Document:

exv10w10

Exhibit
10.10

	 	 	 
	
	 	 
	 
	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: Thomas Motamed

Re:
Grant of Restricted Stock Units – Performance Based

	 	 	 	 	 	 
	 	Number of Restricted 

Stock Units Granted
	 	 	141,758	 
	 	 
	 	 	 	 
	 	Grant Date
	 	 	March 3, 2010	 
	 	 
	 	 	 	 
	 

In accordance with the terms of your Employment Agreement, dated May 22, 2008, as amended October
24, 2008, and March 3, 2010, as such may be further amended from time to time (collectively, the
“Employment Agreement”), you have been granted 141,758 Restricted Stock Units (individually, an
“RSU” and collectively, the “RSUs”) of CNA Financial Corporation (“Company”), pursuant to the terms
of the CNA Financial Corporation 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 March 3, 2010.

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
2010 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 March 3, 2011 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.

For the 2010 year, NOI goals and RSUs Award attainment will be determined according to the
following schedule.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	2010	 	2010	 	Percentage	 	 
	 	 	CNAF NOI	 	CNAF NOI Achievement	 	RSUs Earned	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	< $600M
	 	< 50%
	 	0%
	 	 
	 	 	 	 	 
	 	 	$600M - $750M
	 	50% - 100%
	 	80% - 100% 1	 	 
	 	 	 	 	 
	 	 	$750M - $1300M
	 	Above 100%
	 	100%	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	(1) Percent of RSUs earned to be interpolated	 	 
	 	 	 

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,

 

 

Award Terms

Restricted Stock Unit Award Terms for Performance Based 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 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 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%-100% of the RSUs (and 80%-100% of each
installment for purposes of Paragraph 3) shall be earned with interpolation applied for actual
achievement. 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 11 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
	 	 	March 3, 2011	 
	 	Second quarter of earned RSUs
	 	 	March 3, 2012	 
	 	Third quarter of earned RSUs
	 	 	March 3, 2013	 
	 	Fourth quarter of earned RSUs
	 	 	March 3, 2014	 
	 

          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 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 the Second Amendment thereto dated March
3, 2010, 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.exv10w11w2

Exhibit 10.11.2

	 	 	 
	
	 	 
	 
	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,

 

 

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.

 

 

          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.

 

 

	(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

 

 

	 	 	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.

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