As filed with the Securities and Exchange Commission on August 4, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
the Securities Act of 1933
CNA Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-6169860
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
CNA Plaza
Chicago, Illinois 60685
(Address of Principal Executive Offices) (Zip Code)
CNA Financial Corporation 2000 Long-Term Incentive Plan
(Full Title of the Plan)
Jonathan D. Kantor
Senior Vice President, Secretary and General Counsel
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(Name and Address of Agent For Service)
(312) 822-2000
(Telephone Number, Including Area Code, of Agent For Service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
|--------------------------|-------------|-----------------|------------------|------------------|
| | |Proposed Maximum | Proposed Maximum | |
| | | Offering Price |Aggregate Offering| |
| | | Per Share** | Price** | |
| | | | | |
| Title of Securities to be|Amount to be | | | Amount of |
| Registered |Registered* | | | Registration Fee |
|--------------------------|-------------|-----------------|------------------|------------------|
|--------------------------|-------------|-----------------|------------------|------------------|
| | | | | |
<S> <C> <C> <C> <C>
|Common Stock, par value | | | | |
|$2.50 per share ........ | | | | |
| | | | | |
| | 2,000,000 | $35.8125 | $71,625,000 | $19,911.75 |
| | | | | |
|--------------------------|-------------|-----------------|------------------|------------------|
</TABLE>
* Pursuant to Rule 416, this registration statement shall cover any additional
securities to be offered or issued resulting from stock splits, stock dividends
or any similar such transaction.
** Pursuant to Rule 457(h)(1), computed on the basis of the basis of the average
of the high and low prices per share of the Common Stock on August 3, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have heretofore been filed by CNA
Financial Corporation, a Delaware corporation (the "Company"), with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), File No. 0-27754, are
incorporated by reference herein and shall be deemed to be a part hereof:
(a) Annual Report on Form 10-K for the Year ended December 31, 1998;
(b) Quarterly Report on Form 10-Q for the Quarter ended
March 31, 1999,
(c) Current Report on Form 8-K dated June 10, 1999; and
(d) The description of Common Stock included in the Company's
Registration Statement on Form S-3 (File No. 33-35250)
filed with the Commission on June 6, 1990.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated herein by reference and shall be deemed a part hereof from
the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
3
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the Delaware General Corporation Law ((the "DGCL")
provides in relevant part that "a corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful."
With respect to derivative actions, Section 145(b) of the DGCL provides
in relevant part that "[a] corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor . . . [by reason of the person's service in one
of the capacities specified in the preceding sentence] against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper."
Article X of the Company's By-Laws contains provisions similar to
Section 145 of the DGCL. See also the undertakings set out in response to Item 9
herein.
4
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits which is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
5
<PAGE>
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
2. That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies hat it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, Illinois, on August 4, 1999.
CNA FINANCIAL CORPORATION
By /s/ Jonathan D. Kantor
-----------------------
Jonathan D. Kantor
Senior Vice President, Secretary and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities indicated on August 4, 1999.
Title
-----
__________*__________ Chief Executive Officer and
Laurence A. Tisch Director
__________*__________ Senior Vice President and
W. James MacGinnitie Chief Financial Officer
(Principal Financial and
Accounting Officer)
7
<PAGE>
__________*__________ Director
Antoinette Cook Bush
__________*__________ Director
Dennis H. Chookaszian
__________*__________ Director
Philip L. Engel
__________*__________ Director
Robert P. Gwinn
__________*__________ Director
Bernard L. Hengesbaugh
__________*__________ Director
Walter F. Mondale
__________*__________ Director
Edward J. Noha
__________*__________ Director
Joseph Rosenberg
__________*__________ Director
James S. Tisch
__________*__________ Director
Preston Robert Tisch
8
<PAGE>
__________*__________ Director
Marvin Zonis
*By: /s/ Jonathan D. Kantor
-------------------------
Attorney-in-Fact
9
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Description of Exhibit Number
