EXHIBIT 99.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 16th day
of March, 2005 (the "Effective Date"), by and between Continental Casualty
Company, an Illinois insurance company (the "Company"), and Xxxxxxxx X. Xxxxxx
("Executive");
WITNESSETH:
WHEREAS, the Company wishes to continue to employ Executive as
Executive Vice President, General Counsel and Secretary of the Company and of
such other of the affiliates or subsidiaries of the Company as the CEO (as
defined below) shall in his discretion determine (collectively the "CNA
companies'), with senior management level responsibility for the Law Department
of the Company, and Executive wishes to accept and agree to such employment
under the terms and conditions set forth hereinbelow.
NOW, THEREFORE, in consideration of the foregoing premises and the
promises and covenants herein, the parties hereto agree as follows:
1. EMPLOYMENT TERM. Executive's term of employment under this Agreement
shall be for the period commencing on March 16, 2005 ("Effective Date") and
ending on March 31, 2008, or such earlier date as of which Executive's
employment is terminated in accordance with Section 6 hereof (said period the
"Term"). The covenants set forth in Sections 7, 8, 9, 10, 11, 12, 13, and 14
shall survive the employment term of this Agreement.
2. DUTIES OF EXECUTIVE.
(a) Executive shall perform the duties and responsibilities of an
Executive Vice President, General Counsel and Secretary (hereinafter "GC") of
the CNA companies as defined and directed by the Company's Chief Executive
Officer (hereinafter "CEO"). Executive shall report to the CEO. Executive may be
elected to and shall serve as a member of the Board of Directors of one or more
of the CNA companies, and if so elected Executive agrees to serve on such boards
in such capacity without additional compensation and Executive further agrees to
resign any such position on such Boards upon the termination of his employment
with the Company for any reason; provided, however, that nothing in this
Agreement shall require that
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EXHIBIT 99.1
any CNA companies elect Executive to its board of directors. Executive has also
been elected as an executive officer of CNA Financial Corporation ("CNAF"), a
public company that is the indirect parent of the Company, and Executive agrees
to serve in such capacity for the term of this Agreement without additional
compensation; provided, however, that nothing in this Agreement shall require
that CNAF maintain Executive in any such position.
(b) Executive shall diligently and to the best of his abilities
continue to assume, perform, and discharge the duties and responsibilities of
Executive Vice President, GC, as well as such other specific duties and
responsibilities as the CEO shall assign or designate to Executive from time to
time not inconsistent with Executive's status. Executive shall devote
substantially all of his working time to the performance of his duties as set
forth herein and shall not, without the prior written consent of the CEO, accept
other employment or render or perform other services, nor shall he have any
direct or indirect ownership interest in any other business which is in
competition with the business of the Company or the CNA companies, other than in
the form of publicly traded securities constituting less than five percent (5%)
of the outstanding securities of a corporation (determined by vote or value) or
limited partnership interests constituting less than five percent (5%) of the
value of any such partnership. The foregoing shall not preclude Executive from
engaging in charitable, professional, and personal investment activities,
provided that, in the judgment of the CEO, such activities do not materially
interfere with the performance of his duties and responsibilities hereunder.
3. COMPENSATION.
(a) During the Term, the Company shall pay to Executive for the period
he is employed by the Company hereunder, an annual base salary of $750,000.00
(the "Base Compensation"). The Base Compensation shall be payable not less
frequently than in monthly increments. At the discretion of the CEO and/or the
Incentive Compensation Committee (the "Committee") of CNAF's Board of Directors,
such salary rate may be increased annually during the term of the Agreement,
based on market considerations, responsibilities and performance. In no event
shall Executive's salary rate be reduced to an amount that is less than the
amount specified in this Section 3(a) without Executive's written consent, or to
an amount that is less than the amount that he was previously receiving without
Executive's written consent.
