Document:

Exhibit 10.5

Exhibit 10.5

MONSTER WORLDWIDE, INC.

RESTRICTED STOCK UNIT AGREEMENT

FOR RESIDENTS OF THE UNITED KINGDOM

This RESTRICTED STOCK UNIT AGREEMENT FOR RESIDENTS OF THE UNITED KINGDOM (the “Agreement”) is
made, effective as of [Grant Date] (the “Grant Date”), by and between MONSTER WORLDWIDE, INC., a
Delaware corporation (hereinafter called the “Company”) with State of Delaware registration number
2658285, whose registered office in the State of Delaware is at 2711 Centerville Road, Suite 400,
Wilmington, DE 19808, and [Participant Name] (hereinafter called the “Participant”).

W I T N E S S E T H:

WHEREAS, the Committee desires to award to the Participant pursuant to the Company’s 2008
Equity Incentive Plan (the “Plan”) a grant of Restricted Stock Units (referred to herein as “RSUs”)
upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of RSUs. Subject to the terms and conditions of this Agreement and the Plan,
the Committee hereby grants to the Participant [Number of RSUs] RSUs as of the date of this
agreement (the “Grant Date”). The RSUs shall vest and payment in respect of such RSUs shall be
made, if at all, in accordance with Section 2 hereof.

2. Vesting.

(a) The RSUs granted to the Participant shall vest and payment in respect of such number of
RSUs shall be made as to the percentage of the RSUs indicated on the dates specified below (each a
“RSU Vesting Date”), provided that the Participant has remained in the continuous employment of the
Company or any of its Affiliates from the Grant Date through and including each applicable RSU
Vesting Date:

	 	 	 	 	 
	 	 	Incremental Percentage	 
	Date	 	of Award Being Vested	 
	First Anniversary of Grant Date
	 	 	25	%
	Second Anniversary of Grant Date
	 	 	25	%
	Third Anniversary of Grant Date
	 	 	25	%
	Fourth Anniversary of Grant Date
	 	 	25	%

Any fractional RSUs resulting from the strict application of the incremental percentages set forth
above will be disregarded and the actual number of RSUs becoming vested on any specific RSU Vesting
Date will cover only the full number of RSUs determined by applying the relevant incremental
percentage.

(b) In the event that during the period of the Participant’s employment with the Company or
one of its Affiliates after the Grant Date:

(i) the Participant dies, or

(ii) the Participant incurs a Disability,

 

 

 

(such events are collectively referred to as “Acceleration Events”), then all outstanding unvested
RSUs shall immediately vest as of the date of the applicable Acceleration Event, subject to Section
2(d) below.

(c) In the event that during the period of the Participant’s employment with the Company or
one of its Affiliates after the Grant Date a Change in Control shall occur, then all outstanding
unvested RSUs that have not been forfeited prior to the date of such Change in Control shall vest
on the date of such Change in Control. In the event that the Change in Control occurs on a date
prior to the date that a Participant is determined to be Disabled for purposes of the Plan and this
Agreement, but the Committee, in its sole determination expects the Participant to be Disabled at
the end of the 9-month period referred to in Section 4(a) of this Agreement, then all of the
unvested RSUs of such Participant, to the extent not previously forfeited, shall vest upon the date
of the Change in Control.

(d) In the event that any calendar date on which vesting is purportedly scheduled pursuant to
the terms of Sections 2(a), 2(b) or 2(c) above is not a Business Day (as defined below), the
vesting shall automatically be delayed until the first Business Day following that calendar date.
“Business Day” means a date on which commercial banks in New York, New York are open for general
business.

(e) As a condition to the receipt of the RSUs, the Participant is required to open an account
with the third party administering the Company’s equity awards programs (currently Charles Schwab)
(the “Administrator”). On or as soon as reasonably practicable following the applicable RSU Vesting
Date (but in no event later than the end of the calendar year in which such date occurs), the
Company shall deliver to the Participant’s account with the Administrator one share of Common Stock
with respect to each whole RSU that vests on such date, subject to Sections 3 and 8 below. Upon
such delivery, all obligations of the Company with respect to each such RSU shall be deemed
satisfied in full.

