exv10w9







Exhibit 10.9




2009 INCENTIVE COMPENSATION AWARDS TO NAMED EXECUTIVE OFFICERS



On February 4, 2009, the Compensation Committee of Registrant’s Board of Directors approved grants
of Stock Appreciation Rights (SARs) to D. Craig Mense and Jonathan D. Kantor. The form of the award
letter and the award terms relating to the grants are respectively reproduced below as Appendix
A and Appendix B.



Also on February 4, 2009, the Compensation Committee of Registrant’s Board of Directors approved
the items described below with respect to the incentive compensation awards payable in 2009 to
Registrant’s Named Executive Officers for 2008.



(a) The Annual Incentive Bonus Plan (“AIB Plan”) amounts for 2008 that are payable in 2009 for
Stephen W. Lilienthal, D. Craig Mense, Michael Fusco, Larry A. Haefner, Jonathan D. Kantor and
James R. Lewis. The AIB Plan amounts are determined through a performance goal of Registrant’s net
operating income or payout formula that is a percentage of Registrant’s net operating income
achieved in a particular year, in this instance 2008.



(b) The 2008 performance year results for the Long-Term Incentive Cash Plan (“LTI Cash Plan”) and
the cash awards for the 2006-2008 LTI Cash Plan cycle pursuant to such results. The 2008
performance year results that were approved apply to the 2006-2008, 2007-2009 and 2008-2010 cycles
under the LTI Cash Plan. The form of the letter relating to such awards has not yet been finalized.



(c) The LTI Cash Plan awards for the 2009-2011 LTI Cash Plan cycle for D. Craig Mense and Jonathan
D. Kantor. The form of the award letter and award terms relating to such awards has not yet been
finalized.



(d) The AIB Plan opportunities for the 2009 performance year for D. Craig Mense and Jonathan D.
Kantor, determined through a performance goal of Registrant’s net operating income or payout
formula that is a percentage of Registrant’s net operating income achieved in 2009, payable in
2010.



(e) The net operating income goals for 2009 under the LTI Cash Plan for D. Craig Mense and Jonathan
D. Kantor, applicable to the 2007-2009, 2008-2010 and 2009-2011 LTI Cash Plan cycles. The LTI Cash
Plan potential bonus amounts are based upon Registrant’s net operating income over three year
cycles, with goals set for each calendar year within the three year cycle. Performance is
determined at the end of each calendar year and payouts are made at the end of the three year
cycle.



(f) The definition of net operating income for purposes of determining performance and bonus
payouts applicable to AIB Plan opportunities for 2009 and the 2009 LTI Cash Plan targets for the
2007-2009, 2008-2010 and 2009-2011 LTI Cash Plan cycles for D. Craig Mense and Jonathan D. Kantor.




 









 








Appendix A — Form of SARs Award Letter




February 6, 2009




Private and Confidential




	 	 	 	 	 
	 	 	 	 	 
	To: {Participant}

	 	Number of Stock SARs Granted

	 
	{No. of SARs}

	 
	 	 
	 
	 

	 	 	 	 	 
	Re: Grant of Stock Appreciation Rights paid in Stock

	 	Exercise Price

	 
	{Price}

	 
	 	 
	 
	 

	 	 	 	 	 
	 

	 	Grant Date

	 
	February 4, 2009

	 
	 	 
	 
	 

	 	 	 	 	 
	 

	 	Expiration Date

	 
	February 4, 2019

	 
	 	 
	 
	 

	 	 	 	 	 





The Compensation Committee (the “Committee”) of the Board of Directors of CNA Financial Corporation
(“Company”), which administers the CNA Financial Corporation 2000 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 February 4,
2009.



As described more fully in the attached Award Terms, the Stock SARs will become exercisable in four
equal annual installments on February 4th of 2010, 2011, 2012 and 2013 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 February 4, 2010 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


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Terms, the Award Terms will govern, and if discrepancies arise between the Award Terms and the Plan
document, the terms of the Plan document will govern.




Sincerely,




#####




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Appendix B — Form of SARs Award Terms




Stock Appreciation Rights Paid in Company Common Stock




Award Terms for Grant Under the CNA Financial Corporation 2000 Incentive Compensation Plan




          On February 4, 2009 (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 2000 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):



	 	 	 
	 	 	 
	 
	 
	DATE OF EXERCISABILITY APPLICABLE

	INSTALLMENT
	 
	TO INSTALLMENT

	 	 	 
	First quarter of Stock SARs

	 
	First anniversary of February 4, 2009

	 	 	 
	Second quarter of Stock SARs

	 
	Second anniversary of February 4, 2009

	 	 	 
	Third quarter of Stock SARs

	 
	Third anniversary of February 4, 2009

	 	 	 
	Fourth quarter of Stock SARs

	 
	Fourth anniversary of February 4, 2009

	 	 	 





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




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	 	 	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.
	 
	(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 document, on the other hand,
the terms of the Plan document 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 the
Participant (i) engages in any conduct which the Chief Executive Officer of the Company’s
insurance subsidiaries reasonably determines to be fraudulent, constitute willful malfeasance
or gross negligence, or be inconsistent with the dignity and character of an executive of the
Company, or
(ii) violates in a material manner the then current rules of professional conduct or human
resource




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	 	 	policies of the Company or any Affiliate. 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 Company, in its sole discretion based
on all available medical information, is expected to continue indefinitely and which renders
the Participant incapable of substantially performing of the services required of the
Participant by the Participant’s employer.
	 
	(f)	 	Retirement. Termination because of “Retirement” shall mean the Participant’s Date of
Termination 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.






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