**EMPLOYMENT AGREEMENT**
     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of the 10th day ofJune, 2003 (the “Effective Date”), by and between CNA Financial Corporation, aDelaware corporation (the “Company”), and Robert L. McGinnis (“Executive”);
**WITNESSETH:**
     **WHEREAS,**Executive currently serves as Executive Vice President and ChiefOperating Officer, Group, with senior management level responsibility for groupoperations for the principal business units and subsidiaries of the Company(hereinafter the “CNA insurance companies”): and
     **WHEREAS,**The Company wishes to employ Executive as President and ChiefExecutive Officer of the Life and Group operations of the CNA insurancecompanies
     **WHEREAS,**the Company and the Executive wish to enter into a writtenagreement setting forth the terms of their future employment relationship asset forth below;
     **NOW, THEREFORE,**in consideration of the foregoing premises and thepromises and covenants herein, the parties hereto agree as follows:
     1.     **Employment Term**. The Company and Executive agree that the Company shallemploy Executive to perform the duties of a President and Chief ExecutiveOfficer of the CNA insurance companies for the period commencing on June 10,2003 (“Effective Date”) and ending on December 31, 2005, or such earlier dateas of which Executive’s employment is terminated in accordance with Section 6hereof. The covenants set forth in Sections 7, 8, 9, 10, 11, 12, 13, and 14shall survive the employment term of this Agreement.
     2.     **Duties of Executive**.
     (a)  Executive shall assume the duties and responsibilities of a Presidentand Chief Executive Officer of the Life and Group Operations [or successortitle] of the CNA insurance companies as defined and directed by the Company’sChief Executive Officer (hereinafter “CEO”). Executive shall report to the CEO.Executive may be elected to and shall serve as a
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member of the Board of Directors of one or more of the CNA insurancecompanies, and if so elected Executive agrees to serve on such boards in suchcapacity without additional compensation; provided that nothing in thisAgreement shall require that the shareholders of any company elect Executive toits board of directors.
     (b)  Executive shall diligently and to the best of his abilities assume,perform, and discharge the duties and responsibilities of President and ChiefExecutive Officer, Life and Group Operations, as well as such other specificduties and responsibilities as the CEO shall assign or designate to Executivefrom time to time not inconsistent with Executive’s status. Executive shalldevote substantially all of his working time to the performance of his dutiesas set forth herein and shall not, without the prior written consent of theCEO, accept other employment or render or perform other services, nor shall hehave any direct or indirect ownership interest in any other business which isin competition with the business of the Company or the CNA insurance companies,other than in the form of publicly traded securities constituting less thanfive percent (5%) of the outstanding securities of a corporation (determined byvote or value) or limited partnership interests constituting less than fivepercent (5%) of the value of any such partnership. The foregoing shall notpreclude Executive from engaging in charitable, professional, and personalinvestment activities, provided that, in the judgment of the CEO, suchactivities do not materially interfere with his performance of his duties andresponsibilities hereunder.
     3.     **Compensation**.
     (a)  The Company shall pay to Executive for the period he is employed bythe Company hereunder, an annual base salary at no less than $525,000.00payable not less frequently than monthly (the “Base Compensation”). At thediscretion of the CEO and/or the Incentive Compensation Committee of theCompany’s Board of Directors (“Committee”) such salary rate may be increasedannually as of each March occurring during the term of the Agreement, beginningwith March 2004, based on market considerations, responsibilities andperformance. In no event shall Executive’s salary rate be reduced to an amountthat is less than the amount specified in this paragraph (a), or to an amountthat is less than the amount that he was previously receiving withoutExecutive’s written consent.
     (b)  The Executive shall be eligible for an annual incentive cash award(“Bonus”) pursuant to the CNA Financial Corporation 2000 Incentive CompensationPlan (the “Incentive
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Compensation Plan”). Subject to the approval of Committee, the Executive’starget 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 eventshall the target Bonus be reduced without the Executive’s written consent. Theamount of the award shall be based on the CEO’s assessment of Executive’sperformance, and shall be determined and payable in accordance with the termsof the Incentive Compensation Plan as set forth in the Incentive CompensationPlan documents; however, if Executive is a proxy-named officer, the amount ofthe award shall be based on the Committee’s assessment of Executive’sperformance, and shall be determined and payable in accordance with the termsof the Incentive Compensation Plan, as set forth in the Incentive CompensationPlan documents.
