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As filed with the Securities and Exchange Commission on August 15, 1997
________________________________________________________________________________
________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
FORM 10
GENERAL FORM FOR REGISTRATION OF
SECURITIES PURSUANT TO
SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934
_______________________________
CNA SURETY CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-4144905
(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)
Registrant's telephone number, including area code: (312) 822-2000
Securities to be registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.01 per share New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
________________________________________________________________________________
________________________________________________________________________________
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CNA SURETY CORPORATION
FORM 10
INDEX
PART A
Item Page
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1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Financial Information. . . . . . . . . . . . . . . . . . . . . . . 1
3. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Security Ownership of Certain Beneficial Owners and Management . . 1
5. Directors and Executive Officers . . . . . . . . . . . . . . . . . 1
6. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . 1
7. Certain Relationships and Related Transactions. . . . . . . . . . . 2
8. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 2
9. Market Price of and Dividends on the Registrant's
Common Equity and Related Stockholder Matters. . . . . . . . . . . . 2
10. Recent Sales of Unregistered Securities. . . . . . . . . . . . . . 2
11. Description of Registrant's Securities to be Registered. . . . . . 2
12. Indemnification of Directors and Officers. . . . . . . . . . . . . 2
13. Financial Statements and Supplementary Data. . . . . . . . . . . . 3
14. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . . . . . . . . . 3
15. Financial Statements and Exhibits . . . . . . . . . . . . . . . . . 3
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PART B
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General: This application for registration consists of two parts: Part A and
Part B, which is the registrant's Registration Statement on Form S-4 (File No.
333-33753) under the Securities Act of 1933 (the "Registration Statement")
relating to the Common Stock, which is incorporated herein by reference.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART A
ITEM 1. BUSINESS.
There is incorporated by reference the information set forth in the
Registration Statement under the headings "Description of CCC Surety
Operations," "Description of Capsure Business" and "Description of CNA Surety"
in the Prospectus.
ITEM 2. FINANCIAL INFORMATION.
There is incorporated by reference the information set forth in the
Registration Statement under the headings "Selected Financial Data--CCC Surety
Operations" and "Management's Discussion and Analysis of the Statements of
Certain Assets and Liabilities and the Statements of Certain Revenues and Direct
Operating Expenses of the CCC Surety Operations" in the Prospectus.
ITEM 3. PROPERTIES.
There is incorporated by reference the information set forth in the
Registration Statement under the heading "Description of CCC Surety Operations"
in the Prospectus.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
There is incorporated by reference the information set forth in the
Registration Statement under the heading "Security Ownership of Certain
Beneficial Owners and Management" in the Prospectus.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.
There is incorporated by reference the information set forth in the
Registration Statement under the heading "Management of CNA Surety" in the
Prospectus.
ITEM 6. EXECUTIVE COMPENSATION.
There is incorporated by reference the information set forth in the
Registration Statement under the heading "Management of CNA Surety" in the
Prospectus.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There is incorporated by reference the information set forth in the
Registration Statement under the heading "Relationships and Related
Transactions" in the Prospectus.
ITEM 8. LEGAL PROCEEDINGS.
There is no material pending legal proceeding to which CNA Surety
Corporation ("CNA Surety") or any of its subsidiaries is a party or by which any
of their property is subject, or any proceedings known by CNA Surety to be
contemplated by governmental authorities.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
There is incorporated by reference the information set forth in the
Registration Statement under the headings "Risk Factors--Holding Company
Structure," "Risk Factors--No Prior Public Market for CNA Surety Common Stock;
Possible Volatility of Stock Price," "Market for CNA Surety Common
Stock--Dividend Policy" and "Security Ownership of Certain Beneficial Owners and
Management" in the Prospectus.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On December 10, 1996, CNA Surety issued 10 shares of its Common
Stock, $.01 par value, to Continental Casualty Company ("Continental") for an
aggregate of $1,000. On August 15, 1997, CNA Surety issued an additional
aggregate of 27,096,327 shares of its Common Stock to Continental Casualty
Company and certain of its affiliates, Firemen's Insurance Company of Newark,
New Jersey, Continental Insurance Company, National Fire Insurance Company of
Hartford and American Casualty Company of Reading, Pennsylvania. Such issuances
did not involve an underwriter, and no discount or commission was paid in
connection therewith. Exemption from registration is provided under Section
4(2) of the Securities Act of 1933, regarding transactions by an issuer not
involving any public offering.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
There is incorporated by reference the information set forth in the
Registration Statement under the heading "Description of CNA Surety Common
Stock" in the Prospectus.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There is incorporated by reference the information set forth in the
Registration Statement under Item 20 of Part II thereof.
