Document:

exv10w17

 

EXHIBIT 10.17

CNA SUPPLEMENTAL EXECUTIVE SAVINGS

AND CAPITAL ACCUMULATION PLAN

Restated as of January 1, 2003

 

 

CNA SUPPLEMENTAL EXECUTIVE SAVINGS

AND CAPITAL ACCUMULATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	ARTICLE I GENERAL PROVISIONS
	 	 	1	 
	

	 	 	1.1	 	 	Purpose
	 	 	1	 
	

	 	 	1.2	 	 	Effective Date
	 	 	1	 
	

	 	 	1.3	 	 	Company and Employers
	 	 	1	 
	

	 	 	1.4	 	 	Plan Year
	 	 	1	 
	

	 	 	1.5	 	 	Definitions and Rules of Construction
	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE II ELIGIBILITY AND BENEFITS
	 	 	4	 
	

	 	 	2.1	 	 	Eligibility
	 	 	4	 
	

	 	 	2.2	 	 	Elective Deferrals
	 	 	4	 
	

	 	 	2.3	 	 	Employer Contributions
	 	 	5	 
	

	 	 	2.4	 	 	Earnings
	 	 	6	 
	

	 	 	2.5	 	 	Vesting
	 	 	7	 
	

	 	 	2.6	 	 	Time and Form of Payment
	 	 	7	 
	

	 	 	2.7	 	 	Death Benefits
	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE III PAYMENT OF BENEFITS
	 	 	8	 
	

	 	 	3.1	 	 	Source of Payment
	 	 	8	 
	

	 	 	3.2	 	 	Establishment of Trust
	 	 	8	 
	

	 	 	3.3	 	 	Withdrawals for Financial Emergency
	 	 	8	 
	

	 	 	3.4	 	 	Withholding and Payroll Taxes
	 	 	9	 
	

	 	 	3.5	 	 	Payment on Behalf of Disabled or Incompetent Persons
	 	 	9	 
	

	 	 	3.6	 	 	Missing Participants or Beneficiaries
	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE IV ADMINISTRATION
	 	 	10	 
	

	 	 	4.1	 	 	Plan Administrator
	 	 	10	 
	

	 	 	4.2	 	 	Administrator’s Powers
	 	 	10	 
	

	 	 	4.3	 	 	Binding Effect of Rulings
	 	 	11	 
	

	 	 	4.4	 	 	Claims Procedure
	 	 	11	 
	

	 	 	4.5	 	 	Indemnity
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE V AMENDMENT AND TERMINATION OF PLAN
	 	 	14	 
	

	 	 	5.1	 	 	Amendment
	 	 	14	 
	

	 	 	5.2	 	 	Termination
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE VI MISCELLANEOUS
	 	 	15	 
	

	 	 	6.1	 	 	Status of Plan
	 	 	15	 
	

	 	 	6.2	 	 	Nonassignability
	 	 	15	 
	

	 	 	6.3	 	 	No Contract of Employment
	 	 	15	 
	

	 	 	6.4	 	 	Participant Litigation
	 	 	15	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	6.5	 	 	Participant and Beneficiary Duties
	 	 	16	 
	

	 	 	6.6	 	 	Governing Law
	 	 	16	 
	

	 	 	6.7	 	 	Validity
	 	 	16	 
	

	 	 	6.8	 	 	Notices
	 	 	16	 
	

	 	 	6.9	 	 	Successors
	 	 	16	 

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CNA SUPPLEMENTAL EXECUTIVE SAVINGS

AND CAPITAL ACCUMULATION PLAN

ARTICLE I

GENERAL PROVISIONS

                       1.1 Purpose. The purpose of this CNA Supplemental Executive Savings and Capital
Accumulation Plan (the “Plan”) is to enable selected Employees and former senior Employees of CNA
Financial Corporation (the “Company”) or its subsidiaries (the “Employers”) to elect to defer
additional compensation, and receive additional matching and other employer contributions, to
compensate them for the limitations imposed upon their benefits under the CNA Savings and Capital
Accumulation Plan in order to comply with the requirements of the Internal Revenue Code (the
“Code”), and also to permit the Employers to provide additional amounts of deferred compensation
for other key Employees and former Employees. The Plan was originally adopted jointly by the
Company and Continental Casualty Corporation, one of the Employers, effective as of January 1,
1987, under the name of the CNA Employees’ Supplemental Savings Plan, and has been amended from
time to time.

                       1.2 Effective Date. The Plan was originally effective as of January 1, 1987. This
amendment and restatement of the Plan shall be effective as of January 1, 2003. Except as
otherwise explicitly provided below, the rights of a Participant whose employment terminated, or
who otherwise became entitled to receive benefits, under the Plan prior to January 1, 2003, shall
be determined under the terms of the Plan as in effect at such time.

                       1.3 Company and Employers. The Plan is adopted for the benefit of selected Employees
and former Employees of the Company and the Employers. As of the effective date of this
restatement, Continental Casualty Company is the only Employers other than the Company
participating in the Plan. The Administrator may permit any other company that is an affiliate or
subsidiary of the Company to participate in the Plan in such manner as the Administrator may
determine. Each Employer is liable for the payment of benefits to a Participant that is or was an
Employee of such Employer. The Company is the sponsor of the Plan for purposes of ERISA and the
issuer of all interests in the Plan for securities laws purposes.

                       1.4 Plan Year. The Plan Year of the Plan shall coincide with the calendar year,
except as the Administrator shall otherwise determine.

                       1.5 Definitions and Rules of Construction. As used in this Plan, certain capitalized
terms shall have the meanings set forth below. Capitalized terms not defined herein shall have the
meaning set forth in the S-CAP, if applicable. Nouns and pronouns which are of one gender shall be
construed to include all genders, and the singular shall include the plural and vice-versa, except
as the context otherwise clearly requires. Article and Section headings are for ease of reference
only and shall have no substantive meaning.

