Amendment to Employment Agreement



 



EXHIBIT 10.14



EMPLOYMENT AGREEMENT



     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of the 20th day of
March 2003 by and between CNA Financial Corporation, a Delaware corporation
(the “Company”), and Jonathan Kantor (“Executive”).




W I T N E S S E T H:







     WHEREAS, the Company and the Executive wish to enter into a written
agreement setting forth the terms of the Executive’s 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 set forth in Section 2 for the
period (the “Term”) commencing on the date hereof and ending on March 31, 2005,
or such earlier date as of which Executive’s employment is terminated in
accordance with Section 6 hereof. The covenants set forth in Sections 7, 8, 9,
10, 11, 13 and 14 shall survive the term of Executive’s employment. Should the
Executive remain in the employ of the Company beyond the expiration of the
Term, in the absence of a written agreement extending the Term, the Executive
shall be deemed an “at will” employee and, except as otherwise agreed in
writing by the Executive and the Company, the provisions of Sections 2, 7, 8,
9, 10, 11, 13 and 14shall continue to govern with respect to the duties and
obligations of the parties.




     2.     Duties
of Executive. Executive shall report to the Company’s Chief
Executive Officer (“CEO”). Executive shall diligently and to the best of his
abilities assume, perform, and discharge the duties and responsibilities of a
senior executive of the Company and such of its subsidiaries as the CEO shall
designate, as well as such other specific duties and responsibilities not
inconsistent with Executive’s status and responsibilities as the CEO shall
assign or designate to Executive from time to time. Executive shall devote
substantially all of his working time to the performance of his duties as set
forth herein and shall not during the term of his employment,












 


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 its
subsidiaries, 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 reasonable judgment of
the CEO, such activities do not materially interfere with his performance of
his duties and responsibilities hereunder.




     3.       Compensation.




     (a)     Base Compensation. The Company or its subsidiaries shall pay to
Executive for the period he is employed by the Company hereunder, an annual
base salary at a rate of no less than $650,000.00, payable not less frequently
than monthly (the “Base Compensation”). In no event shall Executive’s Base
Compensation be reduced to an amount that is less than $650,000.00 per annum.




     (b)     Deferred Signing Bonus. The Executive shall be paid an aggregate
signing bonus of $1,500,000 (the “Deferred Signing Bonus”) as follows: $750,000
on March 15, 2004, provided the Executive is employed hereunder on such date;
and $750,000 on March 15, 2005, provided the Executive is employed hereunder on
such date. The deferred signing bonus balance will be credited with interest
at the interest rates applicable to accounts maintained under the CNA
Supplemental Executive Savings and Capital Accumulation Plan (the “SES-CAP”)
for the applicable period. All Deferred Signing Bonus payouts will be
considered pensionable compensation under the CNA retirement plans.




     (c)     Annual Incentive Cash Compensation. Executive shall be entitled to an
annual incentive cash compensation award, under the terms of the CNA Financial
Corporation 2000 Incentive Compensation Plan (the “IC Plan”), for the years
2003 and 2004 in accordance with the following provisions: payouts shall be
subject to award, annual review and certification by the Incentive Compensation
Committee (the “Committee”) based on consideration of various




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financial
performance measures, such as the Company’s Net Operating Income performance
relative to Plan, subject to the provisions of the IC Plan. The Committee shall
have the right to apply up to 100% negative discretion. In no event, however,
shall the payout to the Executive under this subparagraph 3(c) for each year
2003 or 2004 exceed $1,650,000.




     (d)     Long Term Incentive Cash Compensation. Executive shall be entitled to
a long-term incentive cash compensation award, in accordance with the terms of
the IC Plan, as may be in effect during the term of this Agreement. The
Executive’s target long-term incentive cash award shall be no less than the 30
percent of base compensation during the performance period. In no event shall
the target award be reduced without the Executive’s written consent. All
payments of awards shall be subject to annual review and certification by the
Committee and shall be earned and payable in accordance with the terms of the
IC Plan.




     (e)     Executive’s CNA Savings & Capital Accumulation Plan (“S-CAP”) and the
CNA Supplemental Savings & Capital Accumulation Plan (“SES-CAP”) accounts will
be calculated as specified in the plan documents.




