As filed with the Securities and Exchange Commission on October 8, 1998
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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CNA Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-6169860
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
CNA Plaza
Chicago, Illinois 60685
(Address of Principal Executive Offices) (Zip Code)
CNA Financial Corporation Officer Stock Ownership Plan
(Full Title of the Plan)
Jonathan D. Kantor
Senior Vice President, Secretary and General Counsel
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
(Name and Address of Agent For Service)
(312) 822-1384
(Telephone Number, Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE
=======================|===========================|===========================|
Title Of | Proposed Maximum | |
Securities | Aggregate Offering Price | |
To Be Registered | | Amount of Registration Fee|
=======================|===========================|===========================|
Common Stock, par | | |
value $2.50 per share. | $60,000,000 | $17,700 |
=======================|===========================|===========================|
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PART II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have heretofore been filed by CNA Financial
Corporation, a Delaware corporation (the "Company"), with the Securities and
Exchange Commission (the"Commission") pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), File No. 0-27754, are incorporated
by reference herein and shall be deemed to be a part hereof:
(a) Annual Report on Form 10-K for the Year ended December 31, 1997;
(b) Quarterly Reports on Form 10-Q for the Quarters ended March 31 and
June 30, 1998, respectively;
(c) Current Report on Form 8-K dated August 5, 1998; and
(d) The description of Common Stock included in the Company's
Registration Statement on Form S-3 (File No. 33-35250) filed with the
Commission on June 6, 1990.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated herein by reference and shall be deemed a part hereof from the date
of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145(a) of the Delaware General Corporation Law (the "DGCL") provides in
relevant part that "a corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation)by reason of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer,employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful."
With respect to derivative actions, Section 145(b) of the DGCL provides in
relevant part that "[a] corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party
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to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor . . . [by reason of the person's
service in one of the capacities specified in the preceding sentence] against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper."
Article X of the Company's By-Laws contains provisions similar to
Section 145 of the DGCL. See also the undertakings set out in response to Item 9
herein.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Index to Exhibits which is incorporated herein by reference.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii)To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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3. To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to Section 145(a) of the DGCL and Article X of the Company's
By-Laws, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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, Illinois, on October 8, 1998.
CNA FINANCIAL CORPORATION
By /S/ JONATHAN D. KANTOR
--------------------------
Jonathan D. Kantor
Senior Vice President, Secretary and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement hasbeen signed by the following persons in the capacities
indicated on October 8, 1998.
Title
*
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Laurence A. Tisch Chief Executive Officer and Director
/s/ W. James MacGinnitie
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W. James MacGinnitie Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
*
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Antoinette Cook Bush Director
*
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Dennis H. Chookaszian Director
*
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Philip L. Engel Director
*
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Robert P. Gwinn Director
*
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Walter F. Mondale Director
*
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Edward J. Noha Director
*
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Joseph Rosenberg Director
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*
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Richard L. Thomas Director
*
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James S. Tisch Director
*
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Preston Robert Tisch Director
*
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Marvin Zonis Director
*By: /s/ Jonathan D. Kantor
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Attorney-in-Fact
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EXHIBIT INDEX
Exhibit Description of Exhibit Sequential
Number Page Number
- -------- ----------------------- -----------
3.1 Certificate of Incorporation of the Company. . . . . . . .
3.2 By-Laws of the Company . . . . . . . . . . . . . . . . . .
4.1 CNA Financial Corporation Officer Stock Ownership Plan . .
5.1 Opinion of Mayer, Brown & Platt . . . . . . . . . . . . .
23.1 Consent of Mayer, Brown & Platt (included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP . . . . . . . . . . . . .
24.1 Powers of Attorney . . . . . . . . . . . . . . . . . . . .
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
CNA FINANCIAL CORPORATION
FIRST. The name of the Corporation is CNA FINANCIAL CORPORATION.
SECOND. The address of its registered office in the State of Delaware is 1209
Orange Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business purposes to be conducted or promoted is:
1. To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
2. To acquire, as a going concern or otherwise, and pay for in cash, stock
or bonds of the Corporation or otherwise, the whole or any part of the
business, goodwill, rights, or other assets and to undertake or assume
the whole or any part of the obligations or liabilities of any person,
firm, trust, association or corporation.