                       (a) “Account” means the separate bookkeeping account maintained on the books of a
Participant’s Employer to reflect the amount owed to him pursuant to this Plan. Each Account shall
be divided into the following subaccounts:

 

 

	 	(i)  	The Deferred Account shall include the amounts deferred by
the Participant pursuant to Section 2.2 and the income attributable thereto.
	 
	 	(ii)  	The Matching Account shall include any amounts credited to
the Participant pursuant to Section 2.3(a) or (b) and the income attributable
thereto.
	 
	 	(iii)  	The Employer Account shall include any amounts credited to
the Participant pursuant to Section 2.3(c) and the income attributable
thereto.

The Administrator may establish additional subaccounts within a Participant’s Account, or may
combine two or more subaccounts. The term “Account”, when not otherwise specified, shall refer
collectively to all of the subaccounts comprising a Participant’s Account. If a Participant
participates in the Plan both as an Employee and subsequently as a former Employee, he shall have
two separate Accounts, and any election made by him with respect to one Account shall have no
effect on the other Account.

                       (b) “Administrator” means the Company or such other person as the Company shall designate
pursuant to Section 4.1.

                       (c) “Beneficiary” means the person or persons designated to receive the Participant’s Account
in the event of his death pursuant to Section 2.7.

                       (d) “Board” means the Board of Directors of the Company.

                       (e) “Choice 2 Participant” means a Participant who is treated as a “Choice 2 Participant”
under the S-CAP.

                       (f) “Code” means the Internal Revenue Code of 1986, and any treasury regulations, rulings or
other authoritative administrative pronouncements interpreting the Code. If any provision of the
Code specifically referred to herein is amended or replaced, the reference shall be deemed to be to
the provision as so amended, or to the new provision, if such reference is consistent with the
purposes of the Plan.

                       (g) “Company” means CNA Financial Corporation, and any successor thereto that assumes the
obligations of the Company under this Plan.

                       (h) “Compensation” means Compensation as defined in Section 2.1(j) of the S-CAP for purposes
of determining a Participant’s Before-Tax, After-Tax and Matching Contributions, but without regard
to any limits on includable compensation imposed by the Tax Limits.

                       (i) “Deferral Agreement” means an agreement between an Active Participant and his Employer
specifying that a portion of his Compensation shall be withheld and credited to his Account in the
Plan pursuant to Section 2.2, or providing that additional amounts will be credited to his Account
pursuant to Section 2.3, or both, and any amendment thereto. To the extent determined by the
Administrator, a Deferral Agreement may take the form of an election made by the Participant either
in writing or through electronic communications. The term

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“Deferral Agreement” may also refer to
any provision of an employment, consulting, severance, or other agreement for the performance of
services that makes specific reference to this Plan and provides for deferred compensation.

                       (j) “Employee” means any person employed by any Employer and classified as an Employee by such
Employer. Except as otherwise provided in Section 2.1(c), the term “Employee” shall not include a
person who is retained to provide services for an Employer as an independent contractor, or who
provides services for an Employer pursuant to an agreement or understanding, written or unwritten,
with a third party that such person shall be treated as an employee of the third party, but who is
subsequently determined to be an employee at common law, for purposes of any federal or state tax
or employment law, or for any other purpose.

                       (k) “Employer” means the Company and any subsidiary of the Company that adopts the Plan and is
the employer or former employer of a Participant.

                       (l) “ERISA” means the Employee Retirement Income Security Act of 1974, and any Labor
Department regulations, rulings or other authoritative administrative pronouncements interpreting
ERISA. If any provision of ERISA specifically referred to herein is amended or replaced, the
reference shall be deemed to be to the provision as so amended, or to the new provision, if such
reference is consistent with the purposes of the Plan.

                       (m) “Participant” means an Employee or former key Employee designated to participate in the
Plan pursuant to Section 2.1, while he has the right to any benefits under the Plan. Participants
are divided in Active Participants and Inactive Participants, as described in Section 2.1, and the
term “Participant”, when not modified, shall refer to both Active and Inactive Participants, unless
clearly inconsistent with the context.

                       (n) “Plan” means this CNA Supplemental Executive Savings and Capital Accumulation Plan, as
amended from time to time.

                       (o) “Retirement Plan Compensation” means Retirement Plan Compensation as defined in the S-CAP
for purposes of determining a Choice 2 Participant’s Basic and Performance Contributions, but
without regard to any limits on includible compensation imposed by the Tax Limits.

                       (p) “S-CAP” means the CNA Savings and Capital Accumulation Plan, as amended from time to time,
and, if appropriate, any new plan adopted by the Company
to replace the S-CAP. In the case of a Participant who participates in a plan maintained by
his Employer other than the CNA Savings and Capital Accumulation Plan, which plan is qualified
under §401(a) of the Code and includes a cash or deferred feature qualified under §401(k) of the
Code, the term “S-CAP” with respect to such Participant shall mean such other plan.

                       (q) “Tax Limits” means the limitations imposed on a Participant’s benefits under the Plan to
satisfy the requirements of §401(a)(17), §402(g), or §415 of the Code.

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ARTICLE II

ELIGIBILITY AND BENEFITS

                       2.1 Eligibility.

                       (a) Only selected management and highly compensated Employees and former Employees who are
designated as provided herein shall be eligible to participate in the Plan. The Employees and
former Employees who are so designated to participate in the Plan shall be referred to herein as
“Active Participants” for so long as they have the right to have additional amounts credited to
their Accounts pursuant to Section 2.2 or 2.3. A person who is no longer an Active Participant,
but who still has an undistributed Account in the Plan, shall be referred to as an “Inactive
Participant.”

