Document:

Exhibit 10.1

Exhibit 10.1

INDEMNIFICATION AGREEMENT

          This Indemnification Agreement, dated as of June 19, 2008, is made by and between PEABODY
ENERGY CORPORATION, a Delaware corporation (the “Corporation”) and MICHAEL C. CREWS (the
“Indemnitee”).

RECITALS

          A. The Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors or officers of corporations unless they are
protected by comprehensive liability insurance or indemnification, or both, due to increased
exposure to litigation costs and risks resulting from their service to such corporations, and due
to the fact that the exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;

          B. The statutes and judicial decisions regarding the duties of directors and officers are
often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors
and officers with adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take;

          C. The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large
amounts and the costs of litigation may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often beyond the personal resources of
directors and officers;

          D. The Corporation believes that it is unfair for its directors and officers to assume the
risk of huge judgments and other expenses which may occur in cases in which the director or officer
received no personal profit and in cases where the director or officer was not culpable;

          E. The Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in certain
circumstances to cover all possible exposure for which Indemnitee should be protected. The
Corporation believes that the interests of the Corporation and its stockholders would best be
served by a combination of such insurance and the indemnification by the Corporation of the
directors and officers of the Corporation;

          F. The Corporation’s Amended and Restated Certificate of Incorporation (the “Certificate of
Incorporation”) and Amended and Restated By-Laws require the Corporation to indemnify its directors
and officers to the fullest extent permitted by the Delaware General Corporation Law (the “DGCL”).
The Certificate of Incorporation expressly provides that the indemnification provisions set forth
therein are not exclusive, and contemplates that contracts may be entered into between the
Corporation and its directors and officers with respect to indemnification;

 

 

          G. Section 145 of the DGCL (“Section 145”), under which the Corporation is organized, empowers
the Corporation to indemnify its officers, directors, employees and agents by agreement and to
indemnify persons who serve, at the request of the Corporation, as the directors, officers,
employees or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive;

          H. The Board of Directors has determined that contractual indemnification as set forth herein
is not only reasonable and prudent but also promotes the best interests of the Corporation and its
stockholders;

          I. The Corporation desires and has requested Indemnitee to serve or continue to serve as a
director or officer of the Corporation free from undue concern for unwarranted claims for damages
arising out of or related to such services to the Corporation; and

          J. Indemnitee is willing to serve, continue to serve or to provide additional service for or
on behalf of the Corporation on the condition that he is furnished the indemnity provided for
herein.

AGREEMENT

          NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:

     Section 1. Generally.

     To the fullest extent permitted by the laws of the State of Delaware:

          (a) The Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee is
or was or has agreed to serve at the request of the Corporation as a director, officer, employee or
agent of the Corporation, or while serving as a director or officer of the Corporation, is or was
serving or has agreed to serve at the request of the Corporation as a director, officer, employee
or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar
capacity) of another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, or by reason of any action alleged to have been taken or omitted in such capacity.

          (b) The indemnification provided by this Section 1 shall be from and against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such action, suit or
proceeding and any appeal therefrom, but shall only be provided if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action, suit or proceeding, had no reasonable cause
to believe Indemnitee’s conduct was unlawful.

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          (c) Notwithstanding the foregoing provisions of this Section 1, in the case of any threatened,
pending or completed action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of
the Corporation, or while serving as a director or officer of the Corporation, is or was serving or
has agreed to serve at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise,
no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the
Delaware Court of Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court shall deem proper.

          (d) The termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

          Section 2. Successful Defense; Partial Indemnification. To the extent that Indemnitee
has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to in Section 1 hereof or in defense of any claim, issue or matter therein, Indemnitee
shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred
in connection therewith. For purposes of this Agreement and without limiting the foregoing, if any
action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition
without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication
that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by
Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation,
and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable
cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes
hereof to have been wholly successful with respect thereto.

          If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with any action, suit, proceeding or investigation, or in defense of any claim, issue
or matter therein, and any appeal therefrom but not, however, for the total amount thereof, the
Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses (including
attorneys’ fees), judgments, fines or amounts paid in settlement to which Indemnitee is entitled.

     Section 3. Determination That Indemnification Is Proper. Any indemnification hereunder
shall (unless otherwise ordered by a court) be made by the Corporation unless a determination is
made that indemnification of such person is not proper in the circumstances because he or she has
not met the applicable standard of conduct set forth in Section 1(b) hereof. Any such determination
shall be made (i) by a majority vote of the directors who are not parties to the

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action, suit or proceeding in question (“disinterested directors”), even if less than a
quorum, (ii) by a majority vote of a committee of disinterested directors designated by majority
vote of disinterested directors, even if less than a quorum, (iii) by a majority vote of a quorum
of the outstanding shares of stock of all classes entitled to vote on the matter, voting as a
single class, which quorum shall consist of stockholders who are not at that time parties to the
action, suit or proceeding in question, (iv) by independent legal counsel, or (v) by a court of
competent jurisdiction.

     Section 4. Advance Payment of Expenses; Notification and Defense of Claim.

          (a) Expenses (including attorneys’ fees) incurred by Indemnitee in defending a threatened or
pending civil, criminal, administrative or investigative action, suit or proceeding shall be paid
by the Corporation in advance of the final disposition of such action, suit or proceeding within
twenty (20) days after receipt by the Corporation of (i) a statement or statements from Indemnitee
requesting such advance or advances from time to time, and (ii) an undertaking by or on behalf of
Indemnitee to repay such amount or amounts, only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Corporation as authorized by
this Agreement or otherwise. Such undertaking shall be accepted without reference to the financial
ability of Indemnitee to make such repayment. Advances shall be unsecured and interest-free.

          (b) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or
proceeding, Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder,
notify the Corporation of the commencement thereof. The failure to promptly notify the Corporation
of the commencement of the action, suit or proceeding, or Indemnitee’s request for indemnification,
will not relieve the Corporation from any liability that it may have to Indemnitee hereunder,
except to the extent the Corporation is prejudiced in its defense of such action, suit or
proceeding as a result of such failure.

          (c) In the event the Corporation shall be obligated to pay the expenses of Indemnitee with
respect to an action, suit or proceeding, as provided in this Agreement, the Corporation, if
appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with
counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of
its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Corporation, the Corporation will not be liable to Indemnitee
under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to
the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ
Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s expense and (2) if (i)
the employment of counsel by Indemnitee has been previously authorized in writing by the
Corporation, (ii) counsel to the Corporation or Indemnitee shall have reasonably concluded that
there may be a conflict of interest or position, or reasonably believes that a conflict is likely
to arise, on any significant issue between the Corporation and Indemnitee in the conduct of any
such defense or (iii) the Corporation shall not, in fact, have employed counsel to assume the
defense of such action, suit or proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the
defense of any claim brought by or in the right of the Corporation or

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as to which counsel for the Corporation shall have reasonably made the conclusion provided for
in clause (ii) above.

          (d) Notwithstanding any other provision of this Agreement to the contrary, to the extent that
Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Corporation or any
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which
Indemnitee is or was serving or has agreed to serve at the request of the Corporation, a witness or
otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party
in the action, suit or proceeding, the Corporation shall indemnify Indemnitee against all expenses
(including attorneys’ fees) actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith.

     Section 5. Procedure for Indemnification

          (a) To obtain indemnification, Indemnitee shall promptly submit to the Corporation a written
request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Corporation shall, promptly upon receipt of such a
request for indemnification, advise the Board of Directors in writing that Indemnitee has requested
indemnification.

          (b) The Corporation’s determination whether to grant Indemnitee’s indemnification request
shall be made promptly, and in any event within 60 days following receipt of a request for
indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1 of
this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction if the
Corporation denies such request, in whole or in part, or fails to respond within such 60-day
period. It shall be a defense to any such action (other than an action brought to enforce a claim
for the advance of costs, charges and expenses under Section 4 hereof where the required
undertaking, if any, has been received by the Corporation) that Indemnitee has not met the standard
of conduct set forth in Section 1 hereof, but the burden of proving such defense by clear and
convincing evidence shall be on the Corporation. Neither the failure of the Corporation (including
its Board of Directors or one of its committees, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such action that
indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Section 1 hereof, nor the fact that there has been an
actual determination by the Corporation (including its Board of Directors or one of its committees,
its independent legal counsel, and its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has
or has not met the applicable standard of conduct. The Indemnitee’s expenses (including attorneys’
fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification,
in whole or in part, in any such proceeding or otherwise shall also be indemnified by the
Corporation.

          (c) The Indemnitee shall be presumed to be entitled to indemnification under this Agreement
upon submission of a request for indemnification pursuant to this Section 5, and the Corporation
shall have the burden of proof in overcoming that presumption in reaching a determination contrary
to that presumption. Such presumption shall be used as a basis for a

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determination of entitlement to indemnification unless the Corporation overcomes such
presumption by clear and convincing evidence.

     Section 6. Insurance and Subrogation.

          (a) The Corporation may purchase and maintain insurance on behalf of Indemnitee who is or was
or has agreed to serve at the request of the Corporation as a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise against any liability asserted against, and incurred by, Indemnitee or on
Indemnitee’s behalf in any such capacity, or arising out of Indemnitee’s status as such, whether or
not the Corporation would have the power to indemnify Indemnitee against such liability under the
provisions of this Agreement. If the Corporation has such insurance in effect at the time the
Corporation receives from Indemnitee any notice of the commencement of a proceeding, the
Corporation shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the policy. The Corporation shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of such policy.

          (b) In the event of any payment by the Corporation under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy, who shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are necessary to enable
the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance
policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by
Indemnitee in connection with such subrogation.

          (c) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has
otherwise actually received such payment under this Agreement or any insurance policy, contract,
agreement or otherwise.

     Section 7. Certain Definitions. For purposes of this Agreement, the following
definitions shall apply:

          (a) The term “action, suit or proceeding” shall be broadly construed and shall include,
without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration
and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative.

          (b) The term “by reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or while serving as a director or officer of the Corporation, is or was
serving or has agreed to serve at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged
act or omission to act.

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          (c) The term “expenses” shall be broadly and reasonably construed and shall include, without
limitation, all direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs
and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise
compensated by the Corporation or any third party, provided that the rate of compensation and
estimated time involved is approved by the Board, which approval shall not be unreasonably
withheld), actually and reasonably incurred by Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a right to
indemnification under this Agreement, Section 145 of the General Corporation Law of the State of
Delaware or otherwise.

          (d) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and
shall include, without limitation, all direct and indirect payments of any type or nature
whatsoever (including, without limitation, all penalties and amounts required to be forfeited or
reimbursed to the Corporation, as well as any penalties or excise taxes assessed on a person with
respect to an employee benefit plan).

