**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 seniormanagement level responsibility for the actuarial operations for the principal business units andsubsidiaries of the Company (hereinafter the “CNA insurance companies”); and
     **WHEREAS,**the Company and the Executive wish to enter into a written agreement setting forththe terms of their future employment relationship as set forth below;
     **NOW, THEREFORE,**in consideration of the foregoing premises and the promises and covenantsherein, the parties hereto agree as follows:
     1. **Employment Term**. The Company and Executive agree that the Company shall employ Executive toperform the duties of an Executive Vice President of the CNA insurance companies for the periodcommencing on the Effective Date and ending on March 31, 2007, or such earlier date as of whichExecutive’s employment is terminated in accordance with Section 6 hereof (the “Term”). Thecovenants set forth in Sections 7, 8, 9, 10, 11, 12, 13, and 14 shall survive the employment termof this Agreement.
     2. **Duties of Executive**.
     (a) Executive shall continue to perform the duties and responsibilities of an Executive VicePresident and Chief Actuary Officer [or successor title] of the CNA insurance companies as definedand directed by the Company’s Chief Executive Officer (hereinafter “CEO”). Executive shall reportto the CEO. Executive may be elected to and shall serve as a member of the Board of Directors ofone or more of the CNA insurance companies, and if so elected Executive agrees to serve on suchboards in such capacity without additional compensation and Executive
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further agrees to resign anysuch position on such Boards upon the termination of his employment with the Company for anyreason; provided that nothing in this Agreement shall require that the shareholders of any companyelect Executive to its board of directors.
     (b) Executive shall diligently and to the best of his abilities assume, perform, and dischargethe duties and responsibilities of Executive Vice President, Chief Actuary Officer, as well as suchother specific duties and responsibilities as the CEO shall assign or designate to Executive fromtime to time not inconsistent with Executive’s status. Executive shall devote substantially all ofhis working time to the performance of his duties as set forth herein and shall not, without theprior written consent of the CEO, accept other employment or render or perform other services, norshall he have any direct or indirect ownership interest in any other business which is incompetition with the business of the Company or the CNA insurance companies, other than in the formof publicly traded securities constituting less than five percent (5%) of the outstandingsecurities of a corporation (determined by vote or value) or limited partnership interestsconstituting less than five percent (5%) of the value of any such partnership. The foregoing shallnot preclude Executive from engaging in charitable, professional, and personal investmentactivities, provided that, in the judgment of the CEO, such activities do not materially interferewith his performance of his duties and responsibilities hereunder. In addition, the foregoing shallnot preclude Executive from spending a portion of his working time performing his duties fromExecutive’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 IncentiveCompensation Committee (“Committee”) of the Board of Directors of the Company’s parent, CNAFinancial Corporation, increase Executive’s Base Compensation to no less than $500,000, effectiveas 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 issigned by Executive after August 18, 2004. The Base Compensation shall be payable not lessfrequently than monthly. At the discretion of the CEO and/or the Committee, such salary rate may beincreased annually as of each March occurring during the term of the Agreement, beginning withMarch 2005, based on market considerations, responsibilities and performance. In no event shallExecutive’s salary rate be reduced to an amount that is less than the amount specified in thisSection 3(a) without Executive’s written consent, or to an amount that is less than the amount thathe 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”) pursuantto the CNA Financial Corporation 2000 Incentive Compensation Plan (the “Incentive CompensationPlan”). Subject to the approval of the Committee, the Executive’s target Bonus thereunder shall notbe less than the rate of seventy-five percent (75%) of his Base Compensation for each twelve monthbonus period. Effective (1) August 1, 2004, if the Agreement is signed by Executive no later thanAugust 18, 2004, or (2) the next pay period after the date the Agreement is signed by Executive, ifthe Agreement is signed by Executive after August 18, 2004, subject to the approval of theCommittee, the Executive’s target Bonus thereunder shall not be less than the rate of one hundredpercent (100%) of his Base Compensation for each twelve month bonus period. In no event shall thetarget Bonus be reduced without the Executive’s written consent. The amount of the award shall bebased on the CEO’s assessment of Executive’s performance, and shall be determined and payable inaccordance with the terms of the Incentive Compensation Plan as set forth in the IncentiveCompensation Plan documents; however, if Executive is a proxy-named officer, the amount of theaward shall be based on the Committee’s assessment of Executive’s performance, and shall bedetermined and payable in accordance with the terms of the Incentive Compensation Plan, as setforth in the Incentive Compensation Plan documents. Provided, further, that the Committee shallhave unlimited negative discretion under the Incentive Compensation Plan to decrease the amount ofExecutive’s award for any year.