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EXHIBIT 99.1
(b) The Executive shall be eligible for an annual incentive cash award
("Bonus") pursuant to the CNA Financial Corporation 2000 Incentive Compensation
Plan (the "Plan"). Subject to the approval of the Committee, the Executive's
maximum Bonus opportunity thereunder shall not exceed $1,500,000 for each twelve
month bonus period. In no event shall the maximum Bonus opportunity be reduced
without the Executive's written consent. The amount of the Bonus shall be based
on the Committee's assessment in its sole discretion of Executive's performance
and the Net Operating Income goals set annually by the Committee, and shall be
determined and payable in accordance with the terms of the Plan as set forth in
the Plan documents. Provided, further, that the Committee shall have unlimited
negative discretion under the Plan to decrease the amount of Executive's Bonus
for any year. Executive's eligibility for Bonuses under this Agreement will
begin with the 2005 performance year.
(c) Subject to the approval of the Committee, Executive shall be
eligible to receive a long-term incentive cash award, in accordance with the
terms of the Plan, as may be in effect during the Term or such other long term
incentive plan as the Company may from time to time adopt for its senior
officers. The Executive's target long-term incentive cash award shall be thirty
percent (30%) of his Base Compensation during the three-year performance period
as determined by the Company and/or the Committee. In no event shall the target
award be reduced without the Executive's written consent. Actual payout of the
long-term incentive cash award may range from 0% to 200% of target, based on the
Company's overall business results and performance as determined by the
Committee in its sole discretion, subject to the terms of the Plan.
(d) Subject to the approval of the Committee, Executive shall be
awarded a minimum stock option grant of 30,000 shares of CNAF common stock
annually beginning with the 2005 performance year, during the term of
Executive's employment under this Agreement. Such annual grant may be increased
at the recommendation of the CEO and upon approval of the Committee, subject to
share availability. Executive's rights with respect to shares awarded hereunder
shall be subject to the terms of the Plan, share availability and approval by
the Committee.
(e) For avoidance of doubt respecting awards to Executive under Section
3(b), 3(c) and 3(d) hereof, the Committee shall retain such discretion as may be
provided under the Plan to
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EXHIBIT 99.1
satisfy Section 162(m) of the Internal Revenue Code of 1986 ("Code") or any
successor provision. The Company may defer the payment of all compensation to
which Executive is entitled hereunder or otherwise to enable it to comply with
Section 162(m) of the Code or any successor provision with respect to
deductibility of executive compensation. Subject to Section 162(m) of the Code
and any other applicable laws or regulations as interpreted by the Company,
deferred compensation may be credited to the Executive's SES-CAP account and, if
so credited, shall be subject to the terms thereof.
(f) Executive's pensionable earnings under the CNA Retirement Plan, the
CNA Supplemental Executive Retirement Plan ("SERP"), the Savings & Capital
Accumulation Plan ("S-CAP"), and the CNA Supplemental Savings & Capital
Accumulation Plan ("SES-CAP") will be calculated and payable as specified in the
respective plan documents, as amended from time to time, and also subject to the
requirements of any other applicable laws or regulations as interpreted by the
Company.
(g) All payments due under this Agreement shall be subject to
withholding or deferral as required by law.
4. OTHER BENEFITS. Executive shall be entitled to continue to
participate in the various benefit plans, programs or arrangements established
and maintained by the Company from time to time and applicable to senior
executives of the Company such as, but not by way of limitation, medical
benefits, dental benefits, life insurance, long-term disability insurance, both
qualified and supplemental defined contribution plans, and to receive all fringe
benefits made available to senior executives of the Company, including
relocation assistance, club membership, and tax return preparation. Executive's
entitlement to participate in any such plan, program or arrangement shall, in
each case, be subject to the terms and conditions of the Company's policies with
regard to such plans, programs or arrangements as adjusted by the Company from
time to time in its sole discretion. Executive shall not be eligible for paid
time off ("PTO") under the Company's PTO policy. In the event of termination of
employment, Executive's severance shall be determined solely in accordance with
Section 6 hereof.