3. To apply for, obtain, lease or otherwise to acquire and to hold, use,
own and introduce, and to sell, assign and otherwise deal in and
dispose of, any trademarks, trade names, patents and applications for
patents, copyrights, licenses, improvements, processes and secret
formulae used in connection with, or secured under letters patent of
the United States or any foreign country or otherwise, and whether or
not in any way relating to any of the businesses in which the
Corporation may engage, and to use, exercise, develop and grant
licenses in respect of or otherwise turn to account, any such
trademarks, patents, licenses, processes or copyrights.
4. To acquire by purchase, subscription or otherwise, and to invest in,
receive, hold, own, guarantee, sell, assign, exchange, transfer,
mortgage, pledge or otherwise dispose of or deal in and with any of
the shares of the capital stock, or any voting trust certificates in
respect of the shares of capital stock, scrip, warrants, rights,
bonds, debentures, notes, trust receipts, and other securities,
obligations, choses in action and evidences of indebtedness or
interest issued or created by any corporations, joint stock companies,
syndicates, associations, firms, trusts or persons, public or private,
or by the government of the United States, or by any foreign
government, or by any state, territory, province, municipality or
other political subdivision or by any government agency; and to issue
stocks, bonds or other obligations of the Corporation in exchange
therefor; and as owner thereof to possess and exercise all the rights,
powers and privileges of ownership, including the right to execute
consents and vote thereon, and to do any and all acts and things
necessary or advisable for the preservation, protection, improvement
and enhancement in value thereof.
5. To borrow or raise moneys for any of the purposes of the Corporation
and, from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or
non-negotiable instruments and evidences of indebtedness, and to secure
the payment of any thereof and of the interest thereon by mortgage upon
or pledge, conveyance or assignment in trust of the whole or any part
of the property of the Corporation, whether at the time owned or
thereafter acquired, and to sell, pledge or otherwise dispose of such
bonds or other obligations of the Corporation for its corporate
purposes.
6. To purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the purchase
of its own shares of capital stock when such use would cause any
impairment of its capital and provided further that shares of its own
capital stock belonging to it shall not be voted directly or
indirectly.
7. To aid by loan, subsidy or otherwise, any corporation, joint stock
company, trust, association or enterprise any obligation of which or
any interest in which is held by the Corporation or in the affairs or
prosperity of which the Corporation has a lawful interest, and to do
all acts and things designed to protect, preserve, improve or enhance
the value of such obligations or interest; to guarantee or become
surety in respect to the contracts, dividends, stocks, bonds, notes and
other obligations of such corporations, joint stock companies, trusts,
associations or enterprises, and to secure the performance or payments
of the same by mortgage of or lien upon any or all of the assets of the
Corporation.
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8. To cause to be organized under the laws of any jurisdiction
corporations, joint stock companies, trusts or associations and to
cause the same to be dissolved, wound up, liquidated, merged or
consolidated; and to sell or lease to any such corporation, joint stock
company, trust or association or to any other corporation, joint stock
company, trust or association, the whole or any part of the property
and assets of the Corporation, including its goodwill, and the right to
assume its name and to receive and accept in payment or exchange
therefor, stocks, bonds, securities or other obligations of the
transferee, or of other corporations, joint stock companies, trusts or
associations; to consolidate by any lawful method with any other
corporation, joint stock company, trust or association of any
jurisdiction.
9. To act as agent or representative, broker or factor, for governments,
corporations, joint stock companies, trusts, associations, firms or
individuals; and to undertake and carry on the business of management.
10. To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use
and otherwise deal in and with real or personal property, or any
interest therein, wherever situated, and to sell, convey, lease,
exchange, transfer or otherwise dispose of, or mortgage or pledge, all
or any of the Corporation's property and assets, or any interest
therein, wherever situated.
In general, to possess and exercise all the powers and privileges granted by the
General Corporation Law of Delaware or by any other law of Delaware or by this
Certificate of Incorporation together with any powers incidental thereto, so far
as such powers and privileges are necessary or convenient to the conduct,
promotion or attainment of the business or purposes of the Corporation.
The business and purposes specified in the foregoing paragraphs shall, except
where otherwise expressed, be in no way limited or restricted by reference to,
or inference from, the terms of any other paragraph in this Certificate of
Incorporation, but the business and purposes specified in each of the foregoing
paragraphs of this Article shall be regarded as independent business and
purposes.
