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Exhibit 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT
AGREEMENT (the Agreement) is made as of the 9th day of
August, 2002 (the Signing Date), by and between CNA Financial Corporation, a
Delaware corporation (the Company), and James R.
Lewis (Executive);

WITNESSETH:

WHEREAS,the Executive currently serves as the Executive Vice President,
Standard Line, with senior management level responsibility for domestic field
operations and standard commercial lines underwriting for the principal
business units, subsidiaries and affiliates of the Continental Casualty
Company, a subsidiary of the Company, pursuant to an employment agreement dated
as of August 20, 2001 (Prior Employment Agreement);

WHEREAS, the Company wishes to employ Executive as President & Chief
Executive Officer, Property and Casualty Operations, with senior management
level responsibility for all property and casualty operations for the Companys
principal business units and subsidiaries of the CNA Insurance Companies
(collectively, the Company and the CNA Insurance Companies are referred to as
the CNA Companies); and

WHEREAS,the Company and the Executive wish to terminate the Prior
Employment Agreement and to enter into a new written agreement setting forth
the terms of their future employment relationship as set forth below.

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

1.     Employment Term. The Company and Executive agree that the Company
shall employ Executive to perform the duties of President & Chief Executive
Officer, Property and Casualty Operations, for the period commencing on August
26, 2002 (Effective Date) and ending on December 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, 12, 13,
14 through 16 shall survive the term of Executives employment.

2.     Duties of Executive.

(a) Executive shall serve as the President & Chief Executive Officer,
Property and Casualty Operations, as defined and directed by the Companys
President and Chief Executive Officer (hereinafter
President/CEO). Executive
shall report to the President/CEO. Executive may be elected to and shall
serve as a member of the Board of Directors of one or more of the CNA
Companies, and if so elected Executive agrees to serve on such boards in such
capacity without additional compensation; provided that nothing in this
Agreement shall require that the shareholders of any company elect Executive to
its board of directors.

(b) Executive shall diligently and to the best of his abilities assume,
perform, and discharge the duties and responsibilities of President & Chief
Executive Officer, Property and Casualty Operations, as well as such other
specific duties and responsibilities not inconsistent with Executives such
titles, offices, status and responsibilities as the
President/CEO





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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 President/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 CNA Companies, other than in the form of publicly traded
securities constituting less than five percent (5%) of the outstanding
securities of a corporation (determined by vote or value) or limited
partnership interests constituting less than five percent (5%) of the value of
any such partnership. The foregoing shall not preclude Executive from engaging
in charitable, professional, and personal investment activities, and Executive
shall be permitted to continue to engage in such charitable and professional
activities engaged in by Executive during the term of his Prior Employment
Agreement, provided in any case that, in the reasonable judgment of the
President/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 $750,000.00, payable not less frequently
than monthly (the Base Compensation). Such Base Compensation shall be
reviewed by the Incentive Compensation Committee of the Board
(Committee) not
less frequently than annually, as of each March, during the term of the
Agreement commencing, with a view to making such positive adjustments as the
Board deems equitable and appropriate, beginning with March of 2003, based on
market considerations, Executives responsibilities and performance, and the
increased amount shall thereafter be considered Executives Base Compensation
for all purposes under this Agreement. In no event shall Executives salary
rate be reduced to an amount that is less than $750,000.00, or after any
increase in Base Compensation hereafter to an amount that is less than such
increased amount that he was previously receiving, without Executives written
consent.

(b) Annual
Incentive Cash Award. The Executive shall be entitled to an
annual cash award (Bonus) pursuant to the CNA Financial Corporation 2000
Incentive Compensation Plan (the Incentive Compensation
Plan). Subject to
Committee approval, the Executives target Bonus thereunder shall be not less
than the rate of one hundred percent (100%) of his Base Compensation and his
maximum Bonus shall be not more than the greater of (i) the rate of two hundred
percent (200%) of his Base Compensation or (ii) $1,500,000; provided, subject
to Committee approval, a special bonus plan will be established for Executive
for the year 2002 only and Executives 2002 Target Bonus shall be $1,000,000
upon achievement of a goal of $2,600,000,000 net written property casualty
premium for the CNA Companies for the last two fiscal quarters of 2002, subject
to Committee negative discretion. The amount of Executives annual Bonus shall
be based on performance criteria (the Performance Criteria) established by
the Committee pursuant to the Incentive Compensation Plan for each of the years
included in the term of this Agreement, and payment of Executives annual Bonus
shall otherwise be in accordance with the provisions of the Incentive
Compensation Plan, including the requirement of annual review and certification
by the Committee of the awards; provided, that satisfaction of the Performance
Criteria shall be based on Net Operating Income as defined in the Incentive
Compensation Plan.

