Exhibit 10.11.2

     
(CNA LOGO) [c62207c6220702.gif]
     
333 South Wabash, 40-South, Chicago, IL 60604
  Thomas Pontarelli
 
  Executive Vice President &
 
       Chief Administration Officer
 
  Telephone 312-822-5291
 
  Facsimile 312-817-4030
 
  e-Mail      thomas.pontarelli@cna.com

March 31, 2010
Private and Confidential

To: {Participant}
Re: Grant of Stock Appreciation Rights paid in Stock

             
Number of Stock SARs Granted
    {No. of SARs}    
Exercise Price
    {Price}

   
Grant Date
    March 3, 2010

   
Expiration Date
    March 3, 2020

   

The Compensation Committee (the “Committee”) of the Board of Directors of CNA
Financial Corporation (“Company”), which administers the CNA Financial
Corporation Incentive Compensation Plan, as may be amended from time to time
(collectively, the “Plan”), has determined that you are eligible for a grant of
{No. of SARs} stock appreciation rights (the “Stock SARs”) paid in CNA Financial
Corporation common stock at {Price} per share (the “Exercise Price”). Each of
the Stock SARs entitles the eligible person to receive, at the time of exercise,
an amount equal to the difference between the fair market value of a single
share of the Company’s common stock on the date of exercise and the Exercise
Price, which may not be less than the fair market value of a single share of the
Company’s common stock on the date the right was granted, paid in shares of the
Company’s common stock. This Stock SARs award was granted by the Committee under
the Plan on March 3, 2010.
As described more fully in the attached Award Terms, the Stock SARs will become
exercisable in four equal annual installments on March 3rd of 2011, 2012, 2013
and 2014 so long as you are employed by Continental Casualty Company (“CCC”) or
an affiliate of CCC on each such date. For example, one quarter of the Stock
SARs granted will be exercisable on March 3, 2011 if you are an employee on that
date. In most instances, after the Stock SARs become vested, you may exercise
them any time prior to the expiration date shown above provided that you are
employed by CCC or an affiliate of CCC at the time of exercise. After exercising
the Stock SARs, you can decide whether to hold or sell the shares of Company
common stock you have obtained. Please note that the exercise of the Stock SARs
and any decision to sell the shares of Company common stock are subject to CNA’s
Securities Compliance Policy, certain trading window restrictions and applicable
insider trading restrictions, each as in effect from time to time.
Under the present tax laws, as a result of exercising the Stock SARs you will
potentially recognize taxable income at the time of exercise. When and if you
sell the shares of Company common stock acquired through the Stock SARs
exercise, any additional gain may be subject to further tax at capital gain
rates. The Company recommends that you consult with your own tax advisor to
determine the applicability of the tax rules to you in your individual
circumstances.
This Award Letter provides a summary of your Stock SARs, and the Award is
subject to the Award Terms enclosed with this Award Letter. (In the attached
Award Terms, you are referred to as the “Participant.”) This Award Letter shall
be subject to the Award Terms, and the Award Terms shall be subject to the
provisions of the Plan. If discrepancies arise between this Award Letter and the
Award Terms, the Award Terms will govern, and if discrepancies arise between the
Award Terms and the Plan, the terms of the Plan will govern.
Sincerely,
-s- Thomas Pontarelli [c62207c6220703.gif]

 

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Stock Appreciation Rights Paid in Company Common Stock
Award Terms for Grant Under the CNA Financial Corporation Incentive Compensation
Plan
          On March 3, 2010 (the “Grant Date”), CNA Financial Corporation (the
“Company”) granted to the Participant (as defined in Paragraph 1) certain stock
appreciation rights (individually, a “Stock SAR” and collectively, the “Stock
SARs”) paid in Company common stock. Each Stock SAR entitles the Participant to
receive, at the time of exercise, an amount equal to the difference between the
fair market value of a single share of the Company’s common stock on the date of
exercise and the Exercise Price (as defined in Paragraph 1), which may not be
less than the fair market value of a single share of the Company’s common stock
on the date the right was granted, paid in shares of Company common stock. All
Stock SARs grants shall be subject to the following terms and conditions (the
“Award Terms”):
          1. Stock SARs Award. For purposes of these Award Terms, the
“Participant” shall be the eligible person identified in the award letter
included with these Award Terms (the “Award Letter”) and reflecting the date of
grant of the Stock SARs that is the same as the Grant Date specified in these
Award Terms. For purposes of these Award Terms, the “Exercise Price” is the
price per share for such Stock SARs as specified in the Award Letter. The Stock
SARs have been granted under the CNA Financial Corporation Incentive
Compensation Plan, as may be amended from time to time (collectively, the
“Plan”), which is incorporated into and forms a part of these Award Terms.
Certain words, terms and phrases used in these Award Terms are defined in the
Plan (rather than in these Award Terms or Award Letter), and except where the
context clearly implies or indicates the contrary, and except as otherwise
provided in these Award Terms, a word, term, or phrase used or defined in the
Plan is similarly used or defined in these Award Terms and the Award Letter.
Other words, terms or phrases used in these Award Terms or the Award Letter are
defined in Paragraph 10 of these Award Terms or elsewhere in these Award Terms
or the Award Letter.
          2. Date of Exercise. Subject to the limitations of the Plan and these
Award Terms, each Stock SARs installment shall be exercisable on and after the
Date of Exercisability for such Installment as described in the following
schedule (but only if the Date of Termination has not occurred before the Date
of Exercisability):