5. EXPENSE REIMBURSEMENT. Executive shall continue to be entitled to
reimbursement by the Company for all reasonable and customary travel and other
business expenses incurred by Executive in carrying out his duties under this
Agreement, in accordance with the general
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EXHIBIT 99.1
travel and business reimbursement policies adopted by the Company as adjusted
from time to time. 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.
6. TERMINATION OF EMPLOYMENT. If Executive's employment with the
Company shall terminate during the term of this Agreement, the following
conditions set forth herein shall apply with respect to the Executive's
compensation and benefits hereunder. Either party may terminate Executive's
employment with the Company during the term of this Agreement by written notice
to the other party, effective as of the date specified in such notice and
Executive's employment shall automatically terminate in the event of Executive's
death. Upon termination of Executive's employment during or at the end of the
term of this Agreement, the rights of the parties under this Agreement shall be
determined pursuant to this Section 6. All payments to be made hereunder shall
be made either to Executive or to his personal representatives, heirs or
beneficiaries, as the case may be. In the event of Executive's termination
during the term of this Agreement, unless otherwise specified in this Agreement
Executive's rights, if any, under any of the Company's defined contribution,
benefit, incentive or other plans of any nature shall be governed by the
respective terms of such plans.
6.1 DEATH AND DISABILITY. In the event of the death of Executive or, at
the Company's election, in the event of his Permanent Disability (as defined
below) during the term of this Agreement, provided it has not already
terminated, Executive's employment shall terminate; provided, however, that:
(a) The Company shall pay to Executive or his personal representatives,
heirs or beneficiaries as the case may be, an amount equal to his: (i) unpaid
base salary and current year's Bonus calculated at 100% of base salary and CNA
long-term incentive cash award prorated to the date of termination; (ii) any
previous year's unpaid Bonus based upon actual or discretionary payouts, if any;
and (iii) unpaid cash entitlements, if any, earned by Executive or payable to
his beneficiaries as of the date of termination which, pursuant to the terms of
any applicable Company plan or program (which unpaid cash entitlements shall not
include any unpaid Bonus or any unpaid long-term incentive cash award or other
award under the Incentive Compensation Plan), accrued prior to the date of
termination.
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EXHIBIT 99.1
(b) For purposes of this Agreement, the term "Permanent Disability"
means a physical or mental condition of Executive which, as determined by the
CEO based on and consistent with available medical information, is expected to
continue beyond 26 weeks and which renders Executive incapable of performing any
substantial portion of the services contemplated hereunder with reasonable
accommodation compatible with the fulfillment of his duties as described in
Section 2 hereinabove.
6.2 TERMINATION FOR CAUSE BY THE COMPANY. In the event that Executive
shall engage in any conduct which the CEO in his sole discretion shall determine
to be "CAUSE," as defined herein, he shall be subject to termination forthwith.
For purposes of this Agreement, Cause shall mean engaging in or committing: (i)
any act which would constitute a felony or other act involving fraud,
dishonesty, moral turpitude, unlawful conduct or breach of fiduciary duty; (ii)
a substantial breach of any material provision of this Agreement; (iii) a
willful or reckless material misconduct in the performance of the Executive's
duties; or (iv) the habitual neglect of duties; provided however, that, for
purposes of clauses (iii) and (iv), Cause shall not include any one or more of
the following: bad judgment, negligence or any act or omission believed by the
Executive in good faith to have been in or not opposed to the interest of the
Company (without any intent by the Executive to gain, directly or indirectly, a
profit to which he was not legally entitled). If the Executive agrees to resign
from his employment with the Company in lieu of being terminated for Cause, he
may be deemed to have been terminated for Cause for purposes of this Agreement.
