Document:

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.

- 7 -exv10w10

Exhibit 10.10

AWARD LETTER AND AWARD TERMS TO THOMAS F. MOTAMED FOR STOCK 

APPRECIATION RIGHTS AND RESTRICTED STOCK UNITS

Appendix A — Award Letter for SARs

January 9, 2009

Private and Confidential

	 	 	 	 	 
	To: Thomas Motamed 	 	 

	 
	 

	 	 
	 	 	 
	 	 
	Number of Stock SARs Granted

	 
	80,000

	 	 
	 	 	 
	Re: Grant of Stock Appreciation Rights Paid in Stock 	 	Exercise Price

	 
	$16.50

	 	 
	 	 	 
	 	 	Grant Date

	 
	January 2, 2009

	 	 
	 	 	 
	 	 	Expiration Date

	 
	January 2, 2019

	 	 
	 	 	 
	 

In accordance with the terms of your Employment Agreement, dated May 22, 2008, as amended October
24, 2008 and any other amendment subsequently agreed to by you and CNA Financial Corporation
(collectively, the “Employment Agreement”), you have been granted 80,000 Stock Appreciation Rights
(individually, a “Stock SAR” and collectively, the “Stock SARs”) pursuant to the CNA Financial
Corporation 2000 Incentive Compensation Plan, as may be amended from time to time (the “Plan”) paid
in CNA Financial Corporation (“Company”) common stock with an exercise price of $16.50 per share
(the “Exercise Price”). Each Stock SAR 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 appreciation rights award was
granted under the Plan on January 2, 2009.

As described more fully in the attached Award Terms, the Stock SARs will become exercisable in four
equal annual installments on January 2, 2010, January 2, 2011, January 2, 2012, and January 2, 2013
so long as you are employed by the Company on each such date. For example, one quarter of the Stock
SARs granted will be exercisable on January 2, 2010, if you are an employee on that date. In most
instances, after the Stock SARs become exercisable generally you may exercise them any time prior
to the expiration date shown above provided that you are employed by the Company at the time of
exercise. In addition, the Stock SARs will vest and be exercisable for three years (or until the
Expiration Date) if your employment is terminated under certain circumstances and upon a Change in
Control (as defined in Section 16 of the Employment Agreement). After exercising the Stock SARs,
you can decide whether to hold or sell the shares of Company common stock you have obtained,
subject to CNA’s Securities Compliance Policy and applicable insider trading restrictions.

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 the awards granted 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 document, the terms of the Plan document will govern.

Sincerely,

/s/ Thomas Pontarelli

 

 

 

Appendix B — Award Terms for SARs

Award Terms

Stock Appreciation Rights Paid in Company Common Stock Terms for Grant Under the

CNA Financial Corporation 2000 Incentive Compensation Plan

     On January 2, 2009 (the “Grant Date”), CNA Financial Corporation (the “Company”) granted to
the Participant certain Stock Appreciation Rights (individually, a “Stock SAR” and collectively,
the “Stock SARs”) paid in Company common stock. Each Stock SAR 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 CNA Financial Corporation common stock. All
Stock SAR grants shall be subject to the following terms (sometimes referred to as 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 (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 the Award Letter), and except where the context clearly implies or indicates
to 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 11 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 Termination Date has not
occurred before the Date of Exercisability):

	 	 	 
	 	 	 
	INSTALLMENT
	 
	DATE OF EXERCISABILITY APPLICABLE TO INSTALLMENT

	 	 	 
	First quarter of Stock SARs

	 
	January 2, 2010

	 	 	 
	Second quarter of Stock SARs

	 
	January 2, 2011

	 	 	 
	Third quarter of Stock SARs

	 
	January 2, 2012

	 	 	 
	Fourth quarter of Stock SARs

	 
	January 2, 2013

	 	 	 

2

 

Notwithstanding the foregoing, 100% of the Stock SARs shall be immediately vested and exercisable
(a) on the Termination Date, if the Participant’s employment is terminated pursuant to Section 3(b)
or 3(e) of these Award Terms; provided that in the case of a termination pursuant to Section 3(e)
the Participant executes and does not revoke the Release described in the Employment Agreement
within the time period provided therein, or (b) upon a Change in Control, as defined in Section 16
of the Employment Agreement.