              INSTALLMENT     DATE OF EXERCISABILITY APPLICABLE
TO INSTALLMENT     First quarter of Stock SARs     First anniversary of March 3,
2010     Second quarter of Stock SARs     Second anniversary of March 3, 2010  
  Third quarter of Stock SARs     Third anniversary of March 3, 2010     Fourth
quarter of Stock SARs     Fourth anniversary of March 3, 2010    

The Stock SARs may be exercised as provided for herein only as to that portion
of the Stock SARs that were exercisable (or became exercisable) immediately
prior to the Date of Termination, if any.

 

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          3. Expiration. The Stock SARs shall not be exercisable after the
Company’s close of business on the last business day that occurs prior to the
Expiration Date. The “Expiration Date” shall be earliest to occur of:

(a)  
Ten Years. The ten-year anniversary of the Grant Date.
  (b)  
Death or Disability. The one-year anniversary of such Date of Termination, if
the Participant’s termination of employment by Continental Casualty Company or
an Affiliate occurs by reason of the Participant’s death or the Participant’s
Permanent Disability.
  (c)  
Retirement. The three-year anniversary of such Date of Termination, if the
Participant’s termination of employment by Continental Casualty Company or an
Affiliate occurs by reason of the Participant’s Retirement (and not by reason of
death, Permanent Disability, or for Cause).
  (d)  
Cause. The Date of Termination, if the Participant’s termination occurs for
Cause.
  (e)  
Voluntary Resignation. The Date of Termination, if the Participant’s termination
of employment by Continental Casualty Company or an Affiliate occurs by reason
of the Participant’s voluntary resignation (and the termination is for reasons
other than as described in Paragraphs 3(b), (c), (d) or (f)); provided, however,
that the Compensation Committee of the Company’s Board of Directors (the
“Committee”), in its sole discretion, may provide for extension of the date
specified in this Paragraph 3(e), except that such extended date may not be
later than the earlier to occur of the 90 day anniversary of the Date of
Termination or the date specified in Paragraph 3(a).
  (f)  
Termination without Cause. The Date of Termination, if the Participant’s
termination of employment by Continental Casualty Company or an Affiliate occurs
by reason of termination of employment by the Participant’s employer for reasons
other than as described in Paragraphs 3(b), (c), or (d)); provided, however,
that the Committee, in its sole discretion, may provide for extension of the
date specified in this Paragraph 3(f), except that such extended date may not be
later than the earlier to occur of the one-year anniversary of the Date of
Termination or the date specified in Paragraph 3(a); and further provided that,
notwithstanding the provisions of Paragraph 3, the Committee may, in its sole
discretion, permit additional exercisability of the Stock SARs to be earned, if
any, during such extension period.

          4. Method of Exercise. The Stock SARs may be exercised in whole or in
part by sending a written notice to the Secretary of the Company at its
corporate headquarters before the Company’s close of business on the last
business day that occurs prior to the Expiration Date, or, if offered by the
Company at the Company’s discretion, by electing to exercise the Stock SARs
through a Company-arranged broker-dealer. Each exercise of the Stock SARs shall
be subject to the Award Letter, these Award Terms and the Plan, and also to the
following provisions:

(a)  
Any notice of exercise shall specify the number of the Stock SARs which the
Participant elects to exercise and the date(s) on which they were awarded and
vested.
  (b)  
Any gains realized upon the exercise of the Stock SARs will be paid in shares of
Company common stock. Except as otherwise provided by the Committee, before the
Stock SARs are exercised, the Participant will be required to remit to the
Company a sufficient portion of the sale proceeds to pay in either cash or
shares acquired through the exercise any tax withholding requirements resulting
from such exercise.

 

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(c)  
No Stock SARs shall be exercisable if and to the extent the Company determines
in its sole discretion that such exercise would be in violation of applicable
state or federal securities laws or the rules or regulations of any securities
exchange on which the shares of stock are traded. If the Company makes such a
determination, it shall use reasonable efforts to obtain compliance with such
laws, rules or regulations. In making any determination hereunder, the Company
may rely on the opinion of counsel for the Company.