FOURTH. The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is Two Hundred Twelve Million Five
Hundred Thousand (212,500,000) shares of Preferred Stock without par value
(Preferred Stock) and Two Hundred Million (200,000,000) shares of Common Stock
of the par value of $2.50 per share (Common Stock). The designations, voting
powers, preferences and relative participating, optional or other special
rights, and qualifications, limitations or restrictions of the above classes of
stock be as follows:
DIVISION I
Preferred Stock
1. Shares of Preferred Stock may be issued in one or more series at such time
or times and for such consideration or considerations as the Board of
Directors may determine. All shares of any one series shall be of equal
rank and identical in all respects.
2. The Board of Directors is expressly authorized at any time, and from time
to time, to provide for the issuance of shares of Preferred Stock in one or
more series, with such voting powers, full or limited but not to exceed one
vote per share, or without voting powers and with such designations,
preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof, as shall be stated
and expressed in the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, and as are not stated and
expressed in this Certificate of Incorporation, or any amendment thereto,
including (but without limiting the generality of the foregoing) the
following:
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a) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board
of Directors in creating such series) be increased or decreased (but
not below the number of shares then outstanding) from time to time by
action of the Board of Directors.
b) The dividend rate or rates on the shares of such series and the
relation which such dividends shall bear to the dividends payable on
any other class or classes or of any other series of capital stock, the
terms and conditions upon which and the period in respect of which
dividends shall be payable, whether and upon what conditions such
dividends shall be cumulative and, if cumulative, the date or dates
from which dividends shall accumulate.
c) Whether the shares of such series shall be redeemable, the limitations
and restrictions with respect to such redemption, the time or times
when, the price or prices at which and the manner in which such shares
shall be redeemable, including the manner of selecting shares of such
series for redemption if less than all shares are to be redeemed.
d) The rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary
liquidation, dissolution, distribution of assets or winding-up of the
Corporation, which rights may vary depending on whether such
liquidation, dissolution, distribution or winding-up is voluntary or
involuntary, and, if voluntary, may vary at different dates.
e) Whether the shares of such series shall be subject to the operation of
a purchase, retirement or sinking fund, and, if so, whether and upon
what conditions such purchases, retirement or sinking fund shall be
cumulative or noncumulative, the extent to which and the manner in
which such fund shall be applied to the purchase or redemption of the
shares of such series for retirement or to other corporate purposes and
the terms and provisions relative to the operation thereof.
f) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or classes or of any other
series of any class or classes of capital stock of the Corporation,
and, if so convertible or exchangeable, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of adjusting
the same, and any other terms and conditions of such conversion or
exchange.
g) The voting powers, full and/or limited, if any, of the shares of such
series; and whether and under what conditions the shares of such series
(alone or together with the shares of one or more other series having
similar provisions) shall be entitled to vote separately as a single
class, for the election of one or more additional directors of the
Corporation in case of dividend arrearages or other specified events,
or upon other matters.
h) Whether the issuance of any additional shares of such series, or of any
shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other
series.
i) Any other preferences, privileges and powers, and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors
may deem advisable and as shall not be inconsistent with the provisions
of this Certificate of Incorporation.
3. No dividends shall be paid or declared or set apart for payment on any
particular series of Preferred Stock in respect of any period unless
accumulated dividends shall be or shall have been paid, or declared and set
apart for payment, pro rata on all shares of Preferred Stock at the time
outstanding of each other series which ranks equally as to dividends with
such particular series, so that the amount of dividends declared on such
particular series shall bear the same ratio to the amount declared on each
such other series as the dividend rate of such particular series shall bear
to the dividend rate of such other series.
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4. Unless and except to the extent otherwise required by law or provided in
the resolution or resolutions of the Board of Directors creating any series
of Preferred Stock pursuant to this Division I, the holders of the
Preferred Stock shall have no voting power with respect to any matter
whatsoever. In no event shall the Preferred Stock be entitled to more than
one vote in respect of each share of stock. Subject to the protective
conditions or restrictions of any outstanding series of Preferred Stock any
amendment to this Certificate of Incorporation which shall increase or
decrease the authorized capital stock of any class or classes may be
adopted by the affirmative vote of the holders of a majority of the
outstanding shares of the voting stock of the Corporation.
