EXHIBIT 10.16

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of the 1st day of
April, 2004 (the “Effective Date”), by and between Continental Casualty Company,
an Illinois insurance company (the “Company”), and Michael Fusco (“Executive”);

WITNESSETH:

     WHEREAS, Executive currently serves as Executive Vice President, Chief
Actuary, with senior management level responsibility for the actuarial
operations for the principal business units and subsidiaries of the Company
(hereinafter the “CNA insurance companies”); and

     WHEREAS, the Company and the Executive wish to enter into a written
agreement setting forth the terms of their future employment relationship as set
forth below;

     NOW, THEREFORE, in consideration of the foregoing premises and the promises
and covenants herein, the parties hereto agree as follows:

     1. Employment Term. The Company and Executive agree that the Company shall
employ Executive to perform the duties of an Executive Vice President of the CNA
insurance companies for the period commencing on the Effective Date and ending
on March 31, 2007, or such earlier date as of which Executive’s employment is
terminated in accordance with Section 6 hereof (the “Term”). The covenants set
forth in Sections 7, 8, 9, 10, 11, 12, 13, and 14 shall survive the employment
term of this Agreement.

     2. Duties of Executive.

     (a) Executive shall continue to perform the duties and responsibilities of
an Executive Vice President and Chief Actuary Officer [or successor title] of
the CNA insurance companies as defined and directed by the Company’s Chief
Executive Officer (hereinafter “CEO”). Executive shall report to the CEO.
Executive may be elected to and shall serve as a member of the Board of
Directors of one or more of the CNA insurance companies, and if so elected
Executive agrees to serve on such boards in such capacity without additional
compensation and Executive

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further agrees to resign any such position on such Boards upon the termination
of his employment with the Company for any reason; provided that nothing in this
Agreement shall require that the shareholders of any company elect Executive to
its board of directors.

     (b) Executive shall diligently and to the best of his abilities assume,
perform, and discharge the duties and responsibilities of Executive Vice
President, Chief Actuary Officer, as well as such other specific duties and
responsibilities as the CEO shall assign or designate to Executive from time to
time not inconsistent with Executive’s status. Executive shall devote
substantially all of his working time to the performance of his duties as set
forth herein and shall not, without the prior written consent of the CEO, accept
other employment or render or perform other services, nor shall he have any
direct or indirect ownership interest in any other business which is in
competition with the business of the Company or the CNA insurance companies,
other than in the form of publicly traded securities constituting less than five
percent (5%) of the outstanding securities of a corporation (determined by vote
or value) or limited partnership interests constituting less than five percent
(5%) of the value of any such partnership. The foregoing shall not preclude
Executive from engaging in charitable, professional, and personal investment
activities, provided that, in the judgment of the CEO, such activities do not
materially interfere with his performance of his duties and responsibilities
hereunder. In addition, the foregoing shall not preclude Executive from spending
a portion of his working time performing his duties from Executive’s office in
New York during the Term.

     3. Compensation.

     (a) During the Term, the Company shall initially pay to Executive an annual
base salary of $475,000.00 (the “Base Compensation”) and shall, subject to the
approval of the Incentive Compensation Committee (“Committee”) of the Board of
Directors of the Company’s parent, CNA Financial Corporation, increase
Executive’s Base Compensation to no less than $500,000, effective as of
(1) August 1, 2004, if the Agreement is signed by Executive no later than
August 18, 2004, or (2) the next pay period after the date the Agreement is
signed by Executive, if the Agreement is signed by Executive after August 18,
2004. The Base Compensation shall be payable not less frequently than monthly.
At the discretion of the CEO and/or the Committee, such salary rate may be
increased annually as of each March occurring during the term of the Agreement,
beginning with March 2005, based on market considerations, responsibilities and
performance. In no event shall Executive’s salary rate be reduced to an amount
that is less than the amount specified in this Section 3(a) without Executive’s
written consent, or to an amount that is less than the amount that he was
previously receiving without Executive’s written consent.