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(c) Special Long-Term Incentive Award. Executive shall be awarded a
special stock option grant of 5,000 shares of CNA Financial Corporation stock
as of November 27, 2002, pursuant to the terms and conditions set forth in the
attached Addendum (the Addendum), which is incorporated by reference into
this Agreement.

(d) Long-Term
Incentive Awards. Subject to the approval of the Committee,
Executive shall additionally be awarded (i) an annual target long-term
incentive cash award equal to twenty percent (20%) of his Base Compensation and
(ii) (as provided in Section 3 of the attached Addendum) a targeted stock
option grant of 30,000 shares of CNA Financial Corporation stock annually
pursuant to the terms and provisions set forth in the Addendum, and in the case
of such cash, stock option and other long-term incentive awards pursuant to
such other terms that are comparable to such awards to senior executives of the
Company,as well as such other awards under the Incentive Compensation Plan as
the Committee shall in its sole discretion from time to time grant to
Executive. Such cash, stock option, restricted stock and other equity
incentive awards, the long-term cash incentive award and stock option grant
pursuant to subsection 3(c), and all other long-term incentive cash, stock
option, restricted stock and other equity incentive awards granted to Executive
pursuant to this subsection 3(d), are referred as LTIP
Awards hereunder.

(e) Prior
Incentive Awards. All stock option, restricted stock and other
equity incentive awards granted to Executive prior to the Effective Date shall
continue in accordance with the terms thereof (except that December 31, 2005
shall be substituted for April 1, 2004 as the latest Offer Date to
constitute a Triggering Termination thereunder).

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

(g) S-CAP/SES-CAP
Earnings. Executives compensation and pensionable
earnings under the CNA Savings & Capital Accumulation Plan
(S-CAP) and the
CNA Supplemental Savings & Capital Accumulation Plan (SES-CAP) will be
calculated as specified in the plan documents.

4.     Other Benefits. Executive shall be entitled to participate in the
various benefit plans, programs or arrangements established and maintained by
the Company from time to time and applicable to senior executives of the
Company such as, but not by way of limitation, vacation pay, health and major
medical insurance, dental insurance, life insurance, long-term disability
insurance, both qualified and supplemental savings plans, and long-term
incentive compensation plans, and to receive all fringe benefits and
perquisites made available to Band 540 employees of the Company, including but
not limited to club memberships ($10,000 annually), tax preparation and paid
parking. Executives entitlement to participate in any such plan, program or
arrangement shall, in each case, be subject to the terms and conditions
thereof;

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however, notwithstanding the foregoing, in the event of termination of
employment, Executives severance entitlement shall be determined solely in
accordance with Section 6 hereof.

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 (and any
outstanding reimbursable expenses under the Prior Employment Agreement), in
accordance with the general reimbursement policies adopted by the Company from
time to time for its senior executives. 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. The Company shall promptly reimburse Executive for all
reasonable professional expenses incurred in connection with the negotiation
and preparation of this Agreement.

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 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 terminate. Upon such
termination:

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(a) The Company shall pay to Executive, or his personal representatives,
heirs or beneficiaries, as the case may be:



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| | (i) within 30 days after such termination, his (Accrued
Obligations): (1) unpaid Base Compensation at the rate in effect
at the time of notice of termination and current years target
Bonus prorated to the date of termination; (2) any previous years
earned but unpaid Bonus and other earned and unpaid incentive cash
compensation; and (3) unused vacation time, 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;



