EXHIBIT 99.1
CNA Center Chicago IL 60685-0001
[Date]
Private and Confidential
To: [[Current_First_Name]][[Current_Last_Name]]
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To: ____________ Number of Stock SARs _______
Granted
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Exercise Price $_____
Re: Grant of Stock Appreciation
Rights paid in Stock ----------------------------------------------------
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Grant Date February 8, 2006
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Expiration Date February 8, 2016
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The Incentive Compensation Committee (the "Committee") of the Board of Directors
of CNA Financial Corporation ("Company"), which administers the CNA Financial
Corporation 2000 Incentive Compensation Plan (the "Plan"), has determined that
you are eligible for a grant of _____ Stock Appreciation Rights (the "Stock
SARs") paid in CNA Financial Corporation common stock for $_____ 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 Company common stock. This stock appreciation rights award was
granted under the Plan on February 8, 2006.
As described more fully in the attached Award Terms, the Stock SARs will become
exercisable in four equal annual installments on February 8th of 2007, 2008,
2009 and 2010 so long as you are employed by Continental Casualty Company or an
affiliate on each such date. For example, one quarter of the Stock SARs granted
will be exercisable on February 8, 2007 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 Continental Casualty Company or an affiliate 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, 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 individual tax advisor
to determine the applicability of the tax rules to the awards granted to you in
your personal 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,