<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 23, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CNA SURETY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 36-4144905
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
</TABLE>
CNA PLAZA
CHICAGO, ILLINOIS 60685
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
CNA SURETY CORPORATION NON-EMPLOYEE
DIRECTORS DEFERRED COMPENSATION PLAN
(FULL TITLE OF THE PLAN)
------------------------
MARK C. VONNAHME
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CNA SURETY CORPORATION
CHICAGO, ILLINOIS 60685
(312) 822-5000
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
COPIES TO:
MITCHELL L. HOLLINS
ARTHUR J. SIMON
SONNENSCHEIN NATH & ROSENTHAL
8000 SEARS TOWER
CHICAGO, ILLINOIS 60606
(312) 876-8000
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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AMOUNT PROPOSED PROPOSED
TITLE OF SECURITIES TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par
value..................... 160,000 shares $14 1/32 $2,245,000 $662.28
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- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(f), the registration fee was computed on the basis of
$14 1/32 per share, the average of the high and low sale prices of CNA
Surety Corporation common stock on September 18, 1998, on the New York Stock
Exchange in accordance with Rule 457(c) under the Securities Act of 1933.
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<PAGE> 2
CNA SURETY CORPORATION
160,000 SHARES OF COMMON STOCK
PROSPECTUS
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information called for by Part I of Form S-8 is currently included in
the prospectus, dated as of September 1, 1998 (the "Plan Prospectus"), which is
to be distributed to participants in the Non-Employee Director Deferred
Compensation Plan. The documents incorporated by reference into Item 3 of Part
II of this Registration Statement (not including exhibits to the information
that is incorporated by reference, unless such exhibits are specifically
incorporated by reference into the information that this Registration Statement
incorporates) are incorporated by reference into this Section 10(a) prospectus,
and are available, without charge, to the participants upon written or oral
request to John Heneghan, CNA Plaza, Chicago, Illinois 60685 (telephone (312)
822-5000).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the Registrant, pursuant to the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), are incorporated by reference in this registration
statement.
(1) The Registrant's Annual Report on Form 10-K, for the year ended
December 31, 1997;
(2) The Registrant's Quarterly Reports on Form 10-Q for the periods
ended March 31, 1998 and June 30, 1998; and
(3) The description of the Common Stock contained in the Registrant's
Registration Statement on Form 10, filed pursuant to Section 12 of the
Exchange Act on August 15, 1997, including any amendment or report filed
for the purpose of updating such information.
All documents subsequently filed by the Registrant 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 by reference and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Delaware law permits a corporation to adopt a provision in its certificate
of incorporation eliminating or limiting the personal liability of a director to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except that such provision shall not limit the liability of
a director for: (i) any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of the law; (iii)
liability under section 174 of the DGCL; or (iv) any transaction from which the
directors derived an improper personal benefit. The Registrant's certificate of
incorporation limits the personal liability of Registrant's directors for
monetary damages to the fullest extent permissible under applicable law.
Under Delaware law, a corporation may indemnify any person made a party or
threatened to be made a party to any type of proceeding (other than an action by
or in the right of the corporation) because he or she is or was an officer,
director, employee or agent of the corporation, or was serving at the request of
the corporation as an officer, director, employee or agent of the corporation,
against expenses, judgments, fines, and amounts paid in settlement actually and
reasonably incurred in connection with such proceeding if: (i) he or she acted
in good faith and in a manner such director reasonably believed to be in or not
opposed to the best interests of the corporation; or (ii) in the case of a
criminal proceeding, he or she had no reasonable cause to believe that his or
her conduct was unlawful. A corporation may indemnify any person made party or
threatened to be made a party to any threatened, pending or completed action or
suit brought by or in the right of the corporation because he or she was an
officer, director, employee or agent of the corporation, or was serving at the
request of the corporation as an officer, director, employee or agent of the
corporation, against expenses actually and reasonably incurred in connection
with such action or suit if he or she acted in good faith and in a manner such
director reasonably believed to be in or not opposed to the best interests of
the corporation, except that there may be no such indemnification if the person
is found liable to the corporation unless, in such case, the court determines
the person is entitled thereto. A corporation must indemnify a director,
officer, employee or agent against expenses actually and reasonably incurred by
him or her who successfully defends himself or herself in a proceeding to which
they were a party because he or she was a director, officer, employee or agent
of the corporation. Expenses incurred by any officer or director (or other
employees or agents as deemed appropriate by the board of directors) in
defending a civil or criminal proceeding may be paid by the corporation in
advance of the final disposition of such proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the corporation. The Delaware law indemnification and expense
advancement provisions are not exclusive of any other rights which may be
granted by the bylaws, a vote of stockholders or disinterested directors,
agreement or otherwise.