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| | (ii) In the event that the termination occurs during a
Performance Period (as defined under the Incentive Compensation
Plan) with respect to which the Committee has not yet made an LTIP
Award (or affirmatively determined not to make an award) pursuant
to subsection 3(d), an amount equal to the cash equivalent, as of
the date of termination and without any present value discount) of
the target amount referred to in subsection 3(d) for such
Performance Period multiplied by a fraction, the numerator of which
is the number of days in such Performance Period through and
including the date of termination and the denominator of which is
the total number of days in such Performance Period. For the
purpose of this Section 6.1(a)(ii), the cash equivalent of a future
LTIP stock option Award shall be equal to 48% of the fair market
value of the number of shares of stock to be covered by the LTIP
stock option Award, determined based on the fair market
value of the stock on the date of termination, and then discounted
from January 1 of the year for which the LTIP stock option Award
would have been granted to the date of termination using an
interest rate equal to the prime rate for the date of termination
as reported in The Wall Street Journal (Midwest Edition). Fair
market value of the stock shall be determined by taking the average
of the highest and lowest sales prices of the stock on the date of
termination, as reported as the New York Stock Exchange-Composite
Transactions for such day, or if the stock was not traded on the
New York Stock Exchange on such day then on the next preceding day
on which the stock was traded, all as reported by The Wall Street
Journal (Midwest Edition) under the heading New York Stock
Exchange-Composite Transactions, or, if the stock ceases to be
listed on such exchange, as reported on the principal national
securities exchange or national automated stock quotation system on
which the stock is traded or quoted, but in no event shall the
price be less than the par value of the stock; and



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| | (iii) Any unexercised LTIP stock option Award held by
Executive upon termination of employment may be exercised by
Executive (or his heirs or personal representative) following such
termination to the extent of the sum of the number of shares with
respect to which each such LTIP Award was vested but unexercised
immediately prior to such termination, plus an additional number of
shares determined by multiplying the unvested portion of such LTIP
Award by

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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| | the fraction described in subsection 6.1(a)(ii), and rounded
to the next higher number of whole shares. Such portion of each
such LTIP Award may be exercised through the one-year anniversary
of such date of termination, but in no event later than the date on
which such LTIP Award would expire if Executive had remained
employed by the Company. Other stock options held by Executive may
be exercised during the same period, but only to the extent vested
under the terms of each such award. The provisions of this
subsection 6.1(a)(iii) shall apply notwithstanding any contrary
provision in any agreement governing any LTIP Award or other
incentive award.

(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.

(a) In the event that Executive shall engage in any conduct that the Board
shall determine constitutes Cause, as defined in the following sentence, the
Board shall have the right to terminate Executives employment with the Company
by written notice to Executive effective as of the date of such notice. For
purposes of this Agreement, Cause shall mean conduct: (i) which would
constitute a felony or other act involving fraud, dishonesty, moral turpitude,
unlawful conduct or breach of fiduciary duty, other than due to Limited
Vicarious Liability, (ii) which is inconsistent with the dignity and character
of an executive of the Company, (iii) which is a substantial breach of any
material provision of this Agreement, (iv) constituting willful or reckless
material misconduct in the performance of the Executives duties, or (v)
constituting the habitual neglect of duties; provided, however: (x) that the
Board in good faith determines that such conduct has had a material adverse
effect on the business or prospects of the Company; (y) 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); and (z) Limited Vicarious
Liability shall mean
any liability which is (1) based on acts of the Company for which Executive is
responsible solely as a result of his office(s) with the Company and (2)
provided that (A) he was not directly involved in such acts and either had no
prior knowledge of such intended actions or promptly acted reasonably and in
good faith to attempt to prevent the acts causing such liability or (B) he did
not have a reasonable basis to believe that a law was being violated by such
acts. 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.

(b) Upon terminating the Executive for Cause, other than paying the
Executive within 30 days of such termination his Accrued Obligations, the
Company shall have no further obligations under this Agreement, and all rights
or options with regard to LTIP Awards as provided in this Agreement and the
Addendum hereto shall thereupon expire.

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6.3     Termination by the Company Without Cause / Termination by Executive
for Good Reason. In the event Executives employment is terminated by the
Company for any reason not described in subsections 6.1 and 6.2, or in the
event Executive terminates his employment for Good Reason, as defined herein,

(a) The Company shall pay to Executive:



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| | -------------------------------------------------------------------
| | (i) Within 30 days after such termination, his Accrued
Obligations;