     (c)  Subject to Committee approval, Executive shall be eligible to receivea long-term Incentive Cash Award, in accordance with the terms of the IncentiveCompensation Plan, as may be in effect during the term of this Agreement orsuch other long term incentive plan as the Company may from time to time adoptfor its senior officers. The Executive’s target long-term incentive cash awardshall be no less than the 20 percent (20%) of each year’s annual basecompensation during the bonus period. In no event shall the target award bereduced without the Executive’s written consent.
     (d)  Subject to the approval of the Committee, Executive shall be awarded aminimum stock option grant of 10,000 shares of CNA Financial Corporation stockannually at each May Incentive Compensation Committee meeting during hisemployment with the Company. Such annual grant may be increased at therecommendation of the CEO and upon approval of the Committee, subject to shareavailability. In addition, Executive shall be awarded a special promotionalstock option grant of 10,000 shares of CNA Financial Corporation stock as ofAugust 6, 2003. Executive’s rights with respect to shares awarded hereundershall be subject to the terms of the Incentive Compensation Plan.
     (e)  For avoidance of doubt respecting awards to Executive under Section3(b), 3(c) and 3(d) hereof, the Committee shall retain such discretion as maybe provided under the Incentive Compensation Plan to satisfy Section 162(m) ofthe Internal Revenue Code of 1986 (“Code”) or any successor provision. TheCompany may defer the payment of all compensation to which Executive isentitled hereunder or otherwise to enable it to comply with Section 162(m) ofthe Code or any successor provision with respect to deductibility of executivecompensation. All
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deferred compensation will be credited to the Executive’s SES-CAP accountand shall be subject to the terms thereof.
     (f)  Executive’s pensionable earnings under the CNA Savings & CapitalAccumulation Plan (“S-CAP”), and the CNA Supplemental Savings & CapitalAccumulation Plan (“SES-CAP”) will be calculated as specified in the plandocuments.
     (g)  All payments due under this Agreement shall be subject to withholdingas required by law.
     4.     **Other Benefits**. Executive shall be entitled to continue to participatein the various benefit plans, programs or arrangements established andmaintained by the Company from time to time and applicable to senior executivesof the Company such as, but not by way of limitation, health and major medicalinsurance, dental insurance, life insurance, long-term disability insurance,both qualified and supplemental savings plans, and to receive all fringebenefits made available to senior executives of the Company, including clubmembership ($10,000.00 annually), tax return preparation and paid parking.Executive’s entitlement to participate in any such plan, program or arrangementshall, in each case, be subject to the terms and conditions thereof. In theevent of termination of employment, Executive’s severance shall be determinedsolely in accordance with Paragraph 6 hereof.
     5.     **Expense Reimbursement**. Executive shall continue to be entitled toreimbursement by the Company for all reasonable and customary travel and otherbusiness expenses incurred by Executive in carrying out his duties under thisAgreement, in accordance with the general reimbursement policies adopted by theCompany from time to time. Executive shall report all such expenditures notless frequently than monthly accompanied by adequate records and such otherdocumentary evidence as required by the Company or by Federal or state taxstatutes or regulations governing the substantiation of such expenditures.
     6.     **Termination of Employment**. If Executive’s employment with the Companyshall terminate during the term of this Agreement, the following conditions setforth herein shall apply with respect to the Executive’s compensation andbenefits hereunder. Either party may terminate Executive’s employment with theCompany during the term of this Agreement by written notice to the other partyeffective as of the date specified in such notice and Executive’s employmentshall automatically terminate in the event of Executive’s death. Upontermination of
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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 tothis Section 6. All payments made hereunder shall be made either to Executiveor to his personal representatives, heirs or beneficiaries as the case may be.In the event of Executive’s termination during the term of this Agreement,unless otherwise specified in this Agreement, Executive’s rights, if any, underany of the Company’s savings, benefit, incentive or other plans of any natureshall be governed by their terms.