4.1 CNA Financial Corporation 2000 Long-Term Incentive Plan.......
5.1 Opinion of Mayer, Brown & Platt ..............................
23.1 Consent of Mayer, Brown & Platt (included in Exhibit 5.1).....
23.2 Consent of Deloitte & Touche LLP..............................
24.1 Powers of Attorney............................................
CNA FINANCIAL CORPORATION
2000 LONG-TERM INCENTIVE PLAN
-----------------------------
SECTION 1
---------
GENERAL
1.1. Purpose. The CNA Financial Corporation 2000 Long-Term Incentive
-------
Plan (the "Plan") has been established by CNA Financial Corporation (the
"Company") to (i) attract and retain persons eligible to participate in the
Plan, (ii) motivate Participants, by means of appropriate incentives, to achieve
long-term Company goals, and reward participants for achievement of those goals,
and (iii) provide incentive compensation opportunities that are competitive with
those of other similar companies, and thereby promote the financial interest of
the Company and its Subsidiaries.
1.2. Operation and Administration. The operation and administration of
-----------------------------
the Plan shall be subject to the provisions of Section 5 (relating to operation
and administration). Capitalized terms in the Plan shall be defined as set forth
in the Plan (including the definition provisions of Section 8 of the Plan).
SECTION 2
---------
GRANT OF INCENTIVE AWARDS
-------------------------
2.1. Grant of Awards. For each Performance Period, the Committee is
---------------
authorized to select, from among the Eligible Employees, those persons (if any)
who will be eligible to receive Long-Term Incentive Awards for that Performance
Period, and thereby become "Participants" in the Plan, subject to the following:
(a) With respect to the Long-Term Incentive Award for each Participant for
any Performance Period, the Committee is authorized to (i) establish
performance goals for the Performance Period, which shall be based on
the Performance Measure or Performance Measures, and (ii) specify the
payment amount for each Participant for the Performance Period at
designated levels of achievement of the Performance Measures, subject
to this Section 2.
(b) The Committee is authorized to establish any other conditions, not
inconsistent with the Plan, that are to apply to the Long-Term
Incentive Award for the Performance Period.
(c) To the extent required by Code section 162(m), and the regulations
thereunder, to satisfy the requirements for performance-based
compensation, the actions to be taken by the Committee for any
Performance Period in accordance with this Section 2 shall be taken and
reflected in writing: (i) while the outcome as to the performance goals
is substantially uncertain; (ii) not later than 90 days after the
beginning of the Performance Period; and (iii) before the end of the
first 25% of the Performance Period.
<PAGE>
(d) In no event shall the amount of the Long-Term Incentive Awards for any
Participant with respect to all Performance Periods ending in any one
calendar year exceed $5,000,000. For purposes of this paragraph (d),
the date scheduled (at the time the Performance Period is established)
as the end of a Performance Period shall be used.
(e) The Performance Measures that may be used by the Committee for any
Long-Term Incentive Award shall be based on any one or more of the
Approved Performance Measures, as selected by the Committee. For Awards
under this Section 3 intended to be "performance-based compensation,"
the grant of the Awards and the establishment of the Performance
Measures shall be made during the period required under Code section
162(m).
2.2. Determination of Performance Period. The beginning and ending
---------------------------------------
dates of any Performance Period shall be established by the Committee. The
Committee may, but shall not be required to, establish one or more Performance
Periods that begin before the last day of any other Performance Periods.
2.3. Long-Term Incentive Award Distributions. As soon as practicable
------------------------------------------
after the necessary financial data for a Performance Period are available to the
Committee, the Committee shall make a written determination of the extent of the
achievement of the performance goal(s) for the Long-Term Incentive Awards for
that Performance Period, and shall make a written determination of the amount,
if any, to be distributable with respect to the Long-Term Incentive Awards for
the Performance Period. Distributions with respect to any Long-Term Incentive
Award shall be subject to the following:
(a) Except as otherwise specifically provided in the documents reflecting
the terms of a Long-Term Incentive Award, the Committee may, in its
discretion, reduce the amount of any Long-Term Incentive Award or
cancel the award.