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) Termination payments consisting of the greater of: (x)
the sum of (A) two and one-half (2 1/2) times Executives annual
Base Compensation in effect at the time of such termination paid in
thirty (30) equal monthly installments, plus (B) two (2) times
Executives annual target Bonus paid in twenty-four (24) equal
monthly installments, or (y) Executives Base Compensation plus
Executives annual target Bonus (which annual target Bonus shall be
prorated for any fiscal year of less than twelve (12) months during
such period), paid in equal monthly installments, for the unexpired
period of the employment term set forth at Section 1 as such term
may be extended or renewed pursuant to Section 6.5; provided, in
each such case Executives Base Compensation shall be determined
without regard for any reduction that constitutes Good Reason for
such termination.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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| | (iii) A target Bonus and all cash LTIP Awards for the
Performance Period (or long-term incentive periods under the
Incentive Compensation Plan) in which the termination occurs
prorated to the date of termination. Executive shall not be
entitled to any Bonus or cash LTIP Award for the period following
termination, it being the intent of the parties that the portion of
the termination payments described in subsection 6.3(a)(ii) that
exceeds his Base Compensation shall be in lieu of such Bonus; and

(b) Any unexercised LTIP stock option Award held by Executive upon
termination of his employment shall be fully vested on the date of termination
and may be exercised by Executive at any time up to the first anniversary of
Executives date of termination (but not later than the date on which such LTIP
stock option Award would expire if Executive had remained employed by the
Company). Subject to the provisions of Section 3(e), any options other than
LTIP Awards may be exercised during the same period but only to the extent
vested under the terms of such option. The provisions of this subsection
6.3(b) shall apply notwithstanding any contrary provision in any agreement
governing any LTIP stock option Award or other option or other right under the
Incentive Compensation Plan.

(c) In addition, Executive shall continue to participate in such health,
dental, vision, life, and disability plans in which he is enrolled for the
period during which he is entitled to receive termination payments of Base
Compensation under subsection 6.3(a)(ii), as if he were still employed by the
Company, said period of participation to run concurrently with any period of
COBRA coverage to which Executive may be entitled; provided, to the extent that
Executive cannot participate in the Companys health, dental and vision plans
beyond the termination of the COBRA benefit continuation period, Executive
shall be entitled to equivalent such health, dental

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and vision benefits as are provided to senior executives of the Company
under the Companys benefit plans.

(d) In the event that Executive dies before all payments pursuant to this
Section 6.3 have been paid, all remaining payments shall be made to the
beneficiary specifically designated by the Executive in writing prior to his
death, or, if no such beneficiary was designated (or the Company is unable in
good faith to determine the beneficiary designated), to his personal
representative or estate.

(e)
Good Reason as set forth herein is defined as, without the
Executives consent: (i) a reduction in the rate of Executives Base
Compensation or annual target Bonus set forth at subsection 3(b); (ii) the
assignment to Executive of any duties inconsistent with his position (including
status, offices, titles and reporting relationships), authority, duties or
responsibilities, all as in effect on the Signing Date, or any other action by
the Company which results in a diminution in any respect in such position,
authority, duties or responsibilities; (iii) any reduction in any benefits
provided under Section 4 or a material diminution under the expense
reimbursement policies of the Company provided under Section 5 of this
Agreement, that is not generally applicable to all similarly situated
executives of the Company; (iv) a substantial breach of any material provision
of this Agreement by the Company; (v) the Companys requiring Executive to be
based at any office or location that is more than 35 miles from his office or
location in Chicago, Illinois, as of the hire date; or (vi) the failure of the
Company to obtain the assumption in writing of its obligation to perform this
Agreement by any successor to all or substantially all of the assets of the
Company within fifteen (15) calendar days after a merger, consolidation, sale
or similar transaction; provided, however, that for purposes of clauses (i),
(ii) and (iii), the Company shall have ten (10) calendar days after the date
that written notice has been given to the Company by Executive of such Good
Reason in which to cure such conduct not engaged in by the Company in bad
faith.

6.4     Voluntary Resignation by Executive. In the event that Executives
employment is terminated by Executive other than pursuant to Good Reason under
subsection 6.3 or other than as a direct result of his death or Permanent
Disability (as described in subsection 6.1), other than paying the Executive
within 30 days of such termination his Accrued Obligations, the Company shall
have no further obligations under this Agreement, and all rights or options
with regard to LTIP Awards as provided in this Agreement and the Addendum
hereto shall expire in accordance with the terms of such LTIP Awards.
Executive agrees to be bound by the covenants set forth herein effective as of
the termination date.