Upon terminating the Executive for Cause, other than paying the
Executive within 30 days of such termination his: (i) unpaid base salary
prorated to the date of termination and (ii) unpaid cash entitlements, if any,
earned and accrued pursuant to the terms of any applicable Company plan or
program (which unpaid cash entitlements shall not include any unpaid Bonus or
any unpaid long-term incentive cash award or other award under the Incentive
Compensation Plan) prior to the date of the date of termination, the Company
shall have no further obligations whatsoever to Executive under this Agreement.
In the event of termination for Cause, Executive agrees to continue to be bound
by the covenants set forth herein at Sections 7 through 13, subsequent to the
date of such termination for such periods of time as provided for in said
Sections respectively.
6.3 TERMINATION BY THE COMPANY WITHOUT CAUSE / TERMINATION BY EXECUTIVE
FOR GOOD REASON. In the event Executive's employment is terminated by the
Company "WITHOUT
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EXHIBIT 99.1
CAUSE" (as that term is defined hereinbelow), or in the event Executive
terminates his employment for "GOOD REASON" (as that term is defined
hereinbelow):
(a) The Company shall pay to Executive severance consisting of an
amount equal to: (i) 24 months of the Executive's Base Compensation, (ii) two
times Bonus calculated at 100% of base salary in effect at the time of
termination and (iii) two times the long-term incentive cash award payable in
the year of such termination, at target in effect at the time of such
termination. The severance shall be paid over two (2) years in equal monthly
installments following such termination. The Company shall also pay the
Executive within 30 days of his termination: (iv) his unpaid base salary,
prorated to the date of termination and (v) unpaid cash entitlements, if any,
earned and accrued pursuant to the terms of any applicable Company plan or
program prior to the date of the date of termination (which unpaid cash
entitlements under this Section 6.3(a)(v) shall not include any unpaid Bonus or
any unpaid long-term incentive cash award or other award under the Plan).
Executive agrees to be bound by the covenants set forth herein prior to, as of
and subsequent to the termination date. In addition, Executive shall continue to
participate, at the active employee rates, in such health benefits plans in
which he is enrolled throughout the term of the payments set forth in this
Section 6.3(a), up to a maximum of 18 months, with said period of participation
to run concurrently with any period of COBRA coverage to which Executive may be
entitled. Other than as set forth in this Section 6.3 (a), the Company shall
have no further obligations to Executive under this Agreement in the event of a
termination of Executive's employment by the Company Without Cause or any
termination of Executive's employment by Executive.
(b) "Good Reason" as set forth herein is defined as a reduction in the
rate of Executive's base salary, annual incentive maximum opportunity or
long-term incentive cash target compensation, a required relocation of his
personal residence to another geographical area outside of the geographical area
where Executive's personal residence is currently located without Executive's
consent, a change in Executive's direct reporting relationship to the CEO or
other involuntary loss of position as described herein (other than as a result
of a termination by the Company for Cause) or a material diminution in
Executive's duties and responsibilities without Executive's consent.
(c) "Without Cause" as set forth herein is defined as a termination of
the Executive's employment by the Company for any reason not described in
subsections 6.1 and 6.2.
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EXHIBIT 99.1
In the event of any termination of employment as described in this Section 6.3,
Executive agrees to continue to be bound by the covenants set forth herein at
Sections 7 through 13 subsequent to the date of such termination for such
periods of time as provided for in said Sections respectively.
6.4 VOLUNTARY RESIGNATION BY EXECUTIVE. In the event that Executive's
employment is voluntarily terminated by Executive other than pursuant to
subsection 6.3 or as a direct result of his death or Permanent Disability (as
described in subsection 6.1), the Company shall have no further obligations to
Executive under this Agreement other than paying the Executive within 30 days of
such termination his: (i) unpaid base salary prorated to the date of termination
and (ii) unpaid cash entitlements, if any, earned and accrued pursuant to the
terms of any applicable Company plan or program (which unpaid cash entitlements
shall not include any unpaid Bonus or any unpaid long-term incentive cash award
or other award under the Plan) prior to the date of termination. In the event of
termination of employment as described in this Section 6.4, Executive agrees to
continue to be bound by the covenants set forth herein at Sections 7 through 13
subsequent to the date of such termination for such periods of time as provided
for in said Sections respectively.