                       (b) For years prior to 2003, all Employees who had elected to participate in the S-CAP, and
whose benefits under the S-CAP were restricted by the Tax Limits, were automatically eligible to
participate in the Plan. Commencing with 2003, only those Employees described in the preceding
sentence whose Compensation for the Plan Year exceeds (or, as determined by the Plan Administrator,
is expected to exceed) the limitation of Code §401(a)(17) shall automatically be eligible to
participate. Notwithstanding the foregoing, the Administrator may, in its sole discretion,
determine at any time that any Employee or group of Employees described in the preceding sentences
shall no longer be eligible to participate.

                       (c) Any Employer, with the consent of the Administrator, may enter into a Deferral Agreement
with a person not described in paragraphs (a) or (b), who may be either an Employee, a former
Employee, or a consultant or independent contractor, and such person shall thereby become an Active
Participant. To the extent necessary or appropriate, any reference in this Plan to “employment”
shall be modified and interpreted in the case of a former Employee or independent consultant in a
manner consistent with the intent of the Plan.

                       2.2 Elective Deferrals.

                       (a) Each Active Participant may, for any Plan Year in which he is also a participant in the
S-CAP, elect in his Deferral Agreement to accept a reduction in his Compensation from his Employer
equal to a whole percentage (not to exceed the maximum percentage described below) of his or her
Compensation. For purposes of the preceding sentence, the “maximum percentage” is the highest
percentage of Compensation that a participant in the S-CAP would be permitted to defer as
Before-Tax Contributions if he were not a Highly Compensated Employee under the provisions of the
S-CAP applicable to him for the Plan Year. An Active Participant who does not make a contrary
election will be deemed to have elected the same combined Before-Tax and After-Tax Contribution
percentage that he has elected (or been deemed to elect) under the S-CAP. For each payroll period
that begins while an election is in effect, there shall be withheld from the portion of the Active
Participant’s Compensation that exceeds the Tax Limit (determined on a year to date basis) and
credited to his Deferral Account an amount equal to the applicable percentage of the Compensation
for such payroll period. In addition, there shall also be withheld from the Active Participant’s Compensation and
credited to his Deferral Account an amount equal to any Before-Tax or After-

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Tax Contribution that
was elected under the S-CAP, but cannot be credited to his S-CAP account without exceeding the Tax
Limits.

                       (b) Any Employer, with the consent of the Administrator, may enter into a Deferral Agreement
with an Active Participant (including but not limited to a person described in Section 2.1(b))
which provides for Compensation to be withheld and credited to the Active Participant’s Deferral
Account on a basis different from that described in paragraph (a). Such a Deferral Agreement may
provide for the deferral of forms or amounts of compensation different from those defined as
Compensation in Section 1.5(h), including payments to a former Employee or independent contractor,
in which event such compensation shall be considered Compensation for all purposes of this Plan.

                       (c) All deferral elections shall be made, modified and revoked in accordance with rules
established by the Administrator. Amounts deferred pursuant to either paragraph (a) or (b) shall
be credited to the Active Participant’s Deferral Account as of the date on which the deferred
Compensation would otherwise have been paid. No election, and no provision of any Deferral
Agreement, shall permit a Participant to defer Compensation already earned when the election is
made.

                       2.3 Employer Contributions.

                       (a) For each payroll period, the Employer of an Active Participant shall credit to the Active
Participant’s Matching Account an amount equal to the amount deferred by the Active Participant for
such payroll period under Section 2.2 multiplied by the Fixed Matching Contribution percentage
applicable to such Active Participant under the S-CAP. The Company shall also credit to the
Matching Account of an Active Participant any Fixed Matching Contribution that relates to a
Before-Tax or After-Tax Contribution made under the S-CAP, but which Basic Matching Contribution
cannot be allocated to such Active Participant’s S-CAP account without exceeding the Tax Limits.
The total amount of Basic Matching Contributions credited to an Active Participant’s Matching
Account under this Section 2.3 for each Plan Year shall not exceed the excess of 6% the Active
Participant’s total Compensation for the Plan Year reduced by all Basic Matching Contributions
allocated to his account in the S-CAP for the same Plan Year.

                       (b) In addition to the amounts set forth above, at the end of each Plan Year the Employer of
an Active Participant who is a Choice 2 Participant shall credit to the Active Participant’s
Matching Account an amount equal to the amount deferred by the Active Participant for the Plan Year
pursuant to Section 2.2, multiplied by the Variable Matching Contribution percentage applicable to
such Active Participant under the S-CAP. The Company shall also credit to the Matching Account of
an Active Participant any Variable Matching Contribution that relates to a Before-Tax or After-Tax
Contribution made under the S-CAP, but which Basic Matching Contribution cannot be allocated to
such Active Participant’s S-CAP account without exceeding the Tax Limits.

                       (c) In addition to the amounts set forth above, at the end of each Plan Year or pay period, as
applicable, the Employer of an Active Participant who is a Choice 2 Participant

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shall credit to the
Active Participant’s Employer Contribution Account an amount equal to the portion of the Active
Participant’s Retirement Plan Compensation that exceeds the Tax Limits multiplied by the applicable
Basic and Performance Contribution percentages applicable to such Active Participant under the
S-CAP. The Company shall also credit to the Employer Contribution Account of an Active Participant
any Basic or Performance Contribution that cannot be allocated to such Active Participant’s S-CAP
account without exceeding the Tax Limits.

                       (d) Anything else contained herein to the contrary notwithstanding, the amount credited to an
Active Participant’s Matching Account or Employer Contribution Account pursuant to paragraph (a),
(b) or (c) for any Plan Year shall not exceed the amount of additional Fixed Matching, Variable
Matching, Basic or Performance Contributions, as the case may be, that would have been allocated to
the Active Participant’s S-CAP account for the same Plan Year if the Tax Limits did not apply.