(b) Except as otherwise provided by the Committee, Long-Term Incentive
Awards shall be settled through cash payments, which shall be made as
soon as practicable after the Committee makes the determination
described in this subsection 2.3.
SECTION 3
---------
OPTIONS
-------
3.1. Option Grant. The Committee may grant Options in accordance with
-------------
this Section 3.
- 2 -
<PAGE>
3.2. Definitions. The grant of an "Option" permits the Participant to
-----------
purchase shares of Stock at an Exercise Price established by the Committee. Any
Option granted under the Plan may be either an incentive stock option (an "ISO")
or a non-qualified option (an "NQO"), as determined in the discretion of the
Committee. An "ISO" is an Option that is intended to satisfy the requirements
applicable to an "incentive stock option" described in section 422(b) of the
Code. An "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the Code.
3.3. Exercise Price. The "Exercise Price" of each Option granted under
--------------
this Section 3 shall be established by the Committee or shall be determined by a
method established by the Committee at the time the Option is granted; except
that the Exercise Price shall not be less than 100% of the Fair Market Value of
a share of Stock on the date of grant (or, if greater, the par value of a share
of Stock).
3.4. Exercise. An Option shall be exercisable in accordance with such
--------
terms and conditions and during such periods as may be established by the
Committee.
3.5. Payment of Option Exercise Price. The payment of the Exercise
----------------------------------
Price of an Option granted under this Section 3 shall be subject to the
following:
(a) Subject to the following provisions of this subsection 3.5, the full
Exercise Price for shares of Stock purchased upon the exercise of any
Option shall be paid at the time of such exercise (except that, in the
case of an exercise arrangement approved by the Committee and described
in paragraph (c) below, payment may be made as soon as practicable
after the exercise).
(b) The Exercise Price and any tax withholding shall be payable by check.
(c) The Committee may permit a Participant to elect to pay the Exercise
Price upon the exercise of an Option by irrevocably authorizing a third
party to sell shares of Stock (or a sufficient portion of the shares)
acquired upon exercise of the Option and remit to the Company a
sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
SECTION 4
---------
OTHER STOCK AWARDS
------------------
4.1. Definitions.
-----------
(a) A "Stock Unit" Award is the grant of a right to receive shares of
Stock in the future.
(b) A "Performance Share" Award is a grant of a right to receive shares of
Stock or Stock Units which is contingent on the achievement of
performance or other objectives during a specified period.
- 3 -
<PAGE>
(c) A "Restricted Stock" Award is a grant of shares of Stock, and a
"Restricted Stock Unit" Award is the grant of a right to receive shares
of Stock in the future, with such shares of Stock or right to future
delivery of such shares of Stock subject to a risk of forfeiture or
other restrictions that will lapse upon the achievement of one or more
goals relating to completion of service by the Participant, or
achievement of performance or other objectives, as determined by the
Committee.
4.2. Restrictions on Awards. Each Stock Unit Award, Restricted Stock
----------------------
Award, Restricted Stock Unit Award, Performance Share Award shall be subject to
the following:
(a) Any such Award shall be subject to such conditions, restrictions and
contingencies as the Committee shall determine.
(b) The Committee may designate whether any such Award being granted to any
Participant is intended to be "performance-based compensation" as that
term is used in section 162(m) of the Code. Any such Awards designated
as intended to be "performance-based compensation" shall be
conditioned on the achievement of one or more Performance Measures, to
the extent required by Code section 162(m). The Performance Measures
that may be used by the Committee for such Awards shall be based on
any one or more of the Approved Performance Measures, as selected by
the Committee. For Awards under this Section 4 intended to be
"performance-based compensation," the grant of the Awards and the
establishment of the Performance Measures shall be made during the
period required under Code section 162(m).