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ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
There is incorporated by reference the CCC Surety Operations Financial
Statement's of the registrant in the Prospectus and the financial data schedule
included in the Registration Statement and listed in Item 27 of Part II thereof.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
(a) List separately all financial statements filed as part of the
registration statement.
The list of financial statements filed as part of this registration
statement is incorporated by reference to Part II as set forth in the
Registration Statement under the heading "Index to Exhibits and Financial
Statement Schedules" in the Prospectus in Item 21.
(b) Furnish the exhibits required by Item 601 of Regulation S-K.
The exhibits listed below are incorporated by reference to the exhibits
filed as part of the Registration Statement (except for Exhibit 23(2) listed
below which is being filed herewith and Exhibits 10(14), 10(15) and 10(16)
listed below which are incorporated by reference to Exhibit 2 to Capsure
Holdings Corp.'s Form 8-K filed on December 27, 1996).
Exhibit
Number Description
- -------- -----------
2(1) Reorganization Agreement dated as of December 19, 1996 among
Capsure Holdings Corp., Continental Casualty Company, CNA
Surety Corporation, Surety Acquisition Company and certain
affiliates of Continental Casualty Company (filed on
December 27, 1996 as Exhibit 2 to Capsure Holdings Corp.'s
Form 8-K, and incorporated herein by reference).
2(2) First Amendment to the Reorganization Agreement dated as of
July 14, 1997 among Capsure Holdings Corp., Continental
Casualty Company, CNA Surety Corporation, Surety Acquisition
Company and certain affiliates of Continental Casualty
Company (filed on July 16, 1997 as Exhibit 2 to Capsure
Holdings Corp.'s Form 8-K, and incorporated herein by
reference).
3(1) Certificate of Incorporation of CNA Surety Corporation dated
December 10, 1996.
3(2) Amendment to Certificate of Incorporation of CNA Surety
Corporation dated May 27, 1997.
3(3) Bylaws of CNA Surety Corporation.
4(1) Specimen certificate of CNA Surety Corporation.
4(2) Form of Registration Rights Agreement, between CNA Surety
Corporation and Equity Capsure Limited Partnership.
5 Opinion of Sonnenschein Nath & Rosenthal.
8 Opinion of Mayer, Brown & Platt, with respect to certain tax
matters.
9 Not applicable.
10(1) Employment Agreement dated as of September 30, 1995 by and
between Capsure Holdings Corp., a Delaware corporation, and
Bruce A. Esselborn, an individual (filed on March 27, 1996
as Exhibit 10.1 to Capsure Holdings Corp.'s Annual Report on
Form 10-K, and incorporated herein by reference).
10(2) First Amendment dated as of February 20, 1997 to the
Employment Agreement dated as of September 30, 1995 between
Capsure Holdings Corp., a Delaware corporation, and Bruce A.
Esselborn, an individual (filed on March 21, 1997 as Exhibit
10.2 to Capsure Holdings Corp.'s Annual Report on Form 10-K,
and incorporated herein by reference).
10(3) Employment Agreement dated as of September 30, 1995 by and
between Capsure Holdings Corp., a Delaware corporation and
Mary Jane Robertson, an individual (filed on March 27, 1996
as Exhibit 10.2 to Capsure Holdings Corp.'s Annual Report on
Form 10-K, and incorporated herein by reference).