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     (b) The Executive shall be eligible for an annual incentive cash award
(“Bonus”) pursuant to the CNA Financial Corporation 2000 Incentive Compensation
Plan (the “Incentive Compensation Plan”). Subject to the approval of the
Committee, the Executive’s target Bonus thereunder shall not be less than the
rate of seventy-five percent (75%) of his Base Compensation for each twelve
month bonus period. Effective (1) August 1, 2004, if the Agreement is signed by
Executive no later than August 18, 2004, or (2) the next pay period after the
date the Agreement is signed by Executive, if the Agreement is signed by
Executive after August 18, 2004, subject to the approval of the Committee, the
Executive’s target Bonus thereunder shall not be less than the rate of one
hundred percent (100%) of his Base Compensation for each twelve month bonus
period. In no event shall the target Bonus be reduced without the Executive’s
written consent. The amount of the award shall be based on the CEO’s assessment
of Executive’s performance, and shall be determined and payable in accordance
with the terms of the Incentive Compensation Plan as set forth in the Incentive
Compensation Plan documents; however, if Executive is a proxy-named officer, the
amount of the award shall be based on the Committee’s assessment of Executive’s
performance, and shall be determined and payable in accordance with the terms of
the Incentive Compensation Plan, as set forth in the Incentive Compensation Plan
documents. Provided, further, that the Committee shall have unlimited negative
discretion under the Incentive Compensation Plan to decrease the amount of
Executive’s award for any year.

     (c) Subject to Committee approval, Executive shall be eligible to receive a
long-term Incentive Cash Award, in accordance with the terms of the Incentive
Compensation Plan, as may be in effect during the Term or such other long term
incentive plan as the Company may from time to time adopt for its senior
officers. The Executive’s target long-term incentive cash award shall be no less
than 20 percent (20%) of annual base compensation during the three year
performance period. In no event shall the target award be reduced without the
Executive’s written consent.

     (d) Subject to the approval of the Committee, Executive shall be awarded a
minimum stock option grant of 10,000 shares of CNA Financial Corporation stock
annually, during the Term. Such annual grant may be increased at the
recommendation of the CEO and upon approval of the Committee, subject to share
availability. Executive’s rights with respect to shares

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awarded hereunder shall be subject to the terms of the Incentive Compensation
Plan and share availability, and approval by the Committee.

     (e) For avoidance of doubt respecting awards to Executive under
Section 3(b), 3(c) and 3(d) hereof, the Committee shall retain such discretion
as may be provided under the Incentive Compensation Plan to satisfy Section
162(m) of the Internal Revenue Code of 1986 (“Code”) or any successor provision.
The Company may defer the payment of all compensation to which Executive is
entitled hereunder or otherwise to enable it to comply with Section 162(m) of
the Code or any successor provision with respect to deductibility of executive
compensation. All deferred compensation will be credited to the Executive’s
SES-CAP account and shall be subject to the terms thereof; provided, however,
any such deferred compensation to Executive’s SES-CAP account shall be
considered to be immediately vested.

     (f) Executive’s pensionable earnings under the CNA Retirement Plan, the CNA
Supplemental Executive Retirement Plan (“SERP”), the Savings & Capital
Accumulation Plan (“S-CAP”), and the CNA Supplemental Savings & Capital
Accumulation Plan (“SES-CAP”) will be calculated as specified in the plan
documents.

     (g) On or before November 15, 2004, Executive shall receive the final
installment of his sign-on bonus (“Sign-on Bonus”) in the amount of $200,000.00

     (h) All payments due under this Agreement shall be subject to withholding
as required by law.