The Registrant's bylaws provide for the indemnification, in a
non-derivative suit, of any person who is a party or is threatened to be made a
party to any suit or proceeding, because such person, or a person for whom such
person was or is a representative, was or is an officer, director, employee or
agent of the Registrant, or was serving at the request of the Registrant as an
officer, director, employee or agent of the corporation, against expenses in
connection with such suit, action or proceeding if such person acted in good
faith and in a manner such director reasonably believed to be in or not opposed
to the best interests of the Registrant, and with respect to any criminal action
or proceeding, had no reasonable cause to believe such conduct was unlawful. The
Registrant's bylaws provide further for the indemnification in derivative suits
if such person acted in good faith and in a manner such person believed to be in
or not opposed to the best interests of the Registrant; provided, however, that
no indemnification will be made for any claim, issue or matter as to which such
person has been adjudged liable to the Registrant, unless the court in which
such action was brought determined, despite the adjudication of liability, that
such person is fairly and reasonably entitled to indemnity for such expenses
that such court deems proper. The bylaws of the Registrant also permit the
advancement of expenses incurred by a director, officer, employee or agent of
the Registrant in defending a suit or action, provided that such person executes
an undertaking to repay the advanced expenses if it is ultimately determined
that such person is not entitled to be indemnified by the Registrant.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been
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<PAGE> 4
informed that in the opinion of the Commission such indemnification is against
public policy expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<C> <S>
4.1 Certificate of Incorporation of the Registrant, dated
December 10, 1996, incorporated by reference to Exhibit 3(1)
of the Registration Statement on Form S-4 (File No.
333-33753)
4.2 Amendment to Certificate of Incorporation of the Registrant,
dated May 27, 1997, incorporated by reference to Exhibit
3(2) of the Registration Statement on Form S-4 (File No.
333-33753)
4.3 Amended By-Laws of the Registrant.
5.1 Opinion of Sonnenschein Nath & Rosenthal
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Sonnenschein Nath & Rosenthal, included in
opinion filed as Exhibit 5 hereto
24.1 Power of Attorney (included on the signature page)
</TABLE>
ITEM 9. REQUIRED UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
A.1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10 (a)(3) of the
Securities Act;
b. 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;
c. 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;
provided, however, the paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act, 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 the 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.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
C.1. The undersigned Registrant hereby undertakes as follows: that, prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is part of this registration statement, by any
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<PAGE> 5
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reoffering by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
2. The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
the offering of securities subject to Rule 415, will be filed as a part of an
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, 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.
D. Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such
indemnification is against public policy as expressed in the Act 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 and will be governed by the final
adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that 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, State of Illinois, on this 17th day of
August, 1998.
CNA SURETY CORPORATION
By: /s/ MARK C. VONNAHME
------------------------------------
Name: Mark C. Vonnahme
Title: President and Chief Executive
Officer
POWER OF ATTORNEY
KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark C. Vonnahme and Sandra D. Wagman,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
registration statement (including post-effective amendments), and to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ MARK C. VONNAHME President, Chief Executive Officer and
- ------------------------------------ Director August 17, 1998
Mark C. Vonnahme
/s/ JOHN S. HENEGHAN Chief Financial Officer and Principal
- ------------------------------------ Accounting Officer August 17, 1998
John S. Heneghan
/s/ PHILIP H. BRITT Director August 17, 1998
- ------------------------------------
Philip H. Britt
/s/ GIORGIO BALZER Director August 17, 1998
- ------------------------------------
Giorgio Balzer
/s/ DAVID T. CUMMING Director August 17, 1998
- ------------------------------------
David T. Cumming
/s/ ROD F. DAMMEYER Director August 17, 1998
- ------------------------------------
Rod F. Dammeyer
/s/ MELVIN GRAY Director August 17, 1998
- ------------------------------------
Melvin Gray
/s/ JOE P. KIRBY Director August 17, 1998
- ------------------------------------
Joe P. Kirby
/s/ ROY E. POSNER Director August 17, 1998
- ------------------------------------
Roy E. Posner
/s/ ADRIAN M. TOCKLIN Director August 17, 1998
- ------------------------------------
Adrian M. Tocklin
/s/ ROBERT T. VAN GIESON Director August 17, 1998
- ------------------------------------
Robert T. Van Gieson
</TABLE>
6
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
4.1* Certificate of Incorporation dated December 10, 1996
4.2* Amendment to Certificate of Incorporation, dated May 27,
1997
4.3 Amended By-Laws
5.1 Opinion of Sonnenschein Nath & Rosenthal
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Sonnenschein Nath & Rosenthal, included in
opinion filed as Exhibit 5.1 hereto
24.1 Power of Attorney (included on signature page)
</TABLE>
- -------------------------
* Incorporated by reference
7
<PAGE> 1
AMENDED
-------
BY-LAWS
-------
OF
CNA SURETY CORPORATION
----------------------
ARTICLE I
---------
Offices
-------
Section 1. Registered Office. The registered office shall be in the
City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
----------
Stockholders
------------
Section 1. Meetings. All meetings of the stockholders for the election
of directors or for any other purpose shall be held at such time and place,
either within or without the State of Delaware, as shall be designated from time
to time by the board of directors and stated in the notice of the meeting or in
a duly executed waiver of notice thereof.