     6.1     **Death and Disability**. In the event of the death of Executive or, atthe Company’s election, in the event of his Permanent Disability (as definedbelow) during the term of this Agreement, provided it has not alreadyterminated, 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) unpaidbase salary and current year’s target Bonus and CNA long-term incentive cashaward prorated to the date of termination; (ii) any previous year’s earned butnot paid Bonus; and (iii) unpaid cash entitlements earned by Executive orpayable to his beneficiaries as of the date of termination which, pursuant tothe terms of the applicable Company plan or program, accrued prior to the dateof termination.
     (b)  For purposes of this Agreement, the term “Permanent Disability” meansa physical or mental condition of Executive which, as determined by the CEO, inhis sole discretion based on all available medical information, is expected tocontinue beyond 26 weeks and which renders Executive incapable of performingany substantial portion of the services contemplated hereunder with or withoutreasonable accommodation.
     6.2     **Termination for Cause by the Company**. In the event that Executiveshall engage in any conduct which the CEO in his sole discretion shalldetermine to be **Cause**, he shall be subject to termination forthwith. Forpurposes of this Agreement, Cause shall mean engaging in or committing: (i) anyact which would constitute a felony or other act involving fraud, dishonesty,moral turpitude, unlawful conduct or breach of fiduciary duty; (ii) any conductwhich is inconsistent with the dignity and character of an executive of theCompany; (iii) a substantial breach of any material provision of thisAgreement; (iv) a willful or reckless material misconduct in the performance ofthe Executive’s duties; or (v) the habitual neglect of duties; provided,
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however, that for purposes of clauses (iv) and (v), Cause shall notinclude any one or more of the following: bad judgment, negligence or any actor omission believed by the Executive in good faith to have been in or notopposed to the interest of the Company (without any intent by the Executive togain, 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 lieuof being terminated for Cause, he may be deemed to have been terminated forCause for purposes of this Agreement.
     Upon terminating the Executive for cause, other than paying the Executivewithin 30 days of such termination his: (i) unpaid base salary; (ii) anyprevious year’s earned but not paid Bonus; and (iii) unpaid cash entitlementsearned and accrued pursuant to the terms of the applicable Company plan orprogram prior to the date of the date of termination, the Company shall have nofurther obligations under this Agreement. In the event of termination forCause, Executive agrees to be bound by the covenants set forth herein ***atSections 7, 8, and 10 though 13***, effective as of the termination date.
     6.3     **Termination by the Company Without Cause or For Convenience /Termination by Executive for Good Reason**. In the event Executive’s employmentis terminated by the Company **Without Cause**or **For Convenience**as definedherein, or in the event Executive terminates his employment for **Good Reason**, asdefined herein,
     (a) The Company shall pay to Executive severance consisting of an amountequal 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 terminationthrough December 31, 2005; however, in no event shall the period of time forwhich such severance is calculated be less than 12 months. The severance shallbe paid in equal monthly installments following such termination. The Companyshall also pay the Executive within 30 days of his termination his: (i) unpaidbase salary and current year’s target Bonus and CNA long term cash awardprorated to the date of termination; (ii) any previous year’s earned but notpaid Bonus; and (iii) unpaid cash entitlements earned and accrued pursuant tothe terms of the applicable Company plan or program prior to the date of thedate of termination. Executive agrees to be bound by the covenants set forthherein as of the termination date. In addition, Executive shall continue toparticipate in such health insurance plans in which he is enrolled throughoutthe term of the payments set forth in this Section 6.3(a), up to a maximum of18 months, with said period of participation to run concurrently with anyperiod of COBRA coverage to which Executive may be entitled. The Company shallhave no further obligations under this Agreement.
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     (b)  Good Reason as set forth herein is defined as a reduction in the rateof Executive’s base salary, annual incentive target or long-term incentive cashtarget compensation, a required relocation of his personal residence to anothergeographical area without Executive’s consent, or a reporting relationship toany person other than either the CEO or the President & Chief ExecutiveOfficer, Property and Casualty Operations, or a material diminution inExecutive’s duties and responsibilities without Executive’s consent.
     ( c ) Without Cause or For Convenience as set forth herein is defined as atermination of the Executive by the Company for any reason not described insubsections 6.1 and 6.2.