          (e) The term “Corporation” shall include, without limitation and in addition to the resulting
corporation, any constituent corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall
stand in the same position under the provisions of this Agreement with respect to the resulting or
surviving corporation as he or she would have with respect to such constituent corporation if its
separate existence had continued.

          (f) The term “other enterprises” shall include, without limitation, employee benefit plans.

          (g) The term “serving at the request of the Corporation” shall include, without limitation,
any service as a director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries.

          (h) A person who acted in good faith and in a manner such person reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as referred to in
this Agreement.

     Section 8. Limitation on Indemnification. Notwithstanding any other provision herein
to the contrary, the Corporation shall not be obligated pursuant to this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee
with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee, except
with respect to an action, suit or proceeding brought to establish or enforce a right to
indemnification (which shall be governed by the provisions of Section 8(b) of this Agreement),
unless such

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action, suit or proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation.

          (b) Action for Indemnification. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or
interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to
indemnification in such action, suit or proceeding, in whole or in part, or unless and to the
extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s
failure to establish their right to indemnification, Indemnitee is entitled to indemnity for such
expenses; provided, however, that nothing in this Section 8(b) is intended to limit the
Corporation’s obligation with respect to the advancement of expenses to Indemnitee in connection
with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this
Agreement, as provided in Section 4 hereof.

          (c) Section 16 Violations. To indemnify Indemnitee on account of any proceeding with
respect to which final judgment is rendered against Indemnitee for payment or an accounting of
profits arising from the purchase or sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

          (d) Non-compete and Non-disclosure. To indemnify Indemnitee in connection with
proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or
the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements
the Indemnitee may be a party to with the Corporation, or any subsidiary of the Corporation or any
other applicable foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, if any.

     Section 9. Certain Settlement Provisions. The Corporation shall have no obligation to
indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or
proceeding without the Corporation’s prior written consent, which shall not be unreasonably
withheld. The Corporation shall not settle any action, suit or proceeding in any manner that would
impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which
shall not be unreasonably withheld.

     Section 10. Savings Clause. If any provision or provisions of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify Indemnitee as to costs, charges and expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action by or in the right of
the Corporation, to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the full extent permitted by applicable law.

     Section 11. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event,
the Corporation shall, to the fullest extent permitted by law, contribute to the payment of
Indemnitee’s costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in an amount that is just and equitable in the circumstances,

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taking into account, among other things, contributions by other directors and officers of the
Corporation or others pursuant to indemnification agreements or otherwise; provided, that, without
limiting the generality of the foregoing, such contribution shall not be required where such
holding by the court is due to (i) the failure of Indemnitee to meet the standard of conduct set
forth in Section 1 hereof, or (ii) any limitation on indemnification set forth in Section 6(c), 8
or 9 hereof.

     Section 12. Form and Delivery of Communications. Any notice, request or other
communication required or permitted to be given to the parties under this Agreement shall be in
writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or
courier service, or certified or registered mail, return receipt requested, postage prepaid, to the
parties at the following addresses (or at such other addresses for a party as shall be specified by
like notice):

If to the Corporation:

Peabody Energy Corporation

701 Market Street

St. Louis, MO 63101

Attn: Executive Vice President and Chief Legal Officer

Facsimile: (314) 342-3419

If to Indemnitee:

Michael C. Crews

218 Lansbrooke Drive

Chesterfield, MO 63005

Facsimile:

     Section 13. Subsequent Legislation. If the General Corporation Law of Delaware is
amended after adoption of this Agreement to expand further the indemnification permitted to
directors or officers, then the Corporation shall indemnify Indemnitee to the fullest extent
permitted by the General Corporation Law of Delaware, as so amended.

     Section 14. Nonexclusivity. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other rights which
Indemnitee may have under any provision of law, the Corporation’s Certificate of Incorporation or
By-Laws, in any court in which a proceeding is brought, the vote of the Corporation’s stockholders
or disinterested directors, other agreements or otherwise, and Indemnitee’s rights hereunder shall
continue after Indemnitee has ceased acting as an agent of the Corporation and shall inure to the
benefit of the heirs, executors and administrators of Indemnitee. However, no amendment or
alteration of the Corporation’s Certificate of Incorporation or By-Laws or any other agreement
shall adversely affect the rights provided to Indemnitee under this Agreement

     Section 15. Enforcement. The Corporation shall be precluded from asserting in any
judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding
and enforceable. The Corporation agrees that its execution of this Agreement shall constitute a
stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which

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a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced,
continued or appealed, that its obligations set forth in this Agreement are unique and special, and
that failure of the Corporation to comply with the provisions of this Agreement will cause
irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As
a result, in addition to any other right or remedy Indemnitee may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Corporation of its obligations under this Agreement.

     Section 16. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee
to the fullest extent now or hereafter permitted by law.

     Section 17. Entire Agreement. This Agreement and the documents expressly referred to
herein constitute the entire agreement between the parties hereto with respect to the matters
covered hereby, and any other prior or contemporaneous oral or written understandings or agreements
with respect to the matters covered hereby are expressly superceded by this Agreement.

     Section 18. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     Section 19. Successor and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, heirs, executors, administrators and legal
representatives. The Corporation shall require and cause any direct or indirect successor (whether
by purchase, merger, consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation, by written agreement in form and substance reasonably satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Corporation would be required to perform if no such succession had taken
place.

     Section 20. Service of Process and Venue. For purposes of any claims or proceedings to
enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal or
state court of competent jurisdiction in the states of Delaware and Missouri, and waives and agrees
not to raise any defense that any such court is an inconvenient forum or any similar claim.

     Section 21. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within Delaware. If a court of competent
jurisdiction shall make a final determination that the provisions of the law of any state other
than Delaware govern indemnification by the Corporation of its officers and directors, then the
indemnification provided under this Agreement shall in all instances be enforceable to the fullest
extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

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     Section 22. Employment Rights. Nothing in this Agreement is intended to create in
Indemnitee any right to employment or continued employment.

     Section 23. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to be one
and the same instrument, notwithstanding that both parties are not signatories to the original or
same counterpart.

     Section 24. Headings. The section and subsection headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

          IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of
the date first above written.

	 	 	 	 	 
	 	PEABODY ENERGY CORPORATION

 	 
	 	By:  	/s/ Alexander C. Schoch
 	 
	 	 	Alexander C. Schoch 	 
	 	 	Executive Vice President and

Chief Legal Officer 	 
	 
	 	INDEMNITEE:

 	 
	 	By:  	/s/ Michael C. Crews
 	 
	 	 	Michael C. Crews 	 
	 	 	 	 
	 

11Exhibit 10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (together with its Exhibits, this “Agreement”) is made as of the
22nd day of May, 2008 (the “Signing Date”), by and between CNA Financial Corporation, a
Delaware corporation (together with its successors and assigns, the “Company”), and Thomas F.
Motamed (the “Executive”, and, together with the Company, a “Party”);

W I T N E S S E T H:

          WHEREAS, the Company wishes to employ the Executive as the Chairman of the Board, and as the
Chief Executive Officer, of the Company and of its wholly-owned insurance subsidiaries (the “CNA
Insurance Companies,” and together with the Company, the “CNA Companies”) following the expiration
of certain non-compete and non-solicitation obligations to his current employer; and the Executive
wishes to accept, as of the Commencement Date, and agrees to such employment under the terms and
conditions set forth herein.

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

	1.	 	Employment Term. The Company shall employ the Executive under this Agreement, and the
Executive shall accept such employment, for the Term. The “Term” shall commence on Monday,
June 8, 2009 or such other date as the Parties may agree upon in writing (the “Commencement
Date”) and shall end on December 31, 2013, subject to annual renewals thereafter, if any,
upon mutual written agreement by the Parties. Notwithstanding the foregoing, the
Executive’s employment hereunder, and the Term, may be terminated at any time in accordance
with Section 6 below.
	 
	2.	 	Duties of the Executive and Place of Business.

	 	(a)	 	Throughout the Term, the Executive shall serve as a member of the Company’s
Board, as the Chairman of such Board, and as the Chief Executive Officer of the
Company (if elected to such positions by the Board, as is the intention of the
Parties). Throughout the Term, the Executive shall also serve as the Chairman of the
Board, and the Chief Executive Officer, of each of the CNA Insurance Companies, and of
such other Affiliates of the Company as the Parties may from time to time agree upon in writing. As the Chief Executive Officer of the Company,
the Executive shall have all authorities, duties and responsibilities customarily
exercised by an individual serving in that position at an entity of the size and
nature of the Company (including, without limitation, responsibility for the day to
day operations of the CNA Insurance Companies and for development and
implementation of the CNA Insurance Companies’ business plans and strategies);
shall be assigned no duties or responsibilities that are materially inconsistent
with, or that materially impair his ability to discharge, the foregoing duties and
responsibilities; shall have such additional duties and responsibilities,
consistent with the foregoing, as may be from time to time reasonably be assigned
to him by the Company’s Board; and shall report solely and directly to the
Company’s Board. For purposes of this Agreement, “Affiliate” of a Person shall
mean any Person that directly or indirectly controls, is controlled by, or is under
common

 

 

	 	 	 	control with, such Person; “Board” shall mean, in the case of a corporation, the
board of directors of such corporation and, in the case of any other entity, the
corresponding governing Person; and “Person” shall mean any individual,
corporation, partnership, limited liability company, joint venture, trust, estate,
board, committee, agency, body, employee benefit plan, or other person or entity.
Notwithstanding the foregoing, for all purposes of this Agreement (except Sections
6.3(b)(ii), 6.7(x), 7, 18(a), 24 and 25 and Exhibit A), the term Affiliate shall
not include Loews Corporation or any of its direct or indirect subsidiaries (other
than the Company and the Company’s subsidiaries).
	 
	 	(b)	 	Throughout the Term, the Executive: shall diligently and to the best of his
abilities assume, perform, and discharge his duties and responsibilities hereunder as
the Chairman of the Board, and the Chief Executive Officer, of the Company, and the
CNA Insurance Companies; and shall devote substantially all of his business time and
effort to the business and affairs of the Company and its subsidiaries. However,
nothing in this Agreement or elsewhere shall preclude the Executive from: (i)
engaging in civic, charitable or community services; (ii) devoting a reasonable amount
of time to private investments and personal affairs; or (iii) serving, with the prior
approval of the Company’s Board, on the boards of for-profit entities, so long as such
activities or services do not interfere with the Executive’s responsibilities to the
Company.
	 