Section 2. Annual Meetings. Annual meetings of stockholders shall be
held on such date and at such time as shall be designated by the board of
directors from time to time and stated in the notice of the meeting. If any
annual meeting for the election of directors shall not be held on the date
designated therefor, the board of directors shall cause the meeting to be held
as soon thereafter as is convenient. Stockholders shall elect the board of
directors at such annual meeting and transact such other business as may
properly be brought before the meeting.
Section 3. Advance Notice of Stockholder Proposed Business. At an
annual meeting of the stockholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought
before an annual meeting, business must be specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the board of
directors or otherwise properly brought before the meeting by a stockholder. In
addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the secretary of the corporation. To
be timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation, not less than fifty days nor
more than seventy-five days prior to the meeting; provided, however, that in the
event that less than sixty-five days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be so
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received not later than the close of business on the fifteenth day following the
day on which such notice of the date of the annual meeting was mailed or such
public disclosure was made.
A stockholder's notice to the secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and record address of the stockholder proposing such business, (iii) the class
and number of shares of capital stock of the corporation which are beneficially
owned by such stockholder, and (iv) any material interest of such stockholder in
such business.
Notwithstanding anything in these by-laws to the contrary, no business
shall be conducted at the annual meeting except in accordance with the
procedures set forth in this Section 3; provided, however, that nothing in this
Section 3 shall be deemed to preclude discussion by any stockholder of any
business properly brought before the annual meeting in accordance with such
procedures.
The chairman of an annual meeting shall, if the facts so warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of section 3, and if the
chairman should so determine, the chairman shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted.
Section 4. Meeting Notices. Written notice of stockholder meetings,
whether annual or special, stating the place, date and hour of the meeting shall
be given to each stockholder entitled to vote at such meeting not less than ten
or more than sixty days before the date of the meeting. Written notice of a
special meeting shall state the purpose or purposes for which the meeting is
called. Notice of any meeting of stockholders shall not be required to be given
to any stockholder who shall attend such meeting in person or by proxy, except a
stockholder who shall attend such meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting was not lawfully called or convened. Except as otherwise required by
law, notice of any meeting of stockholders following an adjournment shall not be
required to be given if the time and place thereof are announced at the meeting
which is adjourned.
Section 5. Voting Lists. The officer who has charge of the stock ledger
of the corporation shall prepare and make or cause to be prepared and made
through a transfer agent appointed by the board of directors, at least ten days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof and may be inspected by any
stockholder who is present.
Section 6. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called at any time by the chairman of the
board of directors or by the president and shall be called by the chairman,
president or the secretary at the request in writing of a majority of the board
of directors or at the request in writing of stockholders owning a majority in
the amount of the entire capital stock of the
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<PAGE> 3
corporation issued and outstanding which are entitled to vote. Such request
shall state the purpose or purposes of the proposed meeting.
Section 7. Quorum. The holders of a majority of the stock issued and
outstanding which are entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Subject to the terms of Section 8 hereof, when a quorum is present at
any meeting, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of statute or of the certificate of incorporation, a different vote is
required in which case such express provision shall govern and control the
decision of such question.
Section 8. Supermajority Vote. Prior to the second anniversary of the
merger of Surety Acquisition Company into Capsure Holdings Corp., in addition to
the requirements of Section 7 of this Article, the following actions shall
require the affirmative vote of the holders of at least 75% of the common stock
having voting power present in person or represented by proxy at a meeting with
a quorum present: (i) any amendment to the certificate of incorporation; (ii)
any business combination between the corporation and any third party; (iii) any
proposal to sell or otherwise transfer substantially all of the assets of the
corporation; and (iv) any amendment to this Section 8.
Section 9. Voting of Shares. Unless otherwise specifically provided by
statute or the certificate of incorporation, or these by-laws each stockholder
shall at every meeting of the stockholders be entitled to one vote for each
share of the capital stock having voting power held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
Section 11. Informal Action by Stockholders. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken for or in
connection with any corporate action, by any provision of the statutes, the
meeting and vote of stockholders may be dispensed with if all of the
stockholders who would have been entitled to vote upon the action if such
meeting were held shall consent in writing to such corporate action being taken;
or if the certificate of incorporation authorizes the action to be taken with
the written consent of the holders of less than all of the stock who would have
been entitled to vote upon the action if a meeting were held, then on the
written consent of the stockholders having not less than such percentage of the
number of votes as may be authorized in the certificate of incorporation;
provided that in no case shall the written consent be by the holders of stock
having less than the minimum percentage of the vote required by statute for the
proposed corporate
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<PAGE> 4
action, and provided that prompt notice must be given to all stockholders of the
taking of corporate action without a meeting and by less than unanimous written
consent.
