EMPLOYMENT AGREEMENT

1.

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

2.

Duties of the Executive and Place of Business.

control with, such Person; “Board” shall mean, in the case of a corporation, the board of directors of such corporation and, in the case of any other entity, the corresponding governing Person; and “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, estate, board, committee, agency, body, employee benefit plan, or other person or entity. Notwithstanding the foregoing, for all purposes of this Agreement (except Sections 6.3(b)(ii), 6.7(x), 7, 18(a), 24 and 25 and Exhibit A), the term Affiliate shall not include Loews Corporation or any of its direct or indirect subsidiaries (other than the Company and the Company’s subsidiaries).

(b)

Throughout the Term, the Executive: shall diligently and to the best of his abilities assume, perform, and discharge his duties and responsibilities hereunder as the Chairman of the Board, and the Chief Executive Officer, of the Company, and the CNA Insurance Companies; and shall devote substantially all of his business time and effort to the business and affairs of the Company and its subsidiaries. However, nothing in this Agreement or elsewhere shall preclude the Executive from: (i) engaging in civic, charitable or community services; (ii) devoting a reasonable amount of time to private investments and personal affairs; or (iii) serving, with the prior approval of the Company’s Board, on the boards of for-profit entities, so long as such activities or services do not interfere with the Executive’s responsibilities to the Company.

(c)

The Executive shall establish a residence in the Chicago metropolitan area not later than five (5) days following the Commencement Date and shall maintain such a residence during the Term. The Executive’s principal place of business shall be at the Company’s headquarters in Chicago. As soon as practicable following the Commencement Date, but no later than ten (10) days following the Commencement Date the Company shall pay the Executive $250,000 in recognition of the expense of establishing and maintaining a Chicago metropolitan area residence.

(a)

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

(b)

(i)

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

(ii)

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

For purposes of this Agreement, “NOI” for any Performance Year or quarter shall mean the Company’s net income for such Performance Year or quarter, as adjusted in good faith by the Committee for such Performance Year or quarter for the purpose of determining annual bonuses for senior executives of the Company generally. For any Performance Year or quarter, NOI shall be determined on a basis that is no less favorable to the Executive than to other senior executive officers of the Company generally. The Committee may exercise negative discretion under the Plan to decrease or eliminate any portion of the Executive’s Annual Bonus for any Performance Year that exceeds his Annual Bonus target of $2,500,000.

(iii)

For the first Performance Year that ends during the Term, the Executive’s Annual Bonus shall equal 1.2% of the sum of (x) the Company’s NOI for each calendar quarter during such year that commences after the Commencement Date plus (y) a pro-rata portion of the Company’s NOI for the calendar quarter in which the Commencement Date occurs, such pro-rata portion to be determined by multiplying the Company’s NOI for such quarter by a fraction, the numerator of which is the number of calendar days during such quarter that the Executive is employed hereunder and the denominator of which is the number of calendar days in such quarter (the “Quarterly Proration Fraction”). The target Annual Bonus payment for such year, above which the Committee may exercise negative discretion, shall be determined by multiplying $2,500,000 times a fraction, the numerator of which is the number of calendar days during such year that the Executive is employed hereunder and the denominator of which is 365 (the “Yearly Proration Fraction”). The maximum Annual Bonus payment for such year shall be determined by multiplying $4,000,000 by the Yearly Proration Fraction.

(iv)

Annual Bonus payments shall be made to the Executive in cash no later than corresponding bonus payments are made to senior executive officers of the Company generally, and in no event later than 70 days after the end of the Performance Year to which they relate. In the event that the Company ceases to maintain an annual bonus program that is based on NOI and that is similar to the program in effect as of the Signing Date, a new program shall be established under which the Executive shall have an annual target bonus of at least $2,500,000.

(c)

(i)

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

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

(d)

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

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

(e)

(i)

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

 (ii)

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

% of RSUs

NOI as a % of Budgeted NOI

Earned

0

%

80

%

100

%

 (iii)

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

in equal installments on each of the first four anniversaries of the date of grant, provided that the Executive is employed by the Company on such date, except as otherwise provided in this Agreement. All RSUs shall be settled in stock promptly after vesting, but in no event more than thirty (30) days after vesting.

(iv)

All rights with regard to unvested RSUs (including RSUs that have not yet been earned) shall, except to the extent otherwise provided in Section 6, terminate upon termination of the Executive’s employment with the Company. The annual grant of RSUs to the Executive may be increased at the recommendation, and with the approval, of the Committee, subject to share availability.