3. Certain Changes; Rights as a Stockholder. The number and class of shares of Common
Stock which are distributable to the Participant with respect to any RSU covered by this Agreement
shall be adjusted proportionately or as otherwise appropriate to reflect any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split, spin-off, split-off,
split-up, recapitalization, capital reorganization, reclassification of shares of Common Stock,
merger or consolidation, or any like capital adjustment, or the payment of any stock dividend,
and/or to reflect a change in the character or class of shares covered by the Plan arising from a
readjustment or recapitalization of the Company’s capital stock, in each case as determined by the
Committee. The Participant shall not have any rights to cash dividends, voting rights or other
rights of a stockholder with respect to the RSUs covered by this Agreement until the Company
delivers Common Stock to the Participant’s account in accordance with Section 2(e). For purposes
of clarity, it is understood that an RSU is an unsecured right to acquire one share of Common Stock
in accordance with the terms of this Agreement and that prior to the vesting, if any, of an RSU in
accordance with this Agreement, a Participant (i) will not be treated as the owner of the Common
Stock distributable with respect to an RSU, (ii) will not have any rights as a stockholder as to
the Common Stock distributable with respect to an RSU, and (iii) will have only a contractual right
to receive the Common Stock distributable with respect to an RSU, unsecured by any assets of the
Company or any of its Affiliates.

 

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4. Definitions. Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan. The following terms shall have the following meanings:

(a) “Disability” or “Disabled” means, notwithstanding any definition in the Plan, that, in the
determination of the Committee, the Participant is both (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months and (ii) (x) in case the Participant is eligible for the long
term disability program offered to United States-based employees by the Company or its Affiliates,
the Participant has actually received long term disability benefits for no less than 9 months or
(y) in case the Participant is not eligible for such long term disability program solely by virtue
of not being based in the United States, the Participant would have been eligible to receive long
term disability benefits for no less than 9 months but for the Participant not being based in the
United States. For purposes of Section 2(b) above, it is understood that the Disability shall be
deemed to be incurred on the last day of the 9-month period contemplated in clause (ii) of the
immediately preceding sentence. In the event the Participant has met the condition set forth in
clause (i) of the first sentence of this definition but does not satisfy the condition set forth in
clause (ii) of this definition solely by reason of the Participant’s death, then the provisions of
such clause (ii) shall be deemed to have been satisfied and for purposes of Section 2(b) above the
Disability shall be deemed to be incurred on the date of such death.

(b) “PAYE liability” shall mean the amount, if any, of (i) income tax payable by deduction
under Part 11 of the UK Income Tax (earnings and Pensions) Act 2003, (ii) primary Class 1
(employees) National Insurance Contributions and (iii) secondary Class 1 (employers) National
Insurance Contributions transferred to the Participant as provided in Section 7 below.

5. No Employment Rights; Termination of Employment. Nothing in this Agreement shall
give the Participant any right to continue in the employment of the Company or any Affiliate, or to
interfere in any way with the right of the Company or any Affiliate to terminate the employment of
the Participant. Except as otherwise expressly provided in Sections 2(b) and 2(c) hereof, RSUs
that are not vested as of the date the Participant’s employment with the Company and its Affiliates
terminates or ceases for any reason or no reason, whether voluntary or involuntary (including,
without limitation, termination or cessation of employment with or without cause or arising out of
or in connection with a reduction in force, sale or shutdown of certain operations, or otherwise),
shall immediately and automatically terminate and be forfeited in their entirety, provided,
however, that only for purposes of this Agreement the Participant’s employment shall not be
deemed terminated solely by virtue of the Participant’s voluntary cessation of employment in
circumstances that the Committee determines are reasonably likely to result in a Disability for so
long as the Committee determines that the Participant continues to satisfy the conditions that
would ultimately lead to the Committee’s determination that the Participant has incurred a
Disability.

6. Plan Provisions. The provisions of the Plan shall govern, and if or to the extent
that there are inconsistencies between those provisions and the provisions hereof, the provisions
of the Plan shall govern. The Participant acknowledges receipt of a copy of the Plan prior to the
execution of this Agreement.

7. Transfer of Liability of Secondary Class 1 (Employers) National Insurance
Contributions. The Company and one or more of its Affiliates (collectively, the “Secondary
Contributor”) may have liability to secondary Class 1 (employers) National Insurance Contributions
arising in connection with the RSUs. The secondary Class 1 (employers) National Insurance
Contributions means the amount chargeable under Section 4(4)(a) of the UK Social Security
Contributions and Benefits Act 1992 (the “SSCBA”) (or whatever prevailing law or rates are
applicable at RSU Vesting Dates from time to time) and is currently 12.8% multiplied by the Market
Rate (as defined below). “Market Rate” means the prevailing rate which can normally

 