Section 12. Stock Ledger. The stock ledger of the corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 5 of this Article II or the books of the
corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 13. Conduct of Meeting. Unless otherwise provided by the board
of directors, the chief executive officer shall act as chairman; and the
secretary, or in his absence an assistant secretary, shall act as secretary of
the meeting. The order of business shall be determined by the chairman of the
meeting.
Section 14. Inspectors of Election. The corporation, in advance of each
meeting of stockholders, may appoint one or more inspectors of election to act
thereat. The corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act and, if no inspector or
alternate is able to act at a meeting of stockholders, the chairman shall
appoint one or more inspectors to act at the meeting.
ARTICLE III
-----------
Directors
---------
Section 1. Number, Tenure and Qualifications. The number of directors
which shall constitute the whole board shall be eleven or such other number as
may be established from time to time by the board of directors. The directors
shall be elected at the annual meeting of the stockholders, except as provided
in Section 3 of this Article, and each director elected shall hold office until
his or her successor is elected and qualified, or until his or her earlier
resignation or removal. Directors need not be stockholders.
Section 2. Nomination of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors at a meeting of stockholders. Nominations of persons for election to
the board of directors may be made at a meeting of stockholders by the board of
directors or by any nominating committee or person appointed by the board of
directors or by any stockholder of the corporation entitled to vote for the
election of directors at the meeting who complies with the notice procedures set
forth in this Section 2. Nominations by stockholders shall be made pursuant to
timely written notice to the secretary of the corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than fifty days nor more
than seventy-five days prior to the meeting; provided, however, that in the
event that less than sixty-five days' notice or prior public disclosure of the
date of the meeting is given or made to the stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the fifteenth day following the day on which such notice of the date
of the meeting was mailed or such public disclosure was made. Such stockholder's
notice to the secretary shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director, (i)
the name, age, business address and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class and number of
shares of capital stock of the corporation which are beneficially owned by the
person, and (iv) any other information relating to the person that is required
to be disclosed in solicitations for proxies for election of directors
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pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended; and (b) as to the stockholder giving the notice (i) the name and record
address of the stockholder, and (ii) the class and number of shares of capital
stock of the corporation which are beneficially owned by the stockholder. The
corporation may require any proposed nominee to furnish such other information
as may reasonably be required by the corporation to determine the eligibility of
such proposed nominee to serve as a director. No person shall be eligible for
election as a director by the stockholders unless nominated in accordance with
the procedures set forth herein.
The chairman of the meeting shall, if the facts warrant, determine and
declare at the meeting that a nomination was not made in accordance with the
foregoing procedure, and if the chairman should so determine, the chairman shall
so declare to the stockholders present at the meeting and the defective
nomination shall be disregarded.
Section 3. Vacancies. Except as otherwise provided by law, any vacancy
on the board of directors (whether because of death, resignation, removal, an
increase in the number of directors or any other cause) may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and any director so chosen shall hold office until the
next annual election and until his or her successor is duly elected and shall
qualify, or until his or her earlier resignation or removal. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute. If, at the time of filling any vacancy or newly-created
directorship, the directors then in office shall constitute less than a majority
of the whole board (as constituted immediately prior to any such increase), the
Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly-created directorships,
or to replace the directors chosen by the directors then in office.
Section 4. General Powers. The business of the corporation shall be
managed under the direction of its board of directors which may exercise all
such powers of the corporation and do all such lawful acts and things as are not
by statute or by the certificate of incorporation or by these by-laws directed
or required to be exercised or done by the stockholders.
Section 5. Meetings. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 6. First Meeting. The first meeting of each newly-elected board
of directors shall be held at such time and place as shall be fixed by the vote
of the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly-elected directors in order to legally constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly-elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors or as shall be specified in a written
waiver signed by all of the directors.
Section 7. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board.
Section 8. Special Meetings. Special meetings of the board may be called by
either the chairman of the board or the president on twenty-four hours' notice
to each director, either personally or by mail or by telegram or by facsimile;
special meetings shall be called by the president or the secretary in a like
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manner and on like notice on the written request of two directors; provided,
however, that a meeting may be called on such shorter notice as the person or
persons calling such meeting may deem necessary or appropriate in the
circumstances. Any meeting of the board of directors shall be a legal meeting
without any notice thereof having been given if all the directors shall be
present thereat or if notice thereof shall be waived either before or after such
meeting in writing by all absentees therefrom provided a quorum be present
thereat. Notice of any adjourned meeting need not be given.
Section 9. Quorum. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 10. Organization. At each meeting of the board of directors,
the chairman of the board of directors, or in his or her absence, the president
of the corporation, or in his or her absence, a vice chairman, or in the absence
of all of said officers, a chairman chosen by a majority of the directors
present, shall preside. The secretary of the corporation, or in his or her
absence, an assistant secretary, if any, or, in the absence of both the
secretary and assistant secretaries, any person whom the chairman shall appoint,
shall act as secretary of the meeting.