	 	(c)	 	The Executive shall establish a residence in the Chicago metropolitan area
not later than five (5) days following the Commencement Date and shall maintain such a
residence during the Term. The Executive’s principal place of business shall be at
the Company’s headquarters in Chicago. As soon as practicable following the
Commencement Date, but no later than ten (10) days following the Commencement Date the
Company shall pay the Executive $250,000 in recognition of the expense of establishing
and maintaining a Chicago metropolitan area residence.

	3.	 	Compensation.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	(a)	 	Beginning as of the Commencement Date, the Company shall pay the Executive
for the period he is employed by the Company hereunder an annualized base salary of
$1,000,000.00 (the “Base Salary”). The Base Salary shall be paid in accordance with
the regular payroll practices applicable to senior executives of the Company
generally, but no less frequently than monthly. At the discretion of the Company’s
Board, or of the compensation committee of such Board (the
“Committee”), the
annualized Base Salary may be increased annually during the Term of the Agreement,
beginning in calendar year 2010. The Base Salary shall not be decreased at any time,
or for any purpose, during the Term (including, without limitation, for the purpose of
determining benefits due under Section 6) without the Executive’s prior written
consent.
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(b)
	 	(i)
	 	For each calendar year (a “Performance Year”) that ends during the Term,
the Executive shall be entitled to receive an annual incentive cash award (an “Annual
Bonus”) under the CNA Financial Corporation 2000 Incentive Compensation Plan (the
“Plan”) to the extent that the criteria set forth in this Section 3(b) are satisfied
for such year.	 	 	 	 
	 
	 

	 	 
	 	(ii)
	 	For each full Performance Year during the Term, the Annual
Bonus shall equal 1.2% of NOI (as described below) for such year;
provided, however, that, for any such year, the Executive’s target
Annual Bonus shall not be less than $2,500,000, and his maximum Annual Bonus
shall not be more than $4,000,000.	 	 	 	 

 

 

	 	 	 	For purposes of this Agreement, “NOI” for any Performance Year or quarter
shall mean the Company’s net income for such Performance Year or quarter,
as adjusted in good faith by the Committee for such Performance Year or
quarter for the purpose of determining annual bonuses for senior
executives of the Company generally. For any Performance Year or quarter,
NOI shall be determined on a basis that is no less favorable to the
Executive than to other senior executive officers of the Company
generally. The Committee may exercise negative discretion under the Plan
to decrease or eliminate any portion of the Executive’s Annual Bonus for
any Performance Year that exceeds his Annual Bonus target of $2,500,000.
	 
	 	(iii)	 	For the first Performance Year that ends during the Term,
the Executive’s Annual Bonus shall equal 1.2% of the sum of (x) the Company’s
NOI for each calendar quarter during such year that commences after the
Commencement Date plus (y) a pro-rata portion of the Company’s NOI for the
calendar quarter in which the Commencement Date occurs, such pro-rata portion
to be determined by multiplying the Company’s NOI for such quarter by a
fraction, the numerator of which is the number of calendar days during such
quarter that the Executive is employed hereunder and the denominator of which
is the number of calendar days in such quarter (the “Quarterly Proration
Fraction”). The target Annual Bonus payment for such year, above which the
Committee may exercise negative discretion, shall be determined by multiplying
$2,500,000 times a fraction, the numerator of which is the number of calendar
days during such year that the Executive is employed hereunder and the
denominator of which is 365 (the “Yearly Proration Fraction”). The maximum
Annual Bonus payment for such year shall be determined by multiplying
$4,000,000 by the Yearly Proration Fraction.
	 
	 	(iv)	 	Annual Bonus payments shall be made to the Executive in cash
no later than corresponding bonus payments are made to senior executive
officers of the Company generally, and in no event later than 70 days after
the end of the Performance Year to which they relate. In the event that the
Company ceases to maintain an annual bonus program that is based on NOI and
that is similar to the program in effect as of the Signing Date, a new program
shall be established under which the Executive shall have an annual target
bonus of at least $2,500,000.

	 	 	 	 	 	 	 
	 

	 	(c)
	 	(i)
	The Executive shall be entitled to participate in the Company’s long term
incentive cash award program, under the Plan, for each of the three-calendar-year
performance periods (each, a “Performance Period”) that include any calendar year that
begins or ends during the Term (each a “Covered Year”), but only to the extent
provided in this Agreement. For each Covered Year in each such Performance Period,
the Executive shall be entitled to receive a long term incentive cash award under the
Plan (a “Long Term Bonus”) to the extent that the Company achieves performance
objectives established by the Committee for such Covered Year, on terms and conditions
consistent with this Agreement and no less favorable to the Executive than those
applying to senior executive officers of the Company generally. For each Covered
Year, and except to the extent otherwise provided in Section 3(c)(ii), the Executive’s
target long term incentive cash award for each of the three Performance Periods that
are then ongoing shall be eight and one-third percent (8-1/3%) of his annualized Base

 

 

	 	 	 	Salary as in effect on the last day of such year, and his maximum long
term incentive cash award shall be sixteen and two thirds percent
(16-2/3%) of such annualized Base Salary. Except to the extent otherwise
provided in Section 6, the Executive shall not be entitled to any Long
Term Bonus for any calendar year that ends after the Termination Date (as
defined below), except to the extent that the terms and conditions of
corresponding awards to other senior executives generally provide for long
term incentive award payments for such year in corresponding
circumstances.

	 	(ii)	 	Notwithstanding the foregoing, the Long Term Bonus that the
Executive shall be entitled to receive with respect to the Covered Year during
which the Commencement Date occurs shall, for each of the three Performance
Periods that is then ongoing, be determined by multiplying the Long Term Bonus
to which he would have been entitled under Section 3(c)(ii) had he
participated in such Performance Period from the beginning of such Covered
Year by a fraction: (i) the numerator of which is the sum of (a) the Company’s
achievement of the applicable performance measure for each of the full
calendar quarters in such Covered Year that began after the Commencement Date
and (b) the Company’s achievement of the applicable performance measure for
the calendar quarter in which the Commencement Date occurs multiplied by the
Quarterly Proration Fraction, and (ii) the denominator of which is the actual
performance for such Covered Year. With respect to each of such Performance
Periods, the Executive’s target long term bonus for such Covered Year shall be
eight and one-third percent (8-1/3%) of his annualized Base Salary as in
effect on the last day of such year, and his maximum long term bonus shall be
sixteen and two thirds percent (16-2/3 %) of such Base Salary, in each case as
multiplied by the Yearly Proration Fraction.
	 
	 	(iii)	 	Long Term Bonus payments for each Covered Year and each
Performance Period under this Section 3(c) shall be made in cash no later than
the time(s) at which corresponding bonus payments are made to other senior
executive officers of the Company generally. In the event that the long term
bonus program that is in effect as of the Signing Date is discontinued with
respect to any Covered Year, a new program shall be established under which
the Executive has an aggregate target long term incentive cash bonus
opportunity for such Covered Year, after taking into account all performance
periods that are then ongoing (including performance periods that may be
on-going under the former program), that equals at least 25 percent (25%) of
his annualized Base Salary as in effect on the last day of the such Covered
Year, and that is otherwise on terms and conditions not less favorable to the
Executive than those that would have applied if the old program had remained
in effect.

	 	(d)	 	During the Term, the Executive shall be granted stock appreciation rights
(“SARs”) under the Plan at a rate of 80,000 SARs per calendar year (such number being
subject to adjustment under Section 3(j) below). The initial grant shall be made on
the Commencement Date and shall be pro-rated by multiplying 80,000 (such number being
subject to adjustment under Section 3(j) below) by the Yearly Proration Fraction.
Subsequent grants shall be made during the first quarter of each calendar year that
commences during the Term and shall be made at a time, and on terms and conditions,
that are consistent with this Agreement and otherwise no less favorable to the
Executive than those that apply to corresponding grants to other senior executive
officers of the

 

 

	 	 	 	Company. Each of the SARs shall have an exercise price equal to the fair market
value of a share of the Company’s common stock on the date of grant; shall have a
term of ten years; shall be settled in stock (or, at the Company’s election, in
cash); and shall vest, and hence become both exercisable and non-forfeitable, in
equal annual installments on each of the first four anniversaries of the date of
grant, provided that the Executive is employed by the Company on such date, except
as otherwise provided in this Agreement. All rights with regard to unvested SARs
shall, except to the extent otherwise provided in Section 6, terminate upon
termination of the Executive’s employment with the Company. The annual grant of
SARs to the Executive may be increased at the recommendation, and with the
approval, of the Committee, subject to share availability.

	 	 	 	 	 	 	 
	 

	 	(e)
	 	(i)
	 	On the Commencement Date, the Executive shall be granted restricted stock
units (“RSUs”), each representing the right to receive one share of the Company’s
common stock, having a value of $2,500,000, based upon the volume weighted average
price during the ten (10) trading days immediately preceding the date of grant (the
“VWAP”). Notwithstanding the foregoing, the Executive shall be granted RSUs under
this Section 3(e)(i) with respect to no more than 100,000 shares (such number being
subject to adjustment under Section 3(j), below); provided, however, that in
no event shall the RSUs granted under this Section 3(e)(i) have a value, based on the
VWAP, that is less than $2,000,000.

	 	 (ii)	 	Each calendar year during the Term, the Executive shall be
granted RSUs having a value of $2,500,000 on the date of grant, based upon the
VWAP. The first grant shall be made on the Commencement Date and shall be
pro-rated (i.e., shall have a date of grant value equal to $2,500,000
times the Yearly Proration Fraction). The Company shall provide to the
Executive a copy of the award documents that are to govern this first grant,
as well as those that are to govern his initial grant of SARs and his grant of
RSUs under Section 3(e)(i), no later than twenty-one (21) days prior to the
Commencement Date. Subsequent grants of RSUs shall be made during the first
quarter of each calendar year that commences during the Term and on the same
date as SARs are granted to the Executive under Section 3(d), and shall be
made on terms and conditions that are consistent with this Agreement and
otherwise no less favorable to the Executive than those that apply to
corresponding grants to other senior executive officers of the Company. Each
grant shall be earned to the extent (and only to the extent) provided in the
table below, where NOI shall have the same definition as under Section
3(b)(ii) above, and Budgeted NOI shall mean the Company’s budgeted net income
as in effect at the time of the applicable grant, as later adjusted by the
Committee in the same manner in which the Company adjusts net income to
compute NOI, in each case with respect to the calendar year in which the grant
is made.

	 	 	 	 	 
	 	 	% of RSUs
	NOI as a % of Budgeted NOI	 	Earned
	less than 50%
	 	 	0	%
	50% - 100%
	 	 	80	%
	above 100%
	 	 	100	%

	 	 (iii)	 	All RSUs granted pursuant to Section 3(e)(i), and all RSUs
that have been earned pursuant to Section 3(e)(ii), shall vest (and thus
become non-forfeitable)

 

 

	 	 	 	in equal installments on each of the first four anniversaries of the date
of grant, provided that the Executive is employed by the Company on such
date, except as otherwise provided in this Agreement. All RSUs shall be
settled in stock promptly after vesting, but in no event more than thirty
(30) days after vesting.
	 