     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 lesser of three years following the Termination Date or the
remainder of the Stock SARs maximum stated term, if the Participant’s termination of
employment by the Company occurs by reason of the Participant’s death or the Participant’s
Permanent Disability.
	 
	(c)	 	Cause. The lesser of ninety days following the Termination Date or the remainder of
the Stock SARs maximum stated term, if the Participant’s termination occurs by reason of
Cause, as defined in and determined under the Employment Agreement.
	 
	(d)	 	Voluntary Resignation. The lesser of ninety days following the Termination Date or
the remainder of the Stock SARs maximum stated term, if the Participant’s termination of
employment by the Company occurs by reason of the Participant’s voluntary resignation (and the
termination is for reasons other than as described in Paragraphs 3(b), (c) or (e) of these
Award Terms).
	 
	(e)	 	Termination without Cause/Resignation for Good Reason. The lesser of three years
following the Termination Date or the remainder of the Stock SARs maximum stated term, if the
Participant’s termination of employment by the Company occurs by reason of termination of
employment by the Participant’s employer for reasons other than death, Permanent Disability or
Cause, or the Participant resigns for Good Reason, as such terms are defined in and determined
under the Employment Agreement (and the termination is for reasons other than as described in
Paragraphs 3(b), (c), or (d) of these Award Terms); provided, that the Participant executes
and does not revoke the Release described in the Employment Agreement within the time period
provided therein.

     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 Stock SARs which the Participant

elects to exercise and the date(s) on which they were awarded and vested.

	(b)	 	Any gains realized upon exercise of Stock SARs will be paid in shares of Company common
stock. Except as otherwise provided by the Compensation Committee of the Company’s Board of
Directors (“Committee”), before the Stock SARs are exercised the Participant will be required
to remit to the Company a sufficient portion of the 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. Notwithstanding anything
elsewhere to the contrary,

3

 

	 	 	if the Expiration Date occurs pursuant to Paragraphs 3(b), 3(d) or
3(e) of these Award Terms, no Stock SARs shall expire until thirty (30) days after the
resolution of any impediment to exercise that arises under this Paragraph 4(c).

     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
interpretations of these Award Terms by the Committee and any decisions made by it with respect to
these Award Terms are final and binding on the Company and the Participant except to the extent
provided in Paragraph 8 of these Award Terms. These Award Terms may be modified by the Company in
the event subsequent regulatory, tax, or legal developments require any such modification, provided
that any such modification shall have minimum economic effect on these Award Terms.

     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 herein.

     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
these Award Terms and the Plan, 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. Notwithstanding anything in these Award Terms to the contrary, in the
event of any conflict between the Award Letter, these Award Terms, or the Plan, on the one hand,
and the Employment Agreement, on the other hand, the Employment Agreement shall control:

	(a)	 	unless the Participant otherwise agrees in a writing that expressly refers to the provision
of the Employment Agreement whose control he is waiving;

	(b)	 	except as expressly provided in Section 3.2 (other than the provisions of (x) Section

3.2(a) and (y) Section 3.2(c) to the extent that such provision authorizes the Committee to
determine whether the Termination of Affiliation is for Cause or other reason, which
determination shall continue to be governed by the Employment Agreement), Section 4.2,
Article 13 (to the extent any deferral is required to insure deductibility under Section
162(m) of the Code (provided, however, that no such deferral shall be required if it would
violate Section 409A of the Code)), Section 16.1, Article 17, Section 18.4 or Section 18.5
of the Plan; or

	(c)	 	except as expressly provided in Paragraphs 4(b), 4(c), 5, 8, 9 or 10 of these Award Terms.

     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. Arbitration/Beneficiaries/References. Any Claim, as such term is defined in
Section 11 of the Employment Agreement, arising out of or relating to the Award Letter or these
Award Terms shall be resolved by binding confidential arbitration in accordance with Section 24 of
the Employment Agreement. In the event of the earliest to occur of (a) the Participant’s death,
(b) a judicial determination of the Participant’s incompetence, or (c) the Participant’s Permanent
Disability arising from a mental incapacity, references to the Participant in the Award Letter,
these Award Terms and the Plan shall be deemed, where appropriate, to refer to his beneficiary,
estate, or other legal representative.

     11. Definitions. For purposes of these Award Terms, the following definitions shall
apply:

4

 

	(a)	 	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.