          5. Administration. The authority to manage and control the operation
and administration of these Award Terms shall be vested in the Committee, and
the Committee shall have all such powers with respect to these Award Terms as it
has with respect to the Plan. Any interpretation of these Award Terms by the
Committee and any decision made by it with respect to these Award Terms is final
and binding on the Company and the Participant. These Award Terms may be
subsequently modified at the discretion of the Company based on subsequent
regulatory, tax, or legal developments, as interpreted by the Company.
          6. Fractional Shares. Any gains realized upon exercise of Stock SARs
will be paid in shares of Company common stock, in whole or fractional shares,
as determined by the Company to be appropriate and as approved by the Committee.
          7. No Rights as Shareholder. The Participant shall not have any rights
of a shareholder with respect to the Stock SARs issued unless and until a
certificate for such shares has been duly issued by the Company following
exercise of the Stock SARs as provided in these Award Terms.
          8. Governing Documents. The Award Letter shall be subject to these
Award Terms, and these Award Terms shall be subject to the provisions of the
Plan, a copy of which may be obtained by the Participant from the office of the
Secretary of the Company. If discrepancies arise between the Award Letter and
these Award Terms, on the one hand, and the Plan, on the other hand, the terms
of the Plan will govern. These Award Terms are subject to all interpretations,
amendments, rules, and regulations promulgated by the Committee from time to
time pursuant to the Plan.
          9. Amendment. These Award Terms may be amended by written agreement of
the Participant and the Company, without the consent of any other person, except
that any such amendment shall be subject to the approval of the Committee.
          10. Definitions. For purposes of these Award Terms, the following
definitions shall apply:

(a)  
Affiliate. The term “Affiliate” means any business or entity in which at any
relevant time the Company holds directly or indirectly a greater than a 10%
equity (voting or non-voting) interest.
  (b)  
Cause. The Participant will have engaged in conduct that constitutes “Cause” if,
as determined by the Committee, the Participant engages in: (i) any act or
omission involving theft, malfeasance, gross negligence, fraud, dishonesty,
moral turpitude, unlawful conduct, unethical conduct or breach of fiduciary
duty; (ii) willful or reckless material misconduct in the performance of the
Participant’s duties, any act that violates, in any material respect, any
written policy or procedure of the Company or any Affiliate or any conduct that
results in adverse publicity or harm to the business or reputation of the
Company or any Affiliate; or (iii) habitual neglect of duties; provided,
however, that for purposes of clauses (ii) and (iii), Cause shall not include
any one or more of the following: bad judgment, negligence or any act or
omission believed by the Participant in good faith to have been in, or not
opposed to, the best interests of the Company (without intent of the Participant
to gain, directly or indirectly, a profit to which the Participant was not
legally entitled). A Participant who agrees to resign from his or her
affiliation with the Company or any Affiliate in lieu of being terminated for
Cause may be

 

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deemed to have been terminated for Cause for purposes of this Paragraph 10(b).
If the Participant has entered into an employment contract with the Company or
any Affiliate and “Cause” is defined in such contract, then “Cause” for purposes
of these Award Terms shall be as defined in such contract in lieu of the
definition in the immediately prior sentence.
  (c)  
Date of Exercisability. The Participant’s “Date of Exercisability” is the date
on which the specified amount of Stock SARs are first able to be exercised as
provided for in Paragraph 2 of these Award Terms.
  (d)  
Date of Termination. The Participant’s “Date of Termination” shall be the first
day occurring on or after the Grant Date on which the Participant is not
employed by Continental Casualty Company or an Affiliate, regardless of the
reason for the termination of employment; provided that a termination of
employment shall not be deemed to occur by reason of a transfer of the
Participant’s employment between Continental Casualty Company and an Affiliate
or between two Affiliates; and further provided that the Participant’s
employment shall not be considered terminated while the Participant is on a
leave of absence from Continental Casualty Company or an Affiliate if such leave
has been approved by the Participant’s employer. If, as a result of a sale or
other transaction, the Participant’s employer ceases to be an Affiliate (and the
Participant’s employer is or becomes an entity that is not an Affiliate), the
occurrence of such transaction shall be treated as the Participant’s Date of
Termination caused by the Participant being discharged by the employer.
  (e)  
Permanent Disability. The term “Permanent Disability” means a physical or mental
condition of the Participant which, as determined by the Committee, in its sole
discretion based on all available medical information, would qualify the
Participant for benefits under the Company’s long-term disability plan as in
effect when the determination is made (ignoring the requirements of any waiting
period) if the Participant were a participant in such plan (whether or not the
Participant actually participates therein). Notwithstanding the foregoing, if
the Company has no long-term disability plan, “Permanent Disability” means a
physical or mental condition of the Participant which, as determined by the
Committee in its sole discretion based on all available medical information, is
expected to continue indefinitely and which renders the Participant incapable of
performing any substantial portion of the service required by his or her
employer.
  (f)  
Retirement. Termination because of “Retirement” shall mean the Participant’s
Date of Termination due to the Participant’s cessation in providing services to
the Company or any Affiliate (for any reason other than death, Permanent
Disability or Cause) at or after attainment of age 62 or, if earlier, the
Participant’s Date of Termination which is designated by the Committee as a
“Retirement” for purposes of these Award Terms.