     4. Other Benefits. Executive shall be entitled to continue to participate
in the various benefit plans, programs or arrangements established and
maintained by the Company from time to time and applicable to senior executives
of the Company such as, but not by way of limitation, medical benefits, dental
benefits, life insurance, long-term disability insurance, both qualified and
supplemental defined contribution plans, and to receive all fringe benefits made
available to senior executives of the Company, including club membership
($10,000.00 annually), tax return preparation and paid parking. Executive’s
entitlement to participate in any such plan, program or arrangement shall, in
each case, be subject to the terms and conditions thereof. In addition, the
Company shall pay the reasonable attorneys’ fees and costs incurred by Executive
in negotiating this Agreement, as well as any taxes that might be payable on
said attorneys’ fees. Executive shall not be eligible for paid time off (“PTO”)
under the Company’s PTO policy. In the event of termination of employment,
Executive’s severance shall be determined solely in accordance with Section 6
hereof.

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     5. Expense Reimbursement. Executive shall continue to be entitled to
reimbursement by the Company for all reasonable and customary travel and other
business expenses incurred by Executive in carrying out his duties under this
Agreement, in accordance with the general reimbursement policies adopted by the
Company from time to time. Executive shall report all such expenditures not less
frequently than monthly accompanied by adequate records and such other
documentary evidence as required by the Company or by Federal or state tax
statutes or regulations governing the substantiation of such expenditures.

     6. Termination of Employment. If Executive’s employment with the Company
shall terminate during the Term, the following conditions set forth herein shall
apply with respect to the Executive’s compensation and benefits hereunder.
Either party may terminate Executive’s employment with the Company during the
Term by written notice to the other party effective as of the date specified in
such notice and Executive’s employment shall automatically terminate in the
event of Executive’s death. Upon termination of Executive’s employment during or
at the end of the term of this Agreement, the rights of the parties under this
Agreement shall be determined pursuant to this Section 6. All payments made
hereunder shall be made either to Executive or to his personal representatives,
heirs or beneficiaries as the case may be. In the event of Executive’s
termination during the Term, unless otherwise specified in this Agreement,
Executive’s rights, if any, under any of the Company’s defined contribution,
benefit, incentive or other plans of any nature shall be governed by their
terms.

     6.1 Death and Disability. In the event of the death of Executive or, at the
Company’s election, in the event of his Permanent Disability (as defined below)
during the Term, provided it has not already terminated, Executive’s employment
shall terminate; provided, however, that:

     (a) The Company shall pay to Executive or his personal representatives,
heirs or beneficiaries as the case may be, an amount equal to his: (i) unpaid
base salary and current year’s target Bonus and CNA long-term incentive cash
award prorated to the date of termination; (ii) any previous year’s unpaid Bonus
at target; and (iii) unpaid cash entitlements earned by Executive or payable to
his beneficiaries as of the date of termination which, pursuant to the terms of
the applicable Company plan or program (which unpaid cash entitlements shall not
include any unpaid Bonus or any unpaid long-term incentive cash award or other
award under the Incentive Compensation Plan), accrued prior to the date of
termination.

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     (b) For purposes of this Agreement, the term “Permanent Disability” means a
physical or mental condition of Executive which, as determined by the CEO, in
his sole discretion based on all available medical information, is expected to
continue beyond 26 weeks and which renders Executive incapable of performing any
substantial portion of the services contemplated hereunder with or without
reasonable accommodation.

     6.2 Termination for Cause by the Company. In the event that Executive shall
engage in any conduct which the CEO in his sole discretion shall determine to be
Cause, he shall be subject to termination forthwith. For purposes of this
Agreement, Cause shall mean engaging in or committing: (i) any act which would
constitute a felony or other act involving fraud, dishonesty, moral turpitude,
unlawful conduct or breach of fiduciary duty; (ii) any conduct which is
inconsistent with the dignity and character of an executive of the Company;
(iii) a substantial breach of any material provision of this Agreement; (iv) a
willful or reckless material misconduct in the performance of the Executive’s
duties; or (v) the habitual neglect of duties; provided, however, that for
purposes of clauses (iv) and (v), Cause shall not include any one or more of the
following: bad judgment, negligence or any act or omission believed by the
Executive in good faith to have been in or not opposed to the interest of the
Company (without any intent by the Executive to gain, directly or indirectly, a
profit to which he was not legally entitled). If the Executive agrees to resign
from his employment with the Company in lieu of being terminated for Cause, he
may be deemed to have been terminated for Cause for purposes of this Agreement.