Section 11. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting, if all members of the board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board or committee.
Section 12. Participation by Conference Telephone. Unless otherwise
restricted by the certificate of incorporation or these by-laws, members of the
board of directors, or any committee designated by the board, may participate in
a meeting of the board or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 13. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee; provided, however, that, if the resolution of the board of directors
so provides, in the absence or disqualification of any such member or alternate
member of such committee or committees, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he, she or they
constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or disqualified
member or alternate member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the
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corporation or a revocation of a dissolution or amending the by-laws of the
corporation; and, unless the resolution expressly so provides, no such committee
shall have the power or authority to declare a dividend or to authorize the
issuance of stock. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the board of
directors. A majority of those entitled to vote at any meeting of any committee
shall constitute a quorum for the transaction of business at that meeting.
Each-committee shall keep regular minutes of its meetings and report the same to
the board of directors when required.
Section 14. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors or committee and
may be paid a fixed sum for attendance at each meeting of the board of directors
or such committee and/or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Nothing contained in this Section 14 shall be
construed as prohibiting the board of directors from adopting a plan permitting
non-employee directors to defer all or any portion of their compensation.
ARTICLE IV
----------
Notices
-------
Section 1. Written Notice. Whenever, under the provisions of the
statutes or of the certificate of incorporation or of these by-laws, notice is
required to be given to any director or stockholder, such notice shall be in
writing and shall be given in person or by mail to such director or stockholder.
If mailed, such notice shall be addressed to such director or stockholder at his
or her address as it appears on the records of the corporation, with postage
thereon prepaid, and shall be deemed to be given at the time when the same shall
be deposited in the United States mail. Notice to directors may also be given by
telegram, telex or facsimile transmission.
Section 2. Waiver of Notice. Whenever any notice is required to be
given under the provisions of the statutes or of the certificate of
incorporation or of these by-laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE V
---------
Officers
--------
Section 1. Number. The officers of the corporation shall be chosen by
the board of directors and shall include a president, a treasurer and a
secretary. The board of directors, in its discretion, may also choose a
chairman of the board of directors and one or more vice chairmen of the board of
directors from among their members and one or more vice-presidents and one or
more assistant treasurers and assistant secretaries. The board of directors may
appoint such other officers and agents as it shall deem desirable who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these by-laws otherwise provide. The officers of the corporation need not be
stockholders of the corporation.
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Section 2. Election and Term of Office. The board of directors at its
first meeting after each annual meeting of stockholders shall elect the officers
of the corporation. The officers of the corporation shall hold office until
their successors are chosen and qualify.
Section 3. Removal. Any officer elected or appointed by the board of
directors may be removed, with or without cause, at any time by the affirmative
vote of a majority of the board of directors or by any committee or superior
officer upon whom such power of removal may be conferred by the board of
directors.
Section 4. Vacancies. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
Section 5. Chairman of the Board of Directors. The chairman of the
board of directors shall preside, if present, at all meetings of the board of
directors. Except where by law the signature of the president is required, the
chairman of the board of directors shall possess the same power as the president
to sign all documents of the corporation which the president may be authorized
to sign by these by-laws or by the board of directors. The chairman of the board
of directors shall see that all orders and resolutions of the board of directors
are carried into effect and shall from time to time report to the board of
directors all matters within his or her knowledge which the interests of the
corporation may require to be brought to their notice. During the absence or
disability of the president, the chairman of the board of directors shall
exercise all the powers and discharge all the duties of the president unless the
board of directors shall designate another officer to exercise such powers and
discharge such duties. The chairman of the board of directors shall also perform
such other duties and he or she may exercise such other powers as from time to
time may be prescribed by these by-laws or by the board of directors.
Section 6. Vice Chairmen of the Board of Directors. The vice chairmen
of the board of directors, if any, shall perform such duties and may exercise
such powers as from time to time may be prescribed by the board of directors.
Section 7. President. The president shall be the chief executive
officer of the corporation unless the board of directors shall designate another
officer as chief executive officer, and shall have general and active management
of the business of the corporation, subject to the control of the board of
directors. The president shall vote all shares of stock of any other corporation
standing in the name of this corporation except where the voting thereof shall
be expressly delegated by the board of directors to some other officer or agent
of the corporation. The president shall also perform all duties incident to the
office of the president and such other duties as may be prescribed by these
by-laws or by the board of directors from time to time.
Section 8. The Vice-Presidents. Each vice-president shall perform such
duties and have such powers as the board of directors or chief executive officer
may from time to time prescribe. At the request of the board of directors, the
vice-president (or in the event there be more than one vice-president, the
vice-presidents in the order designated, or in the absence of any designation,
then in the order of their election) shall perform the duties of the president,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the president.