(v)

Upon the Company’s payment of a cash dividend in respect of its outstanding Company common stock, the Executive shall be credited with dividend equivalents in respect of each RSU outstanding on the record date for such dividend. Such dividend equivalents shall be equal to the dividend paid on an outstanding share of common stock and shall be credited as of the dividend payment date until the respective outstanding RSU becomes vested, at which time such dividend equivalent right shall be paid to the Executive, without interest, in cash.

together in good faith to amend this Agreement, and to structure any payment, benefit or other entitlement received by the Executive, in a manner that avoids imposition of such additional taxes, interest or penalties while preserving the affected payment, benefit or entitlement to the extent practicable and maintaining the basic financial provisions of this Agreement. For purposes of this Agreement, “Code” shall mean the Internal Revenue Code of 1986, as amended, and any reference to a particular section of the Code shall include any provision that modifies, replaces or supersedes such section.

(j)

If any merger, consolidation, reorganization, recapitalization, spin-off, split-up, combination, exchange of securities, modification of securities, share split, reverse share split, share dividend, other distribution of securities or other property in respect of shares or other securities, or other change in corporate structure or capitalization affecting the rights or value of securities of any class that is to be subject to an SAR grant under Section 3(d), or an RSU grant under Section 3(e)(i) (but only to the extent that the 100,000 share cap applies), occurs (i) on or after the Signing Date and (ii) on or before the date that such grant is awarded, then appropriate adjustment(s) shall be made in the number and/or kind of securities to be subject to such grant, so as to avoid dilution or enlargement of the rights, economic opportunity and value intended to be represented by such grant.

(k)

The Committee, or the Company, shall structure and administer all awards to the Executive under Section 3(b), 3(c), 3(d) and 3(e) hereof in such a manner as to preserve deductibility under Section 162(m) of the Code, provided that the Executive’s rights hereunder are not adversely affected.

(a)

The Executive shall be entitled to prompt reimbursement by the Company for all reasonable and customary travel and other business expenses he incurs in connection with carrying out his duties under this Agreement, in accordance with the general travel and business reimbursement policies then applying to senior executives of the Company generally. The Executive shall report all such expenditures not less frequently than monthly, accompanied by adequate records and such other documentary evidence as

required by the Company or by Federal or state tax statutes or regulations governing the substantiation of such expenditures.

(b)

As soon as practicable following the Commencement Date, the Company shall reimburse the Executive for all appropriately documented attorneys’ fees and other charges of counsel he incurred in entering into, and implementing, this Agreement, provided, however, that the amount reimbursed under this Section 5(b) shall not exceed $130,000.

6.

Termination of Employment

6.1

Death and Disability

(i)

Continued payment of the Base Salary, at the rate in effect as of the date his employment hereunder terminates (the “Termination Date”) and with payment at the times the Base Salary would have been paid in accordance with the Company’s normal payroll practices, for (x) in the case of termination due to death, ninety (90) days following the Termination Date or (y) in the case of termination due to Permanent Disability, through December 31, 2013 or, if the termination due to Permanent Disability is after December 31, 2013, through the end of the then scheduled Term; provided, however, that in the case of termination due to Permanent Disability, the Base Salary paid to the Executive for any month shall be offset by the amount of any gross periodic disability benefits (other than benefits attributable to his own unreimbursed contributions) that he receives during such month under any disability insurance plan or program of the Company or its Affiliates.

(ii)

A Pro-Rata Annual Bonus (as defined below), and a Pro-Rata Long Term Bonus (as defined below), for the calendar year of termination.

(iii)

Full vesting, as of the Termination Date, of all outstanding SARs, each such SAR to remain exercisable for at least the lesser of three years following the Termination Date and the remainder of its maximum stated term; full vesting, as of the Termination Date, of any outstanding RSU whose vesting is based solely on continued employment; full vesting of any outstanding RSU granted pursuant to Section 3(e)(ii) in the calendar year of termination or in the previous year, subject solely to satisfying the performance criteria governing such RSU; and full vesting, as of the Termination Date, of any other outstanding equity-based award (other than SARs and RSUs).

(iv)

In the event such termination of employment occurs prior to December 31, 2013, the payments described in Section 3(g)(i) and the lump sum payment described in Section 3(g)(ii), with the payments described in Section 3(g)(i) to be made at the times they would have been made if the Executive had been employed hereunder on December 31, 2013 and the lump sum payment described in Section 3(g)(ii) to be made within 30 days following the Termination Date.

(v)

The Executive and his dependents shall be entitled to continued participation for a period of thirty (30) months following the Termination Date (which shall be concurrent with any health care continuation benefits under COBRA), in all medical, dental, vision, prescription drug, hospitalization, life insurance, disability and other welfare benefit coverages and benefits in which they were participating as of such date, on terms and conditions that are no less favorable to them than those that applied as of such date.

(vi)

The benefits described in Section 6.6 below.