     Upon terminating the Executive for Cause, other than paying the Executive
within 30 days of such termination his: (i) unpaid base salary prorated to the
date of termination and (ii) unpaid cash entitlements earned and accrued
pursuant to the terms of the applicable Company plan or program (which unpaid
cash entitlements shall not include any unpaid Bonus or any unpaid long-term
incentive cash award or other award under the Incentive Compensation Plan) prior
to the date of the date of termination, the Company shall have no further
obligations under this Agreement. In the event of termination for Cause,
Executive agrees to be bound by the covenants set forth herein at Sections 7
through 13, effective as of the termination date.

     6.3 Termination by the Company Without Cause / Termination by Executive for
Good Reason. In the event Executive’s employment is terminated by the Company
Without

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     Cause as defined herein, or in the event Executive terminates his
employment for Good Reason, as defined herein,

     (a) Subject to the approval of the Committee, the Company shall pay to
Executive severance consisting of an amount equal to the sum of the Executive’s
Base Compensation and Bonus at target, prorated based on the total number of
months from the date of termination through March 31, 2007; however, in no event
shall the period of time for which severance is calculated be less than
12 months.. The severance shall be paid in equal monthly installments following
such termination. The Company shall also pay the Executive (i) within 30 days of
his termination, his unpaid base salary, prorated to the date of termination;
(ii) at the time of the scheduled March payout date, any previous year’s Bonus
and CNA long-term incentive cash award based upon actual or discretionary
payouts, if any; (iii) at the time of the scheduled March payout date, current
year’s Bonus and CNA long-term incentive cash award based upon actual or
discretionary payouts, if any, prorated to the date of termination; (iv) within
30 days of his termination, unpaid cash entitlements earned and accrued pursuant
to the terms of the applicable Company plan or program prior to the date of the
date of termination (which unpaid cash entitlements under this
Section 6.3(a)(iv) shall not include any unpaid Bonus or any unpaid long-term
incentive cash award or other award under the Incentive Compensation Plan); and
(v) any unpaid Sign-on Bonus installment. Executive agrees to be bound by the
covenants set forth herein as of the termination date. In addition, Executive
shall continue to participate, at the active employee rates, in such health
benefits plans in which he is enrolled throughout the term of the payments set
forth in this Section 6.3(a), up to a maximum of 12 months, with said period of
participation to run concurrently with any period of COBRA coverage to which
Executive may be entitled. The Company shall have no further obligations under
this Agreement.

     (b) Good Reason as set forth herein is defined as a reduction in the rate
of Executive’s base salary, annual incentive target or long-term incentive cash
target compensation, a required relocation of his personal residence to another
geographical area without Executive’s consent, or a material diminution in
Executive’s duties and responsibilities without Executive’s consent.

     (c) Without Cause as set forth herein is defined as a termination of the
Executive by the Company for any reason not described in subsections 6.1 and
6.2.

     (d) The amounts payable under this Section 6.3 shall not be subject to any
obligation or duty by Executive to mitigate.

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     6.4 Voluntary Resignation by Executive. In the event that Executive’s
employment is voluntarily terminated by Executive other than pursuant to
subsection 6.3 or as a direct result of his death or Permanent Disability (as
described in subsection 6.1), the Company shall have no further obligations
under this Agreement other than paying the Executive within 30 days of such
termination his: (i) unpaid base salary prorated to the date of termination and
(ii) unpaid cash entitlements earned and accrued pursuant to the terms of the
applicable Company plan or program (which unpaid cash entitlements shall not
include any unpaid Bonus or any unpaid long-term incentive cash award or other
award under the Incentive Compensation Plan) prior to the date of termination.
Executive agrees to be bound by the covenants set forth herein effective as of
the termination date.