3

 

be obtained
from sale by a willing vendor to a willing purchaser on an arm’s length basis. The Participant agrees to promptly enter into a joint
election with the Secondary Contributor to transfer in its entirety, the liability to secondary
Class 1 (employers) National Insurance Contributions which arises in connection with the RSUs and
the Participant hereby agrees to accept the transfer from the Secondary Contributor, the entire
liability to secondary Class 1 (employers) National Insurance Contributions which arises in
connection with the RSUs. The formal election will be evidenced by the appropriate parties signing
a joint election on the terms (or substantially on the terms, if modifications to the terms are
agreed by the Secondary Contributor in its sole and absolute discretion, and, where necessary, with
the agreement of HM Revenue & Customs) set out in Schedule 1 to this Agreement. Each party shall
promptly execute and deliver to the other party (and the Company shall cause the Secondary
Contributor to promptly deliver to the Participant) such other documents, agreements and
certificates as are reasonably necessary for the implementation and consummation of the agreements
set forth in this Section 7. It is understood and agreed that the provisions of Schedule 1 do not
modify or limit the provisions of Sections 7 or 8 of this Agreement.

8. Withholding. In the event that prior to any applicable RSU Vesting Date hereunder
the Participant has not provided the Company with written notice (which may be by written notice or
by an election made via the website operated by the Administrator) (the “Payment Notice”) at least
five (5) Business Days prior to that RSU Vesting Date to the effect that on the RSU Vesting Date
(or such later date at or prior to the 4th Business Day after the RSU Vesting Date as
may be acceptable to the Company in its sole and absolute discretion) the Participant will provide
the Company payment of the amount, if any, deemed necessary by the Company in its reasonable
discretion to enable the Company and its Affiliates to satisfy the minimum federal, foreign or
other tax withholding or similar obligations of the Company and its Affiliates with respect to the
shares of Common Stock (and/or any other items which may be distributable to the Participant on the
RSU Vesting Date pursuant to Section 3 hereof), including but not limited to any PAYE liability
(which PAYE liability includes, without limitation, the liability of the Company or any of its
Affiliates to secondary Class 1 (employers) National Insurance Contributions transferred to the
Participant in accordance with Section 7), or in the event the Participant provides the Payment
Notice but does not deliver payment of the appropriate amount to the Company on the RSU Vesting
Date (or such later date at or prior to the 4th Business Day after the RSU Vesting Date
as may be acceptable to the Company in its sole and absolute discretion), then the Company shall,
and the Participant hereby expressly authorizes the Company to, satisfy the minimum federal,
foreign or other tax withholding or similar obligation of the Company and its Affiliates, including
but not limited to any PAYE liability (which PAYE liability includes, without limitation, the
liability of the Company or any of its Affiliates to secondary Class 1 (employers) National
Insurance Contributions transferred to the Participant in accordance with Section 7), with respect
to such vesting by withholding the number of whole shares of Common Stock on and valued as of the
applicable RSU Vesting Date (and/or other items which may be distributable to the Participant on
the RSU Vesting Date pursuant to Section 3 hereof) sufficient to satisfy such minimum withholding,
PAYE liability and other obligations.

The amounts called for by the preceding paragraph of this Section 8 include amounts with
respect to which the Company and its Affiliates are liable, or in accordance with then current
practice are believed by the Company and its Affiliates to be liable, to account for the PAYE
liability to HM Revenue & Customs. The question of whether a PAYE liability is to be accounted for,
and if so, the amount due shall be assessed by the Company and its Affiliates having regard to the
rates in force at that time, taking into account relief for secondary Class 1 National Insurance
Contributions that are payable by the Participant (if
any), and the prevailing legislation. The assessment by the Company and its Affiliates shall
be final and binding on the Participant.

 

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9. Notices. All notices or other communications to be given or delivered in connection
with this Agreement shall be either in electronic format or in writing and shall be deemed to have
been properly served if delivered electronically, personally, by courier, or by certified or
registered mail, return receipt requested and first class postage prepaid, in the case of notices
to the Company, to the attention of Director of Human Resources, at the Company’s offices at 5
Clock Tower Place, Suite 500, Maynard, MA 01754 and in the case of notices to the Participant, to
the Participant’s last known address (as noted in the Participant’s personnel file) or such other
addresses (including any electronic email addresses) as the recipient party has specified by prior
written notice to the sending party. All such notices and communications shall be deemed received
upon the actual delivery thereof in accordance with the foregoing.

10. Binding Effect; Headings; Status. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and permitted assigns.
The subject headings of Sections are included for the purpose of convenience only and shall not
affect the construction or interpretation of any of the provisions of this Agreement. The
Participant’s rights under this Agreement, including, without limitation, rights to RSUs, shall at
all times that such rights exist represent a general obligation of the Company. The Participant
shall be a general creditor of the Company with respect thereto and shall not have a secured or
preferred position with respect thereto. Nothing in this Agreement or the Plan shall be deemed to
create an escrow, trust, custodial account or fiduciary relationship of any kind.