	(b)	 	Employment Agreement. The Employment Agreement shall mean that certain Employment
Agreement, dated May 22, 2008, between the Participant and the Company, as amended by the
First Amendment thereto, dated October 24, 2008, and any other amendment subsequently agreed
to by the Participant and the Company.

	(c)	 	Permanent Disability. The term “Permanent Disability” shall mean that the
Participant has been unable, due to physical or mental incapacity, to substantially perform
his duties and responsibilities under the Employment Agreement for 180 days out of any 270
consecutive days.

	(d)	 	Termination Date. The Participant’s “Termination Date” shall have the meaning set
forth in the Employment Agreement.
	 

 

5

 

Appendix C —Award Letter for Time Vested RSUs

January 9, 2009

Private and Confidential

To: Thomas Motamed

	 	 	 	 	 
	 	 
	 	 	 
	 	 	Number of Restricted

Stock Units Granted

	 
	130,464

	 	 
	 	 	 
	Re: Grant of Restricted Stock Units — Time Vested 	 	Grant Date

	 
	January 2, 2009

	 	 
	 	 	 

In accordance with the terms of your Employment Agreement, dated May 22, 2008, as amended October
24, 2008, as such may be further amended from time to time (collectively, the “Employment
Agreement”), you have been granted 130,464 Restricted Stock Units (individually, an “RSU” and
collectively, the “RSUs”) of CNA Financial Corporation (“Company”), pursuant to the terms of the
CNA Financial Corporation 2000 Incentive Compensation Plan, as may be amended from time to time
(the “Plan”), each of which represents the right to receive one share of Company common stock,
subject to the terms set forth herein. This RSU award was granted under the Plan on January 2,
2009.

As described more fully in the attached Award Terms, the RSUs will become vested in four equal
annual installments on each of the first four anniversaries of the Grant Date so long as you are
employed by the Company on each such date. For example, one quarter of the RSUs granted will be
vested on January 2, 2010 if you are an employee on that date. In addition, the RSUs will vest if
your employment is terminated under certain circumstances and upon a Change in Control (as defined
in Section 16 of the Employment Agreement). After the RSUs vest, one share of Company common stock
will be transferred to you for each RSU that is earned, and you can decide whether to hold or sell
the shares of Company common stock you have obtained, subject to CNA’s Securities Compliance Policy
and applicable insider trading restrictions.

Under the present tax laws, you will potentially recognize taxable income equal to the value of the
Company common stock at the time it is transferred to you, even if you do not sell the stock. When
and if you sell the shares of Company common stock acquired through the RSUs, 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 the awards granted to you
in your individual circumstances.

This Award Letter provides a summary of your RSUs, 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

 

6

 

Appendix D — Award Terms for Time Vested RSUs

Award Terms

Restricted Stock Unit Award Terms for Time-Vested Grant Under the

CNA Financial Corporation 2000 Incentive Compensation Plan

     On January 2, 2009 (the “Grant Date”), CNA Financial Corporation (the “Company”) granted to
the Participant certain Restricted Stock Units (individually, an “RSU” and collectively, the
“RSUs”) payable in shares of Company common stock. Each RSU constitutes a contractual right that
entitles the eligible person to receive, at the time the right vests as hereinafter provided, one
share of the Company’s common stock. All RSU grants shall be subject to the following terms
(sometimes referred to as the “Award Terms”):

     1. RSUs 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 RSUs that is the same as the Grant Date specified in these
Award Terms. The RSUs have been granted under the CNA Financial Corporation 2000 Incentive
Compensation Plan, as may be amended from time to time (the “Plan”), which is incorporated into and
forms a part of these Award Terms, and shall constitute Deferred Shares, as defined in Section 10.2
of the Plan. 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 12 of these Award Terms or elsewhere in these Award Terms or the Award Letter.