                       (e) Any Employer, with the consent of the Administrator, may enter into a employment
agreement, or adopt employment policies, with or applicable to an Active Participant (including but
not limited to a person described in Section 2.1(b)) which provides for amounts to be credited to
the Active Participant’s Matching or Employer Account on a basis different from that described in
paragraph (a), (b) or (c). Such an agreement or policy shall specify the basis upon which the
amount to be so credited shall be determined, and may also specify a vesting schedule different
than that specified in Section 2.5.

                       2.4 Earnings.

                       (a) Except as otherwise provided in paragraph (b), earnings shall be credited to each
Participant’s Account at the projected rate of return on the Fixed Income Fund established under
the S-CAP. In the event that the Fixed Income Fund is no longer offered as an investment
alternative under the S-CAP, the Administrator shall designate a reasonably equivalent investment
option under the S-CAP to be used to measure the rate at which earnings shall be credited.

                       (b) At any time after the effective date of this restatement, the Administrator may designate
selected mutual funds or other investment media (“funds”), and each Participant shall have the
right to have earnings (including realized and unrealized gains and losses) on his or her Account
computed as if it had been invested in such funds in such proportions as the Participant shall
elect. The funds may be the same as the Investment Funds designated under the S-CAP, or may
exclude some or all of such Investment Funds or include other funds as the Administrator may
determine. The portion of each Participant’s Account that is deemed to be invested in each fund
shall be a whole percentage, and elections may be changed at such intervals and in such manner as
the Administrator may determine. The Administrator shall have the authority to select and
discontinue funds at any time, to establish a rate at which interest shall be credited on Accounts
with respect to which no fund election is in effect, and otherwise to establish
rules and procedures with respect to the calculation and crediting of earnings, including
changing the intervals at which fund elections may be made or at which earnings are posted, and
establishing a minimum or maximum percentage that may be deemed invested in any fund.

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                       (c) Anything else contained herein to the contrary, in no event shall any Participant be
allowed to elect a rate of return on his Account retroactively, and in all cases earnings shall be
computed in such a manner that they shall not be considered additional deferred compensation for
purposes of FICA withholding under §3121(v) of the Code.

                       2.5 Vesting. The balance in a Participant’s Deferral Account shall be fully vested
and nonforfeitable at all times. The balance in a Participant’s Matching Account or Employer
Account (or any subaccount thereof) shall be vested at the same times and to the same extent as the
Participant’s analogous account in the S-CAP; except as otherwise provided in a Deferral Agreement
with respect to amounts credited pursuant to Section 2.3(b). To the extent a Participant’s Account
is not vested at the time of his termination of employment for any reason, the non-vested portion
shall be forfeited, and neither the Company nor any Employer shall have any further obligation to
him whatsoever with respect to the forfeited portion.

                       2.6 Time and Form of Payment. The vested balance in a Participant’s Account shall be
paid to the Participant in accordance with the terms of his Deferral Agreement.

                       2.7 Death Benefits.

                       (a) If a Participant dies while still employed, his Account shall be fully vested and shall be
paid to his Beneficiary in a single lump sum. If a Participant dies after his employment has been
terminated but before his Account has been paid in full, the remaining balance in his Account shall
be paid to his Beneficiary in a single lump sum.

                       (b) A Participant’s Beneficiary shall be the person or persons designated by the Participant
in his Deferral Agreement. A Participant may change his Beneficiary from time to time without the
consent of the Beneficiary. Subject to rules, procedures, and limitations established by the
Administrator, a Beneficiary may be a entity (including a trust or nonprofit organization), and the
Participant may designate multiple or contingent Beneficiaries and specify the manner in which his
Account will be divided among them. All designations of Beneficiaries, and revocations or changes
in designations, shall be made in accordance with rules, procedures and limitations prescribed by
the Administrator. No designation of a Beneficiary, and no revocation or change in a designation,
shall be effective until actually received by the Administrator in writing, and the Administrator’s
determination of a Participant’s Beneficiary, if made in good faith, shall be final and conclusive
on all parties.

                       (c) The determination of the Participant’s Beneficiary shall be made at the time of his death
or, if the Participant has elected payment in installments, on each date on which an installment is
to be paid. If there is no designated Beneficiary living at the time of the Participant’s death,
his Beneficiary shall be the person designated as his beneficiary under the S-CAP, or any similar
retirement plan which permits the Participant to designate a beneficiary, as determined by the
Administrator in its sole discretion (regardless of whether such designation is invalid solely by
reason of §401(a)(11) of the Code or §205 of ERISA by reason of the failure of the Participant’s
spouse to consent) or, if no beneficiary is designated under the S-CAP or any such other plan, his
estate. If the Participant has designated more than one Beneficiary and not
specified the manner
in which his Account shall be divided, it shall be divided among all living Beneficiaries at the
time of his death, per stirpes.

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ARTICLE III

PAYMENT OF BENEFITS

                       3.1 Source of Payment. All payment of benefits under the Plan shall be made directly
from the general funds of the Participant’s Employer. Each Employer shall establish separate
bookkeeping accounts to reflect its liability under the Plan and may, but shall not be obligated
to, invest in insurance or annuity contracts or other assets to assure a source of funds for the
payment of benefits, but any such bookkeeping account, insurance or annuity contracts, or other
investment shall constitute assets solely of such Employer, and Participants shall have no right,
title or interest therein prior to payment of their benefits hereunder. The right of any
Participant or other person to receive benefit payments under the provisions of this Plan shall be
no greater than the right of any unsecured general creditor of the Participant’s Employer. This
Plan shall not create nor be construed to create a trust or fiduciary relationship in favor of any
person whatsoever.