6.5     Failure to Extend Agreement.

(a) On or before June 30, 2005, the Company may offer to Executive in
writing an extension of the period of Executives employment under this
Agreement or a new agreement in principle with Executive, in either case having
a term of employment commencing January 1, 2006 and on terms no less favorable
to Executive than the terms in effect immediately prior to such offer
(Offer). If the Offer is accepted by Executive, the applicable dates under
this subsection 6.5 shall be adjusted in accordance with the term of such
extension or, if a new Agreement, such new Agreement shall govern such new term
of employment. If the Company does not make an Offer to Executive on or before
June 30, 2005, then Executives employment

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shall terminate on December 31, 2005 and Executive shall receive all
amounts and benefits set forth in subsection 6.3(a).

(b) If the Company makes an Offer on or before June 30, 2005 and the
Company and Executive have not mutually agreed to the terms of, and entered
into, a new agreement prior to December 31, 2005, Executives employment shall
terminate on December 31, 2005 and the Company shall pay to Executive the
amounts set forth in subsections 6.5(b)(i), (ii) and (iii) and (iv) and the
benefits set forth in subsection 6.5(b)(v):



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| | (i) Within 30 days after such termination, his Accrued
Obligations;



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| | (ii) Termination payments consisting of: (x) one and
one-quarter (1 1/4) times Executives annual Base Compensation in
effect at the time of such termination (determined without regard
for any reduction that constitutes Good Reason for such
termination) paid in fifteen (15) equal monthly installments, plus
(y) one (1) times Executives annual target Bonus paid in twelve
(12) equal monthly installments;



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| | (iii) A target Bonus and all cash LTIP Awards for the
Performance Period (or long-term incentive periods under the
Incentive Compensation Plan) in which the termination occurs
prorated to the date of termination. Executive shall not be
entitled to any Bonus or cash LTIP Award for the period following
termination, it being the intent of the parties that the portion of
the termination payments described in subsection 6.5(b)(ii) that
exceeds his Base Compensation shall be in lieu of such Bonus.



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| | (iv) Any unexercised LTIP Award comprised of stock options or
stock appreciation rights held by Executive upon termination of his
employment shall be fully vested on the date of termination and may
be exercised by Executive at any time up to the first anniversary
of Executives date of termination (but not later than the date on
which such stock option or stock appreciation right would expire if
Executive had remained employed by the Company). Subject to the
provisions of Section 3(e), any options or stock appreciation
rights other than LTIP Awards may be exercised during the same
period but only to the extent vested under the terms of such
option. The provisions of this subsection 6.5(b)(iv) shall apply
notwithstanding any contrary provision in any agreement governing
any LTIP Award or other stock option or other right under the
Incentive Compensation Plan.



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| | (v) In addition, Executive shall continue to participate in
such health, dental, vision, life, and disability plans in which he
is enrolled for the period during which he is entitled to receive
termination payments of Base Compensation under subsection
6.5(b)(ii), as if he were still employed by the Company, said
period of participation to run concurrently with any period of
COBRA coverage to which Executive may be entitled; provided, to the
extent that Executive cannot participate in the Companys health,
dental and vision plans beyond the termination of the COBRA benefit
continuation period, Executive

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| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | shall be entitled to equivalent such health, dental and vision
benefits as are provided to senior executives of the Company under
the Companys benefit plans.

In the event that Executive dies before all payments pursuant to Section
6.5 have been paid, all remaining payments shall be made to the beneficiary
specifically designated by the Executive in writing prior to his death, or, if
no such beneficiary was designated (or the Company is unable in good faith to
determine the beneficiary designated), to his personal representative or
estate.

6.6     No Offset, No Mitigation.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 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 in Section
7 above. Such information may without limitation include information relating
to data, finances, marketing, pricing, profit margins, underwriting, claims,
loss control, marketing

10



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and business plans, renewals, software, processing, vendors,
administrators, customers or prospective customers, products, brokers, agents
and employees.