5. Shares of Preferred Stock redeemed, converted, exchanged, purchased,
retired or surrendered to the Corporation, or which have been issued and
reacquired in any manner, shall, upon compliance with any applicable
provisions of The General Corporation Law of the State of Delaware, have
the statutus of authorized and unissued shares of Preferred Stock and may
be reissued by the Board of Directors as part of the series of which they
were originally a part or may be reclassified into and reissued as part of
a new series or as a part of any other series, all subject to the
protective conditions or restrictions of any outstanding series of
Preferred Stock.
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DIVISION II
Common Stock
1. Dividends. Subject of the preferential dividend rights, if any, applicable
to shares of the Preferred Stock and subject to applicable requirements, if
any, with respect to the setting aside of sums for purchase, retirement or
sinking funds for the Preferred Stock, the holders of the Common Stock
shall be entitled to receive, to the extent permitted by law, such
dividends as may be declared from time to time by the Board of Directors.
2. Liquidation. In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding-up of the Corporation, after
distribution in full of the preferential amounts, if any, to be distributed
to the holders of shares of the Preferred Stock, holders of the Common
Stock shall be entitled to receive all the remaining assets of the
Corporation of whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common Stock held by them
respectively.
3. Voting Rights. Except as may be otherwise required by law or this
Certificate of Incorporation, each holder of the Common Stock shall have
one vote in respect of each share of stock held by him of record on the
books of the Corporation on all matters voted upon by the stockholders.
DIVISION III
Other Provisions
1. No holder of stock of any class of the Corporation shall be entitled as a
matter of right to purchase or subscribe for any part of any unissued stock
of any class, or of any additional stock of any class of capital stock of
the Corporation, or of any bonds, certificates of indebtedness, debentures,
or other securities convertible into stock of the Corporation, now or
hereafter authorized, but any such stock or other securities convertible
into stock may be issued and disposed of pursuant to resolution by the
Board of Directors to such persons, firms, corporations or associations and
upon such terms and for such consideration (not less than the par value or
stated value thereof) as the Board of Directors in the exercise of its
discretion may determine and as may be permitted by law without action by
the stockholders. The Board of Directors may provide for payment therefor
to be received by the Corporation in cash, property or services. Any and
all shares of stock so issued for which the consideration so fixed has been
paid or delivered, shall be deemed fully paid and not liable to any further
call or assessment.
FIFTH. The name and mailing address of each incorporator is as follows:
Name Mailing Address
B. J. Consono 100 West Tenth Street
Wilmington, Delaware
F.J. Obara, Jr. 100 West Tenth Street
Wilmington, Delaware
B.A. McClain 100 West Tenth Street
Wilmington, Delaware
SIXTH. The Corporation is to have perpetual existence.
SEVENTH. The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatsoever.
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EIGHTH. In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized, subject to the protective
conditions or restrictions of any outstanding series of Preferred Stock fixed by
the Board of Directors pursuant to the authority conferred upon the Board of
Directors by Article Fourth of this Certificate of Incorporation and Section 151
of Title 8 of the Delaware Code:
1. To make, alter or repeal the By-Laws of the Corporation.
2. To authorize and cause to be executed mortgages and liens upon the
real and personal property of the Corporation.
3. To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose and to abolish
any such reserve in the manner in which it was created.
4. By a majority of the whole Board, to designate one or more committees,
each committee to consist of two 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. Any such
committee, to the extent provided in the resolution or in the By-Laws
of the Corporation, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of
the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; provided, however, the
By-Laws may provide that in the absence or disqualification of any
member of such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or
not he 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.
5. When and as authorized by the affirmative vote of the holders of a
majority of the stock issued and outstanding having voting power given
at a stockholders' meeting duly called upon such notice as is required
by statute, or when authorized by the written consent of the holders
of a majority of the voting stock issued and outstanding, to sell,
lease or exchange all or substantially all of the property and assets
of the Corporation, including its goodwill and its corporate
franchises, upon such terms and conditions and for such consideration,
which may consist in whole or in part of money or property including
shares of stock in, and/or other securities of, any other corporation
or corporations, as its Board of Directors shall deem expedient and
for the best interests of the Corporation.
NINTH. Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class
stockholders, of this Corporation as the case may be, and also on this
Corporation.
TENTH. Meetings of stockholders and of the Board of Directors may be held within
or without the State of Delaware, as the By-Laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the statutes)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the By-Laws of the Corporation.