Section 9. The Treasurer. If required by the board of directors, the
treasurer shall give bond for the faithful discharge of his or her duties in
such sum and with such surety or sureties as the board of directors shall
determine. The treasurer (or if there is none, the chief financial officer)
shall: (a)
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have charge and custody of and be responsible for all funds and securities of
the corporation; receive and give receipts for moneys due and payable to the
corporation from any source whatsoever, and deposit all such moneys in the name
of the corporation in such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of these by-laws; (b) sign (unless
the secretary or other proper officer thereunto duly authorized by the board of
directors shall sign), with the chairman of the board of directors, or
president, or a vice president, certificates for shares of the capital stock of
the corporation, the issue of which shall have been authorized by resolution of
the board of directors, provided that the signatures of the officers of the
corporation thereon may be facsimile as provided in these by-laws; and (c) in
general perform all the duties incident to the office of treasurer and such
other duties as from time to time may be assigned to him or her by the chief
executive officer or by the board of directors.
Section 10. The Secretary. The secretary shall: (a) keep the minutes of
the stockholders' and of the board of directors' meetings in one or more books
provided for that purpose; and at the request of the board of directors shall
also perform like duties for the standing committees thereof when required; (b)
see that all notices are duly given in accordance with the provisions of these
by-laws or as required by law; (c) be custodian of the corporate records; (d)
keep a register of the post office address of each stockholder which shall be
furnished to the secretary by such stockholder; (e) have general charge of the
stock transfer books of the corporation; (f) sign (unless the treasurer or other
proper officer thereunto duly authorized by the board of directors shall sign),
with the chairman of the board of directors, or president, or a vice president,
certificates for shares of the capital stock of the corporation the issue of
which shall have been authorized by resolution of the board of directors,
provided that the signatures of the officers of the corporation thereon may be
facsimile as provided in these bylaws; and (g) in general perform all duties
incident to the office of secretary and such other duties as from time to time
may be assigned to him or her by the chairman of the board, the president or by
the board of directors.
Section 11. Assistant Treasurers and Assistant Secretaries. The
assistant treasurers shall respectively, if required by the board of directors,
give bonds for the faithful discharge of their duties in such sums and with such
sureties as the board of directors shall determine. The assistant treasurers and
assistant secretaries, in general, shall perform such duties as shall be
assigned to them by the treasurer or the secretary, respectively, or by the
chief executive officer or the board of directors, and in the event of the
absence, inability or refusal to act of the treasurer or the secretary, the
assistant treasurers or assistant secretaries (in the order designated, or in
the absence of any designation, then in the order of their election) shall
perform the duties of the treasurer or the secretary, respectively.
Section 12. Other Officers. Such other officers as the board of
directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the chief executive officer or the board of
directors. The board of directors may delegate to any other officer of the
corporation the power to choose such other officers and to prescribe their
respective duties and powers.
Section 13. Other Positions. The chief executive officer may authorize
the use of titles, including the titles of chairman, president and vice
president, by individuals who hold management positions with the business
groups, divisions or other operational units of the corporation, but who are not
and shall not be deemed officers of the corporation. Individuals in such
positions shall hold such titles at the discretion of the appointing officer,
who shall be the chief executive officer or any officer to whom the chief
executive officer delegates such appointing authority, and shall have such
powers and perform such duties as such appointing officer may from time to time
determine.
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Section 14. Salaries. The salaries of the officers shall be fixed from
time to time by the board of directors, or by one or more committees or officers
to the extent so authorized from time to time by the board of directors, and no
officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a director of the corporation.
ARTICLE VI
----------
Interested Directors and Officers
---------------------------------
No contract or transaction between the corporation and one or more of
its directors or officers, or between the corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the board of
directors or a committee thereof which authorizes the contract or transaction,
or solely because his, her or their votes are counted for such purpose, if:
(a) The material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are
known to the board of directors or the committee, and the board or
committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or
(b) The material facts as to his or her relationship or
interests and as to the contract or transaction are disclosed or are
known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
stockholders; or
(c) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified by the board of
directors, a committee thereof or the stockholders.
The common or interested directors may be counted in determining the presence of
a quorum at a meeting of the board of directors or of a committee which
authorizes the contract or transaction.
ARTICLE VII
-----------
Indemnification of Directors and Officers
-----------------------------------------
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in or called as a
witness in any Proceeding (as hereinafter defined) because he or she is an
Indemnified Person (as hereinafter defined), shall be indemnified and held
harmless by the corporation to the fullest extent permitted under the Delaware
General Corporation Law (the "DGCL"), as the same now exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the corporation to provide broader indemnification rights than
the DGCL permitted the corporation to provide prior to such amendment). Such
indemnification shall cover all expenses incurred by an Indemnified Person
(including, but not limited to, attorneys' fees and other expenses of
litigation) and all liabilities and losses (including, but
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not limited to, judgments, fines, ERISA or other excise taxes or penalties and
amounts paid or to be paid in settlement) incurred by such person in connection
therewith.