11. Non-Assignability, Etc. The Participant’s rights under this Agreement, including,
without limitation, rights to RSUs, are not assignable or transferable except upon the
Participant’s death to a beneficiary designated by the Participant in a written beneficiary
designation filed with the Company or, if no duly designated beneficiary shall survive the
Participant, pursuant to the Participant’s will and/or by the laws of descent and distribution. Any
and all such rights shall not be subject to anticipation, alienation, sale, transfer, encumbrance
except as otherwise expressly permitted herein.

12. Securities Laws; Insider Trading. The Committee may from time to time impose any
conditions on the RSUs and shares of Common Stock as it deems necessary or advisable to ensure that
the Plan, this Agreement and the issuance and resale or any securities comply with all applicable
securities laws, including without limitation Rule 16b-3 under the Exchange Act and the Securities
Act of 1933, as amended (the “Securities Act”). Such conditions may include, among other things,
the requirement that certificates for shares of Common Stock to be issued to the Participant
hereunder contain a restrictive legend in such form and substance as may be determined by the
Committee. Without limiting the foregoing, it is understood that Affiliates of the Company may
resell Common Stock only pursuant to an effective registration statement under the Securities Act,
pursuant to Rule 144 under the Securities Act, or pursuant to another exemption from registration
under the Securities Act. The Participant understands and agrees that any and all transactions
involving shares of Common Stock or other securities of the Company must comply with applicable
laws, rules, regulations and policies, including but not limited to the Company’s policy regarding
insider trading, which policy, among other things, prohibits transactions involving shares of
Common Stock or other securities of the Company by individuals who have material non-public
information relating to the Company.

 

5

 

13. Applicable Law; Entire Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (other than the conflict of
laws provisions thereof). This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and controls and supersedes any prior understandings,
agreements or representations by or between the parties, written or oral with respect to its
subject matter, including but not limited to the provisions of any and all employment agreements
and offer letters (such as terms providing for acceleration or other enhancement to restricted
stock or other equity interests in the event of the occurrence of specified events), except and
only to the extent of any rights of the Company or its Affiliates relating to Section 280G of the
Internal Revenue Code of 1986, as amended, and may not be modified except by written instrument
executed by the parties. The Participant has not relied on any representation not set forth in
this Agreement.

14. Amendment or Modification; Waiver. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by
a written instrument executed on behalf of the Company (as authorized by the Committee) and the
Participant; provided that the Agreement may be unilaterally amended by the Company without
Participant consent to conform the Agreement to any changes required by the Administrator or as a
result of the change of Administrator.

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

	 	 	 	 	 	 	 	 	 
	 	 	MONSTER WORLDWIDE, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

Agreed and acknowledged as of the date first above written:

	 	 	 
	 

Participant

	 	 

	 	 	 	 	 
	Print Name:
	 	 	 	 
	 

	 	 

	 	 

					 
	National Insurance Number:
	 	 	 	 
	 

	 	 

	 	 

					
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

 

7

 

SCHEDULE 1

Election under Paragraph 3B of Schedule 1

to the Social Security Contribution and Benefits Act 1992

for UK resident and ordinarily resident participants only

Between:

MONSTER WORLDWIDE LIMITED (the “Secondary Contributor”), a company registered in England and Wales
with company registration number 1881381, whose registered office is at Chancery House, 53-64
Chancery Lane, London, WC2A 1QS; and

[Participant Name] (the “Earner”) whose National Insurance number and address are set forth below
his or her signature below.

The Earner acknowledges that a liability to income tax under Section 476 of the UK Income Tax
(Earnings and Pensions) Act 2003 (“ITEPA”) may arise on any employment income arising on the
occurrence of a chargeable event in relation to the Restricted Stock Unit awarded by the Secondary
Contributor’s ultimate parent company, Monster Worldwide, Inc., as set out under a formal
Restricted Stock Unit Agreement dated as of [Grant Date] (the “Restricted Stock Unit Agreement”),
and that a liability to Class 1 National Insurance Contributions (NIC) may arise on the employment
income under Section 4(4)(a) of the UK Social Security Contributions and Benefits Act 1992 (the
“SSCBA”).

The Secondary Contributor would normally be liable to pay secondary Class 1 National Insurance
Contributions (the “Secondary Contributions”) on any relevant employment income as is referred to
below.

The Secondary Contributor and the Earner hereby jointly elect under Paragraph 3B of Schedule 1 to
the SSCBA that all liabilities to Secondary Contributions arising on any “relevant employment
income” in connection with the Restricted Stock Units be transferred to the Earner.