     6.5 Expiration of Agreement. (a) Following March 31, 2007, if the Company
and Executive have not mutually agreed to the terms of, and entered into a new
agreement, Executive’s employment shall be one of employment at will, which may
be terminated by either the Company or Executive at any time. Such continued
employment after March 31, 2007 shall be subject to the Company’s normal
policies and procedures in effect during said period of continued employment.
(b) Notwithstanding any term or provision in subsection (a) herein to the
contrary, the Company shall pay Executive severance upon termination of
Executive’s employment at will as provided for in this Section 6.5 in an amount
equal to the sum of 12 months of the Executive’s Base Compensation at the time
of such termination and Bonus at target unless and until (1) the Company’s
normal policies and procedures no longer provide for severance to be paid to
personnel at Executive’s level in accordance with the severance as provided for
in this Section 6.5 and (2) Executive has received sixty (60) days’ prior notice
of such change in the Company’s normal policies and procedures, in which case
Executive shall be given severance in accordance with such change in the
Company’s normal policies and procedures. ( c ) Notwithstanding any term or
provision in subsections (a) and (b) herein to the contrary, if (1) the Company
and Executive have not entered into a new agreement by March 31, 2007, and
(2) Executive’s employment at will with the Company terminates between April 1,
2007 and May 31, 2007, Executive shall be entitled to receive severance from the
Company in an amount not less than the sum of 12 months of Executive’s Base
Compensation and Bonus at target, irrespective of any changes in the Company’s
normal policies and procedures .

     6.6 Other Benefits. In the event that Executive’s employment is terminated
pursuant to subsections 6.1, 6.2 or 6.4, Executive’s coverage under the
Company’s short-term disability

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plan, shall end on the date of termination of employment; Executive’s coverage
under the Company’s long-term disability plan shall end on the last day of the
month in which termination of employment occurs; and Executive’s coverage under
the Company’s non-contributory and contributory life, dependent life and
accidental death and dismemberment plans shall end on the last day of the month
in which termination occurs. In the event that Executive’s employment is
terminated pursuant to subsection 6.3, the foregoing shall also apply, except
that Executive’s coverage under the Company’s contributory life, dependent life
and contributory accidental death and dismemberment plans shall continue through
the end of the severance period, upon payment of the applicable premium.

     6.7 Release. Executive acknowledges that the severance benefits set forth
in Section 6 hereof provides significant additional benefits as compared to
those available to the Company’s employees in general. As a condition precedent
to receiving any benefits pursuant to Section 6, Executive agrees to sign a full
and complete release acceptable to the Company releasing the Company, its
subsidiaries and affiliates and their directors, officers and employees of any
and all claims, both known and unknown as of the date of Executive’s
termination, provided that such release shall not apply to any accrued rights to
receive payments or benefits under this Agreement. In the absence of Executive’s
executing such a release, the Company shall have no obligation to make the
payments hereunder.

     7. Confidentiality. Executive agrees that while he is employed by the
Company, and at all times thereafter, Executive shall not reveal or utilize
information, knowledge or data which is confidential as defined in this
Agreement and learned during the course of or as a result of his employment
which relates to: (a) the Company and/or any other business or entity in which
the Company during the course of the Executive’s employment has directly or
indirectly held a greater than a 10% equity interest whether voting or
non-voting; and (b) the Company’s customers, employees, agents, brokers and
vendors. The Executive acknowledges that all such confidential information is
commercially valuable and is the property of the Company. Upon the termination
of his employment Executive shall return all confidential information and any
copies thereof to the Company, whether it exists in written, electronic,
computerized or other form.