SECTION 5
---------
OPERATION AND ADMINISTRATION
----------------------------
5.1. Effective Date. Subject to the approval of the shareholders of the
--------------
Company at the Company's 2000 annual meeting of its shareholders, the Plan shall
be effective as of August 4, 1999 (the "Effective Date"); provided, however,
that to the extent that Awards are granted under the Plan prior to its approval
by shareholders, the Awards shall be contingent on approval of the Plan by the
shareholders of the Company at such annual meeting. The Plan shall be unlimited
in duration and, in the event of Plan termination, shall remain in effect as
long as any Awards under it are outstanding.
5.2. Shares Subject to Plan. The shares of Stock for which Awards may
-----------------------
be granted under the Plan shall be subject to the following:
(a) The shares of Stock with respect to which Awards may be made under the
Plan shall be shares currently authorized but unissued or currently
held or subsequently acquired by the Company as treasury shares,
including shares purchased in the open market or in private
transactions.
(b) Subject to the following provisions of this subsection 5.2, the maximum
number of shares of Stock that may be delivered to Participants and
their beneficiaries under the Plan shall be 2,000,000 shares of Stock.
- 4 -
<PAGE>
(c) To the extent provided by the Committee, any Award may be settled in
cash or Stock. To the extent any shares of Stock covered by an Award
are not delivered to a Participant or beneficiary because the Award is
forfeited or canceled, or the shares of Stock are not delivered because
the Award is settled in cash or used to satisfy the applicable tax
withholding obligation, such shares shall not be deemed to have been
delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan.
(d) Subject to paragraph 5.2(f), the maximum number of shares that may be
covered by Options granted to any one individual shall be 200,000
shares during any one calendar-year period.
(e) For Stock Unit Awards, Restricted Stock Awards, Restricted Stock Unit
Awards and Performance Share Awards that are intended to be
"performance-based compensation" (as that term is used for purposes of
Code section 162(m)), no more than 50,000 shares of Stock may be
subject to such Awards granted to any one individual during any
one-calendar-year period. If, after shares have been earned, the
delivery is deferred, any additional shares attributable to dividends
during the deferral period shall be disregarded.
(f) In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares),
the Committee may adjust Awards to preserve the benefits or potential
benefits of the Awards. Action by the Committee may include: (i)
adjustment of the number and kind of shares which may be delivered
under the Plan; (ii) adjustment of the number and kind of shares
subject to outstanding Awards; (iii) adjustment of the Exercise Price
of outstanding Options; and (iv) any other adjustments that the
Committee determines to be equitable.
5.3. General Restrictions. Delivery of shares of Stock or other
--------------------
amounts under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company shall have
no liability to deliver any shares of Stock under the Plan or make any
other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the
applicable requirements of any securities exchange or similar entity.
(b) To the extent that the Plan provides for issuance of stock certificates
to reflect the issuance of shares of Stock, the issuance may be
effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.
- 5 -
<PAGE>
5.4. Liability for Benefits. Each Subsidiary shall be liable for
-------------------------
payment of cash due under the Plan with respect to any Participant to the extent
that such benefits are attributable to the services rendered for that Subsidiary
by the Participant. Any disputes relating to liability of a Subsidiary for cash
payments shall be resolved by the Committee.
5.5. Tax Withholding. All distributions under the Plan are subject to
---------------
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the occurrence
of such withholding, may permit such withholding obligations to be satisfied
through cash payment by the Participant, through the surrender of shares of
Stock which the Participant already owns, or through the surrender of shares of
Stock to which the Participant is otherwise entitled under the Plan.
5.6. Grant and Use of Awards. In the discretion of the Committee, a
------------------------
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary (including
a plan or arrangement of a business or entity, all or a portion of which is
acquired by the Company or a Subsidiary). Subject to the overall limitation on
the number of shares of Stock that may be delivered under the Plan, the
Committee may use available shares of Stock as the form of payment for
compensation, grants or rights earned or due under any other compensation plans
or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.