                       3.2 Establishment of Trust. The Company may, but shall in no event be required to,
establish one or more trusts and contribute, or cause Employers to contribute, amounts to such
trusts to be used for the payment of benefits under this Plan. Any such trust shall be of the type
commonly referred to as a “rabbi trust”, and the Company or Employer shall be treated as the owner
of the assets of such trust for tax purposes in accordance with §671-§678 of the Code. The assets
of any such trust shall remain subject to the claims of creditors of the Company or the Employer
contributing such assets, and no Participant or any other person shall have any beneficial interest
in or other claim to the assets of any such trust beyond that of a general creditor as provided in
Section 3.1. Any payments made to or on behalf of a Participant or Beneficiary from any such trust
shall fully discharge the liability of the Company or Employer to such Participant or Beneficiary
under the Plan to the extent of the amount so paid. The Administrator shall have the right to
select, remove, and replace the trustee thereof at any time in its sole discretion, and shall enter
into one or more agreements governing such trust containing such terms as it determines, and may
modify, amend or revoke any such agreements, all in its sole discretion.

                       3.3 Withdrawals for Financial Emergency. A Participant may withdraw part or all of
the vested portion of his Account if the amount withdrawn is reasonably necessary to satisfy an
unforeseeable financial emergency. Any such withdrawals shall be subject to such rules, procedures
and limitations as the Administrator may, in its sole discretion, determine. For purposes of this
Section 3.3, an unforeseeable financial emergency means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the Participant or one of
his dependents (as defined in §152(a) of the Code), loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. A financial hardship that is foreseeable or within
the Participant’s control, such as the need or desire to purchase a residence or to send a child to
college, shall not be considered an unforeseeable financial emergency. The determination of
whether a Participant’s need for funds constitutes an unforeseeable financial emergency shall be
made in accordance with the requirements of
§457 of the Code. The amount withdrawn may not exceed the amount necessary to satisfy the
financial hardship (taking into account any tax payable on the withdrawal), determined after taking
into account other sources of

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funds available to the Participant, including but not limited to
reimbursement or compensation by insurance or otherwise, and the liquidation of other assets to the
extent that such liquidation would not itself cause severe financial hardship.

                       3.4 Withholding and Payroll Taxes. The Administrator shall withhold, or shall direct
the person making any payment to withhold, from payments made hereunder any taxes required to be
withheld from a Participant’s wages for the federal or any state or local government. To the
extent that benefits hereunder are subject to tax under the Federal Insurance Contributions Act or
any other law prior to the time that they become payable, the Administrator may withhold, or direct
the Participant’s Employer to withhold, the amount of such taxes from any other compensation or
other amounts payable to the Participant. The Administrator’s determination of the amount to be so
withheld shall be final and binding on all parties.

                       3.5 Payment on Behalf of Disabled or Incompetent Persons. If a Plan benefit is
payable to a minor or a person declared incompetent or to a person whom the Administrator, in its
sole discretion, determines to be incapable of handling the disposition of property, the
Administrator may direct payment of such Plan benefit to the guardian, legal representative or
person having the care and custody of such minor or incompetent person, or to any other person,
including any family member, whom the Administrator determines in its sole discretion to be best
suited to receive and apply the payment for the benefit of such person. The Administrator may
require proof of incompetency, minority, incapacity or guardianship as it may deem appropriate
prior to distribution of the Plan benefit. Such distribution shall completely discharge the
Company and the Participant’s Employer from all liability with respect to such benefit.

                       3.6 Missing Participants or Beneficiaries. If the Administrator is unable to locate
any Participant, Beneficiary or other person entitled to benefits under this Plan, the
Administrator may, in its sole discretion, either cause all or a portion of such payment to be
forfeited and to reduce its obligations under this Plan, or may pay all or a portion of such
benefit to members of the missing person’s family or such other person as it may determine in its
sole discretion to be fair and equitable. Any payment made pursuant to this Section 3.6 shall
fully discharge the obligation of the Company and all Employers under this Plan with respect to the
amount so paid.

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ARTICLE IV

ADMINISTRATION

                       4.1 Plan Administrator. This Plan shall be administered by the Company, which shall
be the “administrator” for purposes of §3(16)(A) of the Employee Retirement Income Security Act of
1974. The Company may designate one or more persons who may be officers or Employees of any
Employer, to exercise any of its authority or carry out any of its duties under the Plan, but such
person shall not be considered the “administrator” unless specifically so designated in a
resolution of the Board. In the absence of any other designation, the Executive Vice
President-Human Resources and Corporate Services of Continental Casualty Company, or persons acting
under her supervision, shall be so designated. In addition, the Company has established an
Operations Committee to oversee the operation of various retirement plans, and the Operations
Committee shall have the authority on behalf of the Administrator to adopt rules, regulations and
procedures, to hear all appeals from denied claims under Section 4.4, and to consider all other
issues related to the administration of the Plan referred to it by the Executive Vice
President-Human Resources and Corporate Services and his delegates.

                       4.2 Administrator’s Powers. The Administrator shall have such powers as may be
necessary to discharge its duties hereunder, including, but not by way of limitation, the following
powers, rights and duties:

          (a) Interpretation of Plan. The Administrator shall have the power,
right and duty to construe and interpret the Plan provisions and to determine all
questions arising under the Plan including questions of Plan participation,
eligibility for Plan benefits and the rights of Employees, Participants,
Beneficiaries and other persons to benefits under the Plan and to determine the
amount, manner and time of payment of any benefits hereunder.

          (b) Plan Procedures. The Administrator shall have the power, right
and duty to adopt procedures, rules, regulations and forms to be followed by
Employees, Participants, Beneficiaries and other persons or to be otherwise
utilized in the efficient administration of the Plan and as are consistent with the
Plan.

          (c) Benefit Determinations. The Administrator shall have the power,
right and duty to make determinations as to the rights of Employees, Participants,
Beneficiaries and other persons to benefits under the Plan and to afford any
Participant or Beneficiary dissatisfied with such determination with rights
pursuant to a claims procedure adopted by the Administrator in accordance with
Section 4.4.

          (d) Enforcement of the Plan. The Administrator shall have the power,
right and duty to enforce the Plan in accordance with the terms of the Plan and to
enforce its procedures, rules or regulations.