Notwithstanding the foregoing, except with respect to indemnification
specified in section 3 of this Article, the corporation shall indemnify an
Indemnified Person in connection with a Proceeding (or part thereof) initiated
by such person only if such Proceeding (or part thereof) were authorized by the
board of directors of the corporation.
For purposes of this Article:
(i) a "Proceeding" is an action, suit or proceeding, whether
civil, criminal, administrative or investigative, and any appeal
therefrom;
(ii) an "Indemnified Person" is a person who is, was, or had
agreed to become a director or an officer or a Delegate, as defined
herein, of the corporation or the legal representative of any of the
foregoing; and
(iii) a "Delegate" is a person serving at the request of the
corporation or a subsidiary of the corporation as a director, trustee,
fiduciary, or officer of such subsidiary or of another corporation,
partnership, joint venture, trust or other enterprise.
Section 2. Expenses. Expenses, including attorneys' fees, incurred by a
person indemnified pursuant to Section 1 of this Article in defending or
otherwise being involved in a Proceeding shall be paid by the corporation in
advance of the final disposition of such Proceeding, including any appeal
therefrom, upon receipt of an undertaking (the "Undertaking") by or on behalf of
such person to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation; provided, that in
connection with a Proceeding (or part thereof) initiated by such person, except
a Proceeding authorized by Section 3 of this Article, the corporation shall pay
said expenses in advance of final disposition only if such Proceeding (or part
thereof) were authorized by the board of directors. A person to whom expenses
are advanced pursuant hereto shall not be obligated to repay pursuant to the
Undertaking until the final determination of any pending Proceeding in a court
of competent jurisdiction concerning the right of such person to be indemnified
or the obligation of such person to repay pursuant to the Undertaking.
Section 3. Protection of Rights. If a claim under Section 1 of this
Article is not promptly paid in full by the corporation after a written claim
has been received by the corporation or if expenses pursuant to Section 2 of
this Article have not been promptly advanced after a written request for such
advancement accompanied by the Undertaking has been received by the corporation,
the claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim or the advancement of expenses. If
successful, in whole or in part, in such suit, such claimant shall also be
entitled to be paid the reasonable expense thereof (including, without
limitation, attorneys' fees). It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending any
Proceeding in advance of its final disposition where the required Undertaking
has been tendered to the corporation) that indemnification of the claimant is
prohibited by law, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its board of
directors, independent legal counsel or its stockholders) to have made a
determination, if required, prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel or its stockholders) that indemnification of the
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claimant is prohibited, shall be a defense to the action or create a presumption
that indemnification of the claimant is prohibited.
Section 4. Miscellaneous.
(i) Non-Exclusivity of Rights. The rights conferred on any person by
this Article shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the certificate of
incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise. The board of directors shall have the authority, by
resolution, to provide for such indemnification of employees or agents of the
corporation or others and for such other indemnification of directors, officers
or Delegates as it shall deem appropriate.
(ii) Insurance, Contracts and Funding. The corporation may maintain
insurance, at its expense, to protect itself and any director, officer,
employee, or agent of, or person serving in any other capacity with, the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expenses, liabilities or losses, whether or not the
corporation would have the power to indemnify such person against such expenses,
liabilities or losses under the DGCL. The corporation may enter into contracts
with any director, officer or Delegate of the corporation in furtherance of the
provisions of this Article and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect the
advancing of expenses and indemnification as provided in this Article.
(iii) Contractual Nature. The provisions of this Article shall be
applicable to all Proceedings commenced or continuing after its adoption,
whether such arise out of events, acts or omissions which occurred prior or
subsequent to such adoption, and shall continue as to a person who has ceased to
be a director, officer or Delegate and shall inure to the benefit of the heirs,
executors and administrators of such person. This Article shall be deemed to be
a contract between the corporation and each person who, at any time that this
Article is in effect, serves or agrees to serve in any capacity which entitles
him to indemnification hereunder and any repeal or other modification of this
Article or any repeal or modification of the DGCL or any other applicable law
shall not limit any Indemnified Person's entitlement to the advancement of
expenses or indemnification under this Article for Proceedings then existing or
later arising out of events, acts or omissions occurring prior to such repeal or
modification, including, without limitation, the right to indemnification for
Proceedings commenced after such repeal or modification to enforce this Article
with regard to Proceedings arising out of acts, omissions or events occurring
prior to such repeal or modification.
(iv) Severability. If this Article or any portion hereof shall be
invalidated or held to be unenforceable on any ground by any court of competent
jurisdiction, the decision of which shall not have been reversed on appeal, such
invalidity or unenforceability shall not affect the other provisions hereof, and
this Article shall be construed in all respects as if such invalid or
unenforceable provisions had been omitted therefrom.