5.7. Dividends and Dividend Equivalents. An Award (including without
------------------------------------
limitation an Option Award) may provide the Participant with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Participant, and may be settled in cash or Stock,
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.
5.8. Settlement of Awards. The obligation to make payments and
----------------------
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine (except that Options may not be settled
in cash). Satisfaction of any such obligations under an Award, which is
sometimes referred to as "settlement" of the Award, may be subject to such
conditions, restrictions and contingencies as the Committee shall determine. The
Committee may permit or require the deferral of any Award payment, subject to
such rules and procedures as it may establish, which may include provisions for
the payment or crediting of interest or dividend equivalents, and may include
converting such credits into deferred Stock equivalents. Each Subsidiary shall
be liable for payment of cash due under the Plan with respect to any Participant
to the extent that such benefits are attributable to the services rendered for
that Subsidiary by the Participant. Any disputes relating to liability of a
Subsidiary for cash payments shall be resolved by the Committee.
- 6 -
<PAGE>
5.9. Other Plans. Amounts payable under this Plan shall not be taken
-----------
into account as compensation for purposes of the CNA Employees' Retirement
Benefit Equalization Plan and the CNA Employees' Supplemental Savings Plan,
except to the extent otherwise provided by those plans, or by an agreement
between the affected Participant and the Company.
5.10. Heirs and Successors. The terms of the Plan shall be binding
---------------------
upon, and inure to the benefit of, the Company and its successors and assigns,
and upon any person acquiring, whether by merger, consolidation, purchase of
assets or otherwise, all or substantially all of the Company's assets and
business.
5.11. Transferability. Awards granted under the Plan are not
----------------
transferable except as designated by the Participant by will or by the laws of
descent and distribution. If any rights exercisable by a Participant or benefits
deliverable to a Participant under any Award under the Plan have not been
exercised or delivered, respectively, at the time of the Participant's death,
such rights shall be exercisable by the Designated Beneficiary, and such
benefits shall be delivered to the Designated Beneficiary, in accordance with
the provisions of the applicable terms of the Award and the Plan. The
"Designated Beneficiary" shall be the beneficiary or beneficiaries designated by
the Participant to receive benefits under the Company's group term life
insurance plan. If a deceased Participant fails to designate a beneficiary, or
if the Designated Beneficiary does not survive the Participant, any rights that
would have been exercisable by the Participant and any benefits distributable to
the Participant shall be exercised by or distributed to the legal representative
of the estate of the Participant. If a deceased Participant designates a
beneficiary and the Designated Beneficiary survives the Participant but dies
before the Designated Beneficiary's exercise of all rights under the Award or
before the complete distribution of benefits to the Designated Beneficiary under
the Award, then any rights that would have been exercisable by the Designated
Beneficiary shall be exercised by the legal representative of the estate of the
Designated Beneficiary, and any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of
the Designated Beneficiary.
5.12. Notices. Any written notices provided for in the Plan or under
--------
any Award shall be in writing and shall be deemed sufficiently given if either
hand delivered or if sent by confirmed fax or overnight courier, or by postage
paid first class mail. Notices sent by mail shall be deemed received three
business days after mailed but in no event later than the date of actual
receipt. Notices shall be directed, if to the Participant, at the Participant's
address indicated by the Company's records, or if to the Company, at the
Company's principal executive office to the attention of the Company's
Secretary.
- 7 -
<PAGE>
5.13. Action by Company. Any action required or permitted to be taken
-----------------
by the Company shall be by resolution of the Board, or by action of one or more
members of the Board (including a committee of the Board) who are duly
authorized to act for the Board, or by a duly authorized officer of the Company.
