
and for purposes of vesting under all executive compensation programs in
which the Employee participated (any contrary provisions of option
agreements or such programs notwithstanding), including (without
limitation) stock purchase, stock option, restricted stock or phantom
stock plans, incentive or other bonus plans and similar programs, but
not including any pension, thrift or profit-sharing plan intended to
qualify under section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code").  The preceding sentence shall not be construed to
require the grant of any new awards to the Employee under such executive
compensation programs during the Continuation Period.

       (e)  Supplemental Benefit.  In lieu of accruing additional
pension benefits under the Retirement Plan for Non-Bargaining Unit
Employees of American President Companies, Ltd. (the "Retirement Plan"),
the Excess-Benefit Plan of American President Companies, Ltd. and any
other qualified or nonqualified defined-benefit pension plan maintained
by the Company, and any successor to any of such plans (collectively,
the "Retirement Program"), during the Continuation Period, the Employee
and his surviving spouse (if any) shall be entitled to receive an
unfunded supplemental retirement benefit (the "Supplemental Benefit").
The amount of the Supplemental Benefit shall be determined under
Subsection (f) below.  Supplemental Benefit payments shall be made in
monthly installments, commencing with the month for which the first
pension payment is made to the Employee or his surviving spouse under
the Retirement Plan and ending with the month for which the last pension
payment is made to the Employee or his surviving spouse under the
Retirement Plan.

       (f)  Amount of Supplemental Benefit.  The amount of the
Supplemental Benefit shall be equal to the difference between:

               (i)  The amount of the pension benefits actually paid to
       the Employee or to his surviving spouse, as the case may be,
       under the Retirement Program; and
               
               (ii)  The amount of the hypothetical pension benefits
       that would be payable to the Employee or to his surviving spouse,
       as the case may be, under the Retirement Program if the following
       assumptions are made:
               
                      (A)  The projected Continuation Period, determined
               without regard to the possibility of the Employee's
               death, is counted as employment with the Affiliated Group
               for all purposes (including, without limitation, benefit
               accrual) under the Retirement Program; and
                      
                      (B)  142.5 percent of the projected Base
               Compensation to be received by the Employee during the
               Continuation Period is counted as compensation for
               purposes of determining benefits under the Retirement
               Program.
                      
The Supplemental Benefit shall be payable in the same form as the
pension benefit under the Retirement Plan, unless such pension benefit
is paid in the form of a single lump sum.  In that event, the
Supplemental Benefit shall be payable in the normal form of benefit
provided under the Retirement Plan and shall be computed and paid as if
the pension benefits actually paid under the Retirement Plan were also
payable in the normal form.  The amount of the Supplemental Benefit
shall be recalculated each year in accordance with any provisions of the
Retirement Plan which are applicable to the Employee and which provide
for the adjustment of pension benefits to reflect changes in the cost of
living.

       (g)  Equivalency.  Subsections (e) and (f) above shall be
construed, to the greatest extent possible, so as to place the Employee
in the position in which he would have been if his active participation
in the Retirement Program had continued during the Continuation Period.
However, any incremental tax costs or benefits associated with the
Supplemental Benefit shall be disregarded for this purpose.

       (h)  No Mitigation.  The Employee shall not be required to
mitigate the amount of any payment or benefit contemplated by this
Section 7, nor shall any such payment or benefit be reduced by any
earnings or benefits that the Employee may receive from any other
source.

       8.  Limitation on Payments.

       (a)  Basic Rule.  Any provision of this Agreement to the contrary
notwithstanding, in the event that the independent auditors most
recently selected by the Board of Directors of the Company (the
"Auditors") determine that any payment, transfer or acceleration of
vesting by the Affiliated Group to or for the benefit of the Employee,
whether pursuant to the terms of this Agreement or any other plan or
agreement (a "Payment"), would be nondeductible by the Affiliated Group
for federal income tax purposes because of section 280G of the Code,
then the aggregate present value of all Payments shall be reduced (but
not below zero) to the Reduced Amount.  For purposes of this Section 8,
the "Reduced Amount" shall be the amount, expressed as a present value,
which maximizes the aggregate present value of the Payments without
causing any Payment to be nondeductible by the Affiliated Group because
of section 280G of the Code.

