EXHIBIT 99.6
Cash Long-Term Incentive Award Terms for Grant Under the
CNA Financial Corporation 2000 Incentive Compensation Plan
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On February 9, 2005 (the "Grant Date"), CNA Financial Corporation (the
"Company") granted to the Participant a cash long-term incentive award (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
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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.
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