	 	(iv)	 	All rights with regard to unvested RSUs (including RSUs that
have not yet been earned) shall, except to the extent otherwise provided in
Section 6, terminate upon termination of the Executive’s employment with the
Company. The annual grant of RSUs to the Executive may be increased at the
recommendation, and with the approval, of the Committee, subject to share
availability.
	 
	 	(v)	 	Upon the Company’s payment of a cash dividend in respect of
its outstanding Company common stock, the Executive shall be credited with
dividend equivalents in respect of each RSU outstanding on the record date for
such dividend. Such dividend equivalents shall be equal to the dividend paid
on an outstanding share of common stock and shall be credited as of the
dividend payment date until the respective outstanding RSU becomes vested, at
which time such dividend equivalent right shall be paid to the Executive,
without interest, in cash.

	 	(f)	 	For purposes of determining the Executive’s entitlements under the CNA
Savings & Capital Accumulation Plan (“S-CAP”), the CNA Supplemental Savings & Capital
Accumulation Plan (“SES-CAP”), and their successors (collectively, the “Savings
Plans”), the Executive’s pensionable earnings (e.g., both his “Compensation”,
and his “Retirement Plan Compensation”, as defined under the SES-CAP) shall be deemed
to include both his Base Salary when paid, and his Annual Bonus on the earlier of the
date it is actually paid and the date it would have been paid in the absence of any
elective deferral by the Executive, provided that the aggregate amount of salary and
annual bonus deemed included for any full calendar year shall not exceed $3,500,000.
With respect to the calendar year in which the Commencement Date occurs such amount
shall be determined by multiplying $3,500,000 by the Yearly Proration Fraction.
	 
	 	(g)	 	Provided that the Executive is employed hereunder on December 31, 2013, (i)
the Company shall pay $15,000 to the Executive in each succeeding January, commencing
in January 2014, and ending with the payment made in January 2033, and (ii) the
Company shall pay to the Executive within 30 days following termination of his
employment hereunder a lump sum payment equal to $1,500,000 plus (if such employment
ends after January 1, 2014) interest at a rate of 5% per annum from January 1, 2014
until the date of payment. The benefits provided under this Section 3(g) shall be in
addition to any benefits to which the Executive becomes entitled under any current or
future savings or retirement plan or arrangement of the Company or its Affiliates.
	 
	 	(h)	 	All payments due to the Executive under this Agreement shall be subject to
withholding as required by law or as authorized by the Executive in writing.
	 
	 	(i)	 	It is the Parties’ intention that all payments, benefits and entitlements
received by the Executive be provided in a manner that does not impose any additional
taxes, interest or penalties on the Executive with respect to such payments, benefits
and entitlements under Section 409A of the Code, and its implementing regulations
(“Section 409A”). Each of the Parties has used, and will continue to use, its best
reasonable efforts to avoid the imposition of such additional taxes, interest or
penalties, and the Parties agree to work

 

 

	 	 	 	together in good faith to amend this Agreement, and to structure any payment,
benefit or other entitlement received by the Executive, in a manner that avoids
imposition of such additional taxes, interest or penalties while preserving the
affected payment, benefit or entitlement to the extent practicable and maintaining
the basic financial provisions of this Agreement. For purposes of this Agreement,
“Code” shall mean the Internal Revenue Code of 1986, as amended, and any reference
to a particular section of the Code shall include any provision that modifies,
replaces or supersedes such section.
	 
	 	(j)	 	If any merger, consolidation, reorganization, recapitalization, spin-off,
split-up, combination, exchange of securities, modification of securities, share
split, reverse share split, share dividend, other distribution of securities or other
property in respect of shares or other securities, or other change in corporate
structure or capitalization affecting the rights or value of securities of any class
that is to be subject to an SAR grant under Section 3(d), or an RSU grant under
Section 3(e)(i) (but only to the extent that the 100,000 share cap applies), occurs
(i) on or after the Signing Date and (ii) on or before the date that such grant is
awarded, then appropriate adjustment(s) shall be made in the number and/or kind of
securities to be subject to such grant, so as to avoid dilution or enlargement of the
rights, economic opportunity and value intended to be represented by such grant.
	 
	 	(k)	 	The Committee, or the Company, shall structure and administer all awards to
the Executive under Section 3(b), 3(c), 3(d) and 3(e) hereof in such a manner as to
preserve deductibility under Section 162(m) of the Code, provided that the Executive’s
rights hereunder are not adversely affected.

	4.	 	Other Benefits. During the Term, the Executive shall be entitled to participate in all
benefit and prerequisite plans, programs and arrangements of the Company and its Affiliates
that are made available to senior executives of the Company generally, in each case on
terms and conditions no less favorable to the Executive than those that apply to other
senior executives of the Company generally. The Executive’s entitlement to participate in
any such plan, program or arrangement shall, in each case, be subject to the terms and
conditions of such plan, program or arrangement that apply to senior executives of the
Company generally. For each calendar year that commences or ends during the Term, the
Executive shall be entitled to reimbursement for tax return preparation, and for not more
than one personal club membership if used primarily for business purposes. During the
Term, the Executive shall be entitled to use the Company aircraft for personal use
consistent with the Company’s practice for its Chief Executive Officer as in effect on the
Signing Date and for a maximum of sixty (60) hours per calendar year (pro-rated for partial
years), with imputed taxable income to the Executive for such personal use of the Company
aircraft. If the Company adopts a paid time off policy during the term that is applicable
to the Executive, he shall be deemed to have twenty (20) years of service at the Company as
of the Commencement Date for all purposes under such policy and shall be treated no less
favorably under such policy than any other senior executive of the Company.
	 
	5.	 	Expense Reimbursement.

	 	(a)	 	The Executive shall be entitled to prompt reimbursement by the Company for
all reasonable and customary travel and other business expenses he incurs in
connection with carrying out his duties under this Agreement, in accordance with the
general travel and business reimbursement policies then applying to senior executives
of the Company generally. The 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.
	 
	 	(b)	 	As soon as practicable following the Commencement Date, the Company shall
reimburse the Executive for all appropriately documented attorneys’ fees and other
charges of counsel he incurred in entering into, and implementing, this Agreement,
provided, however, that the amount reimbursed under this Section 5(b) shall
not exceed $130,000.

[Remainder of the page intentionally left blank]

 

 

	6.	 	Termination of Employment
	 
	6.1	 	Death and Disability

	 	(a)	 	In the event that the Executive’s employment hereunder terminates due to his
death or Permanent Disability (as defined below), the Term shall expire, and he shall
be entitled to the following:

	 	(i)	 	Continued payment of the Base Salary, at the rate in effect
as of the date his employment hereunder terminates (the “Termination Date”)
and with payment at the times the Base Salary would have been paid in
accordance with the Company’s normal payroll practices, for (x) in the case of
termination due to death, ninety (90) days following the Termination Date or
(y) in the case of termination due to Permanent Disability, through December
31, 2013 or, if the termination due to Permanent Disability is after December
31, 2013, through the end of the then scheduled Term; provided,
however, that in the case of termination due to Permanent Disability, the Base
Salary paid to the Executive for any month shall be offset by the amount of
any gross periodic disability benefits (other than benefits attributable to
his own unreimbursed contributions) that he receives during such month under
any disability insurance plan or program of the Company or its Affiliates.
	 
	 	(ii)	 	A Pro-Rata Annual Bonus (as defined below), and a Pro-Rata
Long Term Bonus (as defined below), for the calendar year of termination.
	 
	 	(iii)	 	Full vesting, as of the Termination Date, of all outstanding
SARs, each such SAR to remain exercisable for at least the lesser of three
years following the Termination Date and the remainder of its maximum stated
term; full vesting, as of the Termination Date, of any outstanding RSU whose
vesting is based solely on continued employment; full vesting of any
outstanding RSU granted pursuant to Section 3(e)(ii) in the calendar year of
termination or in the previous year, subject solely to satisfying the
performance criteria governing such RSU; and full vesting, as of the
Termination Date, of any other outstanding equity-based award (other than SARs
and RSUs).
	 
	 	(iv)	 	In the event such termination of employment occurs prior to
December 31, 2013, the payments described in Section 3(g)(i) and the lump sum
payment described in Section 3(g)(ii), with the payments described in Section
3(g)(i) to be made at the times they would have been made if the Executive had
been employed hereunder on December 31, 2013 and the lump sum payment
described in Section 3(g)(ii) to be made within 30 days following the
Termination Date.
	 
	 	(v)	 	The Executive and his dependents shall be entitled to
continued participation for a period of thirty (30) months following the
Termination Date (which shall be concurrent with any health care continuation
benefits under COBRA), in all medical, dental, vision, prescription drug,
hospitalization, life insurance, disability and other welfare benefit
coverages and benefits in which they were participating as of such date, on
terms and conditions that are no less favorable to them than those that
applied as of such date.

 

 

	 	(vi)	 	The benefits described in Section 6.6 below.

	 	(b)	 	For purposes of this Agreement, the term “Permanent Disability” shall mean
that the Executive has been unable, due to physical or mental incapacity, to
substantially perform his duties and responsibilities under this Agreement for 180
days out of any 270 consecutive days.
	 
	 	(c)	 	For purposes of this Agreement, “Pro-Rata Annual Bonus,” when used in respect
of a Performance Year, shall mean an amount equal to 1.2% of the sum of (x) the
Company’s NOI for each full calendar quarter during such year that ends on or before
the Termination Date plus (y) in the event that the Termination Date is not the last
calendar day of a calendar quarter, a pro-rata portion of the Company’s NOI for the
calendar quarter in which the Termination Date occurs, such pro-rata portion to be
determined by multiplying the Company’s NOI for such quarter by the Quarterly
Proration Fraction. The Committee may exercise negative discretion with respect to
amounts in excess of the target Pro-Rata Annual Bonus amount, which amount shall be
determined by multiplying $2,500,000 times the Yearly Proration Fraction. The maximum
Pro-Rata Annual Bonus shall be determined by multiplying $4,000,000 by the Yearly
Proration Fraction. Any Pro-Rata Annual Bonus shall be paid as promptly as
reasonably practicable after the last day of the calendar quarter in which the
Termination Date occurs, but in no event more than thirty (30) days after such last
day.
	 
