EXECUTIVE SEVERANCE AGREEMENT

     This EXECUTIVE SEVERANCE AGREEMENT (“Agreement”), made as of the 12th day
of June 2003 (the “Effective Date”), by and among CONTINENTAL CASUALTY COMPANY,
an Illinois Insurance Company (the “Company”), and Debra L. McClenahan (the
“Executive”).

     WHEREAS, the Executive is presently employed by the Company with senior
management level responsibility for its reinsurance business unit commonly known
as CNA Re.

     WHEREAS, the Company considers it essential to its best interests to foster
the retention of key management personnel of the Company; and

     WHEREAS, the Company recognizes that circumstances may arise that would
affect the continuing role of the Executive, and that such circumstances may
result in the departure or distraction of the Executive to the detriment of the
Company.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

     1.     Covered Termination. The termination benefits described in Section 2
hereof shall be provided to the Executive in the event that the Executive
suffers a “Covered Termination” of the Executive’s employment with the Company
between the Effective Date and December 31, 2005 (the “End Date”). Upon their
mutual written agreement the Company and the Executive may extend the End Date.

          For purposes hereof, “Covered Termination” shall mean termination of
the Executive’s employment by the Company other than for “Cause”, as described
in paragraph (a) below; or termination of such employment by the Executive for
“Good Reason”, as described in paragraph (b) below; or termination of employment
as a result of a “Change in Control”, as described in paragraph (c) below. The
Executive shall not be treated as having suffered a Covered Termination in the
event of: the Executive’s death or disability, the involuntary termination of
the Executive’s employment for Cause, the Executive’s voluntary termination of
employment other than for Good Reason, or the Executive’s termination of
employment for any reason following the End Date.

          (a) Termination For Cause. 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 the Company’s Code of Professional Conduct or of
this Agreement; (iv) 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 she was not legally entitled). If the Executive
agrees to resign from her employment with the Company in lieu of being
terminated for Cause, she will be deemed to have been terminated for Cause for
purposes of this Agreement.

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          (b) Termination for Good Reason. For purposes of this Agreement, the
voluntary termination of employment by the Executive prior to the End Date shall
be deemed a termination for “Good Reason” if:

  (i)   there is a substantial diminution of the Executive’s duties or
responsibilities;     (ii)   there is a reduction in the Executive’s “Total
Target Compensation” amount from that which was in effect on the Effective Date.
For purposes hereof, “Total Target Compensation” is defined as the total of
Executive’s annual base salary, annual incentive target, and long-term incentive
cash target; or     (iii)   there is a relocation, without the Executive’s
written consent, of the Executive’s principal place of business by more than 50
miles.

          (c) Change in Control. For purposes of this Agreement the termination
of employment by Executive prior to the End Date shall be deemed a termination
for “Change in Control” if, (i) Executive does not receive a “Qualified Offer”
from the Company, any of its subsidiaries or a Successor Entity. For purposes
hereof, a “Qualified Offer” is an offer of employment in connection with a
Change in Control under terms and conditions that would not constitute Good
Reason under Section 1(b) hereof, or (ii) in the case of an offer other than
from a Successor Entity, if there is a change in Executive’s reporting
relationship other than to the CEO or CFO of the Company, or the President and
COO of its Property & Casualty business unit.

               For purposes of this Agreement, a “Change in Control” shall be
deemed to have occurred if prior to the End Date all or substantially all of the
business of CNA Re, whether conducted by the Company or any of its subsidiaries
is exited, sold, or otherwise transferred, in a single or series of related or
unrelated transactions, whether by asset purchase, stock purchase, merger or
consolidation, reinsurance, or any other form of transaction, or combination
thereof, to entities not controlled by the Company. For purposes of this
Agreement, an entity shall be deemed controlled by the Company if it holds,
directly or indirectly, 50% or more of the voting interest of such entity. If a
Change in Control shall occur, any entity that acquires CNA Re and that becomes
the employer of the Executive in connection therewith shall be referred to
herein, together with its affiliates, as the “Successor Entity.”