6.5 EXPIRATION OF AGREEMENT. Following March 31, 2008, if the Company
and Executive have not mutually agreed to the terms of, and entered into a new
agreement, Executive's employment shall be one of employment at will, which may
be terminated by either the Company or Executive at any time. Such continued
employment after March 31, 2008 shall be subject to the Company's normal
policies and procedures in effect during said period of continued employment.
6.6 OTHER BENEFITS. In the event that Executive's employment is
terminated pursuant to Sections 6.1, 6.2 or 6.4, Executive's coverage under the
Company's short-term disability plan, shall end on the date of termination of
employment; Executive's coverage under the Company's long-term disability plan
shall end on the last day of the month in which termination of employment
occurs; and Executive's coverage under the Company's non-contributory and
contributory life, dependent life and accidental death and dismemberment plans
shall end on the
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EXHIBIT 99.1
last day of the month in which termination occurs. In the event that Executive's
employment is terminated pursuant to Section 6.3, the foregoing shall also
apply, except that Executive's coverage under the Company's contributory life,
dependent life and contributory accidental death and dismemberment plans, if
any, shall continue through the end of any applicable severance period, upon
payment of the applicable premium.
6.7 RELEASE. Executive acknowledges that the severance benefits set
forth in Section 6 hereof provide significant additional benefits as compared to
those available to the Company's employees in general. As a condition precedent
to receiving any payments or other benefits pursuant to Section 6 of this
Agreement, Executive agrees to sign a full and complete release acceptable to
the Company releasing the Company, its subsidiaries and affiliates and their
directors, officers and employees of any and all claims, both known and unknown
as of the date of Executive's termination of employment with the Company. In the
absence of Executive's executing such a release in a form satisfactory to the
Company, the Company shall have no obligation to Executive to make any payments
or provide any other benefits as provided in said Section 6.
7. CONFIDENTIALITY. Executive agrees that while he is employed by the
Company, and at all times thereafter, Executive shall not reveal or utilize
information, knowledge or data which is confidential as defined in this
Agreement and learned during the course of or as a result of his employment
which relates to: (a) the Company and/or any other business or entity in which
the Company during the course of the Executive's employment has directly or
indirectly held a greater than a 10% equity interest whether voting or
non-voting; and (b) the Company's customers, employees, agents, brokers and
vendors. The Executive acknowledges that all such confidential information is
commercially valuable and is the property of the Company. Upon the termination
of his employment Executive shall return all confidential information and any
copies thereof to the Company, whether it exists in written, electronic,
computerized or other form.
8. "CONFIDENTIAL INFORMATION" DEFINED. For purposes of this Agreement
"confidential information" includes all information, knowledge or data (whether
or not a trade secret or protected by laws pertaining to intellectual property)
not generally known outside the Company (unless as a result of a breach of any
of the obligations imposed by this Agreement) concerning the business
operations, performance and other information of the Company or other entities
as described in Section 7 above. Such information may without limitation include
information
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EXHIBIT 99.1
relating to data, finances, marketing, pricing, profit margins, underwriting,
claims, loss control, marketing and business plans, renewals, software,
processing, vendors, administrators, customers or prospective customers,
products, brokers, agents and employees.
