EMPLOYMENT AGREEMENT
Exhibit 10.18
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of the 24th day of August, 2006, by and
between Continental Casualty Company, an Illinois insurance company (the “Company”), and Xxxxx X.
Xxxxxx (“Executive”);
WITNESSETH:
WHEREAS, the Company wishes to continue to employ Executive as Executive Vice President, US
Specialty Lines of the Company with senior management level responsibility for global specialty
underwriting for the principal business units and subsidiaries of the Company being hereinafter
referred to as the “CNA Insurance Companies,” 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. The Company and Executive agree that the Company shall continue to employ
Executive to perform the duties of an Executive Vice President of the CNA Insurance Companies for
the period commencing on September 1, 2006 (“Effective Date”) and ending on December 31, 2009 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 through 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 [or
successor title] of the CNA Insurance Companies as defined and directed by CNA’s President & Chief
Executive Officer, Property and Casualty Operations (hereinafter “President”). Executive shall
report to the President. Executive may be elected to and shall serve as a member of the Board of
Directors of one or more of the CNA Insurance 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 or at the request of the
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President; provided, however, that nothing in this Agreement shall require that any CNA
Insurance Companies elect Executive to its board of directors.
(b) Executive shall diligently and to the best of his abilities assume, perform, and discharge
the duties and responsibilities of Executive Vice President of the CNA Insurance Companies, as
well as such other specific duties and responsibilities as the President 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 President, 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 direct or indirect competition with the business of the Company or the CNA
Insurance 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 President, such
activities do not materially interfere with the performance of his duties and responsibilities
hereunder.
(c) The services to be provided by Executive in accordance with this Agreement shall be
performed principally at the Company’s New Jersey office or such other location or locations as the
President may require from time to time. It is understood and agreed by the parties hereto that,
Executive shall also be required to perform services on a regular basis at the Company’s offices in
Chicago and that, regardless of where Executive is required to perform services in accordance with
this Agreement, Executive shall maintain his residence in the New York City area, unless Executive,
in his sole discretion, relocates his residence to the Chicago, Illinois area.
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 $650,000.00 (the “Base Compensation”). The Base
Compensation shall be payable not less frequently than in monthly increments. At the discretion of
the President and/or the Incentive Compensation Committee (the “Committee”) of the Board of
Directors of CNA Financial Corporation (“CNAF”), such salary rate may be increased annually as of
each March occurring during the term of the Agreement, beginning with March 2007, based on market
considerations, responsibilities and performance. In no event
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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.
(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”)., The Executive’s
target Bonus thereunder shall not be less than the rate of one-hundred percent (100%) of his Base
Compensation for each twelve month bonus period as determined by the Company and/or the Committee.
In no event shall the target Bonus be reduced without the Executive’s written consent. The amount
of the Bonus shall be based on the President’s assessment of Executive’s performance, and shall be
determined and payable in accordance with the terms of the Plan as set forth in the Plan documents;
however, if Executive is a proxy-named officer, the amount of the Bonus shall be based on the
Committee’s assessment in its sole discretion of Executive’s performance, 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.
(c) Executive shall be eligible to receive a long-term Incentive cash award (“LTI”), 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 20 percent (20%) 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.
(d) Subject to the approval of the Committee, Executive shall be awarded a minimum stock
option grant of 20,000 shares of CNA Financial Corporation (“CNAF”) common stock annually beginning
with the 2007 performance year, during the term of Executive’s employment under this Agreement.
Such annual grant may be increased at the recommendation of the President and upon approval of the
Committee, subject to share availability. Executive’s rights
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with respect to shares awarded hereunder shall be subject to the terms of the Plan, share
availability and approval by the Committee.
(e) Executive shall be awarded a Signing Bonus (the “Signing Bonus”) in the amount of
$500,000, payable provided Executive is actively employed by the Company at the end of the Term or
on December 31, 2009 (except as otherwise provided in Section 6.1 hereof) and will be deposited
into the Executive’s CNA Supplemental Executive Savings and Capital Accumulation Plan (the
“SES-CAP”) account in the next pay cycle immediately following December 31, 2009.
(f) For avoidance of doubt respecting awards to Executive under Section 3(b), 3(c), 3(d) and
3(e) hereof, the Committee shall retain such discretion as may be provided under the Plan to
satisfy Section 162(m) of the Internal Revenue Code of 1986 (“Code”) or any successor provision.
The Company may defer the payment of all compensation to which Executive is entitled hereunder or
otherwise to enable it to comply with Section 162(m) of the Code or any successor provision with
respect to deductibility of executive compensation. 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.
(g) The parties acknowledge that they have entered into a “Special Retirement Deferral
Agreement” dated February 5, 2001. To the extent the provisions of Paragraph 5 thereof are
different from those of this Agreement, this Agreement shall govern.
(h) 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.
(i) All payments due under this Agreement shall be subject to withholding as required by law.
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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 but not limited to 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 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.
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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 target Bonus
and CNA long-term incentive cash award prorated to the date of termination; (ii) any previous
year’s earned but 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 under this Section 6.1(a)(iii) shall not include any unpaid Bonus or any unpaid
long-term incentive cash award or other award under the Plan), accrued prior to the date of
termination, except that the Signing Bonus shall be payable as provided for, and subject to the
terms and provisions set forth in this Agreement other than the requirement that Executive be
actively employed by the Company at the end of the Term.
(b) For purposes of this Agreement, the term “Permanent Disability” means a physical or mental
condition of Executive which, as determined by the President 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 President 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
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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.