For these purposes, “relevant employment income” is defined as:

	(a)	 	any amount that counts as employment income of the Earner under section 426 of ITEPA 2003
(restricted securities: charge on certain post-acquisition events),

	(b)	 	any amount that counts as employment income of the Earner under section 438 of that act
(convertible securities: charge on certain post-acquisition events), or

	(c)	 	any gain that is treated as remuneration derived from the Earner’s employment by virtue of
section 4(4)(a) SSCBA 1992.

The Earner hereby authorizes the Secondary Contributor and Monster Worldwide, Inc. to collect
Secondary Contributions in respect of such relevant employment income as referred to above in
accordance with Sections 7 and 8 of the Restricted Stock Unit Agreement.

 

S-1

 

This means that the arrangements for the collection of Secondary Contributions are as follows:

	(a)	 	The Earner can at least 5 Business Days before any applicable RSU Vesting Date notify Monster
Worldwide, Inc. in writing that on the RSU Vesting Date the Earner
will provide Monster Worldwide, Inc. or the Secondary Contributor, in cleared funds, a sum
of money equal to the Secondary Contribution. Monster Worldwide, Inc. can, at its
discretion, extend the payment date by not more than 4 Business Days after the relevant RSU
Vesting Date, but it cannot extend it any further.

	(b)	 	If the Earner does not provide the written notice mentioned in (a) above, or if the Earner
does provide such written notice but does not provide the required payment in cleared funds on
time, then under Section 8 of the Restricted Stock Unit Agreement, the Earner expressly
authorizes Monster Worldwide, Inc. to withhold such number of shares of Common Stock (and/or
other items which may be distributable to the Earner on the Vesting Date pursuant to Section 3
of the Restricted Stock Unit Agreement) sufficient to satisfy the Secondary Contribution.
Monster Worldwide, Inc. and/or the Secondary Contributor would then promptly (and in any event
not later than 14 days after the end of the tax month during which the vesting occurred) make
a payment to HM Revenue & Customs equal to the Secondary Contribution.

Whether or not Secondary Contributions are to be accounted for and, if so the amount due, shall be
determined by the Secondary Contributor having regard to the prevailing legislation and practice
and the National Insurance rates in force at the time. The Secondary Contributor’s determination of
the amount shall be final and binding on the Earner.

The Secondary Contributor will ensure that the contributions are paid to HM Revenue & Customs
within 14 days of the end of the income tax month in which the gain was made by the Earner (or any
other such date that HM Revenue & Customs decide).

By 6 July after the end of the tax year in which a liability to pay Secondary Contributions arises,
the Secondary Contributor will report to HM Revenue & Customs:

	 	(i)	 	details of the amount of National Insurance Contributions arising;

	 	(ii)	 	the amount of the Secondary Contributions liability which was transferred by
way of this Election; and

	 	(iii)	 	the date on which the transferred Secondary Contributions liability was paid
to the Collector of Taxes.

The terms of this joint election will continue in force regardless of whether the Earner ceases to
be an employee of the Secondary Contributor.

This Election shall be in force until (1) it ceases to have effect in accordance with its terms,
(2) a joint revocation of this Election is formally made by both parties to this Election, (3)
notice is given to the Earner by the Secondary Contributor terminating the effect of this Election,
or (4) HM Revenue & Customs withdraw their approval of the Election, whichever is the earliest. The
Secondary Contributor will inform the Earner within 14 days of receipt of notice of the withdrawal.

This Election will not apply to any liability, or any part of any liability, to a contribution
arising as a result of regulations being given retrospective effect by virtue of Section 4B(2) of
the SSCBA.

 

S-2

 

This election will not apply to the extent that it relates to relevant employment income which is
employment income of the Earner by virtue of Chapter 3A of Part 7 of ITEPA 2003 (employment income:
securities with artificially depressed market value).

The Secondary Contributor and the Earner agree to be bound by the terms of this Election. The
Earner understands that in making this election they will be personally liable for the Secondary
Contributions covered by this election.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 	 	 
	Signed for and on behalf of 

Monster Worldwide Limited

(“the Secondary Contributor”)

	 	Signed by	 	 

	 	 

	 	 	 	 	 
	Signed by

(“the Earner”)

	 	 

	 	 

	 	 	 	 	 
	Print Name:
	 	 	 	 
	 

	 	 

	 	 

					
	National Insurance Number:
	 	 	 	 
	 

	 	 

	 	 

					
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

 

S-3exv10w40

EXHIBIT NO. 10 (40)

COMMUTATION AND RELEASE AGREEMENT

This Commutation and Release Agreement (hereinafter the “Commutation Agreement”) is entered into by
and between Continental Casualty Company (hereinafter the “Company”) of the one part and Western
Surety Company (hereinafter the “Reinsurer”) of the other part, effective as of June 30, 2009.