     (c) Subject to Committee approval, Executive shall be eligible to receive a long-termIncentive Cash Award, in accordance with the terms of the Incentive Compensation Plan, as may be ineffect during the Term or such other long term incentive plan as the Company may from time to timeadopt for its senior officers. The Executive’s target long-term incentive cash award shall be noless than 20 percent (20%) of annual base compensation during the three year performance period. Inno 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 stockoption grant of 10,000 shares of CNA Financial Corporation stock annually, during the Term. Suchannual 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 besubject to the terms of the Incentive Compensation Plan and share availability, and approval by theCommittee.
     (e) For avoidance of doubt respecting awards to Executive under Section 3(b), 3(c) and3(d) hereof, the Committee shall retain such discretion as may be provided under the IncentiveCompensation Plan to satisfy Section 162(m) of the Internal Revenue Code of 1986 (“Code”) or anysuccessor provision. The Company may defer the payment of all compensation to which Executive isentitled hereunder or otherwise to enable it to comply with Section 162(m) of the Code or anysuccessor provision with respect to deductibility of executive compensation. All deferredcompensation will be credited to the Executive’s SES-CAP account and shall be subject to the termsthereof; provided, however, any such deferred compensation to Executive’s SES-CAP account shall beconsidered to be immediately vested.
     (f) Executive’s pensionable earnings under the CNA Retirement Plan, the CNA SupplementalExecutive Retirement Plan (“SERP”), the Savings & Capital Accumulation Plan (“S-CAP”), and the CNASupplemental Savings & Capital Accumulation Plan (“SES-CAP”) will be calculated as specified in theplan documents.
     (g) On or before November 15, 2004, Executive shall receive the final installment of hissign-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 variousbenefit plans, programs or arrangements established and maintained by the Company from time to timeand applicable to senior executives of the Company such as, but not by way of limitation, medicalbenefits, dental benefits, life insurance, long-term disability insurance, both qualified andsupplemental defined contribution plans, and to receive all fringe benefits made available tosenior executives of the Company, including club membership ($10,000.00 annually), tax returnpreparation and paid parking. Executive’s entitlement to participate in any such plan, program orarrangement shall, in each case, be subject to the terms and conditions thereof. In addition, theCompany shall pay the reasonable attorneys’ fees and costs incurred by Executive in negotiatingthis Agreement, as well as any taxes that might be payable on said attorneys’ fees. Executive shallnot be eligible for paid time off (“PTO”) under the Company’s PTO policy. In the event oftermination of employment, Executive’s severance shall be determined solely in accordance withSection 6 hereof.
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     5. **Expense Reimbursement**. Executive shall continue to be entitled to reimbursement by theCompany for all reasonable and customary travel and other business expenses incurred by Executivein carrying out his duties under this Agreement, in accordance with the general reimbursementpolicies adopted by the Company from time to time. Executive shall report all such expenditures notless frequently than monthly accompanied by adequate records and such other documentary evidence asrequired by the Company or by Federal or state tax statutes or regulations governing thesubstantiation of such expenditures.