9.     Competition. Executive hereby agrees that, while he is employed by the
Company, and for a period of twelve (12) months following the date of his
termination of his employment with the Company for any reason except that such
period shall be for twenty-four (24) months in the case of a termination of
Executives employment pursuant to subsection 6.5(b) (in either case, the
Restriction Period), he will not, directly or indirectly, without the prior
written approval of the Board, enter into any business relationship (either as
principal, agent, board member, officer, consultant, stockholder, employee or
in any other capacity) with any business or other entity that for the duration
of the Restriction Period is engaged in any of the principal businesses of the
Company (a Competitor); provided, however, that such prohibited activity
shall not include the ownership of less than 5% of the outstanding securities
of any publicly traded corporation (determined by vote or value) regardless of
the business of such corporation. Upon the written request of Executive, the
Board will reasonably determine whether a business or other entity constitutes
a Competitor for purposes of this Section 9; provided that the Board may
require Executive to provide such information as the Board determines to be
necessary to make such determination; and further provided that the current and
continuing effectiveness of such determination may be conditioned on the
accuracy of such information, and on such other factors as the Board may
determine.

10.     Solicitation. Executive agrees that while he is employed by the
Company, and for a period of 36 months following his termination of employment
with the Company for any reason, he will not employ, offer to employ, engage as
a consultant, or form an association with any person who is then, or who during
the preceding one year was, an employee of the Company, 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.

11.     Non-interference. Executive agrees that while he is employed by the
Company, and for a period of 36 months following his termination of employment
for any reason, he will not disturb or attempt to disturb any business
relationship or agreement between either the Company or an Affiliate and any
other person or entity.

12.     Assistance with Claims. Executive agrees that, while he is employed
by the Company, and for a reasonable period (not less than 36 months)
thereafter, he will be available, on a reasonable basis, to assist the Company
and its subsidiaries and affiliates in the prosecution or defense of any
claims, suits, litigation, arbitrations, investigations, or other proceedings,
whether pending or threatened (Claims) that may be made or threatened by or
against the Company or any of its subsidiaries or affiliates. Executive
agrees, unless precluded by law, to promptly inform the Company if he is
requested (i) to testify or otherwise become involved in connection with any
Claim against the Company or any subsidiary or affiliate or (ii) to assist or
participate in any investigation (whether governmental or private) of the
Company or any subsidiary or affiliate or any of their actions, whether or not
a lawsuit has been filed against the Company or any of its subsidiaries or
affiliates relating thereto. 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 $2,885 per day to Executive for such assistance.

11



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

14.     Scope of Covenants.

(a) The Executive acknowledges that: (i) as a senior executive of the
Company he had access to confidential information concerning the entire range
of businesses in which the Company was engaged; (ii) that the Companys
businesses are conducted nation-wide; and (iii) that the Companys confidential
information, if disclosed or utilized without its authorization would
irreparably harm the Company in: (1) obtaining renewals of existing customers;
(2) selling new business; (3) maintaining and establishing existing and new
relationships with employees, agents, brokers, vendors; and (4) other ways
arising out of the conduct of the businesses in which the Company is engaged.

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

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

(d) If he has not already done so Executive agrees to continue to be bound
by and to execute the Companys Confidentiality, Computer Responsibility and
Professional Certification Agreement.

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(e) For purposes of Sections 7 through 14 hereof, the Company shall
include the CNA Insurance Companies, as well.

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

16.     Indemnification. Except as otherwise required by law, the Company
agrees that Executive shall be entitled to indemnification as provided for, and
pursuant to the terms of, Article X of its Corporate by-laws in effect on the
date hereof, or as may be amended hereafter provided such amendment is not less
favorable to Executive than the by-laws in effect on the date hereof. Except
as otherwise required by law, the indemnification of Executive under the Prior
Employment Agreement shall survive the termination of the Prior Employment
Agreement hereunder.

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

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

19.     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.

20.     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).

21.     Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement contains the entire agreement of the parties with regard to the
subject matter hereof, supersedes all prior agreements and understandings,
written or oral, including the Prior Employment Agreement, and may only be
amended by an agreement in writing signed by the parties thereto.
Notwithstanding the foregoing or any other term or provision of this Agreement,

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that certain Addendum to Employment Agreement between the Company and
Executive, made as of August 20th, 2001, remains in full force and effect
except as modified pursuant to Section 3(e) of this Agreement. 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,
with the reservation that resolution of any such conflict must be consistent
with the terms and provisions of the Incentive Compensation Plan, the Companys
Securities Compliance Policy and applicable law and regulation thereunder. 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, but subject to
the foregoing reservation, choose to be treated under either the Terms or the
Provisions.

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

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

24.     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.

25.     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.

26.     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.