WHEREAS:

	 	A.	 	The Reinsurer and the Company have entered into the following reinsurance agreements
as respects surety business:

	 	1.	 	Surety Quota Share Treaty, effective October 1, 1997
	 
	 	2.	 	Surety Quota Share Treaty, effective January 1, 2002
	 
	 	3.	 	Surety Quota Share Treaty, effective October 1, 2002
	 
	 	4.	 	Surety Quota Share Treaty, effective January 1, 2004
	 
	 	5.	 	Surety Quota Share Treaty, effective January 1, 2005
	 
	 	6.	 	Surety Quota Share Treaty, effective January 1, 2006
	 
	 	7.	 	Surety Quota Share Treaty, effective January 1, 2007
	 
	 	8.	 	Surety Quota Share Treaty, effective January 1, 2008
	 
	 	9.	 	Surety Quota Share Treaty, effective January 1, 2009

	 	 	 	Included in the surety business ceded to these reinsurance agreements are certain bonds
issued for the principal Dick Corporation (collectively hereinafter the “Reinsurance
Agreements as respects Surety Business for the Dick Corporation”); and

	 	B.	 	the Reinsurer assumes the Surety Business for the Dick Corporation under the above
named reinsurance agreements which the Company then assumes pursuant to the Surety Excess
of Loss Reinsurance Contract as Respects Only Surety Business for the Dick Corporation,
effective January 1, 2005 (the “Excess of Loss Contract”). The Reinsurer’s retention
under the Excess of Loss Contract is $60,000,000 under which the Reinsurer has to date
retained the amount of $58,206,033. Simultaneously with the execution of this Commutation
Agreement, the Company and the Reinsurer shall terminate the Excess of Loss Contract; and
	 
	 	C.	 	the Company and the Reinsurer desire to fully and finally settle and commute all
past, present and future liabilities and obligations known and unknown of the Company and
the Reinsurer under, arising out of, or in any way related to the Reinsurance Agreements
as respects Surety Business for the Dick Corporation; and
	 
	 	D.	 	the Reinsurer has agreed to pay and the Company has agreed to accept in full and
final satisfaction of the Reinsurer’s past, present and future liability under the
Reinsurance Agreements as respects Surety Business for the Dick Corporation, the
Commutation Amount, being the difference between the Reinsurer’s retention under the
Excess of Loss Contract ($60,000,000) and the actual amount retained to date by the
Reinsurer under the Excess of Loss Contract ($58,206,033) which equals $1,793,967);

Page 1 of 6

 

NOW THEREFORE, it is agreed by and between the Reinsurer and the Company that:

	1.	 	In consideration of the payment, within five days of the execution of this Commutation
Agreement, by the Reinsurer to the Company of the Commutation Amount, being $1,793,967, the
Company shall release and discharge the Reinsurer, its predecessors, parents, affiliates,
subsidiaries, agents, past, present and future officers, directors, employees, consultants,
shareholders, attorneys, agents, administrators, successors, assigns and receivers from any
and all past, present and future liabilities and obligations, whether known or unknown,
reported or unreported, and whether currently existing or arising in the future, including but
not limited to, all claims, obligations, offsets, debts, demands, actions, causes of actions,
suits, sums of money, covenants, contracts, controversies, agreements, reckonings, bonds,
bills, promises, damages, omissions, judgments, arbitrations, mediations, costs, expenses,
losses, adjustments, accounts, executions, representations and warranties whatsoever, which
the Company and their successors and assigns ever had, now have, or hereafter may have,
whether grounded in law or equity, in contract or in tort, against the Reinsurer or any of
them by reason of any matter whatsoever under, arising out of, or in any way related to the
Reinsurance Agreements as respects Surety Business for the Dick Corporation, it being the
intention of the parties that this release operate as a full and final settlement of the
Reinsurer’s past, current and future liabilities and obligations, whether known or unknown, to
the Company under, arising out of or in any way related to the Reinsurance Agreements as
respects Surety Business for the Dick Corporation.
	 
	2.	 	The Company shall accept the Commutation Amount in full and final settlement of any and all
amounts due by the Reinsurer to the Company under, arising out of, or in any way related to
the Reinsurance Agreements as respects Surety Business for the Dick Corporation.
	 