     (f)     Executive’s benefits in the CNA Retirement Plan and CNA Supplemental
Executive Retirement Plan (“SERP”) will be calculated as specified in the plan
documents.




     4.       Other Benefits. Executive shall be entitled to participate in the
employee benefit plans maintained by the Company from time to time as to which
Executive shall be eligible, including severance, health and major medical
insurance, dental insurance, life insurance, long-term disability insurance,
and qualified and supplemental savings plans. Executive’s entitlement to
participate in any such plan, program or arrangement shall, in each case, be
subject to the terms and conditions thereof.




     5.       Expense Reimbursement. Executive shall 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 for its senior executives.




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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 of this Agreement, 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 of this Agreement 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 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 subject to applicable
withholding required by federal, state or local law and 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 of this
Agreement, unless otherwise specified in this Agreement, Executive’s rights, if
any, under any of the Company’s retirement, savings, benefit, pension,
incentive or other plans of any nature shall be governed by the terms of such
plans.




     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 of this Agreement, provided it had not already
terminated, Executive’s employment shall be terminated; provided, however,
that:




     (a)     The Company shall pay to Executive or his personal representatives,
heirs or beneficiaries as the case may be, his (“Accrued Obligations”): (i)
unpaid Base Compensation at the rate in effect at the time of notice of
termination and current year’s annual incentive and long-term cash incentive
target awards as provided in sections 3(c) and 3(d) respectively prorated to
the date of termination; (ii) any previous year’s earned but not paid annual
incentive and long-term cash incentive awards under IC Plan as provided in
Section 3(c) and 3(d) respectively; (iii) unpaid expense reimbursements and
other unpaid cash entitlements earned by




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Executive or payable to his
beneficiaries as of the date of termination pursuant to the terms of the
applicable Company plan or program accrued prior to the date of the date of
termination; and (iv) any unpaid Deferred Signing Bonus.




     (b)     For purposes of this Agreement, the term “Permanent Disability” means
a physical or mental condition of Executive which, as determined by an
independent physician selected by the Company after consultation with Executive
(or, if Executive is incapable of consulting with the Company, with Executive’s
personal physician), based on all available medical information, is expected to
continue indefinitely and which renders Executive incapable of performing any
substantial portion of the services contemplated hereunder.




     6.2     Termination for Cause by the Company. In the event that Executive
shall engage in any conduct which the CEO 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 thirty (30) days of such termination his Accrued Obligations (but not
including any unpaid Deferred Signing Bonus, current annual incentive and
long-term cash incentive awards, which shall not become payable), the Company
shall have no further obligations under this Agreement. In the




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event of
termination for Cause, Executive agrees to be bound by the covenants set forth
herein effective as of the termination date.




     6.3     Voluntary Resignation by Executive. In the event that Executive’s
employment is terminated by Executive other than as a direct result of his
death or Permanent Disability (as described in subsection 6.1), other than
paying the Executive within thirty (30) days of such termination his Accrued
Obligations (but not including any unpaid Deferred Signing Bonus, current
annual incentive and long-term cash incentive awards, which shall not become
payable), the Company shall have no further obligations under this Agreement.
Executive agrees to be bound by the covenants set forth herein effective as of
the termination date.




     6.4     Termination for Convenience by the Company. In the event that
Executive’s employment is terminated by the Company for any reason not
described in subsections 6.1, 6.2, or 6.3 above, the obligations of the parties
hereto shall be deemed discharged, provided, however, that:




     The Company shall pay to Executive or his personal representatives, heirs
or beneficiaries as the case may be, his Accrued Obligations (i) unpaid Base
Compensation at the rate in effect at the time of notice of termination and
current year’s annual incentive and long-term cash incentive target awards as
provided in sections 3(c) and 3(d) respectively prorated to the date of
termination; (ii) any previous year’s earned but not paid annual incentive and
long-term cash incentive awards under IC Plan as provided in Section 3(c) and
3(d) respectively; (iii) unpaid expense reimbursements and other unpaid cash
entitlements earned by Executive or payable to his beneficiaries as of the date
of termination pursuant to the terms of the applicable Company plan or program
accrued prior to the date of the date of termination; and (iv) any unpaid
Deferred Signing Bonus.