       (b)  Reduction of Payments.  If the Auditors determine that any
Payment would be nondeductible by the Affiliated Group because of
section 280G of the Code, then the Company, within five business days
after being notified by the Auditors, shall give the Employee notice to
that effect and a copy of the detailed calculation thereof and of the
Reduced Amount.  The Employee may then elect, in his sole discretion,
which and how much of the Payments shall be eliminated or reduced (as
long as after such election the aggregate present value of the Payments
equals the Reduced Amount) and shall advise the Company in writing of
his election within 30 days of his receipt of notice.  If no such
election is made by the Employee within such 30-day period, then the
Company may elect which and how much of the Payments shall be eliminated
or reduced (as long as after such election the aggregate present value
of the Payments equals the Reduced Amount) and shall notify the Employee
promptly of such election.  For all purposes under this Section 8,
present value shall be determined in accordance with section 280G(d)(4)
of the Code.  All determinations made by the Auditors under this Section
8 shall be binding upon the Affiliated Group and the Employee and shall
be made within 60 days of the date when a Payment becomes payable or
transferable.  Within five business days following the completion of
such determinations and the elections hereunder, the Affiliated Group
shall pay or transfer to or for the benefit of the Employee such amounts
as are then due to him under this Agreement.  It shall, as promptly as
possible, pay or transfer to or for the benefit of the Employee in the
future such amounts as become due to him under this Agreement.

       (c)  Overpayments and Underpayments.  As a result of uncertainty
in the application of section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments
will have been made by the Affiliated Group which should not have been
made (an "Overpayment") or that additional Payments which will not have
been made by the Affiliated Group could have been made (an
"Underpayment"), consistent in each case with the calculation of the
Reduced Amount hereunder.  In the event that the Auditors, based upon
the assertion of a deficiency by the Internal Revenue Service against
the Affiliated Group or the Employee which the Auditors believe has a
high probability of success, determine that an Overpayment has been
made, such Overpayment shall be treated for all purposes as a loan to
the Employee which he shall repay to the Affiliated Group, together with
interest at the applicable federal rate provided for in section
7872(f)(2)(A) of the Code; provided, however, that no amount shall be
payable by the Employee to the Affiliated Group if and to the extent
that such payment would not reduce the amount which is subject to
taxation under section 4999 of the Code.  In the event that the Auditors
determine that an Underpayment has occurred, such Underpayment shall
promptly be paid or transferred by the Affiliated Group to or for the
benefit of the Employee, together with interest at the applicable
federal rate provided for in section 7872(f)(2)(A) of the Code.

       9.     Protection of Trade Secrets.

       (a)    Trade Secrets.  The parties acknowledge and agree that
during the term of this Agreement and in the course of his employment
hereunder, the Employee will have access to and become acquainted with
information concerning the operations of members of the Affiliated
Group, including without limitation financial, personnel, customer,
sales, systems and other information that is owned by members of the
Affiliated Group and regularly used in the operation of their business,
and that such information constitutes the trade secrets of the members
of the Affiliated Group.  The Employee specifically agrees that he shall
not misuse, misappropriate or disclose any such trade secrets, directly
or indirectly, to any other person or use them in any way, either during
the term of this Agreement or at any time thereafter, except as required
in the course of his employment hereunder.

       (b)    Unfair Competition.  The Employee acknowledges and agrees
that the unauthorized use or disclosure of any of the trade secrets
obtained by the Employee during the course of his employment under this
Agreement, including information concerning the Affiliated Group's
current, future or proposed work, services or products, the facts that
any such work, services or products are planned, under consideration or
in production, as well as any descriptions thereof, constitute unfair
competition.  The Employee promises and agrees not to engage in any
unfair competition with any member of the Affiliated Group, either
during the term of this Agreement or at any time thereafter.