-10-

 

          (e) Maintenance of Plan Records. The Administrator shall be
responsible for preparing and maintaining records necessary to determine the rights
and benefits of Employees, Participants and Beneficiaries or other persons under
the Plan.

          (f) Allocation of Duties. The Administrator shall be empowered to
allocate fiduciary responsibilities and the right to employ agents (who may also be
Employees of the Company) and to delegate to them any of the administrative duties
imposed upon the Administrator.

          (g) Correction of Errors. To correct any errors made in the
computation of benefits under the Plan, and, if a trust has been established, to
recover any contributions made to such trust by mistake of fact or law.

                       4.3 Binding Effect of Rulings. Any ruling, regulation, procedure or decision of the
Administrator, including any interpretation of the Plan, which is made in good faith shall be
conclusive and binding upon all persons affected by it. There shall be no appeal from any ruling
by Administrator, except as provided in Section 4.4 below. When making a determination or a
calculation, the Administrator shall be entitled to rely on information supplied by investment
managers, insurance institutions, accountants and other professionals including legal counsel for
the Administrator. Any rule or procedure established by the Administrator may alter any provision
of this Plan that is ministerial or procedural in nature without the necessity for a formal
amendment of the Plan.

                       4.4 Claims Procedure.

                       (a) Any Participant or Beneficiary, or any other person asserting the right to receive a
benefit under this Plan by virtue of his relationship to a Participant or Beneficiary (the
“Claimant”), who believes that he has the right to a benefit that has not been paid, must file a
written claim for such benefit in accordance with the procedures established by the Administrator.
All such claims shall be filed not more than one year after the Claimant knows, or with the
exercise of reasonable diligence would have known, of the basis for such claim. The preceding
sentence shall not be construed to require a Participant or Beneficiary to file a formal claim for
the payment of undisputed benefits in the normal course, but any claim that relates to the amount
of any benefit shall in any event be filed not more than one year after payment of such benefit
commences. The Administrator may retain third party administrators and recordkeepers for the
purpose of processing routine matters relating to the payment of benefits, but correspondence
between a Participant, Beneficiary or other person and such third parties shall not be considered
claims for purposes of this Section, and a person shall not be considered a Claimant until he has
filed a written claim for benefits with the Administrator.

                       (b) All claims for benefits shall be processed by the Administrator, and the Administrator
shall furnish the Claimant within 90 days after receipt of such claim a written notice that
specifies the reason for the denial, refers to the pertinent provisions of the Plan on which the
denial is based, describes any additional material or
information necessary for properly completing the claim and explains why such material or
information is necessary, and explains

-11-

 

the claim review procedures of this Section 4.4, and the
Claimant’s right to bring an action under §502 of ERISA, subject to the restrictions of paragraph
(e) if the request for review is unsuccessful. The 90 day period may be extended by up to an
additional 90 days if the Administrator so notifies the Claimant prior to the end of the initial 90
day period, which notice shall include an explanation of the reason for the extension and an
estimate of when the processing of the claim will be complete. If the Administrator determines
that additional information is necessary to process the claim, the Claimant shall be given a period
not less than 45 days to furnish the information, and the time for responding to the claim shall be
tolled during the period of time beginning on the date on which the Claimant is notified of the
need for the additional information and the day on which the information is furnished (or if
earlier the end of the period for furnishing the information).

                       (c) If the claim is denied in whole or in part, or if the decision on the claim is otherwise
adverse, the Claimant may, within 60 days after receipt of such notice, request a review of the
decision in writing. If the claimant requests a review, the Operations Committee (or such other
fiduciary as the Administrator may appoint for such purpose) shall review such decision. The
Operations Committee’s decision on review shall be in writing and furnished not more than five days
after the meeting at which the review is completed, and shall include specific reasons for the
decision, written in a manner calculated to be understood by the Claimant, shall include specific
references to the pertinent provisions of the Plan on which the decision is based, and shall advise
the Claimant of his right to bring an action under §502 of ERISA, subject to the limitations of
paragraph (e).

                       (d) The Operations Committee shall complete its review of the claim not later than its first
meeting that is held at least 30 days after the request for review is received. If special
circumstances require, such as the need to hold a hearing, require, the decision may be made by the
Operations Committee not later than its third meeting held after the request for review is
received, in which event the Claimant shall be notified of the reason for the delay not later than
five days after the meeting at which the review would otherwise have been completed, which notice
shall explain the reason for the delay and include an estimate of the time at which the review will
be complete. Notwithstanding the foregoing, if at any time the Operations Committee (or any other
fiduciary designated to review appeals) is not scheduled to meet at least quarterly, the decision
on review shall be delivered to the Claimant not more than 60 days after the request for review is
received, which may be extended to not more than 120 days if special circumstances require and the
notice of extension described above is furnished by the end of the initial 60 day period.

                       (e) As additional consideration for receipt of benefits hereunder, each Participant agrees and
covenants, on behalf of himself, his Beneficiaries, and all persons claiming through him, not to
initiate any action before any court, under §502 of ERISA or otherwise, or before any
administrative agency or quasi-judicial tribunal, for any benefit under the Plan, without having
first filed a claim for such benefit and requested review of any adverse decision on such claim in
accordance with this Section and the
procedures established by the Administrator pursuant to this Section, and in any event not
more than 180 days after receipt of the decision on review of the adverse claim decision.

-12-

 

                       (f) The provisions of this Section are intended to comply with ERISA §503 and the Department
of Labor regulations issued pursuant thereto, and shall be so construed and applied. Consistent
with such regulations, each Claimant shall have the right to have an authorized representative act
on his behalf, to submit arguments and information in support of his claim, and to receive, upon
written request and without charge, copies of all documents, records, or other information that
either (i) were relied upon in determining his benefit under the Plan, (ii) were submitted,
considered, or generated in the course of making the benefit determination, even if not relied
upon, or (iii) demonstrate compliance with the administrative processes and safeguards of the claim
and review procedure.