     2. Vesting. Subject to the limitations of the Plan and these Award Terms, each
installment of the RSUs shall be vested, and no longer subject to forfeiture if the Participant’s
employment is terminated, on and after the Vesting Date for such installment as described in the
following schedule (but only if the Termination Date has not occurred before the Vesting Date):

	 	 	 
	 	 	 
	INSTALLMENT
	 
	VESTING
DATE APPLICABLE TO INSTALLMENT

	 	 	 
	First quarter of RSUs

	 
	January 2, 2010

	 	 	 
	Second quarter of RSUs

	 
	January 2, 2011

	 	 	 
	Third quarter of RSUs

	 
	January 2, 2012

	 	 	 
	Fourth quarter of RSUs

	 
	January 2, 2013

	 	 	 

     3. Termination of Employment. All of the RSUs that have not yet vested shall expire
and be forfeited, and the Participant shall have no further rights with respect to such RSUs, if
the Termination Date occurs prior to the Vesting Date with respect to such RSUs, except as
hereinafter provided. Notwithstanding the foregoing, all outstanding RSUs that have not previously
vested shall vest if:

	(a)	 	The Participant’s employment is terminated by reason of his death or Permanent Disability, in
which event the Termination Date shall be the Vesting Date for purposes of Paragraph 2; or

	(b)	 	The Participant is terminated by the Company without Cause, or resigns for Good Reason, in
each case as defined in and determined under the Employment Agreement, in which event the
Termination Date shall be the Vesting Date for purposes of Paragraph 2, provided that the
Participant executes and does not revoke the Release described in the Employment Agreement
within the time period provided therein.

     4. Change in Control. All of the RSUs that have not previously vested shall vest
upon a Change in Control, as defined in Section 16 of the Employment Agreement.

7

 

     5. Transfer of Stock in Settlement of RSUs. As soon as practical, but in no event
more than thirty (30) days after each Vesting Date, whether such Vesting Date occurs pursuant to

Paragraphs 2, 3 or 4, one share of common stock of the Company shall be transferred to the
Participant in full settlement of the Participant’s rights with respect to each RSU that vested on
such Vesting Date.

     6. Dividend Equivalent Payments. In the event that the Company declares any dividend
payable in cash to the holders of its common stock before the Vesting Date with respect to any of
the RSUs (or after the Vesting Date but before shares of stock have been transferred to the
Participant in settlement of the RSUs), the Participant shall be entitled to receive a payment of
additional compensation equal to the dividends he would have received if he had owned a number of
shares of common stock equal to the number of unvested or unsettled RSUs. Such dividend equivalent
payments shall be paid to the Participant, without interest, at the same time that the applicable
RSUs are transferred to him pursuant to Paragraph 5, and if the RSUs expire without vesting the
Participant’s right to the dividend equivalent payments shall also be forfeited.

     7. Administration. The authority to manage and control the operation and
administration of these Award Terms shall be vested in the Compensation Committee of the Company’s
Board of Directors (“Committee”), and the Committee shall have all such powers with respect to
these Award Terms as it has with respect to the Plan. Any interpretations of these Award Terms by
the Committee and any decisions made by it with respect to these Award Terms are final and binding
on the Company and the Participant except to the extent provided in Paragraph 9 of these Award
Terms. These Award Terms may be modified by the Company in the event subsequent regulatory, tax, or
legal developments require any such modification, provided that any such modification shall have
minimum economic effect on these Award Terms.

     8. No Rights As Shareholder. The Participant shall not have any rights of a
shareholder with respect to the RSUs issued unless and until a certificate for the shares of common
stock has been duly issued by the Company following vesting of the RSUs as provided herein.

     9. 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
these Award Terms and the Plan, 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. Notwithstanding anything in these Award Terms to the contrary, in the
event of any conflict between the Award Letter, these Award Terms, or the Plan, on the one hand,
and the Employment Agreement, on the other hand, the Employment Agreement shall control:

	(a)	 	unless the Participant otherwise agrees in a writing that expressly refers to the provision
of the Employment Agreement whose control he is waiving;

	(b)	 	except as expressly provided in Section 3.2 (other than the provisions of (x) Section 3.2(a)
and (y) Section 3.2(c) to the extent that such provision authorizes the Committee to determine
whether the Termination of Affiliation is for Cause or other reason, which determination shall
continue to be governed by the Employment Agreement), Section 4.2, Article 13 (to the extent
any deferral is required to insure deductibility under Section 162(m) of the Code (provided,
however, that no such deferral shall be required if it would violate Section 409A of the
Code)), Section 16.1, Article 17, Section 18.4 or Section 18.5 of the Plan; or
	 
	(c)	 	except as expressly provided in Paragraphs 7, 9, 10 or 11 of these Award Terms.

     10. 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.

