EXHIBIT 99.2
Cash Long-Term Incentive Award Terms for Grant Under the
CNA Financial Corporation 2000 Incentive Compensation Plan
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On February 8, 2006 (the "Grant Date"), the Incentive Compensation
Committee of the Board of Directors of CNA Financial Corporation (the "Company")
set net operating income goals for a cash long-term incentive award to the
Participant for the 2006-2008 LTI Plan cycle (the "LTI Award"). The LTI Award is
subject to the following LTI Award terms (the "Award Terms"):
1. LTI 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"). For purposes of these Award Terms, the amounts of
the target LTI Award and the maximum LTI Award are, respectively, the amounts
specified in the Award Letter. The LTI Award has been granted under the CNA
Financial Corporation 2000 Incentive Compensation Plan (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 the contrary and except as otherwise provided in these
Award Terms, a word, term, or phrase used or defined in the Plan is used or
defined identically in these Award Terms. Other words, terms or phrases used in
these Award Terms are defined in paragraph 9 or elsewhere in these Award Terms
or the Award Letter.
2. Performance Period. The "Performance Period" shall have the meaning set
forth in the Award Letter.
3. Expiration. If the Participant's Date of Termination of Affiliation
occurs, prior to payment for the Performance Period, then the following shall
apply:
(a) Retirement. If the Participant's Date of Termination of Affiliation occurs
before the last day of the Performance Period by reason of the
Participant's Retirement, the Participant shall be eligible for a payment
with respect to the LTI Award in accordance with the terms of these Award
Terms, as though the Participant remained employed by the Company through
the end of the Performance Period, and based on the Company's actual
performance for the period, but subject to a proration based on the number
of months of participation for the portion of the Performance Period prior
to the Participant's Date of Termination of Affiliation. Distribution
under this paragraph (a) for the Performance Period shall be made at the
normally scheduled time for such distribution (determined without regard
to the occurrence of the Participant's Date of Termination of
Affiliation).
(b) Death or Disability. If the Participant's Date of Termination of
Affiliation occurs before the last day of the Performance Period by reason
of the Participant's death or Permanent Disability, the Participant (or
the Participant's estate) shall be eligible for a payment with respect to
the LTI Award in accordance with the terms of these Award Terms based on
the Company's actual performance for the period, but subject to a
proration based on the number of months of participation for the portion
of the Performance Period prior to the Participant's Date of Termination
of Affiliation. Distribution under this paragraph (b) shall be made as
soon as practicable after the Participant's Date of Termination of
Affiliation.
(c) Voluntary, Involuntary Termination and Termination for Cause. If the
Participant's Date of Termination of Affiliation occurs at any time prior
to the distribution of the LTI Award (as provided for in paragraph 6
below) by reason of termination of employment by the Participant's
employer for Cause, or by reason of the Participant's voluntary or
involuntary termination, the Participant's LTI Award shall be forfeited.
Notwithstanding the foregoing provisions of this paragraph 3, if a Participant
has engaged in any conduct which constitutes Cause prior to distribution with
respect to the LTI Award, the LTI Award shall be forfeited.
4. New Hires/Promotions. If an eligible employee is hired during the
Performance Period, the Participant's LTI Award will be pro-rated based on the
appropriate number of complete months of participation. If an eligible employee
is promoted outside of the Company annual officer salary review process, the
Participant's LTI Award will be pro-rated based on the appropriate number of
complete months of participation. If an eligible employee is promoted as part of
the Company annual officer salary review process, the Participant's LTI Award
will be effective as of the beginning of the Performance Period.
5. Award Amount. The amount to be distributed with respect to the LTI Award
shall be determined according to the schedule in the Award Letter, subject to
review and approval of the Incentive Compensation Committee of the Company's
Board of Directors (the "Committee"). If the Net Operating Income for the
Performance Period is at least the minimum level but less than the target level,
the amount distributable with respect to the LTI Award shall be interpolated
between zero and the target amount. If the Net Operating Income for the
Performance Period is greater than the target level but less than the maximum
level, the amount distributable with respect to the LTI Award shall be
interpolated between the target amount and the maximum amount. As soon as
practicable after the necessary financial data for the Performance Period is
available to the Committee, the Committee shall make a written determination of
the extent of the achievement of the performance goal(s) for that Performance
Period, and shall make a written determination of the amount, if any, of the
distribution to be made under the LTI Award to the Participant for the
Performance Period. The Committee may, in its discretion, reduce the amount of
the LTI Award or cancel the LTI Award entirely.
6. Settlement of Award. The amount that is distributable with respect to
the LTI Award shall be settled through cash payment of that amount to be made as
soon as practicable as determined by the Company after the Committee makes the
determination described in paragraph 5.
7. Administration. The authority to manage and to control the operation and
administration of these Award Terms shall be vested in the Committee, and the
Committee shall have all 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 all persons.
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.
9. 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 directly or indirectly holds 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 Committee,
in good faith, shall determine to be fraudulent, constitute willful
malfeasance or gross negligence, or inconsistent with the dignity and
character of an executive or other employee of the Company, or (ii)
violates in a material manner the then current rules of professional
conduct or human resource policies of the Company.
(c) Date of Termination of Affiliation. The Participant's "Date of Termination
of Affiliation" shall be the first day occurring on or after the Grant
Date on which the Participant is not employed by the Company or any
Affiliate, as determined by the Company, 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 between
the 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 the Company
or an Affiliate 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
separate from the Company), the occurrence of such transaction shall be
treated as the Participant's Date of Termination of Affiliation caused by
the Participant being discharged by the employer.
(d) Net Operating Income. "Net Operating Income" will mean net operating
income of the Company as defined by the Committee for the Performance
Period.
(e) Permanent Disability. The term "Permanent Disability" means a physical or
mental condition of 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 Participant incapable
of performing any substantial portion of the services required of
Participant by the Participant's employer.
(f) Retirement. Termination because of "Retirement" shall mean the
Participant's Date of Termination of Affiliation after attainment of age
62 or, if earlier, the Participant's Date of Termination of Affiliation
which is designated by the Committee as a "Retirement" for purposes of
these Award Terms.