10(4) First Amendment dated as of February 20, 1997 to the
Employment Agreement dated as of September 30, 1995 by and
between Capsure Holdings Corp., a Delaware corporation, and
Mary Jane Robertson, an individual (filed on March 21, 1997
as Exhibit 10.4 to Capsure Holdings Corp.'s Annual Report on
Form 10-K, and incorporated herein by reference).
10(5) Employment Agreement dated as of September 22, 1994 by and
among Universal Surety Holdings Corp., Universal Surety of
America, Capsure Financial Group, Inc., Capsure Holdings
Corp. and John Knox, Jr.
10(6) Agreement dated as of June 30, 1997 by and among John Knox,
Jr., Capsure Holdings Corp. and CNA Surety Corporation.
10(7) Employment Agreement dated as of April 26, 1996 (effective
as of April 15, 1996) by and between Western Surety Company
and Steven T. Pate.
10(8) Stock Purchase Agreement among John Knox, Jr., Universal
Surety Holding Corp., Capsure Financial Group, Inc. and
Capsure Holdings Corp. dated July 26, 1994 (filed on October
6, 1994 as Exhibit 2 to Capsure Holdings Corp.'s Current
Report on Form 8-K, and incorporated herein by reference).
10(9) Non-Competition and Non-Solicitation Agreement between
Capsure Holdings Corp. and Frontier Insurance Company, dated
as of May 22, 1996.
10(10) Contract Surety Bond Reinsurance Agreement dated as of
September 22, 1994 between Western Surety Company, a South
Dakota corporation, and Universal Surety of America, a Texas
corporation (filed on March 30, 1995 as Exhibit 10.23 to
Capsure Holdings Corp.'s Annual Report on Form 10-K, and
incorporated herein by reference).
10(11) Co-Employee Agreement dated as of September 22, 1994 between
Western Surety Company and Universal Surety of America
(filed on March 30, 1995 as Exhibit 10.24 to Capsure
Holdings Corp.'s Annual Report on Form 10-K, and
incorporated herein by reference).
10(12) Form of The CNA Surety Corporation Replacement Stock
Option Plan.
10(13) Form of CNA Surety Corporation 1997 Long-Term Equity
Compensation Plan.
10(14) Form of Aggregate Stop Loss Reinsurance Contract by and
between Western Surety Company, Universal Surety of
America, Surety Bonding Company of America and Continental
Casualty Company (filed on December 27, 1996 as Exhibit 2
to Capsure Holdings Corp.'s Form 8-K, and incorporated
herein by reference).
10(15) Form of Surety Excess of Loss Reinsurance Contract by and
between Western Surety Company, Universal Surety of America,
Surety Bonding Company of America and Continental Casualty
Company (filed on December 27, 1996 as Exhibit 2 to Capsure
Holdings Corp.'s Form 8-K, and incorporated herein by
reference).
10(16) Form of Surety Quota Share Treaty by and between Western
Surety Company and Continental Casualty Company (filed on
December 27, 1996 as Exhibit 2 to Capsure Holdings Corp.'s
Form 8-K, and incorporated herein by reference).
11 Not Applicable.
21 Subsidiaries of the Registrant.
23(1) Consent of Coopers & Lybrand L.L.P. dated August 15, 1997.
23(2) Consent of Deloitte & Touche LLP dated August 15, 1997.
23(3) Consent of Sonnenschein Nath & Rosenthal included in
opinion filed as Exhibit 5 hereto.
23(4) Consent of Mayer, Brown & Platt dated August 15, 1997.
24 Power of Attorney, dated as of August 11, 1997.
27 Financial Data Schedule.
99(1) Consent of Smith Barney Inc. dated August 15, 1997.
99(2) Consent of Adrian M. Tocklin to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(3) Consent of Melvin Gray to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(4) Consent of Roy E. Posner to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(5) Consent of Bruce A. Esselborn to serve as a Director on the
CNA Surety Corporation Board of Directors.