     6. **Termination of Employment**. If Executive’s employment with the Company shall terminateduring the Term, the following conditions set forth herein shall apply with respect to theExecutive’s compensation and benefits hereunder. Either party may terminate Executive’s employmentwith the Company during the Term by written notice to the other party effective as of the datespecified in such notice and Executive’s employment shall automatically terminate inthe event of Executive’s death. Upon termination of Executive’s employment during or at theend of the term of this Agreement, the rights of the parties under this Agreement shall bedetermined pursuant to this Section 6. All payments made hereunder shall be made either toExecutive or to his personal representatives, heirs or beneficiaries as the case may be. In theevent 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 orother 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’selection, in the event of his Permanent Disability (as defined below) during the Term, provided ithas not already terminated, Executive’s employment shall terminate; provided, however, that:
     (a) The Company shall pay to Executive or his personal representatives, heirs or beneficiariesas the case may be, an amount equal to his: (i) unpaid base salary and current year’s target Bonusand CNA long-term incentive cash award prorated to the date of termination; (ii) any previousyear’s unpaid Bonus at target; and (iii) unpaid cash entitlements earned by Executive or payable tohis beneficiaries as of the date of termination which, pursuant to the terms of the applicableCompany plan or program (which unpaid cash entitlements shall not include any unpaid Bonus or anyunpaid 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 mentalcondition of Executive which, as determined by the CEO, in his sole discretion based on allavailable medical information, is expected to continue beyond 26 weeks and which renders Executiveincapable of performing any substantial portion of the services contemplated hereunder with orwithout reasonable accommodation.
     6.2 **Termination for Cause by the Company**. In the event that Executive shall engage in anyconduct which the CEO in his sole discretion shall determine to be **Cause**, he shall be subject totermination 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 conductwhich is inconsistent with the dignity and character of an executive of the Company; (iii) asubstantial breach of any material provision of this Agreement; (iv) a willful or reckless materialmisconduct 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 ormore of the following: bad judgment, negligence or any act or omission believed by the Executive ingood faith to have been in or not opposed to the interest of the Company (without any intent by theExecutive to gain, directly or indirectly, a profit to which he was not legally entitled). If theExecutive agrees to resign from his employment with the Company in lieu of being terminated forCause, 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 ofsuch termination his: (i) unpaid base salary prorated to the date of termination and (ii) unpaidcash entitlements earned and accrued pursuant to the terms of the applicable Company plan orprogram (which unpaid cash entitlements shall not include any unpaid Bonus or any unpaid long-termincentive cash award or other award under the Incentive Compensation Plan) prior to the date of thedate of termination, the Company shall have no further obligations under this Agreement. In theevent of termination for Cause, Executive agrees to be bound by the covenants set forth herein atSections 7 through 13, effective as of the termination date.
     6.3 **Termination by the Company Without Cause / Termination by Executive for Good Reason**. Inthe event Executive’s employment is terminated by the Company **Without**
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     **Cause**as defined herein, orin 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 Executiveseverance consisting of an amount equal to the sum of the Executive’s Base Compensation and Bonusat target, prorated based on the total number of months from the date of termination through March31, 2007; however, in no event shall the period of time for which severance is calculated be lessthan 12 months.. The severance shall be paid in equal monthly installments following suchtermination. The Company shall also pay the Executive (i) within 30 days of his termination, hisunpaid base salary, prorated to the date of termination; (ii) at the time of the scheduled Marchpayout date, any previous year’s Bonus and CNA long-term incentive cashaward based upon actual or discretionary payouts, if any; (iii) at the time of the scheduledMarch payout date, current year’s Bonus and CNA long-term incentive cash award based upon actual ordiscretionary payouts, if any, prorated to the date of termination; (iv) within 30 days of histermination, unpaid cash entitlements earned and accrued pursuant to the terms of the applicableCompany plan or program prior to the date of the date of termination (which unpaid cashentitlements under this Section 6.3(a)(iv) shall not include any unpaid Bonus or any unpaidlong-term incentive cash award or other award under the Incentive Compensation Plan); and (v) anyunpaid Sign-on Bonus installment. Executive agrees to be bound by the covenants set forth herein asof the termination date. In addition, Executive shall continue to participate, at the activeemployee rates, in such health benefits plans in which he is enrolled throughout the term of thepayments set forth in this Section 6.3(a), up to a maximum of 12 months, with said period ofparticipation to run concurrently with any period of COBRA coverage to which Executive may beentitled. 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 basesalary, annual incentive target or long-term incentive cash target compensation, a requiredrelocation of his personal residence to another geographical area without Executive’s consent, or amaterial 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 theCompany 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 dutyby Executive to mitigate.