     8. “Confidential Information” Defined. For purposes of this Agreement
“confidential information” includes all information, knowledge or data (whether
or not a trade secret or

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protected by laws pertaining to intellectual property) not generally known
outside the Company (unless as a result of a breach of any of the obligations
imposed by this Agreement) concerning the business and technical information of
the Company or other entities as described in Section 7 above. Such information
may without limitation include information relating to data, finances,
marketing, pricing, profit margins, underwriting, claims, loss control,
marketing and business plans, renewals, software, processing, vendors,
administrators, customers or prospective customers, products, brokers, agents
and employees.

     9. Competition. Executive hereby agrees that, while he is employed by the
Company, and for a period of 12 months following the date of his termination of
employment with the Company for any reason, he will not, directly or indirectly,
without the prior written approval of the CEO, enter into any business
relationship (either as principal, agent, board member, officer, consultant,
stockholder, employee or in any other capacity) with any business or other
entity that at any relevant time is engaged in the business of insurance (a
“Competitor”); provided, however, that such prohibited activity shall not
include the ownership of less than 5% of the outstanding securities of any
publicly traded corporation (determined by vote or value) regardless of the
business of such corporation. Upon the written request of Executive, the CEO
will determine whether a business or other entity constitutes a “Competitor” for
purposes of this Section 9; provided that the CEO may require Executive to
provide such information as the CEO determines to be necessary to make such
determination; and further provided that the current and continuing
effectiveness of such determination may be conditioned on the accuracy of such
information, and on such other factors as the CEO may determine.

     10. Solicitation. Executive agrees that while he is employed by the
Company, and for a period of 24 months following his termination of employment
with the Company for any reason, he will not employ, offer to employ, engage as
a consultant, or form an association with any person who is then, or who during
the preceding one year was, an employee of the Company or any Subsidiary or
Affiliate of the Company or any successor or purchaser of any portion thereof,
nor will he assist any other person or entity in soliciting for employment or
consultation any person who is then, or who during the preceding one year was,
an employee of the Company or any Subsidiary or Affiliate of the Company or any
successor or purchaser of any portion thereof.

     11. Non-interference. Executive agrees that while he is employed by the
Company, and for a period of 24 months following his termination of employment
with the Company for any reason, he will not disturb or attempt to disturb any
business relationship or agreement between

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either the Company or any Subsidiary or Affiliate of the Company or any
successor or purchaser of any portion thereof, and any other person or entity.

     12. Assistance with Claims. Executive agrees that, while he is employed by
the Company, and for a reasonable period (not less than 60 months from the date
of termination) thereafter, he will be available, on a reasonable basis, to
assist the Company and its subsidiaries and affiliates in the prosecution or
defense of any claims, suits, litigation, arbitrations, investigations, or other
proceedings, whether pending or threatened (“Claims”) that may be made or
threatened by or against the Company or any of its subsidiaries or affiliates.
Executive agrees, unless precluded by law, to promptly inform the Company if he
is requested (i) to testify or otherwise become involved in connection with any
Claim against the Company or any subsidiary or affiliate or (ii) to assist or
participate in any investigation (whether governmental or private) of the
Company or any subsidiary or affiliate or any of their actions, whether or not a
lawsuit has been filed against the Company or any of its subsidiaries or
affiliates relating thereto. For the period following the 24-month anniversary
of the date of Executive’s termination of employment with the Company, the
Company agrees to provide reasonable compensation to Executive for such
assistance.

     13. Return of Materials. Executive shall, at any time upon the request of
the Company, and in any event upon the termination of his employment with the
Company, for whatever reason, immediately return and surrender to the Company
all originals and all copies, regardless of medium, of property belonging to the
Company created or obtained by Executive as a result of or in the course of or
in connection with his employment with the Company regardless of whether such
items constitute proprietary information, provided that Executive shall be under
no obligation to return written materials acquired from third parties which are
generally available to the public. Executive acknowledges that all such
materials are, and will remain, the exclusive property of the Company.