5.14. Limitation of Implied Rights.
-----------------------------
(a) Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets,
funds or property of the Company whatsoever, including, without
limitation, any specific funds, assets, or other property which the
Company, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual
right to the amounts, if any, payable under the Plan, unsecured by any
assets of the Company, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company shall be
sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and selection as
a Participant will not give any participating employee the right to be
retained in the employ of the Company or any Subsidiary, nor any right
or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.
5.15. Gender and Number. Where the context admits, words in any gender
-----------------
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
5.16. Evidence. Evidence required of anyone under the Plan may be by
---------
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
SECTION 6
---------
COMMITTEE
---------
6.1. Administration. The authority to control and manage the operation
--------------
and administration of the Plan shall be vested in the Incentive Compensation
Committee of the Board (the "Committee") in accordance with this Section 6.
6.2. Powers of Committee. The Committee's administration of the Plan
-------------------
shall be subject to the following:
(a) Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible Employees
those persons who shall receive Awards, to determine the performance
goals and amounts payable under these awards, to establish the terms,
the terms of eligibility, conditions, performance criteria,
restrictions, and other provisions of such Awards, and (subject to the
restrictions imposed by Section 7) to cancel or suspend Awards.
- 8 -
<PAGE>
(b) The Committee will have the authority and discretion to interpret the
Plan, to establish, amend, and rescind any rules and regulations
relating to the Plan, and to make all other determinations that may be
necessary or advisable for the administration of the Plan.
(c) Any interpretation of the Plan by the Committee and any decision made
by it under the Plan is final and binding on all persons.
(d) In controlling and managing the operation and administration of the
Plan, the Committee shall take action in a manner that conforms to the
articles and by-laws of the Company, and applicable state corporate
law.
6.3. Delegation by Committee. Except to the extent prohibited by
-------------------------
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.
6.4. Information to be Furnished to Committee. The Company and
---------------------------------------------
Subsidiaries shall furnish the Committee with such data and information as it
determines may be required for it to discharge its duties. The records of the
Company and Subsidiaries as to an employee's or Participant's employment,
termination of employment, leave of absence, reemployment and compensation shall
be conclusive on all persons unless determined to be incorrect. Participants and
other persons eligible for benefits under the Plan must furnish the Committee
such evidence, data or information as the Committee considers desirable to carry
out the terms of the Plan.
- 9 -
<PAGE>
SECTION 7
---------
AMENDMENT AND TERMINATION
-------------------------
The Board may, at any time, amend or terminate the Plan; provided that
no amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; and further provided that adjustments
pursuant to subject to paragraph 5.2(f) shall not be subject to the foregoing
limitations of this Section 7.
SECTION 8
---------
DEFINED TERMS
-------------
In addition to the other definitions contained herein, the following
definitions shall apply:
(a) The "Approved Performance Measures" shall be any one or more of
following Company, Subsidiary, operating unit or division performance
measures: net operating return on equity; gross premiums written; net
premiums written; net premiums earned; net investment income; losses
and loss expenses; underwriting and administrative expenses; operating
expenses; cash flow(s); operating income; earnings before interest and
taxes; net income; stock price; dividends; strategic business
objectives, consisting of one or more objectives based on meeting
specified cost targets, business expansion goals, and goals relating
to acquisitions or divestitures; or any combination thereof. Each goal
may be expressed on an absolute and/or relative basis, may be based on
or otherwise employ comparisons based on internal targets, the past
performance of the Company and/or the past or current performance of
other companies, and in the case of earnings-based measures, may use
or employ comparisons relating to capital, shareholders' equity and/or
shares outstanding, investments or to assets or net assets.
(b) Award. The term "Award" shall mean any award or benefit granted under
------
the Plan, including the grant of Long-Term Incentive Awards, Options,
Stock Unit Awards, Restricted Stock Awards, Restricted Stock Unit
Awards, and Performance Share Awards.
(c) Board. The term "Board" means the Board of Directors of the Company.
------
(d) Code. The term "Code" means the Internal Revenue Code of 1986, as
-----
amended. A reference to any provision of the Code shall include
reference to any successor provision of the Code.