     6.4     **Voluntary Resignation by Executive**. In the event that Executive’semployment is terminated by Executive other than pursuant to subsection 6.3 oras a direct result of his death or Permanent Disability (as described insubsection 6.1), other than paying the Executive within 30 days of suchtermination his: (i) unpaid base salary; (ii) any previous year’s earned butnot paid Bonus; and (iii) unpaid cash entitlements earned and accrued pursuantto the terms of the applicable Company plan or program prior to the date of thedate of termination, the Company shall have no further obligations under thisAgreement upon a termination under this Section 6.4. Executive agrees to bebound by the covenants set forth herein effective as of the termination date.
     6.5     **Failure to Extend Agreement**.
     (a)  Following December 31, 2005, if the Company terminates Executive’semployment for any reason other than for cause, in which case Paragraph 6.2(relating to termination for cause) shall apply, or if the Company andExecutive, after good faith negotiations have not mutually agreed to the termsof, and entered into a new agreement prior to March 31, 2006, Executive’semployment shall terminate on April 1, 2006. Upon the termination ofExecutive’s employment pursuant to this section, the Company shall payExecutive severance consisting of: (i) Executive’s then current annual basecompensation; and (ii) Executive’s then current annual target Bonus. Theseverance shall be paid in 12 equal monthly installments following suchtermination. The Company shall also pay Executive within 30 days of histermination his (i) unpaid base salary and current year’s target Bonus andlong-term incentive cash award, prorated to the date of termination; (ii) anyprevious year’s earned but not paid Bonus; and (iii) unpaid cash entitlementsearned and accrued pursuant to the terms of the applicable Company
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plan or program prior to the date of termination. Executive shall be boundby the covenants set forth herein effective as of the termination date. Inaddition, Executive shall continue to participate in such health insuranceplans in which he is enrolled throughout the term of the payments set forth inthis Section 6.5(a), as if he were still employed by the Company, saidparticipation to run concurrently with any period of COBRA coverage to whichExecutive may be entitled.
     (b)  Notwithstanding the foregoing, if Executive’s employment with theCompany terminates following Executive’s rejection of an offer by the Companyto extend the period of the Agreement or to enter into a new Agreement onsubstantially the same terms as prior to termination, with compensation that isnot less than Executive’s yearly compensation prior to the termination or ifExecutive voluntarily resigns, then his employment shall be treated as havingbeen terminated in accordance with Paragraph 6.4 (relating to voluntaryresignation), and the payments to which he may be entitled after suchtermination shall be solely governed by said Paragraph.
     (c)  During such period as the Executive shall continue to be employed bythe Company between January 1, 2006 and April 1, 2006, he shall be paid underthe same terms and at the same rate as was in effect on December 31, 2005.
     (d)  Executive shall continue to be eligible to participate in theCompany’s health insurance plans on the same basis as he was participatinguntil April 1, 2006 in the event of any termination or expiration under thisSection 6.5.
     6.6     **Change in Control.**
     ***(a) ***In the event that the Company eliminates both its Life and GroupOperations, whether by sale, spin-off, run-off or other business transaction,Executive’s employment with the Company shall terminate and Executive shallreceive the severance benefits set forth in Section 6.3(a). The payment of saidseverance benefits shall be ***subject to the provisions of subsection 6.6(b*****), andshall be**subject to the ***further***condition that Executive must ***(i)***remain inthe employment of, and cooperate with, the Company for a period of 120 daysafter the date the Company publicly announces it is eliminating both its Lifeand Group Operations, in the event said Life and Group Operations are notcontinued by any successor or purchaser, or ***(ii)***in the event of a continuationof said Life and Group Operations by any successor or purchaser as
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a result of a business transaction, remain in the employment of, andcooperate with, said successor or purchaser for a period of 120 days after thedate of the closing of said business transaction. Executive agrees to be boundby the covenants set forth herein effective as of the termination date of hisemployment with the Company and further agrees that, in the event that theCompany’s Life and Group Operations are continued by any successor orpurchaser, the covenants set forth in Sections 10 and 11 shall apply equallyto, and run to the benefit of, the Company and said successor or purchaser. TheCompany shall have no further obligations under this agreement.