     14. Scope of Covenants.

     (a) The Executive acknowledges that: (a) as a senior executive of the
Company he had access to confidential information concerning not only the
business segments for which he may have been responsible (an outline summary of
which appears in the Company’s Form 10K filed with the Securities and Exchange
Commission) but the entire range of businesses in which the Company was engaged;
(b) that the businesses segments for which he may have been

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responsible and the Company’s businesses are conducted nation-wide; and (c) that
the Company’s confidential information, if disclosed or utilized without its
authorization would irreparably harm the Company in: (i) obtaining renewals of
existing customers; (ii) selling new business; (iii) maintaining and
establishing existing and new relationships with employees, agents, brokers,
vendors; and (iv) other ways arising out of the conduct of the businesses in
which the Company is engaged.

     (b) To protect such information and such existing and prospective
relationships, and for other significant business reasons, the Executive agrees
that it is reasonable and necessary that: (a) the scope of this agreement be
nation-wide; (b) its breadth include the entire insurance industry; and (c) the
duration of the restrictions upon the Executive be as indicated therein.

     (c) The Executive acknowledges that the Company’s customer, employee and
business relationships are long-standing, indeed, near permanent and therefore
are of great value to the Company. The Executive agrees that neither any of the
provisions in this Agreement nor the Company’s enforcement of it alters or will
alter his ability to earn a livelihood for himself and his family and further
that both are reasonably necessary to protect the Company’s legitimate business
and property interests and relationships, especially those which he was
responsible for developing or maintaining. The Executive agrees that his actual
or threatened breach of the covenants set forth in Sections 7 through 13 above
would cause the Company irreparable harm and that the Company is entitled to an
injunction, in addition to whatever other remedies may be available, to restrain
such actual or threatened breach. The Executive agrees that if bond is required
in order for the Company to obtain such relief, if need only be in a nominal
amount and that he shall reimburse the Company for all costs of any such suit,
including the Company’s reasonable attorneys’ fees. The Executive consents to
the filing of any such suit against him in the state or federal courts located
in Illinois or any state in which he resides. He further agrees that in the
event of such suit or any other action arising out of or relating to this
Agreement, the parties shall be bound by and the court shall apply the internal
laws of the State of Illinois and irrespective of rules regarding choice of law
or conflicts of laws.

     (d) If he has not already done so Executive agrees to continue to be bound
by and to execute the Company’s Confidentiality, Computer Responsibility and
Professional Certification Agreement, a copy of which is attached hereto and
incorporated by reference herein.

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     (e) For purposes of Sections 7 through 14 hereof, the “Company” shall
include the “CNA insurance companies”, as well.

     15. Effect of Covenants. Nothing in Sections 7 through 14 shall be
construed to adversely affect the rights that the Company would possess in the
absence of the provisions of such Sections.

     16. Revision. The parties hereto expressly agree that in the event that any
of the provisions, covenants, warranties or agreements in this Agreement are
held to be in any respect an unreasonable restriction upon Executive or are
otherwise invalid, for whatsoever cause, then the court or arbitrator so holding
is hereby authorized to (a) reduce the territory to which said covenant,
warranty or agreement pertains, the period of time in which said covenant,
warranty or agreement operates or the scope of activity to which said covenant,
warranty or agreement pertains or (b) effect any other change to the extent
necessary to render any of the restrictions contained in this Agreement
enforceable.

     17. Severability. Each of the terms and provisions of this Agreement is to
be deemed severable in whole or in part and, if any term or provision of the
application thereof in any circumstances should be invalid, illegal or
unenforceable, the remaining terms and provisions or the application thereof to
circumstances other than those as to which it is held invalid, illegal or
unenforceable, shall not be affected thereby and shall remain in full force and
effect.