(e) Eligible Employee. The term "Eligible Employee" shall mean the Chief
-------------------
Executive Officer and any Executive Vice President of the Company or a
Subsidiary, and any other officer of the Company or a Subsidiary
between grade 93 and grade 96, inclusive. An Award may be granted to an
individual in connection with hiring prior to the date the individual
first performs services for the Company or the Subsidiaries, provided
that the individual will be an Eligible Employee upon his hiring, and
further provided that such Awards shall not become vested prior to the
date the individual first performs such services.
(f) Fair Market Value. The "Fair Market Value" of a share of Stock shall be
------------------
determined in accordance with procedures established by the Committee.
- 10 -
<PAGE>
(g) Stock. The term "Stock" shall mean shares of common stock of the
-----
Company.
(h) Subsidiary. The term "Subsidiary" means any business or entity in which
-----------
at any relevant time the Company holds at least a 50% equity (voting or
non-voting) interest.
- 11 -
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
August 4, 1999
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Ladies and Gentlemen:
We are acting as special counsel to CNA Financial Corporation (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 2,000,000 shares of its Common Stock, $2.50 par value (the
"Shares"), to be offered pursuant to the CNA Financial Corporation 2000
Long-Term Incentive Plan (the "Plan"). In connection therewith, we have examined
or are otherwise familiar with the Company's Certificate of Incorporation, the
Company's By-Laws, the Plan, the Company's Registration Statement on Form S-8
(the "Registration Statement") relating to the Shares, relevant resolutions of
the Board of Directors of the Company, and such other documents and instruments
as we have deemed necessary for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares are
duly authorized for issuance and when issued in accordance with the provisions
of the Plan will be legally issued, fully paid and non-assessable shares of the
Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
MAYER, BROWN & PLATT
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CNA Financial Corporation on Form S-8, filed on or about August 4, 1999, of our
reports, dated February 10, 1999, appearing in the Annual Report on Form 10-K of
CNA Financial Corporation for the year ended December 31, 1998.
Deloitte & Touche LLP
Chicago, Illinois
August 4, 1999
Powers of Attorney
FURTHER RESOLVED, that each officer and director who may be required to sign and
execute (whether on behalf of the Company, as an officer or director of the
Company or otherwise) such Registration Statements or any amendment thereto or
any document in connection therewith or in connection with the public offering
contemplated thereby or the closing of a sale of the Registered Shares hereby
grants a Power of Attorney appointing W. James MacGinnitie and Jonathan D.
Kantor, or any successor Chief Financial Officer or Secretary of the Company or
either of them acting individually, his true and lawful attorney to sign in such
officer's or such director's name, place and stead (including in any such
capacity) such Registration Statements, all amendments thereto and documents in
connection therewith; and that each director who signs below hereby appoints and
authorizes each such attorney-in-fact to sign such Registration Statements,
amendments and documents in the name, place and stead of each such officer and
director who shall have executed this Power of Attorney (whether acting on
behalf of the Company, as an officer or director of the Company or otherwise).
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 4th day of August, 1999.
/s/Antoinette Cook Bush /s/Joseph Rosenberg
- ------------------------- --------------------
Antoinette Cook Bush Joseph Rosenberg
/s/Dennis H. Chookaszian /s/Richard L. Thomas
- -------------------------- --------------------
Dennis H. Chookaszian Richard L. Thomas
/s/Philip L. Engel /s/James S. Tisch
- ------------------- -------------------
Philip L. Engel James S. Tisch
/s/Robert P. Gwinn /s/Laurence A. Tisch
- ------------------- --------------------
Robert P. Gwinn Laurence A. Tisch
/s/Walter F. Mondale /s/Preston R. Tisch
- --------------------- -------------------
Walter F. Mondale Preston R. Tisch
/s/Edward J. Noha /s/Marvin Zonis
- ------------------ -------------------
Edward J. Noha Marvin Zonis