     ***(b)  In the event that the Company eliminates both its Life and GroupOperations pursuant to subsection 6.6(a) and makes Executive an offer to retainExecutive in the Company’s employment in an executive capacity reporting toeither the CEO or the President & Chief Executive Officer, Property andCasualty Operations, with no reduction in the rate of Executive’s base salary,annual incentive target or long-term incentive compensation and no requirementthat Executive relocate his personal residence to another geographic areawithout Executive’s consent, and Executive declines said offer of continuedemployment, Executive’s employment with the Company shall terminate pursuant toSection 6.4 of this Agreement, and Executive shall receive only the paymentsset forth in Section 6.4. Executive agrees to be bound by the covenants setforth herein effective as of the termination date, and the Company shall haveno further obligations under this Agreement.***
     6.7     **Other Benefits**. In the event that Executive’s employment is terminatedpursuant to subsections 6.1, 6.2 or 6.4, Executive’s coverage under theCompany’s short-term disability plan, shall end on the date of termination ofemployment; Executive’s coverage under the Company’s long-term disability planshall end on the last day of the month in which termination of employmentoccurs; and Executive’s coverage under the Company’s non-contributory andcontributory life, dependent life and accidental death and dismemberment plansshall end on the last day of the month in which termination occurs. In theevent that Executive’s employment is terminated pursuant to subsection 6.3, 6.5or 6.6, the foregoing shall also apply, except that Executive’s coverage underthe Company’s contributory life, dependent life and contributory accidentaldeath and dismemberment plans shall continue through the end of the severanceperiod.
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     6.8     **Release.**Executive acknowledges that the severance plan set forth inSection 6 hereof provides significant additional benefits as compared to thoseavailable to the Company’s employees in general. As a condition precedent toreceiving any benefits pursuant to Section 6, Executive agrees to sign a fulland complete release acceptable to the Company releasing the Company, itssubsidiaries and affiliates and their directors, officers and employees of anyand all claims, both known and unknown as of the date of Executive’stermination. In the absence of Executive’s executing such a release, theCompany shall have no obligation to make the payments hereunder.
     7.     **Confidentiality**. Executive agrees that while he is employed by theCompany, and at all times thereafter, Executive shall not reveal or utilizeinformation, knowledge or data which is confidential as defined in thisAgreement and learned during the course of or as a result of his employmentwhich relates to: (a) the Company and/or any other business or entity in whichthe Company during the course of the Executive’s employment has directly orindirectly held a greater than a 10% equity interest whether voting ornon-voting; (b) the Company’s customers, employees, agents, brokers andvendors. The Executive acknowledges that all such confidential information iscommercially valuable and is the property of the Company. Upon the terminationof his employment Executive shall return all confidential information and anycopies 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 (whetheror 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 of anyof the obligations imposed by this Agreement) concerning the business andtechnical information of the Company or other entities as described inParagraph 7 above. Such information may without limitation include informationrelating 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 theCompany, and for a period of 12 months following the date of his termination ofemployment with the Company for any reason ***except a termination for causepursuant to Section 6.2 or a termination pursuant to Section 6.6(a)(ii) inwhich the Company’s Life and Group***
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***Operations are continued by any successor or purchaser***, he will not,directly or indirectly, without the prior written approval of the CEO, enterinto any business relationship (either as principal, agent, board member,officer, consultant, stockholder, employee or in any other capacity) with anybusiness or other entity that at any relevant time is engaged in the businessof insurance (a “Competitor”); provided, however, that such prohibited activityshall not include the ownership of less than 5% of the outstanding securitiesof any publicly traded corporation (determined by vote or value) regardless ofthe business of such corporation. Upon the written request of Executive, theCEO will determine whether a business or other entity constitutes a“Competitor” for purposes of this Section 9; provided that the CEO may requireExecutive to provide such information as the CEO determines to be necessary tomake such determination; and further provided that the current and continuingeffectiveness of such determination may be conditioned on the accuracy of suchinformation, and on such other factors as the CEO may determine.