               The final and binding determination of whether a sale of the
business of CNA Re or any portion thereof shall constitute a Change in Control
shall be made in good faith by the CEO of the Company (“CEO”), as shall the
determination of whether a termination is a result of Cause or Good Reason or as
a result of any other reason or cause.

     2.     Consequences of Covered Termination. In the event that the
Executive’s employment with the Company shall have been terminated prior to the
End Date in a manner that shall constitute a Covered Termination, the Executive
shall be provided with the following severance payments and benefits:

          (a) Base Salary. The Executive shall receive following the Covered
Termination an amount equal to one (1) times the Executive’s annual base salary
as in effect at the time of the Covered Termination (disregarding any reduction
in base salary rate that constitutes Good Reason under Section 1 (b) hereof)
(“Base Salary”) payable in 12 equal monthly installments,

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          (b) Annual Bonus. The Executive shall receive following the Covered
Termination an amount equal to one (1) times the annual target bonus as in
effect at the time of the Covered Termination, payable in 12 equal monthly
installments.

          (c) CNA Re Deferred Profit Sharing Plan. For purposes of the CNA Re
Deferred Profit Sharing Plan (DPS), the Executive’s Covered Termination shall be
treated as a termination through retirement, and the Executive shall receive
those amount that would be payable in the event of termination through
retirement pursuant to the terms of the DPS in effect immediately prior to the
Covered Termination.

          (d) Miscellaneous Items. The Executive shall receive any unpaid base
salary prorated to the date of her termination and any previous year’s earned,
but unpaid annual bonus.

          (e) Welfare Benefits. Provided they are maintained by the Company, the
Executive shall be entitled to coverage and benefits under the Company’s benefit
programs, on substantially the same terms as were in effect immediately prior to
a Covered Termination, including any applicable co-payments or premiums to be
paid by the Executive, for a period of one (1) year following the Executive’s
Covered Termination (the “Continuation Period”), under the medical, dental and
group life insurance plans in which the Executive was participating at the time
of the Covered Termination, as though the Executive’s termination of employment
had not occurred. (The benefits and coverages to be provided under this
paragraph (f) are hereinafter referred to as “Welfare Continuation Coverages”.)
All Welfare Continuation Coverages shall apply to the Executive and any of the
Executive’s dependents as and to the extent they would have been eligible for
coverage if the Executive had continued to be employed by the Company during the
Continuation Period. The Company may provide the Executive with the Welfare
Continuation Coverages under arrangements other than pursuant to the generally
applicable welfare benefit plans of the Company in which the Executive was
previously participating, provided that the benefits and coverages so provided
are at least as favorable to the Executive as coverage under the otherwise
applicable Welfare Continuation Coverages, on a coverage by coverage basis, and
taking into account all tax consequences to the Executive. The Executive’s
entitlement to “COBRA” continuation coverages for medical and dental benefits
under section 4980B of the Internal Revenue Code (or any successor provision
thereto) shall run concurrent with Welfare Continuation Coverages.

     3.     Termination Prior To End Date For Cause, Voluntary Termination Other
Than For Good Reason, Or Termination Because Of Death Or Disability. In the
event of The Executive’s termination prior to the End Date for Cause or due to
her voluntary termination other than for Good Reason or her termination because
of death or disability, the Company shall pay the Executive as severance only
the Miscellaneous Items set forth in Section 2(d) above and she shall be
entitled to benefits only as provided for in Section 5, below.

     4.     Termination Prior To End Date By The Company Without Cause. In the
event of the termination of the Executive by the Company prior to the End Date
other than for Cause, she shall receive the same severance payments and other
benefits as if she had terminated her employment for Good Reason.