                       4.5 Indemnity. To the extent permitted by applicable law and to the extent that they
are not indemnified or saved harmless under any liability insurance contracts, any present or
former officers, Employees or directors of the Company, and each of them shall be indemnified and
saved harmless by the Company from and against any and all liabilities or allegations of liability
to which they may be subjected by reason of any act done or omitted to be done in good faith in the
administration of the Plan, including all expenses reasonably incurred in their defense in the
event that the Company fails to provide such defense after having been requested in writing to do
so.

-13-

 

ARTICLE V

AMENDMENT AND TERMINATION OF PLAN

                       5.1 Amendment. The Company may amend the Plan at any time by action of the Board, or
any person to whom the Board may delegate such authority, except that no amendment shall decrease
the vested Account balance of any Participant as of the effective date of the amendment. The Board
has delegated the authority to amend the Plan, with certain exceptions, to the Executive Vice
President-Human Resources and Corporate Services of Continental Casualty Company, and any amendment
executed by such officer shall be binding on all parties. In addition, the Administrator is
authorized pursuant to Section 4.3 to adopt rules and procedures that have the effect of amendment
technical, administrative or ministerial provisions of the Plan. By their execution of this
amendment and restatement of the Plan, each Employer ratifies and accepts all prior amendments to
the Plan, and agrees that in the future the Plan may be amended by action of the Company without
consent of the other Employers.

                       5.2 Termination. The Company may at any time terminate the Plan by action of the
Board. Upon termination, no further allocations shall be made to Accounts, but Accounts shall
continue to be credited with earnings and shall be paid in accordance with the provisions of the
Plan; provided, however, that upon termination, the Company may, but shall not be obligated to,
provided that the Account balances of some or all Participants shall be fully vested and paid to
such Participants in a lump sum, which shall fully discharge all obligations owed to such
Participants under the Plan. Any Employer may at any time withdraw from the Plan by written notice
to the Administrator, in which event the Plan shall be considered terminated with respect to the
Participants employed by such Employer (or who were so employed at the time of their termination of
employment), and the provisions of this Section 5.2 shall apply to such Participants only.

-14-

 

ARTICLE VI

MISCELLANEOUS

                       6.1 Status of Plan. This Plan is intended to be an unfunded plan maintained primarily
to provide retirement benefits for a select group of management Employees or highly compensated
Employees within the meaning of §201(1), §301(a)(3), and §401(a)(1) of ERISA and Department of
Labor Regulations 29 C.F.R. §2520.104-23, and shall be so construed.

                       6.2 Nonassignability. Neither a Participant nor any other person shall have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any
part thereof, which are, and all rights to which are, expressly declared to be nonassignable and
nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to
garnishment, seizure or sequestration for the payment of any debts owed by a Participant or any
other person, nor be transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency. Notwithstanding the foregoing, the Company shall have the right
to offset any amount owed to it or the Participant’s Employer against the amount payable to a
Participant or his Beneficiary, or to defer payment until any dispute with respect to any amount
owed has been resolved.

                       6.3 No Contract of Employment. The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between the Company or any Employer and the
Participant, and neither the Participant nor the Participant’s Beneficiary shall have any rights
against the Company or any Employer except as may otherwise be specifically provided herein.
Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in
the service of the Company or any Employer or to interfere with the right of the Company and each
Employer to discipline or discharge him at any time.

                       6.4 Participant Litigation. In any action or proceeding regarding the Plan,
Participants, Employees or former Employees of the Company or an Employer, their Beneficiaries or
any other persons having or claiming to have an interest in this Plan shall not be necessary
parties and shall not be entitled to any notice or process. Any final judgment which is not
appealed or appealable and may be entered in any such action or proceeding shall be binding and
conclusive on the parties hereto and all persons having or claiming to have any interest in this
Plan. To the extent permitted by law, if a legal action is begun against the Company, an Employer,
the Administrator, the trustee of any trust established hereunder, or any person acting on the
behalf or under the direction of any of the foregoing persons, by or on behalf of any person and
such action results adversely to such person or if a legal action arises because of conflicting
claims to a Participant’s or other person’s benefits, the costs to any such person of defending the
action will be charged to the amounts, if any, which were involved in the action or were payable to
the Participant or other person concerned. To the extent permitted by applicable law, acceptance
of participation in this Plan shall constitute a release of the Company, each Employer, the
Administrator and such trustee and their respective agents
from any and all liability and obligation not involving willful misconduct or gross neglect.

-15-

 

                       6.5 Participant and Beneficiary Duties. Persons entitled to benefits under the Plan
shall file with the Administrator from time to time such person’s post office address and each
change of post office address. Each such person entitled to benefits under the Plan also shall
furnish the Administrator with all appropriate documents, evidence, data or information which the
committee considers necessary or desirable in administering the Plan.

                       6.6 Governing Law. The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Illinois to the extent not pre-empted by the laws of the
United States.

                       6.7 Validity. In case any provision of this Plan shall be held illegal or invalid for
any reason, such illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal and invalid provision had never been
inserted herein.

                       6.8 Notices. Any notice or filing required or permitted to be given to the
Administrator or the Company under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail to the Company at its principal executive offices, or to
Company’s statutory agent. Notices shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt for registration or
certification. Any notice required or permitted to be given to a Participant shall be sufficient
if in writing and hand delivered or sent by first class mail to the Participant at the last address
listed on the records of the Company or such Participant’s Employer.

                       6.9 Successors. The provisions of this Plan shall bind and inure to the benefit of
each Employer and its respective successors and assigns. The term successors as used herein shall
include any corporate or other business entity which shall, whether by merger, consolidation,
purchase or otherwise acquire all or substantially all of the business and assets of an Employer,
and successors of any such corporation or other business entity.