     18. Binding Agreement; Assignment; Approval. This Agreement shall be
binding upon the parties hereto and their respective heirs, successors, personal
representatives and assigns. The Company shall have the right to assign this
Agreement to any successor in interest to the business, or any majority part
thereof, of the Company or any joint venture or partnership to which the Company
is a joint venturer or general partner which conducts substantially all of the
Company’s business. Executive shall not assign any of his obligations or duties
hereunder and any such attempted assignment shall be null and void. This
Agreement is subject to the substantial approval of its terms by the Committee.

     19. Controlling Law; Jurisdiction. This Agreement shall be governed by,
interpreted and construed according to the laws of the State of Illinois
(without regard to choice of law or conflict of laws principles).

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     20. Entire Agreement. Except as otherwise expressly set forth herein, this
Agreement contains the entire agreement of the parties with regard to the
subject matter hereof, supersedes all prior agreements and understandings,
written or oral, and may only be amended by an agreement in writing signed by
the parties thereto.

     21. Additional Documents. Each party hereto shall, from time to time, upon
request of the other party, execute any additional documents which shall
reasonably be required to effectuate the purposes hereof.

     22. Incorporation. The introductory recitals hereof are incorporated in
this Agreement and are binding upon the parties hereto.

     23. Failure to Enforce. The failure to enforce any of the provisions of
this Agreement shall not be construed as a waiver of such provisions. Further,
any express waiver by any party with respect to any breach of any provision
hereunder by any other party shall not constitute a waiver of such party’s right
to thereafter fully enforce each and every provision of this Agreement.

     24. Survival. Except as otherwise set forth herein, the obligations
contained in this Agreement shall survive the termination, for any reason
whatsoever, of Executive’s employment with the Company.

     25. Headings. All numbers and headings contained herein are for reference
only and are not intended to qualify, limit or otherwise affect the meaning or
interpretation of any provision contained herein.

     26. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid
(provided that international mail shall be sent via overnight or two-day
delivery), or sent by facsimile or prepaid overnight courier to the parties at
the addresses set forth below (or such other addresses as shall be specified by
the parties by like notice). Such notices, demands, claims and other
communications shall be deemed given:

     (a) in the case of delivery by overnight service with guaranteed next day
delivery, the next day or the day designated for delivery;

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     (b) in the case of certified or registered U.S. mail, five days after
deposit in the U.S. mail; or

     (c) in the case of facsimile, the date upon which the transmitting party
received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:

If to the Company:

CNA Financial Corporation
CNA Plaza
Chicago, IL 60685
Attn: Corporate Secretary

If to Executive:

Michael Fusco
57 Colgate Lane
Woodbury, NY 11797-2220

or to such other address as either party shall furnish to the other party in
writing in accordance with the provisions of this Section 26.

     27. Gender. The masculine, feminine or neuter pronouns used herein shall be
interpreted without regard to gender, and the use of the singular or plural
shall be deemed to include the other whenever the context so requires.

     28. Arbitration of All Disputes. Any controversy or claim arising out of or
relating to this Agreement (or the breach thereof) shall be settled by final,
binding and non-appealable arbitration in Chicago, Illinois by three
arbitrators. Except as otherwise expressly provided in this

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Section 28, the arbitration shall be conducted in accordance with the rules of
the American Arbitration Association (the “Association”) then in effect. One of
the arbitrators shall be appointed by the Company, one shall be appointed by
Executive, and the third shall be appointed by the first two arbitrators. If the
first two arbitrators cannot agree on the third arbitrator within 30 days of the
appointment of the second arbitrator, then the third arbitrator shall be
appointed by the Association. This Section 28 shall not be applicable with
respect to any matter or controversy subject to Sections 7 through 14 of this
Agreement.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Effective Date.

CONTINENTAL CASUALTY COMPANY

     
By:
  /s/ Lori S. Komstadius

  Lori S. Komstadius
 
   
Title:
  Senior Vice President — Human

  Resources of Continental Casualty

  Company

/s/ Michael Fusco
Michael Fusco

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