     11. Arbitration/Beneficiaries/References. Any Claim, as such term is defined in
Section 11 of the Employment Agreement, arising out of or relating to the Award Letter or these
Award Terms shall be

8

 

resolved by binding confidential arbitration in accordance with Section 24 of
the Employment Agreement. In the event of the earliest to occur of (a) the Participant’s death,
(b) a judicial determination of the Participant’s incompetence, or (c) the Participant’s Permanent
Disability arising from a mental incapacity, references to the Participant in the Award Letter,
these Award Terms and the Plan shall be deemed, where appropriate, to refer to his beneficiary,
estate, or other legal representative.

     12. Definitions. For purposes of these Award Terms, the following definitions shall
apply:

	(a)	 	Employment Agreement. The Employment Agreement shall mean that certain Employment
Agreement, dated May 22, 2008, between the Participant and the Company, as amended by the
First Amendment thereto dated October 24, 2008, and any other amendment subsequently agreed to
by the Participant and the Company.

	(b)	 	Vesting Date. The Participant’s “Vesting Date” is the date on which the specified
amount of RSUs are vested as provided for in Paragraphs 2, 3 or 4 of these Award Terms.

	(c)	 	Termination Date. The Participant’s “Termination Date” shall have the meaning set
forth in the Employment Agreement.

	(d)	 	Permanent Disability. The term “Permanent Disability” shall mean that the
Participant has been unable, due to physical or mental incapacity, to substantially perform
his duties and responsibilities under the Employment Agreement for 180 days out of any 270
consecutive days.
	 

  

9

 

Appendix E — Award Letter for Performance Based RSUs

February 19, 2009

Private and Confidential

To: Thomas Motamed

	 	 	 	 	 
	 	 
	 	 	 
	 	 	Number of Restricted
Stock Units Granted

	 
	208,160

	 	 
	 	 	 
	Re: Grant of Restricted Stock Units — Performance Based 	 	Grant Date

	 
	February 4, 2009

	 	 
	 	 	 

In accordance with the terms of your Employment Agreement, dated May 22, 2008, as amended October
24, 2008, as such may be further amended from time to time (collectively, the “Employment
Agreement”), you have been granted 208,160 Restricted Stock Units (individually, an “RSU” and
collectively, the “RSUs”) of CNA Financial Corporation (“Company”), pursuant to the terms of the
CNA Financial Corporation 2000 Incentive Compensation Plan, as may be amended from time to time
(the “Plan”), each of which represents the right to receive one share of Company common stock,
subject to the terms set forth herein. This RSU award was granted under the Plan on February 4,
2009.

As described more fully in the attached Award Terms, the number of RSUs that are earned will be
based on the extent to which the Company achieves its budgeted Net Operating Income (“NOI”) for the
year, and the RSUs, to the extent earned, will become vested in four equal annual installments on
each of the first four anniversaries of the Grant Date so long as you are employed by the Company
on each such date. For example, one quarter of the RSUs granted (to the extent earned) will be
vested on February 4, 2010 if you are an employee on that date. In addition, the RSUs (to the
extent earned) will vest if your employment is terminated under certain circumstances and upon a
Change in Control (as defined in Section 16 of the Employment Agreement). After the RSUs vest, one
share of Company common stock will be transferred to you for each RSU that is earned, and you can
decide whether to hold or sell the shares of Company common stock you have obtained, subject to
CNA’s Securities Compliance Policy and applicable insider trading restrictions.

Under the present tax laws, you will potentially recognize taxable income equal to the value of the
Company common stock at the time it is transferred to you, even if you do not sell the stock. When
and if you sell the shares of Company common stock acquired through the RSUs, 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 the awards granted to you
in your individual circumstances.

This Award Letter provides a summary of your RSUs, 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

 

  

10

 

Appendix F — Award Terms for Performance Based RSUs

Award Terms

Restricted Stock Unit Award Terms for Performance Based 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 certain Restricted Stock Units (individually, an “RSU” and collectively, the
“RSUs”) payable in shares of Company common stock. Each RSU constitutes a contractual right that
entitles the eligible person to receive, at the time the right vests as hereinafter provided, one
share of the Company’s common stock. All RSU grants shall be subject to the following terms
(sometimes referred to as the “Award Terms”):

     1. RSUs 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 RSUs that is the same as the Grant Date specified in these
Award Terms. The RSUs have been granted under the CNA Financial Corporation 2000 Incentive
Compensation Plan, as may be amended from time to time (the “Plan”), which is incorporated into and
forms a part of these Award Terms, and shall constitute Deferred Shares as defined in Section 10.2
of the Plan. 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 12 of these Award Terms or elsewhere in these Award Terms or
the Award Letter.