     10.     **Solicitation**. Executive agrees that while he is employed by theCompany, and for a period of 24 months following his termination of employmentwith the Company for any reason, he will not employ, offer to employ, engage asa consultant, or form an association with any person who is then, or who duringthe preceding one year was, an employee of the Company or any Subsidiary orAffiliate 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 orconsultation 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 anysuccessor or purchaser of any portion thereof.
     11.     **Non-interference**. Executive agrees that while he is employed by theCompany, and for a period of 24 months following his termination of employmentwith the Company for any reason, he will not disturb or attempt to disturb anybusiness relationship or agreement between either the Company or any Subsidiaryor Affiliate of the Company or any successor or purchaser of any portionthereof, and any other person or entity.
     12.     **Assistance with Claims**. Executive agrees that, while he is employed bythe Company, and for a reasonable period (not less than 60 months from the dateof termination) thereafter, he will be available, on a reasonable basis, toassist the Company and its subsidiaries and affiliates in the prosecution ordefense of any claims, suits, litigation, arbitrations, investigations, orother proceedings, whether pending or threatened (“Claims”) that may be made orthreatened by or against the Company or any of its subsidiaries or affiliates.
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Executive agrees, unless precluded by law, to promptly inform the Companyif he is requested (i) to testify or otherwise become involved in connectionwith any Claim against the Company or any subsidiary or affiliate or (ii) toassist or participate in any investigation (whether governmental or private) ofthe Company or any subsidiary or affiliate or any of their actions, whether ornot a lawsuit has been filed against the Company or any of its subsidiaries oraffiliates relating thereto. For the period following the 24-month anniversaryof the date of Executive’s termination of employment with the Company, theCompany agrees to provide reasonable compensation to Executive for suchassistance.
     13.     **Return of Materials**. Executive shall, at any time upon the request ofthe Company, and in any event upon the termination of his employment with theCompany, for whatever reason, immediately return and surrender to the Companyall originals and all copies, regardless of medium, of property belonging tothe Company created or obtained by Executive as a result of or in the course ofor in connection with his employment with the Company regardless of whethersuch items constitute proprietary information, provided that Executive shall beunder no obligation to return written materials acquired from third partieswhich are generally available to the public. Executive acknowledges that allsuch 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 theCompany he had access to confidential information concerning not only thebusiness segments for which he may have been responsible (an outline summary ofwhich appears in the Company’s Form 10K filed with the Securities and ExchangeCommission) but the entire range of businesses in which the Company wasengaged; (b) that the businesses segments for which he may have beenresponsible and the Company’s businesses are conducted nation-wide; and (c)that the Company’s confidential information, if disclosed or utilized withoutits authorization would irreparably harm the Company in: (i) obtaining renewalsof existing customers; (ii) selling new business; (iii) maintaining andestablishing existing and new relationships with employees, agents, brokers,vendors; and (iv) other ways arising out of the conduct of the businesses inwhich the Company is engaged.
     (b)  To protect such information and such existing and prospectiverelationships, and for other significant business reasons, the Executive agreesthat it is reasonable and necessary
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that: (a) the scope of this agreement be nation-wide; (b) its breadthinclude the entire life and group industry, and where indicated in thisAgreement, the entire insurance industry; and (c) the duration of therestrictions upon the Executive be as indicated therein.
     (c)  The Executive acknowledges that the Company’s customer, employee andbusiness relationships are long-standing, indeed, near permanent and thereforeare of great value to the Company. The Executive agrees that neither any of theprovisions in this Agreement nor the Company’s enforcement of it alters or willalter his ability to earn a livelihood for himself and his family and furtherthat both are reasonably necessary to protect the Company’s legitimate businessand property interests and relationships, especially those which he wasresponsible for developing or maintaining. The Executive agrees that his actualor threatened breach of the covenants set forth in Paragraphs 7 through 13above would cause the Company irreparable harm and that the Company is entitledto an injunction, in addition to whatever other remedies may be available, torestrain such actual or threatened breach. The Executive agrees that if bond isrequired in order for the Company to obtain such relief, if need only be in anominal amount and that he shall reimburse the Company for all costs of anysuch suit, including the Company’s reasonable attorneys’ fees. The Executiveconsents to the filing of any such suit against him in the state or federalcourts located in Illinois or any state in which he resides. He further agreesthat in the event of such suit or any other action arising out of or relatingto this Agreement, the parties shall be bound by and the court shall apply theinternal laws of the State of Illinois and irrespective of rules regardingchoice of law or conflicts of laws.