9. COMPETITION. Executive hereby agrees that, while he is employed by
the Company, and for a period of 12 months following the date of his termination
of employment with the Company for any reason, he will not, directly or
indirectly, without the prior written approval of the CEO, enter into any
business relationship (either as principal, agent, board member, officer,
consultant, stockholder, employee or in any other capacity) with any business or
other entity that at any relevant time is engaged in the business of insurance
in direct or indirect competition with the Company or any of its affiliates (a
"Competitor"); provided, however, that such prohibited activity shall not
include the ownership of less than 5% of the outstanding securities of any
publicly traded corporation (determined by vote or value) regardless of the
business of such corporation. Upon the written request of Executive, the CEO
will determine whether a business or other entity constitutes a "Competitor" for
purposes of this Section 9; provided that the CEO may require Executive to
provide such information as the CEO determines to be necessary to make such
determination; and further provided that the current and continuing
effectiveness of such determination may be conditioned on the accuracy of such
information, and on such other factors as the CEO may determine.
10. SOLICITATION. Executive agrees that while he is employed by the
Company, and for a period of 24 months following his termination of employment
with the Company for any reason, he will not employ, offer to employ, engage as
a consultant, or form an association with any person who is then, or who during
the preceding one year was, an employee of the Company or any Subsidiary or
Affiliate of the Company or any successor or purchaser of any portion thereof,
nor will he assist any other person or entity in soliciting for employment or
consultation any person who is then, or who during the preceding one year was,
an employee of the Company or any Subsidiary or Affiliate of the Company or any
successor or purchaser of any portion thereof.
11. NON-INTERFERENCE. Executive agrees that while he is employed by the
Company, and for a period of 24 months following his termination of employment
with the Company for any reason, he will not disturb or attempt to disturb any
business relationship or agreement between either the Company or any Subsidiary
or Affiliate of the Company or any successor or purchaser of any portion
thereof, and any other person or entity.
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EXHIBIT 99.1
12. ASSISTANCE WITH CLAIMS. Executive agrees that, while he is employed
by the Company, and for a reasonable period (not less than 60 months from the
date of termination) thereafter, he will be available, on a reasonable basis, to
assist the Company and its subsidiaries and affiliates in the prosecution or
defense of any claims, suits, litigation, arbitrations, investigations, or other
proceedings, whether pending or threatened ("Claims") that may be made or
threatened by or against the Company or any of its subsidiaries or affiliates.
Executive agrees, unless precluded by law, to promptly inform the Company if he
is requested (i) to testify or otherwise become involved in connection with any
Claim against the Company or any subsidiary or affiliate or (ii) to assist or
participate in any investigation (whether governmental or private) of the
Company or any subsidiary or affiliate or any of their actions, whether or not a
lawsuit has been filed against the Company or any of its subsidiaries or
affiliates relating thereto. The Company agrees to provide reasonable
compensation to Executive for such assistance provided during such period.
Nothing in this Section 12 is intended or shall be construed to prevent
Executive from cooperating fully with any government investigation or review as
required by applicable law or regulation.
13. RETURN OF MATERIALS. Executive shall, at any time upon the request
of the Company, and in any event upon the termination of his employment with the
Company for any reason, immediately return and surrender to the Company all
originals and all copies, regardless of medium, of property belonging to the
Company created or obtained by Executive as a result of or in the course of or
in connection with his employment with the Company regardless of whether such
items constitute proprietary information, provided that Executive shall be under
no obligation to return written materials acquired from third parties which are
generally available to the public. Executive acknowledges that all such
materials are, and will remain, the exclusive property of the Company.
14. SCOPE OF COVENANTS.
(a) The Executive acknowledges that: (i) as a senior executive of the
Company he has and will have access to confidential information concerning not
only the business segments for which he may have been responsible (an outline
summary of which appears in the Company's
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EXHIBIT 99.1
reports on Forms 10-K and 10-Q filed with the Securities and Exchange
Commission) but the entire range of businesses in which the Company was engaged;
(ii) that the businesses segments for which he may have been responsible and the
Company's businesses are conducted nation-wide; and (iii) that the Company's
confidential information, if disclosed or utilized without its authorization
would irreparably harm the Company in: (A) obtaining renewals of existing
customers; (B) selling new business; (C) maintaining and establishing existing
and new relationships with employees, agents, brokers, vendors; and (D) other
ways arising out of the conduct of the businesses in which the Company is
engaged.