	 	(d)	 	For purposes of this Agreement, “Pro-Rata Long Term Bonus”, when used in
respect of a calendar year, shall mean the amount obtained by multiplying (x) the sum
of the Long Term Bonuses that the Executive would have received for such year with
respect to each performance period that is then ongoing if he had remained employed
hereunder through the end of such year (assuming for this purpose that his annualized
Base Salary at the end of such year would have been equal to his annualized Base
Salary as of the Termination Date) times (y) the Yearly Proration Fraction. Each of
the prorated amounts that constitute the Pro-Rata Long Term Bonus shall be paid on the
date that the corresponding Long Term Bonus would have been paid if the Executive’s
employment hereunder had not terminated.

	5.2	 	Termination for Cause by the Company.

	 	(a)	 	The Company may terminate the Executive’s employment hereunder for Cause.
Prior to any such termination of employment for Cause, the Company shall provide the
Executive with written notice from the Company’s Board stating in reasonable detail
the particular circumstances that constitute the grounds on which the termination for
Cause is based (the “Cause Notice”). The Executive shall then be entitled to a
hearing at a duly convened meeting of the Company’s Board, at which he may be
accompanied by counsel of his choice, provided that he submits a request for a hearing
within four (4) business days after he receives the Cause Notice. Within four (4)
business days following such request the Board shall hold such hearing, which shall
last no more than one (1) business day, and within four (4) business days following
such hearing the Company’s Board shall give written notice to the Executive stating
whether, in the judgment of at least two thirds of the members of the Company’s Board
(other than the Executive), Cause for terminating his employment on the basis set
forth in the original Cause Notice exists. Upon such notice from such Board, the
Executive’s employment hereunder shall terminate for Cause, subject to de
novo review of such Board’s determination, through arbitration in accordance
with Section 24, if the Executive so chooses. For avoidance of

 

 

	 	 	 	doubt, the arbitrators shall have no right to order reinstatement of the
Executive’s employment. The Company’s Board may suspend the Executive from his
duties under this Agreement for up to 30 days following the delivery of any Cause
Notice to the Executive, and no such suspension shall by itself constitute grounds
for a Good Reason termination.
	 
	 	(b)	 	In the event that the Executive’s employment hereunder is terminated for Cause in
accordance with Section 6.2(a), the Term shall expire and he shall be entitled only to the
benefits described in Section 6.6 and, notwithstanding anything in this Agreement to the
contrary, the Company shall have no further obligations under Section 19.
	 
	 	(c)	 	For purposes of this Agreement, “Cause” shall mean that: (i) the Executive is
convicted of, or pleads guilty or nolo contendere to, a felony, (ii)
the Executive engages in conduct that constitutes either (x) a material and willful
breach of this Agreement, (y) willful, or reckless, material misconduct in the
performance of the Executive’s duties under this Agreement, or (z) habitual neglect of
the Executive’s material duties under this Agreement; provided, however, that:
(x) in the case of clause (ii) only, such conduct has had a material adverse effect on
the business or prospects of the CNA Companies and (y) for purposes of clauses (ii)(y)
and (ii)(z), Cause shall not include any 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 is not legally entitled).

	5.3	 	Termination by the Company Without Cause / Termination by the Executive for
Good Reason.

	 	(a)	 	In the event that the Executive’s employment hereunder is terminated during
the Term (other than in accordance with Section 6.5) (x) by the Company other
than for Permanent Disability in accordance with Section 6.1 or for Cause in
accordance with Section 6.2 or (y) by the Executive with Good Reason in accordance
with Section 6.3(b), the Term shall expire and he shall be entitled to the following
(in lieu of separation payments under any other Company severance plan, policy or
arrangement):

	 	(i)	 	Separation payments at a rate of $312,500 per month,
commencing with the month of termination, with such termination payments to be
made in substantially equal installments, not less frequently than monthly,
through December 31, 2013 (or, if Executive’s employment hereunder is
terminated after December 31, 2013, through the end of the then scheduled
Term); provided, however, that such payments shall be made for a
period of no less than six (6) months following the Termination Date.
	 
	 	(ii)	 	The Executive and his dependents shall be entitled to
continued participation, for a period of forty two (42) months following the
Termination Date (which shall be concurrent with any health care continuation
benefits under COBRA), in all medical, dental, vision, prescription drug,
hospitalization, life insurance, disability and other welfare benefit
coverages and benefits in which they were participating as of such date, on
terms and conditions that are no less favorable to them than those that
applied as of such date.
	 
	 	(iii)	 	The benefits described in Sections 6.1(a)(ii), 6.1(a)(iii),
6.1(a)(iv) and 6.6.

 

 

	 	(b)	 	“Good Reason” shall mean the occurrence, at any time during the two (2) year
period immediately prior to the Termination Date, of any of the following events,
without the Executive’s prior written consent and without cure by the Company within
thirty (30) days after the Executive gives notice of such event to the Company
requesting cure, such notice to be given within ninety (90) days after the Executive
learns that such event has occurred: (i) the assignment to the Executive of duties
that are materially inconsistent with his position (including his status, offices,
titles and reporting relationships), authority, duties or responsibilities, all as in
effect on the Commencement Date, (ii) actions by the Company or its Affiliates that
have resulted in a substantial diminution in his position, authority, duties or
responsibilities as compared to his position, authority, duties or responsibilities at
the Commencement Date; (iii) a substantial breach by the Company or any of its
Affiliates of any material obligation to the Executive, under this Agreement or
otherwise (e.g., a substantial failure to honor the terms of any material
equity or long term incentive grant, or a material breach of Section 3(a), 3(b), 3(c),
3(d) or 3(e)); (iv) the Company requiring the Executive to be based at any office or
location that is more than 50 miles from the Company’s headquarters in Chicago,
Illinois, as of the Signing Date; (v) any failure to elect or appoint the Executive as
a member of the Company’s Board, Chairman of such Board, and Chief Executive Officer
of the Company, as of the Commencement Date, or to maintain him in such positions
throughout the Term (provided, however, that the Executive need not be elected
as, or maintained as, Chairman of the Company’s Board to the extent that doing so
would be a violation of applicable law, or of applicable rules of the New York Stock
Exchange or other self-regulatory organization to whose rules the Company is subject,
and would result in material harm to the Company); or (vi) any 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 business or assets of the Company within
fifteen (15) calendar days after a merger, consolidation, sale or similar transaction.
	 
	 	(c)	 	Upon termination of his employment hereunder in a termination governed by
this Section 6.3, the Executive shall be entitled to the benefits described in Section
6.3(a) (except in the case of benefits described in Section 6.6), but only if he
executes, and delivers to the Company within 21 days after the Termination Date (or
such longer period as may reasonably be necessary if the Executive dies or becomes
incapacitated, or if the Company has claimed that the termination is for Cause), a
Release substantially in the form attached hereto as Exhibit A, which Release he does
not revoke during the “Revocation Period” as defined in such Release.
	 
	 	(d)	 	For all purposes of this Agreement, if an Executive Presentment takes place
on the Commencement Date, or within 15 days following the Commencement Date in the
event of extraordinary circumstances, the failure by the Company to employ the
Executive on or within 15 days following the Executive Presentment shall be treated as
if the Executive had become employed hereunder on the date of the Executive
Presentment and had been terminated 15 days later in a termination of employment to
which Section 6.3(a) applies. Notwithstanding the foregoing and anything to the
contrary in Section 1, if an Executive Presentment does not occur on June 8, 2009 (or
such other date as the Parties may agree upon in writing in accordance with Section
1), then the Commencement Date shall be the date on which the Executive Presentment
occurs. For purposes of this Agreement, an “Executive Presentment” shall be deemed to
have occurred if (i) the Executive presents himself at the Company’s headquarters
prepared to commence employment and perform his duties hereunder, (ii) the Executive
is not subject to any injunction preventing him from performing his duties hereunder
on the date that he presents himself, and (iii) the Executive has neither been
convicted of, nor plead guilty to, any felony.

 

 

	5.4	 	Voluntary Resignation by the Executive; Failure of Executive Presentment.

	 	(a)	 	In the event that the Executive terminates his employment hereunder prior to
the then-scheduled expiration of the Term on his own initiative, other
than in a termination governed by Section 6.1 or 6.3, the Term shall expire
and he shall be entitled only to the benefits described in Section 6.6 and,
notwithstanding anything in this Agreement to the contrary, the Company shall have no
further obligations under Section 19. A voluntary termination under this Section 6.4 shall
not be deemed a breach of this Agreement. Promptly following any termination of
the Executive’s employment that is governed by this Section 6.4(a), the Company
shall represent that none of the events described in clauses (i) through (vi) of
Section 6.3(b) have occurred.
	 
	 	(b)	 	If the Executive terminates his employment hereunder, in a termination
governed by Section 6.4(a), at any time prior to the first anniversary of the
Commencement Date, the Executive shall be required to promptly repay, on an after-tax
basis, (i) all amounts previously paid by the Company to Executive pursuant to Section
2(c) or Section 5(b) and (ii) all amounts that the Company previously advanced
pursuant to Section 19.
	 
	 	(c)	 	In the event that an Executive Presentment does not occur in accordance with
Section 6.3(d), then (i) the Term shall not commence, (ii) the Executive shall not be
entitled to any of the benefits described in Section 6.6, (iii) the Company shall have
no further obligations under Section 19, and (iv) Executive shall be required to
promptly repay, on an after-tax basis, (x) all amounts previously paid by the Company
to Executive pursuant to Section 2(c) or Section 5(b) and (y) all amounts that the
Company previously advanced pursuant to Section 19.

	5.5	 	Expiration of Term. Upon the expiration of the Term on December 31, 2013 (or on such
later expiration date as the Parties may have agreed upon in accordance with Section 1),
the Executive’s employment with the Company hereunder shall terminate and the Executive
shall be entitled to the benefits described in Sections 6.1(a)(ii) (but only if the Parties
extend the Term beyond December 31, 2013 in accordance with Section 1), 6.1(a)(iii),
6.1(a)(iv) and 6.6.
	 
	5.6	 	Any Termination of Employment.

	 	(a)	 	Upon any termination of the Executive’s employment hereunder, he shall be
entitled to:

	 	(i)	 	Unpaid Base Salary through the Termination Date.
	 
	 	(ii)	 	The balance of any unpaid Annual Bonus in respect of any
Performance Year that ended on or before the Termination Date, and the balance
of any unpaid Long Term Bonus with respect to any Covered Year that ended on
or before the Termination Date, in each case paid on the date that it would
have been paid if the Executive’s employment hereunder had not terminated (or,
if such date has already passed, as soon as practicable following the
Termination Date).
	 
	 	(iii)	 	The right to exercise his vested SARs for at least the
lesser of 90 days following the Termination Date and the balance of their
maximum stated term.