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     6.4 **Voluntary Resignation by Executive**. In the event that Executive’s employment isvoluntarily terminated by Executive other than pursuant to subsection 6.3 or as a direct result ofhis death or Permanent Disability (as described in subsection 6.1), the Company shall have nofurther obligations under this Agreement other than paying the Executive within 30 days of suchtermination his: (i) unpaid base salary prorated to the date of termination and (ii) unpaid cashentitlements 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-termincentive cash award or other award under the Incentive Compensation Plan) prior to thedate of termination. Executive agrees to be bound by the covenants set forth herein effectiveas of the termination date.
     6.5 **Expiration of Agreement**. (a) Following March 31, 2007, if the Company and Executive havenot mutually agreed to the terms of, and entered into a new agreement, Executive’s employment shallbe one of employment at will, which may be terminated by either the Company or Executive at anytime. Such continued employment after March 31, 2007 shall be subject to the Company’s normalpolicies and procedures in effect during said period of continued employment. (b) Notwithstandingany term or provision in subsection (a) herein to the contrary, the Company shall pay Executiveseverance upon termination of Executive’s employment at will as provided for in this Section 6.5 inan amount equal to the sum of 12 months of the Executive’s Base Compensation at the time of suchtermination and Bonus at target unless and until (1) the Company’s normal policies and proceduresno longer provide for severance to be paid to personnel at Executive’s level in accordance with theseverance as provided for in this Section 6.5 and (2) Executive has received sixty (60) days’ priornotice of such change in the Company’s normal policies and procedures, in which case Executiveshall be given severance in accordance with such change in the Company’s normal policies andprocedures. ( c ) Notwithstanding any term or provision in subsections (a) and (b) herein to thecontrary, 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 May31, 2007, Executive shall be entitled to receive severance from the Company in an amount not lessthan the sum of 12 months of Executive’s Base Compensation and Bonus at target, irrespective of anychanges in the Company’s normal policies and procedures .
     6.6 **Other Benefits**. In the event that Executive’s employment is terminated pursuant tosubsections 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’slong-term disability plan shall end on the last day of the month in which termination of employmentoccurs; 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 monthin which termination occurs. In the event that Executive’s employment isterminated pursuant to subsection 6.3, the foregoing shall also apply, except that Executive’scoverage under the Company’s contributory life, dependent life and contributory accidental deathand dismemberment plans shall continue through the end of the severance period, upon payment of theapplicable premium.
     6.7 **Release.**Executive acknowledges that the severance benefits set forth in Section 6hereof provides significant additional benefits as compared to those available to the Company’semployees 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 theCompany, its subsidiaries and affiliates and their directors, officers and employees of any and allclaims, both known and unknown as of the date of Executive’s termination, provided that suchrelease 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 tomake the payments hereunder.
     7. **Confidentiality**. Executive agrees that while he is employed by the Company, and at alltimes thereafter, Executive shall not reveal or utilize information, knowledge or data which isconfidential as defined in this Agreement and learned during the course of or as a result of hisemployment which relates to: (a) the Company and/or any other business or entity in which theCompany during the course of the Executive’s employment has directly or indirectly held a greaterthan 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 confidentialinformation is commercially valuable and is the property of the Company. Upon the termination ofhis employment Executive shall return all confidential information and any copies thereof to theCompany, whether it exists in written, electronic, computerized or other form.