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

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

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

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(c) in the case of facsimile, the date upon which the transmitting party
received confirmation of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that
are to be delivered by the U.S. mail or by overnight service or two-day
delivery service are to be delivered to the addresses set forth below:

|                   |                                                                                
|------------------ | -------------------------------------------------------------------------------
|If to the Company: |                                                                                
|                  
|                   | CNA Financial Corporation
CNA Plaza
Chicago, IL 60685
Attn: Corporate Secretary
|                  
|If to Executive:   |                                                                                
|                  
|                   | James R. Lewis
CNA Financial Corporation
CNA Plaza
Chicago, IL 60685           

or to such other address as either party shall furnished to the other party in
writing in accordance with the provisions of this Section 27.

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

29.     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 29, 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 30 days of the appointment of the second arbitrator, then the
third arbitrator shall be appointed by the Association. This Section 29 shall
not be construed to limit the Companys right to obtain relief under Section 14
with respect to any matter or controversy subject to Section 14 and, pending a
final determination by the arbitrator with respect to any such matter or
controversy, the Company shall be entitled to obtain any such relief by direct
application to state, federal or other applicable court, without being required
to first arbitrate such matter or controversy.

30.     Section 280G Gross-Up. If Executive becomes entitled to any payments
or benefits (collectively, Payments) whether pursuant to the terms of or by
reason of this Agreement or any other plan, arrangement, agreement, policy or
program with the Company, any successor to the Company or to all or a part of
the business or assets of the Company (whether direct or indirect, by purchase,
merger, consolidation, spin off, or otherwise and regardless of whether such
payment is made by or on behalf of the Company or such successor) which

15



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Payments are subject to the tax imposed by Section 4999 or any successor
provision of the Internal Revenue Code of 1986, as amended, or any similar
state or local tax, or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the
Excise Tax),
the Company shall pay Executive an additional amount
(Gross-Up Payment) such
that the net amount retained by Executive, after deduction or payment of (i)
any Excise Tax on the Payments, (ii) any federal, state and local income or
employment tax and Excise Tax upon the Payment, and (iii) any additional
interest and penalties imposed because the Excise Tax is not paid when due,
shall be equal to the full amount of the Payments.

31.     Counterparts.This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.

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



| |           |                                                                               
| | --------- | ------------------------------------------------------------------------------
| |           | CNA FINANCIAL CORPORATION                                                     
|
| | By:Title: | /s/ Jonathan D. Kantor
Executive Vice President,
General Counsel and Secretary
| |           |                                                                               
| |           | /s/ James R. Lewis
James R. Lewis                                             





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ADDENDUM TO
EMPLOYMENT AGREEMENT
GRANT OF OPTION RIGHTS

THIS ADDENDUM TO
EMPLOYMENT AGREEMENT (the Addendum) is made as of even
date with the Employment Agreement, dated as of August 9, 2002, to which it is
attached and into which it is incorporated by reference (the Agreement), by
and between CNA Financial Corporation, a Delaware corporation (the Company),
and James R. Lewis (the Executive);

WITNESSETH:

WHEREAS,the Company and the Executive wish to enter into a written
agreement setting forth the terms and conditions for the granting of certain
option rights as set forth below.

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

1.     Option
To Purchase Stock.Upon execution of the Agreement and this
Addendum by both parties, the Executive shall be granted the option to purchase
5,000 shares (the Option Stock) of the common stock of CNA Financial
Corporation (the Option). The Executives exercise of all Option rights shall
be effected in accordance with the terms of the CNA Financial Corporation 2000
Incentive Compensation Plan (the Plan). For all purposes of this Agreement
and Addendum, the Grant Date shall be November 27, 2002. The Executives right
to purchase the Option Stock pursuant to this provision shall accrue as
described in the vesting period provision set forth in Section 2 below (the
Vesting Period). The Executive may exercise such Option at any time prior to
the tenth anniversary of the effective date of the Agreement and this Addendum.
The price at which the Option shall be exercisable by the Executive shall be
100% of the Fair Market Value (as that term is defined in the Plan) of the
Option Stock on the Grant Date, determined by the Company and agreed by
Executive to be Twenty-four dollars and fourteen cents ($24.14) per share.
Executives rights with respect to all shares that are the subject of this
provision shall be governed by the terms of the Plan.