     2. Satisfaction of Performance Criteria. The RSUs shall be earned if, and only if,
the Company’s NOI for the year that includes the Grant Date is at least equal to 50% of the
Budgeted NOI for such year. For purposes of these Award Terms, “NOI” and “Budgeted NOI” shall have
the meanings set forth in the Employment Agreement. If the NOI is equal to at least 50%, but not
more than 100%, of the Budgeted NOI for the year, 80% of the RSUs (and 80% of each installment for
purposes of Paragraph 3) shall be earned. If the NOI is greater than 100% of the Budgeted NOI,
100% of the RSUs shall be earned (and 100% of each installment for purposes of Paragraph 3). If
fewer than 100% of the RSUs are earned, the portion of the RSUs that are not earned shall be
forfeited and the Participant shall have no further rights with respect to such unearned RSUs, and
all provisions hereof that relate to the vesting and settlement of RSUs shall apply only to the
earned portion. The Compensation Committee of the Company’s Board of Directors (“Committee”) shall
determine the extent to which the RSUs are earned in accordance with Article XI of the Plan as if
the RSUs were Performance Bonus Awards as defined therein, and the requirements of Section 162(m)
of the Internal Revenue Code, except that the Committee shall not have the authority to use
negative discretion to reduce the number of RSUs that are earned.

     3. Vesting. Subject to the limitations of the Plan and these Award Terms, each
installment of RSUs, to the extent earned, shall be vested, and no longer subject to forfeiture if
the Participant’s employment is terminated, on and after the Vesting Date for such installment as
described in the following schedule (but only if the Termination Date has not occurred before the
Vesting Date):

	 	 	 
	 	 	 
	INSTALLMENT
	 
	VESTING DATE APPLICABLE TO INSTALLMENT

	 	 	 
	First quarter of earned RSUs

	 
	February 4, 2010

	 	 	 
	Second quarter of earned RSUs

	 
	February 4, 2011

	 	 	 
	Third quarter of earned RSUs

	 
	February 4, 2012

	 	 	 
	Fourth quarter of earned RSUs

	 
	February 4, 2013

	 	 	 

11

 

     4. Termination of Employment. All of the RSUs that have not yet vested shall expire
and be forfeited, and the Participant shall have no further rights with respect to such RSUs, if
the Termination Date occurs prior to the Vesting Date with respect to such RSUs, except as
hereinafter provided. Notwithstanding the foregoing, all outstanding RSUs (to the extent earned)
that have not previously vested shall vest if:

	(a)	 	The Participant’s employment is terminated, either during the year that includes the Grant
Date or the following year, by reason of his death or Permanent Disability, in which event the
Termination Date shall be the Vesting Date for purposes of Paragraph 3;

	(b)	 	The Participant is terminated by the Company without Cause, or resigns for Good Reason, as
both such terms are defined in and determined under the Employment Agreement, in either case
either during the year that includes the Grant Date or the
following year, in which event the Termination Date shall be the Vesting Date for purposes
of Paragraph 3, provided that the Participant executes and does not revoke the Release
described in the Employment Agreement within the time period provided therein; or

	(c)	 	There is a Change in Control, as defined in Section 16 of the Employment Agreement, in which
event the date on which the Change in Control occurs shall be the Vesting Date for purposes of
Paragraph 3.

     5. Transfer of Stock in Settlement of RSUs. As soon as practical, but in no event
more than thirty (30) days after each Vesting Date, whether such Vesting Date occurs pursuant to
Paragraph 3 or Paragraph 4, one share of common stock of the Company shall be transferred to the
Participant in full settlement of the Participant’s rights with respect to each RSU that vested on
such Vesting Date. Notwithstanding the foregoing, if on the Vesting Date the Committee has not yet
determined the extent to which the RSUs have been earned, the shares, to the extent earned, shall
be transferred to the Participant not more than thirty (30) days after the Committee makes its
determination, but in no event later than the last day of the year following the year that includes
the Grant Date; provided that if the Vesting Date occurs during the year that includes the Grant
Date by reason of a termination of employment pursuant to Paragraph 4(b), then the transfer shall
be deferred to the first business day that is at least six months after the Participant has
incurred a separation from service as defined in Section 409A of the Internal Revenue Code.