     8. **“Confidential Information” Defined**. For purposes of this Agreement “confidentialinformation” 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) concerningthe business and technical information of the Company or other entities as described inSection 7 above. Such information may without limitation include information relating to data,finances, marketing, pricing, profit margins, underwriting, claims, loss control, marketing andbusiness plans, renewals, software, processing, vendors, administrators, customers or prospectivecustomers, products, brokers, agents and employees.
     9. **Competition**. Executive hereby agrees that, while he is employed by the Company, and for aperiod of 12 months following the date of his termination of employment with the Company for anyreason, 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 any business or other entity that at anyrelevant time is engaged in the business of insurance (a “Competitor”); provided, however, thatsuch prohibited activity shall not include the ownership of less than 5% of the outstandingsecurities of any publicly traded corporation (determined by vote or value) regardless of thebusiness of such corporation. Upon the written request of Executive, the CEO will determine whethera business or other entity constitutes a “Competitor” for purposes of this Section 9; provided thatthe CEO may require Executive to provide such information as the CEO determines to be necessary tomake such determination; and further provided that the current and continuing effectiveness of suchdetermination may be conditioned on the accuracy of such information, and on such other factors asthe CEO may determine.
     10. **Solicitation**. Executive agrees that while he is employed by the Company, and for a periodof 24 months following his termination of employment with the Company for any reason, he will notemploy, offer to employ, engage as a consultant, or form an association with any person who isthen, or who during the 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 assistany other person or entity in soliciting for employment or consultation any person who is then, orwho during the preceding one year was, an employee of the Company or any Subsidiary or Affiliate ofthe 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 aperiod of 24 months following his termination of employment with the Company for any reason, hewill not disturb or attempt to disturb any business relationship or agreement between
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either theCompany or any Subsidiary or 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 by the Company, andfor a reasonable period (not less than 60 months from the date of termination) thereafter, he willbe available, on a reasonable basis, to assist the Company and its subsidiaries and affiliates inthe prosecution or defense of any claims, suits, litigation, arbitrations, investigations, or otherproceedings, whether pending or threatened (“Claims”) that may be made or threatened by or againstthe Company or any of its subsidiaries or affiliates. Executive agrees, unless precluded by law, topromptly inform the Company if he is requested (i) to testify or otherwise become involved inconnection with any Claim against the Company or any subsidiary or affiliate or (ii) to assist orparticipate in any investigation (whether governmental or private) of the Company or any subsidiaryor affiliate or any of their actions, whether or not a lawsuit has been filed against the Companyor any of its subsidiaries or affiliates relating thereto. For the period following the 24-monthanniversary of the date of Executive’s termination of employment with the Company, the Companyagrees 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 inany event upon the termination of his employment with the Company, for whatever reason, immediatelyreturn and surrender to the Company all originals and all copies, regardless of medium, of propertybelonging to the Company created or obtained by Executive as a result of or in the course of or inconnection with his employment with the Company regardless of whether such items constituteproprietary information, provided that Executive shall be under no obligation to return writtenmaterials acquired from third parties which are generally available to the public. Executiveacknowledges 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 toconfidential information concerning not only the business segments for which he may have beenresponsible (an outline summary of which appears in the Company’s Form 10K filed with theSecurities and Exchange Commission) but the entire range of businesses in which the Company wasengaged; (b) that the businesses segments for which he may have been
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responsible and the Company’sbusinesses are conducted nation-wide; and (c) that the Company’s confidential information, ifdisclosed or utilized without its authorization would irreparably harm the Company in: (i)obtaining renewals of 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 in which the Company is engaged.