                       IN WITNESS WHEREOF, the Company, and each Employer that was participating in the Plan on the
effective date of this Amendment, have caused this amendment and restatement of the Plan to be
executed on July 1, 2003.

	 	 	 
	CNA FINANCIAL CORPORATION

	 	CONTINENTAL CASUALTY COMPANY
	 
	 	 
	By: /s/ Thomas Pontarelli

	 	By: /s/ Thomas Pontarelli
	 
	 	 
	Thomas Pontarelli, Executive Vice President -

	 	Thomas Pontarelli, Executive Vice President -
	Human Resources and Corporate Services

	 	Human Resources and Corporate Services
	of Continental Casualty Company
	 	 

-16-exv10w18

 

EXHIBIT 10.18

FIRST AMENDMENT TO THE

CNA SUPPLEMENTAL EXECUTIVE SAVINGS

AND CAPITAL ACCUMULATION PLAN

               The CNA SUPPLEMENTAL EXECUTIVE SAVINGS AND CAPITAL ACCUMULATION PLAN, as restated by CNA
effective January 1, 2003, is hereby amended as follows:

	 	1.  	Section 1.5(i) is amended to read as follows:

                        “(i) “Deferral Agreement” means an agreement between an Active Participant and his Employer
specifying that a portion of his Compensation shall be withheld and credited to his Account in the
Plan pursuant to Section 2.2, or providing that additional amounts will be credited to his Account
pursuant to Section 2.3, or both, and any amendment thereto. To the extent determined by the
Administrator, a Deferral Agreement may take the form of an election made by the Participant either
in writing or through electronic communications, and a Participant’s election to participate in the
S-CAP may be treated as a Deferral Agreement under this Plan in the absence of a contrary election.
The term “Deferral Agreement” may also refer to any provision of an employment, consulting,
severance, or other agreement for the performance of services that makes specific reference to this
Plan and provides for deferred compensation.”

	 	2.  	Section 2.5 is amended to read as follows:

                        “2.5 Vesting. The balance in a Participant’s Deferral Account shall be fully
vested and nonforfeitable at all times. The balance in a Participant’s Matching Account or
Employer Account (or any subaccount thereof) shall be vested at the same times and to the same
extent as the Participant’s analogous account in the S-CAP (except as otherwise provided in a
Deferral Agreement with respect to amounts credited pursuant to Section 2.3(b)); provided, however,
that an event that results in the S-CAP accounts of a group of Participants being vested without
regard to their years of service, including but not limited to the sale of a business unit or a
determination that a partial termination of the S-CAP has occurred, shall apply to this Plan if and
only if such event is listed in Appendix A to this Plan. To the extent a Participant’s Account is
not vested at the time of his termination of employment for any reason, the non-vested portion
shall be forfeited, and neither the Company nor any Employer shall have any further obligation to
him whatsoever with respect to the forfeited portion.”

	 	3.  	Section 2.6 is amended to read as follows:

                        “2.6 Time and Form of Payment. The vested balance in a Participant’s Account shall be
paid to the Participant at the time and in the method elected by the Participant at the time of his
initial Deferral Agreement in accordance with the procedures established by the Administrator. If
the Participant does not specify a time and method of payment, the vested balance in his Account
shall be distributed in a single lump sum as soon as administratively feasible following his
termination of employment. The initial election or deemed election as to the time and form of
distribution cannot be changed.”

 

 

	 	4.  	A new Appendix A is added to the Plan in the form appended to this Amendment.

          5.     This amendment is intended to clarify the meaning of the Plan as restated, and shall be
effective as of the effective date of the restatement. Except as otherwise provided herein, the
Plan shall remain in full force and effect.

     IN WITNESS WHEREOF, this Amendment has been executed on behalf of CNA Financial Corporation
pursuant to the authority reserved under Section 5.1 of the Plan, this 27 day of February, 2004.

CNA FINANCIAL CORPORATION

	 	 	 
	By:

	 	/s/ Thomas Pontarelli

	

	 	Thomas Pontarelli,

Senior Vice President-Human Resources
	

	 	of Continental Casualty Company,
	

	 	pursuant to authority delegated by the
	

	 	Board of Directors of CNA Financial Corporation

-2-

 

APPENDIX A

FULL VESTING OF PARTICIPANTS AFFECTED BY CERTAIN EVENTS

               A.1      Sales of Business Units

               In accordance with Section 2.5, Participants whose employment is terminated in connection with
the following sales or other dispositions of business units shall be fully vested in their Account
balance regardless of their years of service. Except as otherwise provided below, the Participants
who qualify for full vesting with respect to any transaction shall be those, and only those, who
qualify as an “Affected Member” with respect to such transaction in accordance with Appendix F of
the S-CAP.

	 	 	 	 	 
	Transaction
	 	Closing Date
	 	Exceptions/Special Rules

	Sale of Life Reinsurance
	 	 	 	 
	Business Unit to MARC

	 	12/31/00
	 	None
	 
	 	 	 	 
	Sale of CNA Credit Collection
	 	 	 	 
	Agency, Inc., to Coface

	 	12/31/02
	 	None
	 
	 	 	 	 
	Sale of the unbundled risk
	 	 	 	 
	management business of RSKCo
	 	 	 	 
	Services, Inc to Cunningham
	 	 	 	 
	Lindsey US

	 	6/2/03
	 	None
	 
	 	 	 	 
	Sale of Smith System to
	 	 	 	 
	McFadden Brothers

	 	4/29/03
	 	None
	 
	 	 	 	 
	Sale of CNA Group Operations to
	 	 	 	 
	Hartford Financial Services
	 	 	 	 
	Group

	 	12/31/03
	 	None
	 
	 	 	 	 
	Sale of individual life
	 	 	 	 
	insurance business to Swiss Re
	 	 	 	 
	Life & Health America

	 	App. 3/31/04
	 	None

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