THE CONTINENTAL CORPORATION
Executive Termination Program
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ARTICLE I
The Continental Corporation has maintained a
policy of providing severance benefits to senior executives
of the Corporation in the event of the involuntary termi-
nation of their employment other than for cause or upon
retirement. The Corporation currently maintains The
Executive Severance Plan, that provides termination benefits
following a Change of Control. In order to help assure a
continuing dedication by senior executives to their duties
to the Corporation in the absence of a Change of Control,
the Board of Directors of the Corporation desires to codify
its current severance policy and its policies relating to
reductions in force as they would be applied to senior
executives and provide that such policies will not be
changed in a manner adverse to any Executive prior to
January 1, 1997.
ARTICLE II
Definitions
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2.1 "Board" means the Board of Directors of The
Continental Corporation.
2.2 "Change of Control" has the meaning given it by the
Executive Severance Plan.
2.3 "Committee means the Compensation Committee of the
Board.
2.4 "Corporation" means The Continental Corporation and
its successors and assigns and any corporation which
shall acquire substantially all of its assets.
2.5 "Deferred Retirement Date" means, with respect to an
Executive whose employment continues or is expected to
continue beyond his or her Normal Retirement Date, the
date specified by the Committee for purposes of this
Program on which such Executive's employment is
expected to terminate.
2.6 "Disability" means a disability qualifying an
Executive for benefits under the Long-Term Disability
Plan of the Corporation, whether or not he or she
participates therein.
2.7 "Executive" means a senior executive of the
Corporation who has been selected as at September 1,
1994 or thereafter by the Committee to participate in
the Executive Severance Plan.
2.8 "Executive Severance Plan" means The Executive
Severance Plan of The Continental Corporation,
effective January 1, 1988.
2.9 "Normal Retirement Date" means an Executive's normal
retirement date under the terms of The Retirement Plan
of The Continental Corporation or any successor
retirement plans.
2.10 "Program" means this Executive Termination Program of
the Corporation.
2.11 "Subsidiary" means any corporation in which the
Corporation owns, directly or indirectly, stock
possessing 50% or more of the total combined voting
power.
ARTICLE III
Effective Date and Eligibility
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3.1 This Program is effective September 1, 1994 and shall
continue in effect until terminated in accordance with
Article VI hereof.
3.2 An Executive shall be eligible to participate in this
Program upon his or her selection by the Committee and
such eligibility shall continue for the duration of
the Program.
ARTICLE IV
Compensation Upon Involuntary Termination
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4.1 In the event an Executive's employment with the
Corporation and its Subsidiaries is terminated
(a) by the Corporation prior to a Change in
Control other than (i) as a result of the
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Executive's willful misconduct in the performance
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of such Executive's duties as an employee, or
(ii) by reason of retirement at or after his or
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her Normal Retirement Date or Deferred Retirement
Date, if applicable, or (iii) by reason of
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Executive's Disability, or
(b) by the Executive prior to a Change in
Control following a reduction in (i) the
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Executive's grade level at the time such
Executive began participation in this Program by
more than one grade level or (ii) the Executive's
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base salary at the time such Executive began
participation in this Program by more than 15%,
the Corporation shall pay to such Executive an amount
equal to twice the greater of the annualized base pay
the Executive is receiving from the Corporation and
its Subsidiaries on (a) the date the Executive began
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participation in this Program, and (b) the date of
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such termination of Employment, provided that if the
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termination of such Executive's employment occurs
within the twenty-four month period prior to such
Executive's Normal Retirement Date (or Deferred
Retirement Date, if applicable), the amount payable
hereunder will be reduced to an amount that bears the
same relationship to such payment as the number of
whole months included in the period commencing on the
date of such termination and ending on such
Executive's Normal Retirement Date (or Deferred
Retirement Date) bears to twenty four.
ARTICLE V
Payment Obligation Absolute
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5.1 The Corporation's obligation to pay the Executive
hereunder shall be absolute and unconditional and
shall not be affected by any circumstances, including,
without limitation, any setoff, counterclaim,
recoupment, defense or other right which the
Corporation may have against him or her or anyone
else. The Executive shall not be required to mitigate
the amount of the payment provided herein by seeking
other employment or otherwise nor shall the amount of
a payment provided for herein be reduced by amounts
earned by the Executive from other employment or
otherwise. The amount payable hereunder shall be paid
without notice or demand. The payment hereunder by or
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on behalf of the Corporation shall be final and the
Corporation and its affiliates will not seek to
recover all or any part of such payment from the
Executive or from whomever.
ARTICLE VI
Amendment and Termination
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6.1 The Board may amend or terminate this Program only
from and after January 1, 1997, and only if all
Executives have been given advance written notice of
such action. Notwithstanding the foregoing, no such
amendment or termination shall relieve the Corporation
of its obligation to pay any amount which an Executive
theretofore became entitled to receive hereunder.
ARTICLE VII
Miscellaneous
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7.1 Effect on Other Benefits. Amounts that are vested
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benefits or that an Executive is otherwise entitled to
receive under any plan or program of the Corporation
or any of its Subsidiaries at or subsequent to the
date of his or her termination of employment will be
payable in accordance with such plan or program,
provided if the Executive becomes entitled to payment
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under the Executive Severance Plan, any amount paid
under this Program shall be deemed to be a Severance
Payment under the Executive Severance Plan and shall
reduce the amount otherwise due as a Severance Payment
under the Executive Severance Program by the amount
actually paid hereunder.
7.2 Withholding. The Corporation may withhold from any
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amounts payable under this Program such Federal, state
or local taxes as may be required to be withheld
pursuant to any applicable law or regulation.
7.3 Limited Effect. It is understood that no term or
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condition of this Program shall constitute or be
evidence of any understanding, express or implied, on
the part of the Corporation to employ any Executive
for any specific period.
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7.4 Inalienability of Interests. An Executive's interests
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under this Program are not subject to alienation,
assignment, garnishment, or execution of levy of any
kind, and any attempt to cause benefits to be so
subjected shall not be recognized. Notwithstanding
the foregoing, interests may be transferred by will or
by the laws of descent and distribution.
7.5 Facility of Payment. In the event that the Committee
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finds that, at the time a payment is due under this
Program, an Executive is unable to care for his or her
affairs because of illness or accident, or otherwise,
the Committee may direct that any such payment be paid
to his or her duly appointed legal representative, or
if there be no duly appointed legal representative, to
his or her spouse, child, parent or other blood
relative or to any person deemed by the Committee to
have incurred expense for his or her benefit, and any
such payment so made shall be a complete discharge of
the liabilities under this Program therefor.
7.6 Arbitration. Any dispute or controversy arising under
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or in connection with this Program shall be settled
exclusively by arbitration held in accordance with the
rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's
award in any court having jurisdiction. The
Corporation shall pay on a current basis all legal or
other professional fees and expenses incurred by any
Executive in connection with such arbitration
(regardless of the outcome thereof) and the entering
of such award.
7.7 Applicable law. The validity, interpretation,
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construction and performance of this Program shall be
governed by the laws of the State of New York without
reference to principles of conflicts of laws.
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