 

 

	 	(iv)	 	Other or additional benefits in accordance with the then
applicable terms of any applicable Company Arrangement, including, without
limitation, Sections 3, 4, 5, 18, 19, 24 and 25 of this Agreement, and any
equity award grant or agreement, provided that this shall not result in a
duplication of benefits or payments to the Executive or his beneficiaries, as
the case may be.

	 	(b)	 	For purposes of this Agreement, “Company Arrangement” shall mean any plan,
program, corporate governance document, policy, agreement or other arrangement of the
Company or any of its Affiliates.
	 
	 	(c)	 	Upon any termination of his employment hereunder, the Executive shall be
deemed to have resigned from all offices, and Board memberships, that he holds
pursuant to this Agreement, and the Executive agrees to promptly execute any documents
reasonably requested by the Company to evidence or effectuate such resignation.
	 
	 	(d)	 	Upon any termination of employment hereunder, Executive shall continue to be
bound by the covenants set forth herein at Sections 7 through 15 subsequent to the
date of such termination for such periods of time as provided for in said Sections
respectively.

	5.7	 	No
Mitigation; No
Offset. In the
event of any
termination of the
Executive’s
employment
hereunder, the
Executive shall be
under no obligation
to seek other
employment or
otherwise mitigate
the obligations of
the Company or its
Affiliates under
this Agreement or
otherwise, and
there shall be no
offset against
amounts or benefits
due the Executive
under this
Agreement or
otherwise on
account of (x) any
Claim that the
Company or any of
its Affiliates may
have against him or
(y) any
remuneration or
other benefit
earned or received
by the Executive
after such
termination. Any
amounts due under
this Section 6 are
considered to be
reasonable by the
Company and are not
in the nature of a
penalty.

	5.8	 	Section 409A. Notwithstanding any provision to the contrary in this Agreement or otherwise,
no payment or distribution under this Agreement or otherwise that
constitutes an item of “deferred compensation” under Section 409A and becomes payable by
reason of the termination of the Executive’s employment hereunder shall be made to the Executive unless the termination
of the Executive’s employment constitutes a “separation from service” (as such term
is defined in Section 409A). In addition, no such payment or distribution of deferred compensation
shall be made to the Executive prior to the earlier of (a) the expiration of the six (6) month period
measured from the date of the Executive’s “separation from service” (as such term is defined in Section
409A), or (b) the date of the Executive’s death, if the Executive is deemed at the time of such separation
from service to be a “specified employee” within the meaning of that term under Section 409A and if such delayed
commencement is otherwise required to avoid “additional tax” under Section 409A(a)(2) of the Code. All payments and
benefits that are delayed pursuant to the immediately preceding sentence shall be paid
to the Executive in a lump sum upon expiration of such six (6) month period (or if earlier
upon the Executive’s death), together with accrued interest for the period of delay at the rate of 5% per annum.
Any separate payment or benefit under this Agreement or otherwise shall not be “deferred compensation” subject to
Section 409A to the extent provided in the exceptions in Treasury Regulation 1.409A-1(b)(4) and (b)(9) and other
applicable provisions of Treasury Regulation Section 1.409A-1 through A-6. Each individual installment payment
that becomes payable under this Agreement, and each payment of Base Salary after a Termination Date, shall be a
“separate payment” under Section 409A. The payment or reimbursement of any expense under this Agreement in one
of the Executive’s taxable years shall not affect the payment or reimbursement of any expense in any other
taxable year of the Executive. Any payment or reimbursement for expenses under this Agreement shall in any
event

 

 

	 	 	be made on or before the last day of the Executive’s taxable year following the taxable
year in which the expense was incurred, and any such payment or reimbursement may not be
liquidated or exchanged for any other benefit.

	6.	 	Confidentiality.

	 	(a)	 	The Executive agrees that, during the Term and at all times thereafter, he
shall not reveal or utilize Confidential Information (as defined in this Agreement)
that he acquired during the course of or as a result of his employment with the
Company and that relates to (x) the CNA Companies and any of their Affiliates or
(y) the CNA Companies’ customers, employees, agents, brokers and vendors. The
Executive acknowledges that all such Confidential Information is commercially
valuable and is the property of the CNA Companies. Upon the termination of his
employment hereunder, the Executive shall return all such Confidential Information
to the Company, whether it exists in written, electronic, computerized or other
form. Notwithstanding anything elsewhere to the contrary (including, without
limitation, in Exhibit B), the Executive (a) may disclose Confidential Information
(i) to the Company and its Affiliates, or to any authorized (or apparently
authorized) agent or representative of any of them, (ii) in confidence to any
attorney or accountant actually retained by Executive for the purpose of securing
professional advice (but not the Company’s privileged information), or (iii) when
required to do so by law or by a court, governmental agency, legislative body,
arbitrator or other Person with jurisdiction to order him to divulge, disclose or
make accessible such information, and (b) may disclose or use Confidential
Information (i) with the Company’s prior written consent, (ii) in connection with
performing his duties hereunder or (iii) in connection with any Proceeding under
Section 15 or 24. In the event that the Executive is required to disclose any
Confidential Information pursuant to clause (a)(iii) or (b)(iii)of the immediately
preceding sentence, he shall (A) promptly give the Company advance notice that such
disclosure may be made and (B) not oppose and affirmatively cooperate with the
Company, at its reasonable request and sole expense, in seeking to protect the
confidentiality of the Confidential Information. For purposes of this Agreement
“Confidential Information” shall mean information, knowledge or data (whether or
not a trade secret or protected by laws pertaining to intellectual property and
including, without limitation, information relating to data, finances, marketing,
pricing, profit margins, underwriting, claims, legal matters, loss control,
marketing and business plans, renewals, software, processing, vendors,
administrators, customers or prospective customers, products, brokers, agents and
employees), other than information, knowledge or data that (x) has previously been
disclosed to the public, or is in the public domain, other than as a result of the
Executive’s breach of this Section 7, or (y) is known or generally available to the
public or within any trade or industry of the Company or any of its Affiliates.
	 
	 	(b)	 	The Executive agrees to execute, as of the Commencement Date, a
Confidentiality, Computer Responsibility and Professional Certification Agreement in
the form attached hereto as Exhibit B; provided, however, that the Executive’s
obligation to maintain confidentiality and return Company property will be governed by
Section 7(a) and Section 12 of this Agreement, respectively. The Company shall supply
to the Executive, no later than twenty-one (21) days prior to the Commencement Date, a
copy of any additional document that he will be requested to sign, acknowledge, or
otherwise accept, in connection with commencing employment hereunder.

 

 

	8.	 	Competition. The Executive hereby agrees that, during the Term and for 24 months thereafter,
he will not, directly or indirectly, perform services for, or otherwise have any involvement
with (other than in connection with performing services hereunder), in each case, whether as
an officer, director, partner, consultant, security holder, owner, employee, independent
contractor or otherwise, any Person that competes (whether directly or indirectly) with the
Company or its Affiliates in the Business in the United States, Europe, Canada, Argentina or
any other country in which any of the CNA Companies is conducting business as of the
Termination Date (any such Person, a “Competitor”); provided, however, that the
Executive may in any event (x) own up to a 5% passive ownership interest in any public or
private entity and (y) be employed by, or otherwise have material association with, any
business that competes materially with the Company or its Affiliates in the Business if his
employment or association is with a separately managed and operated division or Affiliate of
such business that does not compete with the Company or its Affiliates in the Business and he
has no business communication relating to the Business with employees of any division or
Affiliate of such business that does compete with the Company or its Affiliates in the
Business. For purposes of this Agreement, the term “Business” shall mean (a) any line of
commercial property and casualty insurance or (b) any other revenue producing activity in
which the Company or its Affiliates are involved as of the Termination Date; provided,
however, that such other revenue producing activity constitutes at least 2.5% of the Company’s
consolidated revenue in the year of, or the year immediately prior to, the Executive’s
termination of employment. Upon the written request of the 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 the Executive to
provide such information as the Board determines to be necessary to make such determination;
and provided, further that the current and continuing effectiveness of such
determination may be conditioned upon the accuracy of such information, and upon such other
factors as the Board may determine.
	 
	9.	 	Solicitation. The Executive agrees that, during the Term and for 36 months thereafter,
he will not, directly or indirectly, solicit any individual (other than his own personal
assistant) who is then an employee of the Company or any of its Affiliates to terminate
such employee’s employment with the Company or its Affiliates or to accept employment
elsewhere, other than in connection with terminating, or altering, the employment of such
employee in connection with performing services hereunder.
	 
	10.	 	Non-interference. The Executive agrees that, during the Term and for 36 months
thereafter, he will not, directly or indirectly, other than in connection with performing
services hereunder and in the interest of the Company, solicit any Person that to his
knowledge had a business relationship with the Company or its Affiliates at any time during
the Term to terminate, or reduce, any such business relationship.
	 
	11.	 	Assistance with Claims. The Executive agrees that, during the Term and for a
reasonable period thereafter, and for no less than 36 months thereafter, he will make
himself available, on reasonable request, to assist the Company or any of its Affiliates in
the prosecution or defense of any Claim that may be made or threatened by or against the
Company or any of its Affiliates, and that relates to events, acts or omissions occurring
during the Term, by meeting with representatives of the Company (including attorneys) and
providing truthful and accurate information; provided, however, that he shall in no
event be required to (i) waive any constitutional rights or privileges, (ii) cooperate in
connection with a Claim brought by the Company against the Executive or a Claim brought by
the Executive against the Company, or (iii) disclose confidential information of any third
party which Executive is legally bound to maintain as confidential. The Executive agrees,
unless precluded by law or, in the case of requests from governmental and
quasi-governmental entities, reasonably advised to proceed otherwise by counsel, to
promptly inform the

 

 

	 	 	Company in advance if he is requested (i) to testify or otherwise become involved in
connection with any Claim against the interests of the Company or any of its Affiliates or
(ii) to assist or participate in any investigation (whether governmental or private) of the
Company or any of its Affiliates, whether or not a lawsuit has been filed against the
Company or any of its Affiliates relating thereto. The Company agrees to promptly
reimburse the Executive for any expenses he reasonably incurs in connection with his
obligations under this Section 11, including, without limitation, transportation (and, for
this purpose, the Executive shall be permitted to travel via Company aircraft if it is
available, at no charge to the Executive), lodging, meal expenses, and attorney’s fees (and
other charges of counsel). The Company agrees to make all reasonable efforts to minimize
any inconvenience to the Executive that may be created by his obligations under this
Section 11. Nothing in this Agreement or elsewhere is intended or shall be construed to
prevent the Executive from cooperating fully with any governmental investigation or review.
For purposes of this Agreement, “Claim” shall mean any claim, demand, request,
investigation, dispute, controversy, threat, discovery request, or request for testimony or
information.
	 