	3.	 	Effective on the same date on which the Company shall release the Reinsurer as provided for
in Section 1 above, the Reinsurer shall release and discharge the Company, its predecessors,
parents, affiliates, subsidiaries, agents, past, present and future officers, directors,
employees, consultants, shareholders, attorneys, agents, administrators, successors, assigns
and receivers from any and all past, present and future liabilities and obligations, whether
known or unknown, reported or unreported, and whether currently existing or arising in the
future, including but not limited to, all claims, obligations, offsets, debts, demands,
actions, causes of actions, suits, sums of money, covenants, contracts, controversies,
agreements, reckonings, bonds, bills, promises, damages, omissions, judgments, arbitrations,
mediations, costs, expenses, losses, adjustments, accounts, executions, representations and
warranties whatsoever, which the Reinsurer and its successors and assigns ever had, now have
or hereafter may have, whether grounded in law or equity, in contract or in tort, against the
Company or any of them by reason of any matter whatsoever under, arising out of, or in any way
related to the Reinsurance Agreements as respects Surety Business for the Dick Corporation, it
being the intention of the parties that this release operate as a full and final settlement of
the Company’s past, current and future liabilities and obligations, whether known or unknown,
to the Reinsurer under, arising out of, or in any way related to the Reinsurance Agreements as
respects Surety Business for the Dick Corporation.
	 
	4.	 	The rights, duties and obligations set forth in this Commutation Agreement shall inure to the
benefit of and be binding upon any and all predecessors, parents, affiliates,
subsidiaries, agents, past, present and future officers, directors, employees,

Page 2 of 6

 

	 	 	consultants,
shareholders, attorneys, agents, administrators, successors, assigns and receivers of the
parties hereto.

	5.	 	The parties hereto expressly warrant and represent that they are corporations in good
standing in their respective places of domicile; that the execution, delivery and performance
of this Commutation Agreement is fully authorized by each of them; that the making and
performance of this Commutation Agreement shall not violate any provisions of law or of their
respective articles of incorporation or bylaws; that the person or persons executing this
Commutation Agreement have the necessary and appropriate authority to do so; that there are no
pending agreements, transactions, or negotiations to which any of them are a party that would
render this Commutation Agreement or any part thereof void, voidable, or unenforceable; that
it is the sole owner of any and all rights of the respective party under the Reinsurance
Agreements as respects Surety Business for the Dick Corporation and that no claim being
released hereunder has been assigned, ceded, sold or otherwise transferred (or is subject to
any understanding to take any such action) to any person or entity; and that no authorization,
consent or approval of any government entity or other person or entity is required to make
this Commutation Agreement valid and binding upon them.
	 
	6.	 	This Commutation Agreement shall be interpreted under and governed by the laws of Illinois.
	 
	7.	 	In the event that there is a dispute between or among the parties arising under or related to
this Commutation Agreement, each party agrees that any legal proceeding shall be instituted
only in the United States District Court for the Northern District of Illinois. Each party
irrevocably consents to the exclusive jurisdiction and venue of such court and agrees that
service of the complaint or other process may be made as provided in the applicable rules of
court. The Company hereby agrees to waive any and all requirements, whether arising under any
statutes, rules, regulations or otherwise, which would have the effect of requiring the
Reinsurer to post or otherwise deposit or obtain any bond, security or monies in order to
participate in any legal proceeding.
	 
	8.	 	The Company and the Reinsurer hereby agree to execute promptly any and all supplemental
agreements, releases, affidavits, waivers and other documents of any nature or kind which the
other party may reasonably require in order to implement the provisions or objectives of this
Commutation Agreement.
	 
	9.	 	This Commutation Agreement may be executed in multiple counterparts, each of which, when so
executed and delivered shall be an original, but such counterparts shall together constitute
one and the same instrument and agreement.
	 
	10.	 	This Commutation Agreement contains the entire agreement between the parties as respects its
subject matter. All discussions and agreements previously entertained between the parties
concerning the subject hereto are merged into this Commutation Agreement. This Commutation
Agreement may not be modified or amended, nor any of its provisions waived, except by an
instrument in writing, signed by each of the parties hereunder.
	 
	11.	 	This Commutation Agreement and any of its rights and obligations may not be assigned in whole
or in part.

Page 3 of 6

 

	12.	 	As used in this Section, “Person” shall mean any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether national, federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

	 	(i)	 	It is mutually understood and agreed by and between the Reinsurer and the Company
that the Reinsurer and the Company shall keep all terms and provisions of this Commutation
Agreement confidential and shall not disclose such terms or provisions to any third party,
other than their auditors, accountants, actuaries, financial and legal advisors and any
officers, directors, shareholders and employees (on a need-to-know basis) of any of the
parties hereto and/or their affiliates and subsidiaries, without the prior written consent
of the other party, except where otherwise required by operation of law or the
requirements of any regulatory authority, or stock exchange or otherwise in connection
with a proceeding to enforce the terms of this Commutation Agreement. Notwithstanding the
foregoing provisions of this Section 12, the Reinsurer and the Company may disclose this
Commutation Agreement and its terms to rating agencies.
	 