ARTICLE VIII
------------
Certificates Of Stock and Their Transfer
----------------------------------------
Section l. Certificates of Stock. Every holder of stock in the
corporation shall be entitled to have a certificate, in such form as the board
of directors shall prescribe, signed in the name of the
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corporation by (i) the chairman of the board of directors, president or a
vice-president and (ii) by the treasurer or an assistant treasurer or the
secretary or an assistant secretary of the corporation, certifying the number
and class of shares owned by him or her in the corporation. Any of or all of the
signatures on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 2. Records of Certificates. A record shall be kept of the name
of the person, firm or corporation of record holding the stock represented by
such certificates and the dates thereof, and in case of cancellation, the dates
of cancellation. Every certificate surrendered to the corporation for exchange
or transfer shall be cancelled and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing certificate
shall have been so cancelled, except in cases provided for in Section 3 of this
Article VIII.
Section 3. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require and/or to give the corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 4. Transfers of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Transfer and Registry Agents. The corporation may maintain a
transfer office or agency where its stock shall be directly transferable and a
registry office, which may be identical with the transfer or agency, where its
stock shall be registered; and the corporation may, from time to time, maintain
one or more other transfer offices or agencies, and registry offices; and the
board of directors may from time to time define the duties of such transfer
agents and registrars and make such rules and regulations as it may deem
expedient, not inconsistent with these by-laws, concerning the issue, transfer
and registration of certificates for shares of the capital stock of the
corporation.
Section 6. Fixing Record Date. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the board of directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
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Section 7. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE IX
----------
General Provisions
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Section 1. Execution of Documents. The chief executive officer, or any
other officer, employee or agent of the corporation designated by the board of
directors or designated in accordance with corporate policy approved by the
board of directors, shall have the power to execute and deliver proxies, stock
powers, deeds, leases, contracts, mortgages, bonds, debentures, notes, checks,
drafts and other orders for payment of money and other documents for and in the
name of the corporation, and such power may be delegated (including the power to
redelegate) by the chief executive officer or to the extent provided in such
corporate policy by written instrument to other officers, employees or agents of
the corporation.
Section 2. Dividends. Subject to the provisions of the certificate of
incorporation, dividends upon the capital stock of the corporation, if any, may
be declared by the board of directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property or in shares of the
capital stock, subject to the provisions of the Certificate of incorporation.
Before payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the directors from time
to time, in their absolute discretion, think proper as a reserve or reserves to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or for such other purpose as the directors
shall think conducive to the interest of the corporation and the directors may
modify or abolish any such reserve in the manner in which it was created.
Section 3. Fiscal Year. The fiscal year of the corporation shall end on the last
day of December in each year.
ARTICLE X
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Amendments
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Except as otherwise provided in these by-laws, these by-laws may be
altered, amended or repealed, in whole or in part, or new by-laws may be adopted
by the stockholders or the board of directors; provided, however, that notice of
such alteration, amendment, repeal or adoption of new by-laws be contained in
the notice of such meeting of stockholders or board of directors as the case may
be. Except as otherwise provided in these by-laws, all such amendments must be
approved by either the holders of a majority of the outstanding capital stock
entitled to vote thereon or by the board of directors.
<PAGE> 1
Exhibit 5.1
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[ARTHUR J. SIMON LETTERHEAD]
(312) 876-7567
September 21, 1998
CNA Surety Corporation
CNA Plaza
Chicago, Illinois 60685
Re: CNA Surety Corporation
Registration Statement on Form S-8
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Ladies and Gentlemen:
As counsel to CNA Surety Corporation, a Delaware corporation (the
"Company"), we have represented the Company in connection with the Registration
Statement on Form S-8 concerning shares of Common Stock, $0.01 par value, of the
Company ("Common Stock") to be issued in connection with the Non-Employee
Director Deferred Compensation Plan (the "Plan"). In connection with the
foregoing, we have examined the corporate records of the Company, including its
Certificate of Incorporation, as amended, by-laws and other corporate records
and documents and have made such other examinations as we consider necessary to
render this opinion. Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Delaware.
2. The Plans and the shares of Common Stock covered by the Plan have been
duly authorized by all requisite corporate action.
3. With respect to the authorized but unissued shares of Common Stock
covered by the Plan, such shares, when issued in accordance with the
terms and provisions for their issuance under the Plan, will be validly
issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the registration
statement referenced above and to the references to the firm in the registration
statement
Yours very truly,
SONNENSCHEIN NATH & ROSENTHAL
By:
Arthur J. Simon
<PAGE> 1
Exhibit 23.1
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CNA Surety Corporation on Form S-8, filed on or about September 23, 1998 of our
report dated February 27, 1998, appearing in the Annual Report on Form 10-K of
CNA Surety Corporation for the year ended December 31, 1997.
Deloitte & Touche LLP
Chicago, Illinois
September 23, 1998
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