	12.	 	Return of Materials. The Executive shall, at any time upon the request of a duly
authorized officer of the Company, and in any event promptly following the Termination
Date, return and surrender to the Company all property of the Company, including but not
limited to originals and all copies, regardless of medium, of property belonging to the
Company created or obtained by the 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, however, that the Executive shall be under no
obligation to return written materials acquired from third parties that are generally
available to the public. Notwithstanding anything to the contrary in this Agreement or
elsewhere (including, without limitation, Exhibit B), the Executive shall be entitled to
retain: (i) his home computer, (ii) papers and other materials of a personal nature,
including, but not limited to, photographs, correspondence, personal diaries, calendars and
Rolodexes, personal files and phone books (including information on personal and
professional contacts in whatever form maintained), (iii) information relating to his
compensation or to reimbursement of expenses, (iv) information that he reasonably believes
may be needed for tax purposes, and (v) any other documents or information that relate to
his personal entitlements or obligations.
	 
	13.	 	Non-Disparagement. The Executive agrees that he shall not make any public statement at any
time after the Term that disparages the CNA Companies, or any of their officers or directors.
The Company shall instruct its directors and officers not to make any public statement at any
time after the Term that disparages the Executive. Notwithstanding the foregoing, nothing in
this Agreement or elsewhere shall prevent any Person from (i) responding publicly to
incorrect, disparaging or derogatory public statements to the extent reasonably necessary to
correct or refute such public statements or (ii) making any truthful statement to the extent
(y) reasonably necessary in connection with any litigation, arbitration or mediation or (z)
required by law or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with apparent jurisdiction to order such Person to disclose
or make accessible such information.
	 
	14.	 	Scope of Covenants.

	 	(a)	 	The Executive acknowledges that: (i) as a senior executive of the Company, he
will have access to confidential information concerning the entire range of businesses
in which the CNA Companies were and are engaged; (ii) that the CNA Companies’
businesses are conducted world-wide; and (iii) that the CNA Companies’ confidential
information, if disclosed or utilized without its authorization, would irreparably
harm the CNA Companies in: (1) obtaining renewals of existing customers; (2) selling
new business; (3) maintaining and establishing existing and new relationships with
employees, agents,

 

 

	 	 	 	brokers and vendors; and (4) other ways arising out of the conduct of the
businesses in which the CNA Companies are 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 world-wide; (ii) its breadth
include those segments of the entire insurance industry in which the CNA Companies
conduct business; and (iii) the duration of the restrictions upon the Executive be as
indicated herein.
	 
	 	(c)	 	The Executive acknowledges that the CNA Companies’ customer, employee and
business relationships are long-standing, indeed, near permanent, and therefore are of
great value to the CNA Companies. The Executive agrees that the provisions of
Sections 7, 8, 9, 10, 12 and 13 of this Agreement, and the Company’s enforcement of
them, are reasonably necessary to protect the CNA Companies’ legitimate business and
property interests and relationships, especially those that he was responsible for
developing or maintaining.
	 
	 	(d)	 	The Company shall not condition any compensation or other benefits provided
under this Agreement on covenants that are more restrictive than those set forth in
this Agreement.
	 
	 	(e)	 	If any one or more of the provisions contained in Sections 7, 8, 9, 10, 11,
12 or 13 shall be held to be excessively broad as to duration, geographic scope,
activity or subject, such provisions shall be construed by limiting and reducing them
so as to be enforceable to the maximum extent allowed by applicable law.

	15.	 	Equitable Relief. Each Party agrees that any actual or threatened breach of the covenants
set forth in Sections 7, 8, 9, 10, 12 or 13 above could cause the other Party irreparable
harm. Therefore, in the event of any actual or threatened breach by either Party (the
“Breaching Party”) of the provisions of Section 7, 8, 9, 10, 12 or 13 above, the other Party
shall be entitled to seek, through arbitration in accordance with Section 24 or from any court
with jurisdiction over the matter and the defendant(s), temporary, preliminary and/or
permanent equitable/injunctive relief restraining the Breaching Party from violating such
provisions and to seek, in addition, but solely through arbitration in accordance with Section
24, money damages, together with any and all other remedies available under applicable law.
	 
	16.	 	Change in Control. Upon the occurrence of any Change in Control, any unvested SARs and any
earned but unvested RSUs held by the Executive shall become fully vested (i.e.,
non-forfeitable), and any SARs that are or become vested shall become exercisable. For
purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the
following events: (i) any “person” or “group”, other than Loews Corporation and its
Affiliates, is or becomes the “beneficial owner”, as such terms are used as of the Signing
Date in Rule 13d-3 promulgated under the 1934 Act, of a percentage of the Voting Stock of the
Company (measured either by number of securities or by number of votes entitled to be cast)
that is greater than both (x) the percentage of the Voting Stock of the Company (thus
measured) then held by Loews Corporation and its Affiliates and (y) 20%; (ii) the Company
combines with another entity and is not the surviving entity; or (iii) all or substantially
all of the assets or business of the Company is disposed of pursuant to a sale, merger,
consolidation, liquidation or other transaction or series of transactions, unless the holders
of Voting Stock of the Company immediately prior to such combination, transaction or series of
transactions (collectively, a “Triggering Event”) own, directly or indirectly, by reason of
their ownership of Voting Stock of the Company immediately prior to such Triggering Event, a
majority of the Voting Stock (measured both by number of

 

 

	 	 	securities and by voting power) of the entity, if any, that succeeds to all or
substantially all of the assets and business of the Company. For purposes of this
Agreement, “Voting Stock” shall mean issued and outstanding capital stock or other
securities of any class or classes having general voting power, under ordinary
circumstances in the absence of contingencies, to elect, in the case of a corporation, the
directors of such corporation and, in the case of other entities, the corresponding
governing person or body; and “1934 Act” shall mean the Securities Exchange Act of 1934, as
amended.
	 
	17.	 	Representations.

	 	(a)	 	The Executive represents and warrants to the Company that he (i) has the
legal right to enter into this Agreement and to perform all of the obligations to be
performed by him hereunder in accordance with its terms, (ii) is not a party to any
agreement or understanding, written or oral, that would prevent him from entering into
this Agreement or performing his obligations under it, and (iii) has not materially
breached any of his fiduciary duties to his current employer or its Affiliates. The
Executive represents and warrants to the Company that he is not a party to any
non-compete or non-solicitation obligations with any Person, including his current
employer, or its Affiliates, other than the “Restrictive Covenants” and obligations
that have now expired. For purposes of this Agreement, “Restrictive Covenants” means
the Executive’s non-compete, non-solicit and other obligations to his current employer
and its Affiliates, including any restrictions on his activities violation of which
could lead to loss of benefits, as provided in (x) the Restricted Stock Unit
Agreements between the Executive and his current employer, dated March 3, 2005 (as
amended), March 2, 2006, March 1, 2007, and March 12, 2008, and (y) the Performance
Share Award Agreements between the Executive and his current employer, dated March 3,
2005 (as amended), March 2, 2006 (as amended), March 1, 2007, and March 12, 2008.
	 
	 	(b)	 	The Company represents and warrants that (i) it is fully authorized by action
of its Board (and of any other Person or body whose action is required) to enter into
this Agreement and to perform its obligations under it, (ii) the execution, delivery
and performance of this Agreement by it does not violate any applicable law,
regulation, order, judgment or decree, or any agreement, arrangement, plan or
corporate governance document to which it is a party or by which it is bound and (iii)
upon the execution and delivery of this Agreement by the Parties, this Agreement shall
be its valid and binding obligation, enforceable against it in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally.
	 
	 	(c)	 	The Parties agree that there will be no contact prior to the Commencement
Date between the Parties that violates the Restrictive Covenants. Notwithstanding
anything in this Agreement to the contrary, the Executive agrees that he will not at
any time violate the Restrictive Covenants or his fiduciary or other obligations to
his current employer and its Affiliates and that he will not become a party to any
agreement or understanding, written or oral, that would prevent him from entering into
this Agreement or performing his obligations under it. The Executive agrees that if
the Executive’s non-compete and non-solicit obligations under the Restrictive
Covenants should expire earlier than the date set forth in the Restrictive Covenants
(as in effect on the Signing Date), he will promptly inform the Company and he will
cooperate with the Company to determine an earlier Commencement Date that is mutually
agreeable to the Parties.

 

 

	18.	 	Indemnification, Advancement of Expenses, D&O Insurance.

	 	(a)	 	If the Executive is made a party, is threatened to be made a party, or
reasonably anticipates being made a party, to any Proceeding by reason of the fact
that he is or was a director, officer, member, employee, agent, manager, trustee,
consultant or representative of the Company or any of its Affiliates, or is or was
serving at the request of the Company or any of its Affiliates, or in connection with
his service hereunder, as a director, officer, member, employee, agent, manager,
trustee, consultant or representative of another Person, or if any Claim is made, is
threatened to be made, or is reasonably anticipated to be made, that arises out of or
relates to the Executive’s service in any of the foregoing capacities, then the
Executive shall promptly be indemnified and held harmless to the fullest extent
permitted or authorized by the Certificate of Incorporation or Bylaws of the Company,
or if greater, by applicable law, against any and all reasonable and appropriately
documented costs, expenses, liabilities and losses (including, without limitation,
attorneys’ and other professional fees and charges that are reasonably incurred,
judgments, interest, expenses of investigation that are reasonably incurred,
penalties, fines, ERISA excise taxes or penalties and reasonable amounts paid or to be
paid in settlement) incurred or suffered by the Executive in connection therewith, and
such indemnification shall continue as to the Executive even if he has ceased to be a
director, officer, member, employee, agent, manager, trustee, consultant or
representative of the Company or other Person and shall inure to the benefit of his
heirs, executors and administrators. The Executive shall be entitled to prompt
advancement of any and all appropriately documented costs and expenses (including,
without limitation, attorneys’ and other professional fees and charges) reasonably
incurred by him in connection with any such Proceeding or Claim, any such advancement
to be made within 15 days after the Executive gives written notice, supported by
reasonable documentation, requesting such advancement. Such notice shall include an
undertaking by the Executive to repay the amounts advanced to the extent that he is
ultimately determined not to be entitled to indemnification against such costs and
expenses. Nothing in this Agreement or elsewhere shall operate to limit or extinguish
any right to indemnification, advancement of expenses, or contribution that the
Executive would otherwise have (including, without limitation, by agreement or under
applicable law). For purposes of this Agreement, “Proceeding” shall mean any actual,
threatened or reasonably anticipated action, suit or proceeding, whether civil,
criminal, administrative, investigative, appellate, formal, informal or other.
	 