     6. Dividend Equivalent Payments. In the event that the Company declares any dividend
payable in cash to the holders of its common stock before the Vesting Date with respect to any of
the RSUs (or after the Vesting Date but before shares of stock have been transferred to the
Participant in settlement of the RSUs), the Participant shall be entitled to receive a payment of
additional compensation equal to the dividends he would have received if he had owned a number of
shares of common stock equal to the number of unvested or unsettled RSUs. Such dividend equivalent
payments shall be paid to the Participant, without interest, at the same time that the applicable
RSUs are transferred to him pursuant to Paragraph 5, and if the RSUs expire without vesting the
Participant’s right to the dividend equivalent payments shall also be forfeited.

     7. 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
interpretations of these Award Terms by the Committee and any decisions made by it with respect to
these Award Terms are final and binding on the Company and the Participant except to the extent
provided in Paragraph 9 of these Award Terms. These Award Terms may be modified by the Company in
the event subsequent regulatory, tax, or legal developments require any such modification, provided
that any such modification shall have minimum economic effect on these Award Terms.

     8. No Rights As Shareholder. The Participant shall not have any rights of a
shareholder with respect to the RSUs issued unless and until a certificate for the shares of common
stock has been duly issued by the Company following vesting of the RSUs as provided herein.

     9. 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 
12

 

Participant from the office of the Secretary of the Company. If discrepancies arise between
these Award Terms and the Plan, 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. Notwithstanding anything in these Award

Terms to the contrary, in the event of any conflict between the Award Letter, these Award Terms, or
the Plan, on the one hand, and the Employment Agreement, on the other hand, the Employment
Agreement shall control:

	(a)	 	unless the Participant otherwise agrees in a writing that expressly refers to the provision
of the Employment Agreement whose control he is waiving;

	(b)	 	except as expressly provided in Section 3.2 (other than the provisions of (x) Section 3.2(a)
and (y) Section 3.2(c) to the extent that such provision authorizes the Committee to determine
whether the Termination of Affiliation is for Cause or other reason, which determination shall
continue to be governed by the Employment Agreement), Section 4.2, Article 13 (to the extent
any deferral is required to insure deductibility under Section 162(m) of the Code (provided,
however, that no such deferral shall be required if it would violate Section 409A of the
Code)), Section 16.1, Article 17, Section 18.4 or Section 18.5 of the Plan; or

	(c)	 	except as expressly provided in Paragraphs 7, 9, 10 or 11 of these Award Terms.

     10. 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.

     11. Arbitration/Beneficiaries/References. Any Claim, as such term is defined in
Section 11 of the Employment Agreement, arising out of or relating to the Award Letter or these
Award Terms shall be resolved by binding confidential arbitration in accordance with Section 24 of
the Employment Agreement. In the event of the earliest to occur of (a) the Participant’s death,
(b) a judicial determination of the Participant’s incompetence, or (c) the Participant’s Permanent
Disability arising from a mental incapacity, references to the Participant in the Award Letter,
these Award Terms and the Plan shall be deemed, where appropriate, to refer to his beneficiary,
estate, or other legal representative.

     12. Definitions. For purposes of these Award Terms, the following definitions shall
apply:

	(a)	 	Employment Agreement. The Employment Agreement shall mean that certain Employment
Agreement, dated May 22, 2008, between the Participant and the Company, as amended by the
First Amendment thereto dated October 24, 2008, and any other amendment subsequently agreed to
by the Participant and the Company.

	(b)	 	Vesting Date. The Participant’s “Vesting Date” is the date on which the specified
amount of RSUs are vested as provided for in Paragraphs 3 or 4 of these Award Terms.

	(c)	 	Termination Date. The Participant’s “Termination Date” shall have the meaning set
forth in the Employment Agreement.

	(d)	 	Permanent Disability. The term “Permanent Disability” shall mean that the
Participant has been unable, due to physical or mental incapacity, to substantially perform
his duties and responsibilities under the Employment Agreement for 180 days out of any 270
consecutive days.

13

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