     (d)  If he has not already done so Executive agrees to continue to be boundby and to execute the Company’s Confidentiality, Computer Responsibility andProfessional Certification Agreement, a copy of which is attached hereto andincorporated by reference herein.
     (e)  For purposes of Sections 7 through 14 hereof, the “Company” shallinclude the “CNA insurance companies”, as well.
     15.     **Effect of Covenants**. Nothing in Sections 7 through 14 shall beconstrued to adversely affect the rights that the Company would possess in theabsence of the provisions of such Sections.
     16.     **Revision**. The parties hereto expressly agree that in the event thatany of the provisions, covenants, warranties or agreements in this Agreementare held to be in any respect
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an unreasonable restriction upon Executive or are otherwise invalid, forwhatsoever cause, then the court or arbitrator so holding is hereby authorizedto (a) reduce the territory to which said covenant, warranty or agreementpertains, the period of time in which said covenant, warranty or agreementoperates or the scope of activity to which said covenant, warranty or agreementpertains or (b) effect any other change to the extent necessary to render anyof the restrictions contained in this Agreement enforceable.
     17.     **Severability**. Each of the terms and provisions of this Agreement is tobe deemed severable in whole or in part and, if any term or provision of theapplication thereof in any circumstances should be invalid, illegal orunenforceable, the remaining terms and provisions or the application thereof tocircumstances other than those as to which it is held invalid, illegal orunenforceable, shall not be affected thereby and shall remain in full force andeffect.
     18.     **Binding Agreement; Assignment**. This Agreement shall be binding uponthe parties hereto and their respective heirs, successors, personalrepresentatives and assigns. The Company shall have the right to assign thisAgreement to any successor in interest to the business, or any majority partthereof, of the Company or any joint venture or partnership to which theCompany is a joint venturer or general partner which conducts substantially allof the Company’s business. Executive shall not assign any of his obligations orduties hereunder and any such attempted assignment shall be null and void.
     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).
     20.     **Entire Agreement**. Except as otherwise expressly set forth herein, thisAgreement contains the entire agreement of the parties with regard to thesubject matter hereof, supersedes all prior agreements and understandings,written or oral, and may only be amended by an agreement in writing signed bythe parties thereto.
     21.     **Additional Documents**. Each party hereto shall, from time to time, uponrequest of the other party, execute any additional documents which shallreasonably be required to effectuate the purposes hereof.
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     22.     **Incorporation**. The introductory recitals hereof are incorporated inthis Agreement and are binding upon the parties hereto.
     23.     **Failure to Enforce**. The failure to enforce any of the provisions ofthis 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 provisionhereunder by any other party shall not constitute a waiver of such party’sright to thereafter fully enforce each and every provision of this Agreement.
     24.     **Survival**. Except as otherwise set forth herein, the obligationscontained in this Agreement shall survive the termination, for any reasonwhatsoever, of Executive’s employment with the Company.
     25.     **Headings**. All numbers and headings contained herein are for referenceonly and are not intended to qualify, limit or otherwise affect the meaning orinterpretation of any provision contained herein.
     26.     **Notices**. Notices and all other communications provided for in thisAgreement shall be in writing and shall be delivered personally or sent byregistered or certified mail, return receipt requested, postage prepaid(provided that international mail shall be sent via overnight or two-daydelivery), or sent by facsimile or prepaid overnight courier to the parties atthe addresses set forth below (or such other addresses as shall be specified bythe parties by like notice). Such notices, demands, claims and othercommunications shall be deemed given:
     (a)  in the case of delivery by overnight service with guaranteed next daydelivery, the next day or the day designated for delivery;
     (b)  in the case of certified or registered U.S. mail, five days afterdeposit in the U.S. mail; or
     (c)  in the case of facsimile, the date upon which the transmitting partyreceived confirmation of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed tobe given later than the date they are actually received. Communications thatare to be delivered by the U.S.
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mail or by overnight service or two-day delivery service are to be delivered tothe addresses set forth below:
If to the Company:
CNA Financial Corporation