     5.     Other Payments. Other than as set forth is this Agreement, in the
event of her termination prior to the End Date the Executive shall be entitled
to no other severance payments pursuant to any Company severance plans or
otherwise and her rights, if any, under any of the Company’s retirement,
savings, benefit, pension, welfare (including medical, dental and life),
incentive or other non-severance plans of any nature shall be governed by their
terms. In the event of her termination for any reason subsequent to the End
Date, the Executive’s

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severance and other benefits shall be governed by the terms of the Company’s
employee benefit plans or programs in effect as of the time of such termination.

     6.     Tax Withholding. All payments required to be made to the Executive
under this Agreement shall be subject to the withholding of such amounts, if
any, relating to income tax, excise tax, employment tax and other payroll taxes
as the payer may reasonably determine it should withhold pursuant to any
applicable law or regulation.

     7.     No Mitigation or Offset. In the event of a Covered Termination, the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of obligations hereunder for the payments and
the benefit coverages required to be provided to the Executive.

     8.     Covenants.

          (a) Confidentiality. The Executive agrees that, while employed by the
Company, and at all times thereafter, the 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 Executive’s
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 10% equity interest whether voting or
non-voting; (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 Executive’s employment, the Executive shall return all confidential
information to the Company, whether it exists in written, electronic,
computerized or other form. Notwithstanding the foregoing provisions of this
Section 8(a), the Executive may disclose or use any such information (i) as such
disclosure or use may be required or appropriate in the course of the
Executive’s employment with the Company, (ii) when required by a court of law,
by any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction, provided that in the event Executive
believes she is so required to make such disclosure or use, she will notify the
Company in writing of the basis for that belief before actually making such
disclosure or use in order to permit the Company to take steps to protect the
Company’s interest and will cooperate with the Company in all reasonable
respects to permit the Company to oppose such disclosure or use, or (iii) with
the prior written consent of the Company. In addition, if the Executive has not
already done so, she agrees to be bound by the Company’s Confidentiality,
Computer Responsibility and Professional Certification Agreement incorporated by
reference herein.

               For purposes of this Agreement, “Confidential Information”
includes all information, knowledge or data (whether or not a trade secret or
protected by laws pertaining to intellectual property) not generally known
outside the Company (unless as a result of a breach by the Executive of any of
the obligations imposed by this Agreement) concerning the business and technical
information of the Company or other entities as described above. Such
information may without limitation include information relating to data,
finances, marketing, pricing, profit margins, underwriting, actuarial, claims,
loss control, marketing and business plans, renewals, software, processing,
vendors, administrators, customers or prospective customers, products, brokers,
agents, and employees.

          (b) Non-Solicitation. The Executive agrees that, during her employment
and for a period of 12 months following the Executive’s termination of
employment with the Company, for whatever reason, should said termination occur
between the Effective Date and the End Date, the Executive will not employ,
offer to employ, engage as a consultant, or form an association

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with any person who is then, or who during the preceding one year was, an
employee of the Company, nor will the Executive assist any other person in
soliciting for employment or consultation any person who is then, or who during
the preceding one year was, an employee of the Company.

          (c) Non-Interference. The Executive agrees that during her employment
and for a period of 12 months following Executive’s termination of employment,
for whatever reason, with the Company, should said termination occur between the
Effective Date and the End Date, the Executive will not disturb or attempt to
disturb any business relationship or agreement between and the Company any other
person or entity.

          (d) Assistance with Claims. The Executive agrees that, during her
employment and for a reasonable period (not fewer than 24 months from the date
of termination) thereafter, the Executive will be available, on a reasonable
basis to assist the Company 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. The Executive agrees, unless precluded by law, to promptly inform the
Company if she is requested (i) to testify or otherwise become involved in
connection with any Claim against the Company, or (ii) to assist or participate
in any investigation (whether governmental or private) of the Company or any of
their actions, whether or not a lawsuit has been filed against the Company
relating thereto. After the termination of her employment, the Company agrees to
provide reasonable compensation to the Executive at an hourly rate computed by
dividing Executive’s base salary as of her termination by 2080 hours for such
assistance. The Company also shall reimburse the Executive or cause the
Executive to be reimbursed for any out-of-pocket expenses reasonably incurred by
the Executive in complying with this section.