2.     Vesting Period. (a)With respect to all shares of Option Stock which are
the subject of the rights and/or Option(s) described in the provisions set
forth above, the Vesting Period shall begin on the Grant Date. The Vesting
Period with respect to each installment shown on the schedule shall end on the
Vesting Date applicable to such installment:



|INSTALLMENT   | VESTING DATE
APPLICABLE TOINSTALLMENT
|------------- | -------------------------------------
|1,250 Options | August 9, 2003                       
|1,250 Options | August 9, 2004                       
|1,250 Options | August 9, 2005                       
|1,250 Options | August 9, 2006                       



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(b). In the event of any expiration or termination of Executives
employment by the Company and all of its subsidiaries and affiliates,
Executives rights and options with respect to any unvested Option Stock shall
be exercisable only as provided for in Section 6 of the Agreement. All Option
Stock shall be subject to any restrictions imposed by the Securities Act of
1933 or the Securities Exchange Act of 1934, as amended, or the rules thereto.

3.     Additional
Options to Purchase Stock.Beginning on a date in 2003
to be determined by the Company and subject to vesting requirements to be
determined by the Company for its senior executives and the approval of said
Incentive Compensation Committee, Executive shall, for so long as he is
employed pursuant to the Agreement, be awarded an annual targeted stock option
grant (the Annual Grant) of 30,000 shares of the Companys common stock. The
Annual Grant shall, if feasible, be submitted for consideration to said
Incentive Compensation Committee during or prior to its May meeting each such
year. Subject to share availability, the Annual Grant may be increased or
decreased at the discretion of said Incentive Compensation Committee. Any
Annual Grant or portion of Annual Grant that has not vested on the effective
date of any termination of Executives employment with the Company and all of
its subsidiaries shall be exercisable only in accordance with the provisions of
Section 6 of the Agreement. All rights of Executive with respect to the Annual
Grant shall be subject to the terms of the Plan and any restrictions imposed by
the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended,
or the rules thereto.

4.     Primacy
of Plan and ICC.Any term or provision contained in this
Addendum to the contrary herein notwithstanding, the terms and provisions of
this Addendum and all rights and/or options granted herein shall be subject to
the provisions of the Plan and to the prior review and approval of the
Incentive Compensation Committee of the Companys Board of Directors.

5.     Application
of IRC Section 162(m).In the event the Executive is or
becomes a proxy-named executive or the Company in relation to the Executive is
otherwise subject to the provisions of Section 162(m) of the Internal Revenue
Code, the Company may defer the payment of all compensation to which Executive
is entitled pursuant to this Addendum or otherwise take all measures, the
Company reasonably deems necessary or advisable to comply with said Section
162(m) of the Internal Revenue Code or any successor provision with respect to
deductibility of executive compensation. All deferred compensation will be
credited to the Executives SES-CAP account and shall be subject to the terms
thereof.

6.     Entire
Agreement.Subject to the Employment Agreement to which this
Addendum is attached as an addendum thereunder, this addendum, in conjunction
with the Agreement in its entirety, contains the entire agreement of the
parties with regard to the subject matter hereof, supersedes all prior
agreements and understandings, regarding such subject matter, whether written
or oral, and may only be amended by an agreement in writing signed by the
parties thereto. Notwithstanding the foregoing or any other term or provision
of this Addendum or the Agreement, that certain Addendum to Employment
Agreement made as of August 20th, 2001 remains in full force and effect, except
as modified pursuant to Section 3(e) of the Agreement.

7.     No
Effect on Agreement.Except as otherwise specifically set forth
in this Addendum, all terms and conditions contained in the Agreement of which
this Addendum is





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made part are and shall remain unmodified hereby. In the event of any
conflict or inconsistency between the provisions of this Addendum and the
provisions of the Agreement, this Addendum shall be controlling.

8.     Counterparts.This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.

IN WITNESS WHEREOF,the parties hereto have executed this Addendum as of
the date set forth hereinabove.

|       |  |                                                         |  |                   
|------ |  | ------------------------------------------------------- |  | ------------------
|       |  | CNA FINANCIAL CORPORATION                               |  | JAMES R. LEWIS    
|       |  |                                                         |  |                   
|By:    |  | /s/ Jonathan D. Kantor                                  |  | /s/ James R. Lewis
|       |  |                                                         |  |                   
|       |  |                                                         |  |                   
|Title: |  | Executive Vice President,
General Counsel and Secretary |  |                   
|       |  |                                                         |  |                   

3