	 	(ii)	 	In the event a party hereto learns that a Person to whom disclosure is not permitted
under the Commutation Agreement is seeking disclosure of the Commutation Agreement or any
of its terms in any proceeding, or in the event any party hereto receives notice of
subpoena, request or order directing the disclosure of this Commutation Agreement, or any
portion thereof, such party shall provide notice to the other party promptly and
sufficiently in advance of disclosure, to the extent possible, to permit such other party
to take steps to prevent the disclosure.
	 
	 	(iii)	 	If a party hereto is required by a government agency or by court order or subpoena
to disclose this Commutation Agreement, it shall notify the other party as soon as
possible and provide a copy of the order or subpoena upon receipt thereof, together with
proof of the disclosing party’s compliance with the terms of this Section 12.

	13.	 	The Reinsurer and the Company have each entered into this Commutation Agreement freely,
without duress, in good faith and at arms’ length based upon its independent assessment of its
rights and obligations under the Agreement and this Commutation Agreement, and not based upon
any representations made by the other or their respective representatives other than as set
forth in this Commutation Agreement. The parties acknowledge and agree that the Commutation
Amount constitutes fair consideration for the amounts allegedly owing now or potentially owing
in the future by the Reinsurer to the Company, net of any amount allegedly owing now or
potentially owing in the future by the Company to the Reinsurer, arising under or relating to
the Reinsurance Agreements as respects Surety Business for the Dick Corporation.
	 
	14.	 	Any statements, communications or notices to be provided pursuant to this Commutation
Agreement shall be sent to the attention of the person indicated below, until such time as
notice of any change of person to be notified or change of address is forwarded to the
parties:

Page 4 of 6

 

	 	(i)	 	to the Company:

Continental Casualty Company

333 S. Wabash Ave.

Chicago, IL 60604

Attn: Senior Vice President — Reinsurance

	 	(ii)	 	to the Reinsurer:

Western Surety Company

333 S. Wabash Ave.

Chicago, IL 60604

Attn: Senior Vice President

	15.	 	If any provision of this Commutation Agreement is invalid, unenforceable or illegal under the
law of any jurisdiction, such provision shall be deemed severable from the balance of this
Commutation Agreement, and the validity and enforceability of the remaining provisions of this
Commutation Agreement, and the validity and enforceability of such provision in any other
jurisdiction shall not be affected thereby. In the event of such invalidity, unenforceability
or illegality, the parties shall negotiate in good faith to amend this Commutation Agreement
through the insertion of additional provisions which are valid, enforceable and legal and
which reflect, to the extent possible, the economic and other purposes contained in the
invalid, unenforceable or illegal provisions.
	 
	16.	 	The Company and the Reinsurer absolutely and unconditionally covenant and agree with each
other, and their respective successors and assigns, that after the effective date of this
Commutation Agreement, neither party shall hereafter for any reason whatsoever, demand, claim
or file suit or initiate arbitration proceedings against the other in respect of any matters
under, arising out of or in any way related to the Reinsurance Agreements as respects Surety
Business for the Dick Corporation, except for demands, suits or arbitrations with respect to
rights, options and/or remedies provided for pursuant to this Commutation Agreement.
	 
	17.	 	The parties have participated jointly in the negotiation and drafting of this Commutation
Agreement, consequently, in the event an ambiguity or question of intent or interpretation
arises, this Commutation Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Commutation Agreement.
	 
	18.	 	This commutation and release is limited strictly to certain bonds issued for the principal
Dick Corporation under the reinsurance agreements listed in paragraph A above and all rights
and obligations related to all other Surety business under those reinsurance agreements shall
remain unchanged.

IN WITNESS WHEREOF, the authorized representatives of the parties hereto have executed this
Commutation Agreement as of the dates indicated below.

Page 5 of 6

 

	 	 	 	 	 
	CONTINENTAL CASUALTY COMPANY

 	 	 
	By:  	 	 	 
	 	 	 	 
	Printed Name:   	
 	 	 
	 	 	 	 
	Title:   	
 	 	 
	 	 	 	 
	Date:   	
 	 	 

	 	 	 	 	 
	WESTERN SURETY COMPANY
 	 	 
	 	 	 	 
	By:  	 	 	 
	 	 	 	 
	Printed Name:   	
 	 	 
	 	 	 	 
	Title:   	
 	 	 
	 	 	 	 
	Date:   	
 	 	 

Page 6 of 6

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