          (e) Return of Materials. The Executive shall, at any time upon the
request of the Company, and in any event upon the termination of 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 the 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 the Executive shall be under no obligation to return written materials
acquired from third parties which are generally available to the public. The
Executive acknowledges that all such materials are, and will remain, the
exclusive property of the Company.

          (f) Effect of Breach. The Executive acknowledges that the violation of
the covenants set forth in this Section 8 would cause the Company irreparable
harm and the Executive agrees that the Company shall be entitled to injunctive
relief restraining the Executive from actual or threatened breach of the
covenants and that if bond is required to be posted in order for the Company to
secure such relief said bond need only be in a nominal amount. The right of the
Company to seek injunctive relief shall be in addition to any other remedies
available to the Company with respect to an alleged or threatened breach. The
Executive shall be liable for the Company’s reasonable attorneys’ fees and costs
in bringing such an action.

          (g) Definition of Company. For purposes of this Section 8 the meaning
of Company also shall include its parent and any of its subsidiaries or
affiliates.

     9.     Release of Claims. As a condition of Executive’s entitlement to the
severance payments and benefits provided in this Agreement, at the time of her
termination, the Executive, shall enter into a release in a form acceptable to
the Company releasing the Company and its parent, subsidiaries, affiliates,
directors, officers, employees and agents from

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any and all claims arising prior to the date of such release, including but not
limited to those arising from the Age Discrimination In Employment Act, as
amended.

     10.     Other Compensation and Benefit Plans. Except as specifically
provided herein, the Covered Termination of the Executive’s employment shall not
accelerate the time of payment or vesting under, or increase the amount of
benefits due under, any benefit or incentive compensation plans of the Company.
The amount of any compensation deemed to be received by the Executive pursuant
to this Agreement shall not constitute compensation with respect to which any
other benefit or incentive compensation of such Executive is determined. Except
as provided herein, the rights and benefits of the Executive under this
Agreement shall not be in lieu of the Executive’s benefits under any employee
benefit plan or program of the Company, which shall be payable in accordance
with the terms and conditions of such plans or programs.

     11.     Successors and Assigns. This Agreement and all rights hereunder are
personal to the Executive and shall not be assignable by the Executive.

     12.     No Right of Employment. Nothing in this Agreement shall confer upon
the Executive any right to continue as an employee of the Company or interfere
in any way with the right of the Company or the Executive to terminate their
employment relationship at any time.

     13.     Severability. The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of any
other provision.

     14.     Entire Agreement. This Agreement constitutes the entire agreement
among the parties respecting the subject matter hereof and supersedes any prior
agreements respecting the subject matter hereof. No amendment to this Agreement
shall be deemed valid unless in writing and signed by the parties, and no
discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.

     15.     Notices. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally or by
courier or by facsimile transmission or sent by express, registered or certified
mail, postage prepaid, to the parties at the addresses hereinafter set forth, or
at such other places that either party may designate by notice to the other.

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                     Notice to CNA or the Company shall be addressed to:

     
Jonathan D. Kantor
 
Executive Vice President and General Counsel
 
CNA Financial Corporation
 
CNA Plaza 43 South
 
Chicago, IL 60685

                    Fax: (312) 817-0511

                    Notice to the Executive shall be addressed to the Executive
at the address indicated on the signature page hereof.

     16.     Governing Law. This Agreement shall be construed and interpreted
according to the laws of the State of Illinois without regard to conflict of
laws principles

     17.     Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one Agreement. It shall not be necessary that
any counterpart be signed by the parties hereto so long as each such party shall
have executed a counterpart.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

          CONTINENTAL CASUALTY COMPANY         /s/ Jonathan D. Kantor

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By: Jonathan D. Kantor
Its: Executive Vice President and General Counsel             EXECUTIVE      
Name:
Address:   /s/ Deborah L. McClenahan

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Debra L. McClenahan
942 Pine Tree Lane
Winnetka, IL 60093-1323       Fax: (312) 876-5429

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