     6.5     No Offset, No Mitigation. Except as provided herein, the Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense or
other right which the Company may have against




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Executive or others. In no
event shall Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any
of the provisions of this Agreement, and such amounts shall not be reduced
whether or not the Executive obtains other employment.




     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; (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 to the
Company, whether it exists in written, electronic, computerized or other form.
Notwithstanding the foregoing provisions of this Section 7, the Executive may
disclose or use any such information (i) as such disclosure or use may be
required or appropriate in the course of his 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 he is so required to make such
disclosure or use, he 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 interests 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.




     8.     “Confidential Information” Defined. 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 of any
of the obligations imposed by this Agreement) concerning the business and
technical information of the Company or other entities as described




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in Section
7 above. Such information may without limitation include information relating
to data, finances, marketing, pricing, profit margins, underwriting, claims
reserves, loss control, marketing and business plans, renewals, software,
processing, vendors, administrators, customers or prospective customers,
products, brokers, agents and employees.




     9.       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 the reasons set forth in subsections 6.2, 6.3 and 6.4, 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,
nor will he 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 or any Subsidiary or Affiliate of the Company.




     10.     Non-interference. Executive agrees that while he is employed by the
Company, and for a period of twenty-four (24) months following his termination
of employment with the Company for the reasons set forth in subsections 6.2,
6.3 and 6.4, he will not disturb or attempt to disturb any business
relationship or agreement between either tihe Company or an Affiliate and any
other person or entity.




     11.     Assistance with Claims. Executive agrees that for a reasonable
period following termination of his employment with the Company (not less than
60 months from the date of termination), 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 (“Clams”)
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




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affiliates relating thereto. The Company
agrees to provide reasonable compensation, in advance, including, without
limitation, transportation, lodging and meals expenses, and a reasonable
stipend for his time of not less than $2,700 per day to Executive for such
assistance.




     12.     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.




     13.     Effect of Covenants. Nothing in Sections 7 through 11 shall be
construed to adversely affect the rights that the Company would possess in the
absence of the provisions of such Sections.




     14.     Indemnification. The Company agrees Executive shall be entitled to
indemnification as provided for, and pursuant to the terms of, Article X of its
Corporate by-laws, a copy of which is attached hereto.




     15.     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 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.




     16.     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




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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.




     17.     Binding Agreement; Assignment. 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.




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




     19.     Entire Agreement. Except as otherwise expressly set forth herein,
this Agreements 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. In the case of any conflict between the terms of this
Agreement (the “Terms”) and the provisions of any plan, policy, or practice of
the Company, or agreement or award thereunder, as in effect from time to time
(the “Provisions”), Executive’s rights or the Company’s obligations shall be
established by whichever of the Terms or Provisions would be more beneficial to
Executive. If the choice between the Terms or the provisions is unclear at the
time such choice must be made, the Executive may, in his sole discretion,
choose to be treated under either the Terms or the Provisions.




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




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     21.     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.




     22.     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.




     23.     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.




     24.     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 net day
delivery, the next day or the day designated for delivery;




     (b)     in the case of certified or registered U.S. mail, five (5) 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 other otherwise;
provided, however, that in no event shall nay 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:




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If to the Company:	 	 
	 
	 	 	CNA Financial Corporation
	 	 	CNA Plaza
	 	 	Chicago, IL 60685
	 
	 
	 	
If to the Executive:	 	 
	 
	 	 	Jonathan Kantor
	 	 	CNA
	 	 	CNA Plaza — 43S
	 	 	Chicago, IL 60685



or to such other address as either party shall furnish to the other party in
writing in accordance with the provisions of this Section 24.




     25.     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 Section 25, the
arbitration shall be conducted in accordance with the rules for resolution of
employment disputes 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 thirty (30) days of the appointment of the second arbitrator,
then the third arbitrator shall be appointed by the Association.




     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.




CNA FINANCIAL CORPORATION







By:   /s/ Lawrence J. Boysen









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Title: Senior Vice President and
Controller

          Lawrence J.
Boysen






/s/ Jonathan D. Kantor

Jonathan D. Kantor




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