UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 8, 2006
CNA FINANCIAL CORPORATION
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-5823 36-6169860
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
CNA CENTER, CHICAGO, ILLINOIS 60685
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312)822-5000
NOT APPLICABLE
-------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Page 1 of 2
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 8, 2006 the Incentive Compensation Committee of Registrant's Board
of Directors approved grants of stock appreciation rights ("SARS") to the
executive officers of Registrant, specifically Stephen W. Lilienthal, Michael
Fusco, Jonathan D. Kantor, James R. Lewis and D. Craig Mense (collectively the
"Executive Officers"). The form of Award Letter pursuant to such grants is filed
as Exhibit 99.1 and the form of Award Terms pursuant to such grants is filed as
Exhibit 99.2 to this Form 8-K.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 8, 2006 the Incentive Compensation Committee of Registrant's Board
of Directors approved the following items with regard to the Executive Officers:
a. Annual Incentive Bonus ("AIB") amounts for 2005, payable in
2006. The AIB is determined through a performance goal of
Registrant's net operating income or payout formula that is a
percentage of Registrant's net operating income achieved in a
particular year, in this instance 2005.
b. 2005 performance year results for the Long-Term Incentive
Cash Plan (the "LTI Plan"). The 2005 Performance Year
Results that were approved apply to the 2003-2005, 2004-2006
and 2005-2007 cycles under the LTI Plan (described below).
The next scheduled payout under the LTI Plan is expected to
be in March of 2006, following the end of the 2003-2005 LTI
Plan cycle.
c. AIB opportunities for the 2006 performance year, determined
through a performance goal of Registrant's net operating
income or payout formula that is a percentage of Registrant's
net operating income achieved in 2006, payable in 2007.
d. Net operating income goals for 2006 under the LTI Plan,
applicable to the 2004-2006, 2005-2007 and 2006-2008 LTI
Plan cycles. The LTI Plan potential bonus amounts are based
upon Registrant's net operating income over three year
cycles, with goals set for each calendar year within the
three year cycle. Performance is determined at the end of
each calendar year and payouts are accrued until the end of
each three year cycle.
e. The definition of net operating income for purposes of
determining performance and bonus payouts applicable to AIB
opportunities for 2006 and the 2006 LTI Plan cash targets
for the 2004-2006, 2005-2007 and 2006-2008 LTI Plan cycles.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit No. Description
----------- ------------------------------------------------------------
99.1 Form of Award Letter for SARS grants to Executive
Officers approved by the Incentive Compensation Committee of
Registrant's Board of Directors on February 8, 2006.
99.2 Form of Award Terms for SARS grants to Executive
Officers approved by the Incentive Compensation Committee of
Registrant's Board of Directors on February 8, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CNA FINANCIAL CORPORATION
(Registrant)
Date February 14, 2006 /s/ D. Craig Mense
------------------------------------
(Signature)
By: D. Craig Mense
Its: Executive Vice President and
Chief Financial Officer
Page 2 of 2