99(6) Consent of Rod F. Dammeyer to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(7) Consent of John T. Knox, Jr. to serve as a Director on the
CNA Surety Corporation Board of Directors.
99(8) Consent of Joe P. Kirby to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(9) Consent of Giorgio Balzer to serve as a Director on the CNA
Surety Corporation Board of Directors.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
CNA SURETY CORPORATION
By: /s/ Mark C. Vonnahme
------------------------------
Name: Mark C. Vonnahme
Title: President and Chief
Executive Officer
August 15, 1997
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EXHIBIT INDEX
Exhibit
Number Description Page
- -------- ----------- ----
2(1) Reorganization Agreement dated as of December 19, 1996 among
Capsure Holdings Corp., Continental Casualty Company, CNA
Surety Corporation, Surety Acquisition Company and certain
affiliates of Continental Casualty Company (filed on
December 27, 1996 as Exhibit 2 to Capsure Holdings Corp.'s
Form 8-K, and incorporated herein by reference).
2(2) First Amendment to the Reorganization Agreement, dated as of
July 14, 1997 among Capsure Holdings Corp., Continental
Casualty Company, CNA Surety Corporation, Surety Acquisition
Company and certain affiliates of Continental Casualty
Company (filed on July 16, 1997 as Exhibit 2 to Capsure
Holdings Corp.'s Form 8-K, and incorporated herein by
reference).
3(1) Certificate of Incorporation of CNA Surety Corporation dated
December 10, 1996.
3(2) Amendment to Certificate of Incorporation of CNA Surety
Corporation dated May 27, 1997.
3(3) Bylaws of CNA Surety Corporation.
4(1) Specimen certificate of CNA Surety Corporation.
4(2) Form of Registration Rights Agreement, between CNA Surety
Corporation and Equity Capsure Limited Partnership.
5 Opinion of Sonnenschein Nath & Rosenthal.
8 Opinion of Mayer, Brown & Platt, with respect to certain tax
matters.
9 Not applicable.
10(1) Employment Agreement dated as of September 30, 1995 by and
between Capsure Holdings Corp., a Delaware corporation, and
Bruce A. Esselborn, an individual (filed on March 27, 1996
as Exhibit 10.1 to Capsure Holdings Corp.'s Annual Report on
Form 10-K, and incorporated herein by reference).
10(2) First Amendment dated as of February 20, 1997 to the
Employment Agreement dated as of September 30, 1995 between
Capsure Holdings Corp., a Delaware corporation, and Bruce A.
Esselborn, an individual (filed on March 21, 1997 as Exhibit
10.2 to Capsure Holdings Corp.'s Annual Report on Form 10-K,
and incorporated herein by reference).
10(3) Employment Agreement dated as of September 30, 1995 by and
between Capsure Holdings Corp., a Delaware corporation and
Mary Jane Robertson, an individual (filed on March 27, 1996
as Exhibit 10.2 to Capsure Holdings Corp.'s Annual Report on
Form 10-K, and incorporated herein by reference).
10(4) First Amendment dated as of February 20, 1997 to the
Employment Agreement dated as of September 30, 1995 by and
between Capsure Holdings Corp., a Delaware corporation, and
Mary Jane Robertson, an individual (filed on March 21, 1997
as Exhibit 10.4 to Capsure Holdings Corp.'s Annual Report on
Form 10-K, and incorporated herein by reference).
10(5) Employment Agreement dated as of September 22, 1994 by and
among Universal Surety Holdings Corp., Universal Surety of
America, Capsure Financial Group, Inc., Capsure Holdings
Corp. and John Knox, Jr.
10(6) Agreement dated as of June 30, 1997 by and among John Knox,
Jr., Capsure Holdings Corp. and CNA Surety Corporation.
10(7) Employment Agreement dated as of April 26, 1996 (effective
as of April 15, 1996) by and between Western Surety Company
and Steven T. Pate.