       (c)    Return of Documents.  The Employee further agrees that
all files, records, documents, computer disks, drawings, specifications,
equipment and similar items relating to the business of members of the
Affiliated Group, whether prepared by the Employee or others, are and
shall remain exclusively the property of the members of the Affiliated
Group and shall be returned to the Affiliated Group upon the termination
of his employment hereunder.

       10.  Successors.

       (a)  Company's Successors.  The Company shall require any
successor (whether direct or indirect and whether by purchase, lease,
merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company's business and/or assets, by an agreement in
substance and form satisfactory to the Employee, to assume this
Agreement and to agree expressly to perform this Agreement in the same
manner and to the same extent as the Company would be required to
perform it in the absence of a succession.  The Company's failure to
obtain such agreement prior to the effectiveness of a succession shall
be a breach of this Agreement and shall entitle the Employee to all of
the compensation and benefits to which he would have been entitled
hereunder if the Company had involuntarily terminated his employment
without Cause on the date when such succession becomes effective.  For
all purposes under this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets which executes and
delivers the assumption agreement described in this Subsection (a) or
which becomes bound by this Agreement by operation of law.

       (b)  Employee's Successors.  This Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

       11.  Notice.

       Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered mail,
return receipt requested and postage prepaid.  In the case of the
Employee, mailed notices shall be addressed to him at the home address
which he most recently communicated to the Company in writing. In the
case of the Company, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of its
Secretary.

       12.  Miscellaneous Provisions.

       (a)  Waiver.  No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by the Company's
Chief Executive Officer.  No waiver by either party of any breach of, or
of compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time.

       (b)  Whole Agreement.  No agreements, representations or
understandings (whether oral or written and whether express or implied)
which are not expressly set forth in this Agreement have been made or
entered into by either party with respect to the subject matter hereof.
Effective as of the date hereof, this Agreement supersedes all prior
employment agreements between the Employee and any member of the
Affiliated Group.

       (c)  Choice of Law.  The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
State of California.

       (d)  Severability.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision hereof, which shall remain in
full force and effect.

       (e)  Arbitration.  Except as otherwise provided in Section 8, any
controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in Oakland,
California, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.

       (f)  No Assignment.  The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by
operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor's process, and any action in
violation of this Subsection (f) shall be void.

       IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as
of the day and year first above written.

                                                            /s/  Michael Diaz

                                                           _____________________
                                                               Michael Diaz

                                           AMERICAN PRESIDENT COMPANIES, LTD.

                                                /s/  J. M. Lillie
                                           By   ________________________
                                                J. M. Lillie
                                                Chairman of the Board, President
                                                and Chief Executive Officer
TW940329Cemp-1130tw 

Basic Info X:

Name: EMPLOYMENT AGREEMENT
Type: Employment Agreement
Date: Nov. 4, 1994
Company: APL LTD
State: Delaware

Other info:

Date:

  • 28th day of July , 1992
  • March 25 , 1987
  • March 15 , 1988

Organization:

  • b Early Termination
  • Scope of Employment
  • American President Lines , Ltd.
  • Company 's Board of Directors
  • Involuntary Termination Without Cause
  • c Insurance Coverage
  • Non-Bargaining Unit Employees of American President Companies , Ltd.
  • Amount of Supplemental Benefit
  • b Reduction of Payments
  • Internal Revenue Service
  • c Return of Documents
  • the State of California
  • Commercial Arbitration Rules of the American Arbitration Association

Location:

  • Delaware
  • U.S.
  • Oakland
  • California

Money:

  • $ 275,810

Person:

  • Michael Diaz

Percent:

  • 20 percent
  • 142.5 percent