	 	(b)	 	Neither (i) the failure of the Company (including its Board, independent
legal counsel or stockholders) to have made a determination prior to the commencement
of any Proceeding concerning payment of amounts claimed by the Executive under Section
18(a) that indemnification of the Executive is proper because he has met the
applicable standard of conduct, nor (ii) a determination by the Company (including its
Board, independent legal counsel or stockholders) that the Executive has not met such
applicable standard of conduct, shall create a presumption that the Executive has not
met the applicable standard of conduct.
	 
	 	(c)	 	A directors’ and officers’ liability insurance policy (or policies) shall be
kept in place, during the Term and for six years thereafter, to the extent that such
coverage is then provided to any other current or former director or executive officer
of the Company, providing coverage to the Executive that is no less favorable to him
in any respect (including, without limitation, with respect to scope, exclusions,
amounts, and

 

 

	 	deductibles)	 	than the coverage then being provided to any other present or former
senior executive or director of the Company.

	19.	 	Current Employer Disputes. The Executive shall be entitled to prompt advancement of, and
indemnification against, any and all appropriately documented costs and expenses (including,
without limitation, attorneys’ and other professional fees and charges) reasonably incurred by
him in connection with any Proceeding or Claim (a “Covered
Dispute”) that alleges or otherwise
involves, as a material issue in such Covered Dispute, any Claim that the Executive breached
any of the Restrictive Covenants or breached any of his fiduciary obligations to his current
employer or its Affiliates, in each case resulting from his employment or services hereunder,
or his agreement to become employed hereunder, or activities, if any, taken prior to the
Commencement Date at the express request of the Company, any such advancement to be made
within 15 days after the Executive gives written notice, supported by reasonable
documentation, requesting such advancement. To the extent that the Executive’s current
employer (or its Affiliates, if applicable) substantially and finally prevails with respect to
any such Covered Dispute, the Executive shall promptly repay any amounts advanced under this
Section 19 with respect to such Covered Dispute. For avoidance of doubt, the Company shall
not be required to indemnify the Executive against any final judgment obtained by his current
employer or any of its Affiliates with respect to any Covered Dispute in respect of which it
has advanced expenses under this Section 19. The Executive shall have the right to counsel of
his choice in connection with any Covered Dispute, subject to the Company’s consent (which
shall not be unreasonably withheld or delayed). The Company shall have the right to resolve
any Covered Dispute with respect to which it has advanced legal fees or expenses under this
Section 19, provided, however, that the Executive’s rights and interests are not
adversely affected by any such resolution.
	 
	20.	 	Severability. Each of the terms and provisions of this Agreement shall be deemed
severable in whole and in part. To the extent that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in
part, the remaining provisions of this Agreement shall remain in full force and effect so
as to achieve the intentions of the Parties, as set forth in this Agreement, to the maximum
extent possible.

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	21.	 	Assignment.

	 	(a)	 	This Agreement shall be binding upon, and inure to the benefit of, the
Parties and their respective successors, heirs (in the case of the Executive) and
assigns.
	 
	 	(b)	 	No rights or obligations of the Company under this Agreement may be assigned
or transferred by the Company except that such rights and obligations may be
assigned or transferred pursuant to a merger, consolidation or other combination in
which the Company is not the continuing entity, or a sale or liquidation of all or
substantially all of the business and assets of the Company, provided that the
assignee or transferee is the successor to all or substantially all of the business
and assets of the Company and such assignee or transferee expressly assumes the
liabilities, obligations and duties of the Company as set forth in this Agreement.
	 
	 	(c)	 	No rights or obligations of the Executive under this Agreement may be
assigned or transferred by the Executive other than his rights to compensation and
benefits, which may be transferred only by will or by operation of law.
Notwithstanding the foregoing, the Executive shall be entitled, to the extent
permitted under applicable law and applicable Company Arrangements, to select and
change a beneficiary or beneficiaries to receive any compensation or benefit hereunder
following the Executive’s death by giving written notice thereof to the Company. In
the event of the Executive’s death or a judicial determination of his incompetence,
references in this Agreement to the Executive shall be deemed, where appropriate, to
refer to his beneficiary, estate or other legal representative. In the event that
Executive dies before all payments he may be entitled to 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.

	22.	 	Miscellaneous.

	 	(a)	 	This Agreement shall be governed, interpreted, performed and enforced in
accordance with its express terms, and otherwise in accordance with the laws of the
State of Delaware (without regard to choice of law or conflict of laws principles), to
the extent not displaced by federal law.
	 
	 	(b)	 	Except as otherwise expressly set forth herein, this Agreement contains the
entire agreement of the Parties with regard to the subject matter hereof, and
supersedes all prior agreements and understandings, written or oral, with respect to
such subject matter.
	 
	 	(c)	 	No provision in this Agreement may be amended unless such amendment is set
forth in a writing that expressly refers to the provision of this Agreement that is
being amended and that is signed by the Executive and by an authorized officer of the
Company. No waiver by any Person of any breach of any condition or provision
contained in this Agreement shall be deemed a waiver of any similar or dissimilar
condition or provision at the same or any prior or subsequent time. To be effective,
any waiver must be set forth in a writing signed by the waiving Person and must
specifically refer to the condition(s) or provision(s) of this Agreement being waived.
In the event of any conflict between any provision of this Agreement and any
provision of any Company Arrangement, the

 

 

	 	 	 	provisions of this Agreement shall control unless the Executive otherwise agrees in
a writing that expressly refers to the provision of this Agreement whose control he
is waiving.
	 
	 	(d)	 	Except as otherwise expressly set forth in this Agreement, the respective
rights and obligations of the Parties (including, without limitation, those set forth
in Sections 6 through 19 above and Sections 23 through 25 below) shall survive any
termination of the Executive’s employment hereunder.
	 
	 	(e)	 	All numbers and headings contained in this Agreement are for reference only
and are not intended to qualify, limit or otherwise affect the meaning or
interpretation of any provision contained in this Agreement.

	23.	 	Notices. Any notice, consent, demand, request, or other communication given to a Person in
connection with this Agreement shall be in writing and shall be deemed to have been given to
such Person (x) when delivered personally to such Person or (y), provided that a written
acknowledgment of receipt is obtained, five days after being sent by prepaid certified or
registered mail, or two days after being sent by a nationally recognized overnight courier, to
the address (if any) specified below for such Person (or to such other address as such Person
shall have specified by ten days’ advance notice given in accordance with this Section 23) or
(z) on the first business day after it is sent by facsimile to the facsimile number (if any)
set forth below (or to such other facsimile number as shall have specified by ten days’
advance notice given in accordance with this Section 23), with a confirmatory copy sent by
certified or registered mail or by overnight courier in accordance with this Section 23.

If to the Company:

CNA Financial Corporation

CNA Center

Chicago, IL 60685

Attn: Corporate Secretary

Fax: 312-817-0511

If to the Executive:

The address of his principal residence as it appears in the Company’s records, with
a copy to him (during the Term) at his office in Chicago, and a copy to:

Morrison Cohen LLP.

909 Third Avenue

New York, NY 10022

Attn: Robert M. Sedgwick

Fax: 212-735-8708

If to beneficiary of the Executive:

The address most recently specified by the Executive or beneficiary.

	24.	 	Arbitration of All Disputes. Any Claim between the Executive and the Company or any of
its Affiliates, including any Claim arising out of or relating to this Agreement, any other
agreement or arrangement between the Executive and the Company or any of its Affiliates,
the Executive’s

 

 

	 	 	employment with the Company, or any termination thereof (a “Covered Claim”) shall
(except to the extent otherwise provided in Section 15 with respect to certain requests for
injunctive relief) be resolved by binding confidential arbitration, to be held in Chicago,
Illinois, in accordance with the Commercial Arbitration Rules (and not the National Rules
for Resolution of Employment Disputes) of the American Arbitration Association and this
Section 24. Judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The Company shall advance to (or for the benefit of)
the Executive (or his beneficiaries, as applicable), promptly upon written request, any
appropriately documented costs or expenses (including, without limitation, attorneys’ fees
and other charges of counsel) reasonably incurred by the Executive or his beneficiaries in
connection with any Covered Claim, subject to prompt repayment to the extent that the
Company (and its Affiliates, as applicable) are determined to have substantially prevailed
with respect to such Covered Claim.
	 
	25.	 	Section 280G Gross-Up. In the event that any payment or benefit made or provided to or
for the benefit of the Executive under this Agreement, or under any plan, agreement,
program or arrangement of the Company, of any Person effecting a change in control of the
Company, or any Affiliates of any of the foregoing (a “Payment”) is determined to be
subject to any excise tax (“Excise Tax”) imposed by Section 4999 of the Code, or any
comparable state or local tax provision, the Company shall pay to the Executive at or prior
to the time any Excise Tax is payable with respect to such Payment (through withholding or
otherwise), an additional amount which, after the imposition of all income, employment,
excise and other taxes payable by the Executive thereon, is equal to the sum of (i) the
Excise Tax on such Payment plus (ii) any penalty and interest assessments associated with
such Excise Tax. The determination of whether any Payment is subject to the Excise Tax
and, if so, the amount to be paid by the Company to the Executive and the time of payment
pursuant to this Section 25 shall be made by an independent, nationally recognized United
States public accounting firm (the “Auditor”) assuming in all cases taxation at the highest
applicable marginal rates. The Auditor shall be selected by the Company (subject to the
Executive’s approval, which shall not be unreasonably withheld or delayed), and shall be
paid for by the Company. The Parties shall cooperate with each other in connection with
any Proceeding or Claim relating to the existence or amount of any liability for any Excise
Tax. The Company shall have the right to control the conduct of and to resolve and
compromise any Claim or Proceeding subject to the remainder of this Section 25, and
provided the Executive’s rights and interests are not adversely affected by any such
resolution or compromise. All appropriately documented expenses relating to any such
Proceeding or Claim (including any attorneys’ fees and other expenses associated therewith)
reasonably incurred by the Executive shall be paid by the Company promptly upon demand by
the Executive, and any such payment shall be grossed up for all taxes (assuming taxation at
the highest applicable marginal rates) in the event that the Executive is subject to any
income tax, employment tax or Excise Tax on it. All payments under this Section 25 shall
be made within the time periods required by Treasury Regulation § 1.409A-3(i)(1)(v).

[Remainder of the page intentionally left blank.]

 

 

	26.	 	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. Signatures delivered
by facsimile shall be deemed effective for all purposes.
	 
	 	 	IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Signing Date.

CNA FINANCIAL CORPORATION

By:
/s/ Jonathan D. Kantor

Name: Jonathan D. Kantor

Title: Executive Vice-President

THOMAS F. MOTAMED

/s/ Thomas F. Motamed

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