Stock-Based Compensation

The CNAF Incentive Compensation Plan (the Plan), as amended and restated on January 1, 2010, as amended, authorizes the grant of stock-based compensation to certain management personnel for up to 11 million shares of CNAF common stock. The Plan currently provides for awards of stock options, stock appreciation rights (SARs), restricted shares, restricted stock units (RSUs), performance-based RSUs and performance share units. The number of shares available for the granting of stock-based compensation under the Plan as of December 31, 2017 was approximately 2.8 million.

The Company recorded stock-based compensation expense related to the Plan of $36 million, $36 million and $14 million for the years ended December 31, 2017, 2016 and 2015. The related income tax benefit recognized was $18 million, $12 million and $5 million for the years ended December 31, 2017, 2016, and 2015. The compensation cost not yet recognized was $41 million, and the weighted average period over which it is expected to be recognized is 1.8 years as of December 31, 2017.

Equity based compensation that is not fully vested prior to termination is generally forfeited upon termination, except in cases of retirement, death or disability, and as otherwise provided by contractual obligations.

Share Awards

The fair value of share awards is based on the market value of the Company's common stock as of the date of grant. Share awards currently granted under the Plan include RSUs, performance-based RSUs and performance share units. Generally, RSU's vest over a two or three-year service period following the date of grant. Performance-based RSUs generally become payable within a range of 0% to 100% of the number of shares initially granted based upon the attainment of specific annual performance goals and vest ratably over a four-year service period following the date of grant. As of December 31, 2017 the Company does not have any outstanding performance-based RSUs.

In 2016, CNA adopted the Annual Performance Share Plan (PSP). The PSP provides officers with an opportunity to earn an award based upon attainment of specific performance goals achieved over a one-year performance period. Awards are granted at the beginning of each performance year and are generally subject to a two-year cliff vesting period after the Company’s annual performance has been determined. Prior to the PSP, CNA issued performance share units under the Long Term Incentive Plan (LTI Plan). The LTI Plan had a three-year performance period and continued to have outstanding awards through 2017. In both plans, the performance share units become payable within a range of 0% to 200% of the number of performance share units initially granted.

In 2016, CNA granted Special Supplemental Equity Awards (SSE). The awards consist of restricted stock units subject to both Company performance in 2016 and service-based vesting up to two years. Payments made under the PSP and SSE are made entirely in shares of common stock, except for awards made to foreign participants, which are paid in cash.

The following table presents activity for non-vested RSUs, performance-based RSUs and performance share units under the Plan in 2017.



	Number of Awards		Weighted-Average Grant Date Fair Value
Balance as of January 1, 2017	2,131,782		$	33.28
Awards granted	1,010,741		44.20
Awards vested	(930,616	)	33.31
Awards forfeited, canceled or expired	(290,296	)	36.20
Performance-based adjustment	149,126		44.07
Balance as of December 31, 2017	2,070,737		$	38.92