10(8) Stock Purchase Agreement among John Knox, Jr., Universal
Surety Holding Corp., Capsure Financial Group, Inc. and
Capsure Holdings Corp. dated July 26, 1994 (filed on October
6, 1994 as Exhibit 2 to Capsure Holdings Corp.'s Current
Report on Form 8-K, and incorporated herein by reference).
10(9) Non-Competition and Non-Solicitation Agreement between
Capsure Holdings Corp. and Frontier Insurance Company, dated
as of May 22, 1996.
10(10) Contract Surety Bond Reinsurance Agreement dated as of
September 22, 1994 between Western Surety Company, a South
Dakota corporation, and Universal Surety of America, a Texas
corporation (filed on March 30, 1995 as Exhibit 10.23 to
Capsure Holdings Corp.'s Annual Report on Form 10-K, and
incorporated herein by reference).
10(11) Co-Employee Agreement dated as of September 22, 1994 between
Western Surety Company and Universal Surety of America
(filed on March 30, 1995 as Exhibit 10.24 to Capsure
Holdings Corp.'s Annual Report on Form 10-K, and
incorporated herein by reference).
10(12) Form of the CNA Surety Corporation Replacement Stock
Option Plan.
10(13) Form of CNA Surety Corporation 1997 Long-Term Equity
Compensation Plan.
10(14) Form of Aggregate Stop Loss Reinsurance Contract by and
between Western Surety Company Universal Surety
of America, Surety Bonding Company of America and Continental
Casualty Company (filed on December 27, 1996 as Exhibit 2 to
Capsure Holdings Corp.'s Form 8-K and incorporated herein by
reference).
10(15) Form of Surety Excess of Loss Reinsurance Contract by and
between Western Surety Company, Universal Surety of America,
Surety Bonding Company of America and Continental Casualty
Company (filed on December 27, 1996 as Exhibit 2 to Capsure
Holdings Corp.'s Form 8-K and incorporated herein by
reference).
10(16) Form of Surety Quota Share Treaty by and between Western
Surety Company and Continental Casualty Company (filed on
December 27, 1996 as Exhibit 2 to Capsure Holdings Corp.'s
Form 8-K and incorporated herein by reference).
11 Not Applicable.
21 Subsidiaries of the Registrant.
23(1) Consent of Coopers & Lybrand L.L.P. dated August 15, 1997.
23(2) Consent of Deloitte & Touche LLP dated August 15, 1997.
23(3) Consent of Sonnenschein Nath & Rosenthal dated ,
1997 included in opinion filed as Exhibit 5 hereto.
23(4) Consent of Mayer, Brown & Platt dated August 15, 1997.
24 Power of Attorney, dated as of August 11, 1997.
27 Financial Data Schedule.
99(1) Consent of Smith Barney Inc. dated August 15, 1997.
99(2) Consent of Adrian M. Tocklin to serve as a Director on the
CNA Surety Corporation Board of Directors.
99(3) Consent of Melvin Gray to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(4) Consent of Roy E. Posner to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(5) Consent of Bruce A. Esselborn to serve as a Director on the
CNA Surety Corporation Board of Directors.
99(6) Consent of Rod F. Dammeyer to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(7) Consent of John T. Knox, Jr. to serve as a Director on the
CNA Surety Corporation Board of Directors.
99(8) Consent of Joe P. Kirby to serve as a Director on the CNA
Surety Corporation Board of Directors.
99(9) Consent of Giorgio Balzer to serve as a Director on the CNA
Surety Corporation Board of Directors.
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EXHIBIT 23(2)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CNA Surety Corporation on Form 10 under the Securities Exchange Act of 1934 of
our report dated March 20, 1997, appearing in the Prospectus, and contained in
the Registration Statement, filed on or about August 15, 1997, of CNA Surety
Corporation on Form S-4 under the Securities Act of 1933.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Chicago, Illinois
August 15, 1997
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