     (b) To protect such information and such existing and prospective relationships, and for othersignificant 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 businessrelationships are long-standing, indeed, near permanent and therefore are of great value to theCompany. The Executive agrees that neither any of the provisions in this Agreement nor theCompany’s enforcement of it alters or will alter his ability to earn a livelihood for himself andhis family and further that both are reasonably necessary to protect the Company’s legitimatebusiness and property interests and relationships, especially those which he was responsible fordeveloping or maintaining. The Executive agrees that his actual or threatened breach of thecovenants set forth in Sections 7 through 13 above would cause the Company irreparable harm andthat the Company is entitled to an injunction, in addition to whatever other remedies may beavailable, to restrain 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 a nominal amount andthat he shall reimburse the Company for all costs of any such suit, including the Company’sreasonable attorneys’ fees. The Executive consents to the filing of any such suit against himin the state or federal courts located in Illinois or any state in which he resides. He furtheragrees that in the event of such suit or any other action arising out of or relating to thisAgreement, the parties shall be bound by and the court shall apply the internal laws of the Stateof 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 executethe Company’s Confidentiality, Computer Responsibility and Professional Certification Agreement, acopy 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 “CNAinsurance companies”, as well.
     15. **Effect of Covenants**. Nothing in Sections 7 through 14 shall be construed to adverselyaffect 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 unreasonablerestriction upon Executive or are otherwise invalid, for whatsoever cause, then the court orarbitrator 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 agreementoperates 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 thisAgreement enforceable.
     17. **Severability**. Each of the terms and provisions of this Agreement is to be deemed severablein whole or in part and, if any term or provision of the application thereof in any circumstancesshould be invalid, illegal or unenforceable, the remaining terms and provisions or the applicationthereof 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 partieshereto and their respective heirs, successors, personal representatives and assigns. The Companyshall have the right to assign this Agreement to any successor in interest to the business, or anymajority part thereof, of the Company or any joint venture or partnership to which the Company is ajoint 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 attemptedassignment shall be null and void. This Agreement is subject to the substantial approval of itsterms by the Committee.
     19. **Controlling Law; Jurisdiction**. This Agreement shall be governed by, interpreted andconstrued according to the laws of the State of Illinois (without regard to choice of law orconflict of laws principles).
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     20. **Entire Agreement**. Except as otherwise expressly set forth herein, this Agreement containsthe entire agreement of the parties with regard to the subject matter hereof, supersedes all prioragreements and understandings, written or oral, and may only be amended by an agreement in writingsigned by the parties thereto.
     21. **Additional Documents**. Each party hereto shall, from time to time, upon request of theother party, execute any additional documents which shall reasonably be required to effectuate thepurposes hereof.
     22. **Incorporation**. The introductory recitals hereof are incorporated in this Agreement and arebinding upon the parties hereto.
     23. **Failure to Enforce**. The failure to enforce any of the provisions of this Agreement shallnot be construed as a waiver of such provisions. Further, any express waiver by any party withrespect to any breach of any provision hereunder by any other party shall not constitute a waiverof 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 thisAgreement shall survive the termination, for any reason whatsoever, of Executive’s employment withthe Company.
     25. **Headings**. All numbers and headings contained herein are for reference only and are notintended to qualify, limit or otherwise affect the meaning or interpretation of any provisioncontained herein.
     26. **Notices**. Notices and all other communications provided for in this Agreement shall be inwriting and shall be delivered personally or sent by registered or certified mail, return receiptrequested, 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 at the addresses setforth below (or such other addresses as shall be specified by the parties by like notice). Suchnotices, demands, claims and other communications shall be deemed given:
     (a) in the case of delivery by overnight service with guaranteed next day delivery, the nextday 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 confirmationof receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to be given later thanthe date they are actually received. Communications that are to be delivered by the U.S. mail or byovernight service or two-day delivery service are to be delivered to the addresses set forth below:
If to the Company:
CNA Financial Corporation