(a) 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) any
previous year’s earned but unpaid Bonus based upon actual or discretionary payouts, if any; and;
(iii) unpaid cash entitlements, if any, earned and accrued pursuant to the terms of any applicable
Company plan or program (which unpaid cash entitlements under this Section 6.2(a)(iii) 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 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 14,
subsequent to the date of such termination for such periods of time as provided for in said
Sections respectively. The President shall, in his discretion but in consultation with the Chairman
and Chief Executive Officer of the CNA Insurance Companies and/or the Board of Directors of CNAF,
determine whether, in light of all surrounding circumstances, (i) any additional compensation
should be paid to the Executive as a result of Executive being bound by the provisions of Section 9
hereinbelow in the event of his termination for Cause and (ii) any modification to the requirements
of said Section 9 in relation to the Executive should be made.
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 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 the sum of: (i) two times the
Executive’s Base Compensation; and (ii) two times Executive’s Bonus at target in effect at time of
termination. The severance shall be paid in a lump-sum within 30 days following termination The
Company shall also pay the Executive (i) within 30 days of his termination, his unpaid base salary
prorated to the date of termination; (ii) at the time of the
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scheduled March payout date, current year’s target Bonus , if any, and (iii) within 30 days of
his termination, unpaid cash entitlements, if any, earned 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)(iii) shall not include 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
24 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 target 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 resides without Executive’s consent, 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.
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 14 subsequent to the
date of such termination for such periods of time as provided for in said Sections respectively.
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, whether or not they are in existence or in
effect when this Agreement is executed by the parties hereto.
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
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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 under this Section 6.4(iii) 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 the date of termination, the Company shall have no further obligations
whatsoever to Executive under this Agreement. 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 14 subsequent to the date of such termination for such periods of time
as provided for in said Sections respectively.
6.5 Failure to Extend Agreement.
(a) If the Company has not made an offer to Executive by November 30, 2009 to extend his
employment with the Company under a compensation and severance structure no less favorable to
Executive than the one provided for in this Agreement, Executive’s employment shall terminate on
January 1, 2010. Upon the termination of Executive’s employment pursuant to this section, the
Company shall pay Executive severance consisting of: (i) one times the Executive’s Base
Compensation; and (ii) one times Executive’s Bonus at target in effect at time of termination. The
severance shall be paid in a lump-sum within 30 days following termination The Company shall also
pay the Executive within 30 days of termination: (i) his unpaid base salary prorated to the date
of termination; (ii) unpaid cash entitlements, if any, earned 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 6.5 (a) shall not include any unpaid Bonus or any unpaid long-term
incentive cash award or other award under the Plan). In the event of termination of employment as
described in any portion of this Section 6.5, Executive agrees to continue to be bound by the
covenants set forth herein at Sections 7 through 14 subsequent to the date of such termination for
such periods of time as provided for in said Sections respectively. 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 6.5 (a), up to a maximum of
12 months, with said period of participation to run concurrently with any period of COBRA coverage
to which Executive may be
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entitled. Other than as set forth in this Section 6.5 (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 “Failure to Extend Agreement” or any termination of Executive’s
employment by Executive.
(b) Notwithstanding the foregoing, if Executive’s employment with the Company terminates
following Executive’s rejection of an offer by the Company to extend the period of the Agreement or
to enter into a new Agreement as prior to termination, under a compensation and severance structure
no less favorable to Executive than the one provided for in this Agreement or if Executive
voluntarily resigns, then his employment shall be treated as having been terminated in accordance
with Paragraph 6.4 (relating to voluntary resignation), and the sole payments to which he may be
entitled shall be governed by said Paragraph.
(c) During such period as the Executive shall continue to be employed by the Company between
November 30, 2009 and December 31, 2009, he shall be paid under the same terms and at the same rate
as was in effect on November 29, 2009.
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 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 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
provides 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
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reasonably 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 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 President,
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
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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 President will determine
whether a business or other entity constitutes a “Competitor” for purposes of this Section 9;
provided that the President may require Executive to provide such information as the President
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 President 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.
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
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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, including
reasonable attorney’s fees, 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: (a) 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 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; (b) that the businesses segments for which he may have been
responsible and the Company’s businesses are conducted nation-wide; and (c) that the Company’s
confidential information, if disclosed or utilized without its authorization would irreparably harm
the Company in: (i) obtaining renewals of existing customers; (ii) selling new business; (iii)
maintaining and establishing existing and new relationships with employees, agents, brokers,
vendors; and (iv) 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
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that: (a) the scope of this Agreement be national and international; (b) its breadth include
the entire insurance industry; and (c) 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 14 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.
(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 attached hereto and 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.
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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.
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, and may only be amended by an agreement in writing
signed by the parties thereto.
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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.
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
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(c) in the case of facsimile, the date upon which the transmitting party received confirmation
of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to be given later than
the date they are actually received. Communications that are to be delivered by the U.S. mail or by
overnight service or two-day delivery service are to be delivered to the addresses set forth below:
If to the Company:
CONTINENTAL CASUALTY COMPANY
XXX Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Secretary
XXX Xxxxx
Xxxxxxx, XX 00000
Attn: Corporate Secretary
If to Executive:
Xxxxx X. Xxxxxx
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.
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
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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 Signing Date.
CONTINENTAL CASUALTY COMPANY
By: /s/ Xxxx Xxxxxxxxxx
Title: EVP Human Resources
/s/ Xxxxx X. Xxxxxx
|
8/24/06 | |
Xxxxx X. Xxxxxx
|
Date |
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