(b) To protect such information and such existing and prospective
relationships, and for other significant business reasons, the Executive agrees
that it is reasonable and necessary that: (i) the scope of this Agreement be
national and international; (ii) its breadth include the entire insurance
industry; and (iii) the duration of the restrictions upon the Executive be as
indicated therein.
(c) The Executive acknowledges that the Company's customer, employee
and business relationships are long-standing, indeed, near permanent and
therefore are of great value to the Company. The Executive agrees that neither
any of the provisions in this Agreement nor the Company's enforcement of it
alters or will alter his ability to earn a livelihood for himself and his family
and further that both are reasonably necessary to protect the Company's
legitimate business and property interests and relationships, especially those
which he was responsible for developing or maintaining. The Executive agrees
that his actual or threatened breach of the covenants set forth in Sections 7
through 13 above would cause the Company irreparable harm and that the Company
is entitled to an injunction, in addition to whatever other remedies may be
available, to restrain such actual or threatened breach. The Executive agrees
that if bond is required in order for the Company to obtain such relief, such
bond need only be in a nominal amount and that he shall reimburse the Company
for all costs of any such suit, including the Company's reasonable attorneys'
fees. The Executive consents to the filing of any such suit against him in the
state or federal courts located in Illinois or any state in which he resides. He
further agrees that in the event of such suit or any other action arising out of
or relating to this Agreement, the parties shall be bound by and the court shall
apply the internal laws of the State of Illinois and irrespective of rules
regarding choice of law or conflicts of laws.
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EXHIBIT 99.1
(d) If he has not already done so, Executive agrees to be bound by and
to execute the Company's Confidentiality, Computer Responsibility and
Professional Certification Agreement, a copy of which is incorporated by
reference herein.
(e) For purposes of Sections 7 through 14 hereof, the "Company" shall
include all subsidiaries and affiliates of the Company and CNAF, as well as the
Company.
15. EFFECT OF COVENANTS. Nothing in Sections 7 through 14 shall be
construed to limit or otherwise adversely affect any rights, remedies or options
that the Company would possess in the absence of the provisions of such
Sections.
16. REVISION. The parties hereto expressly agree that in the event that
any of the provisions, covenants, warranties or agreements in this Agreement are
held to be in any respect an unreasonable restriction upon Executive or are
otherwise invalid, for whatsoever cause, then the court or arbitrator so holding
is hereby authorized to (a) reduce the territory to which said covenant,
warranty or agreement pertains, the period of time in which said covenant,
warranty or agreement operates or the scope of activity to which said covenant,
warranty or agreement pertains or (b) effect any other change to the extent
necessary to render any of the restrictions contained in this Agreement
enforceable.
17. SEVERABILITY. Each of the terms and provisions of this Agreement is
to be deemed severable in whole or in part and, if any term or provision of the
application thereof in any circumstances should be invalid, illegal or
unenforceable, the remaining terms and provisions or the application thereof to
circumstances other than those as to which it is held invalid, illegal or
unenforceable, shall not be affected thereby and shall remain in full force and
effect.
18. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be binding upon
the parties hereto and their respective heirs, successors, personal
representatives and assigns. The Company shall have the right to assign this
Agreement to any successor in interest to the business, or any majority part
thereof, of the Company or any joint venture or partnership to which the Company
is a joint venturer or general partner which conducts substantially all of the
Company's business. Executive shall not assign any of his obligations or duties
hereunder and any such attempted assignment shall be null and void.
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EXHIBIT 99.1
19. CONTROLLING LAW; JURISDICTION. This Agreement shall be governed by,
interpreted and construed according to the laws of the State of Illinois
(without regard to choice of law or conflict of laws principles).
20. ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
this Agreement contains the entire agreement of the parties with regard to the
subject matter hereof, supersedes all prior agreements and understandings,
written or oral (including without limitation that certain Employment Agreement
made as of March 20, 2003 between Executive and CNAF), and may only be amended
by an agreement in writing signed by the parties thereto. Any term or provision
herein to the contrary notwithstanding, the timing and other conditions of any
severance or other payments to be made under this Agreement shall be subject to
the requirements of all applicable laws and regulations as interpreted by the
Company, whether or not they are in existence or in effect when this Agreement
is executed by the parties hereto.
21. ADDITIONAL DOCUMENTS. Each party hereto shall, from time to time,
upon request of the other party, execute any additional documents which shall
reasonably be required to effectuate the purposes hereof.
22. INCORPORATION. The introductory recitals hereof are incorporated in
this Agreement and are binding upon the parties hereto.
23. FAILURE TO ENFORCE. The failure to enforce any of the provisions of
this Agreement shall not be construed as a waiver of such provisions. Further,
any express waiver by any party with respect to any breach of any provision
hereunder by any other party shall not constitute a waiver of such party's right
to thereafter fully enforce each and every provision of this Agreement.
24. SURVIVAL. Except as otherwise set forth herein, the obligations
contained in this Agreement shall survive the termination, for any reason
whatsoever, of Executive's employment with the Company.
25. HEADINGS. All numbers and headings contained herein are for
reference only and are not intended to qualify, limit or otherwise affect the
meaning or interpretation of any provision contained herein.
14
EXHIBIT 99.1
26. NOTICES. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid
(provided that international mail shall be sent via overnight or two-day
delivery), or sent by facsimile or prepaid overnight courier to the parties at
the addresses set forth below (or such other addresses as shall be specified by
the parties by like notice). Such notices, demands, claims and other
communications shall be deemed given:
(a) in the case of delivery by overnight service with guaranteed next
day delivery, the next day or the day designated for delivery;
(b) in the case of certified or registered U.S. mail, five days after
deposit in the U.S. mail; or
(c) in the case of facsimile, the date upon which the transmitting
party received confirmation of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:
If to the Company:
CONTINENTAL CASUALTY COMPANY
XXX Xxxxxx
Xxxxxxx, XX 00000
Attn: Senior Human Resources Officer
If to Executive:
Xxxxxxxx X. Xxxxxx
CNA Center
Chicago, IL 60685
or to such other address as either party shall furnish to the other party in
writing in accordance with the provisions of this Section 26.
15
EXHIBIT 99.1
27. GENDER. The masculine, feminine or neuter pronouns used herein
shall be interpreted without regard to gender, and the use of the singular or
plural shall be deemed to include the other whenever the context so requires.
28. ARBITRATION OF ALL DISPUTES. Any controversy or claim arising out
of or relating to this Agreement (or the breach thereof), except as otherwise
indicated hereinbelow, shall be settled by final, binding and non-appealable
arbitration in Chicago, Illinois by three arbitrators. Except as otherwise
expressly provided in this Section 28, the arbitration shall be conducted in
accordance with the rules of the American Arbitration Association (the
"Association") then in effect. One of the arbitrators shall be appointed by the
Company, one shall be appointed by Executive, and the third shall be appointed
by the first two arbitrators. If the first two arbitrators cannot agree on the
third arbitrator within 30 days of the appointment of the second arbitrator,
then the third arbitrator shall be appointed by the Association. This Section 28
shall not be applicable with respect to any subject matter or controversy
relating to Sections 7 through 14 of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
CONTINENTAL CASUALTY COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------------------------
Title: Executive Vice President Human Resources
------------------------------------------------
Date: 6/9/05
-------------------------------------------------
/s/ Xxxxxxxx X. Xxxxxx 6/7/05
---------------------------------------- --------------------------
Xxxxxxxx X. Xxxxxx Date
16