Elections of Directors need not be by written ballot unless the By-Laws of the
Corporation shall so provide.
ELEVENTH. The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
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TWELFTH. 1. 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 or committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if:
a) The material facts as to his 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 a vote sufficient for such purpose without
counting the vote of the interested Director or Directors; or
b) The material facts as to his interest 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.
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.
THIRTEENTH. 1. No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director, except (1) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit.
2. Any repeal or modification of this Article THIRTEENTH shall not increase
the personal liability of any director for any act or occurrence taking
place prior to such repeal or modification, or otherwise adversely affect
any right or benefit of a director existing at the time of such repeal or
modification.
3. The provisions of this Article THIRTEENTH shall not be deemed to limit or
preclude indemnification of a director by the Corporation for any liability
which has not been limited by the provisions of this Article THIRTEENTH.
FOURTEENTH. Any corporate action upon which a vote of stockholders is required
or permitted may be taken with the written consent of stockholders having not
less than a majority of all of the stock entitled to vote upon the action if a
meeting were held; provided, that in no case shall the written consent be by
holders having less than the minimum percentage of the total vote required by
statute or the protective conditions or restrictions of any outstanding series
of Preferred Stock fixed by the Board of Directors pursuant to the authority
conferred upon the Board of Directors by Article Fourth of this Certificate of
Incorporation and Section 151 of Title 8 of the Delaware Code for the proposed
corporate action and provided that prompt notice be given to all stockholders of
the Corporation of the taking of corporate action without a meeting and by less
than unanimous written consent.
Exhibit 3.2
BY-LAWS
OF
CNA FINANCIAL CORPORATION
(As Amended Effective May 6, 1998)
ARTICLE I. OFFICES.
SECTION 1. The registered office shall be in the City of Wilmington, County of
New Castle, State of Delaware.
SECTION 2. 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. MEETINGS OF STOCKHOLDERS.
SECTION 1. Meetings of stockholders for any purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual meetings of stockholders, commencing with the year 1970, shall
be held on the first Wednesday in May if not a legal holiday, and if a legal
holiday, then on the next business day following, at 10:00 a.m., or at such
other date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting, at which they shall elect by
a plurality vote a Board of Directors, and transact such other business as may
properly be brought before the meeting. Elections of Directors need not be by
ballot.
SECTION 3. Written notice of the annual meeting 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 nor more than fifty days before the date of the
meeting.
SECTION 4. The officer who has charge of the stock ledger of the Corporation
shall prepare and make, 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 opened
to the examination of any stockholder, for the 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 5. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Certificate of Incorporation,
may be called by the Chief Executive Officer or President and shall be called by
the President or Secretary at the request in writing of a majority of the Board
of Directors, or at the request in writing of stockholders owning not less than
one-fifth of all shares issued and outstanding and entitled to vote on any
proposal to be submitted to said meeting. Such request shall state the purpose
or purposes of the proposed meeting.
SECTION 6. Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than ten nor more than fifty days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
SECTION 7. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice.
SECTION 8. The holders of a majority of the stock issued and outstanding and
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.
<PAGE>
SECTION 9. 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 the statutes 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 10. Each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
SECTION 11. 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 total 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 total required
by statute for the proposed corporate 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.
ARTICLE III. DIRECTORS.
SECTION 1. The number of Directors which shall constitute the whole Board shall
be twelve. Except as provided in Section 2 of this Article, the Directors shall
be elected at the annual meeting of the stockholders, and each Director shall
hold office until his successor is elected and qualified. Directors need not be
stockholders.
SECTION 2. The office of a Director shall become vacant if he dies or resigns by
a writing signed by him and delivered to the Corporation, and the Board of
Directors may declare vacant the office of a Director if he be declared of
unsound mind by an order of Court or convicted of a felony, or for any other
proper cause, of if, within sixty days after notice of his election as a
Director, he does not accept such office either in writing or by attending a
meeting of the Board of Directors.
Vacancies and newly created directorships resulting from any increase in the
authorized number of Directors may be filled by a majority of the Directors then
in office, though less than a quorum, or by a sole remaining Director, and the
Directors so chosen shall hold office until the next annual election and until
their successors are duly elected and shall qualify, unless sooner displaced. 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 filing any vacancy or any
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 3. The business of the Corporation shall be managed by 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.
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4. The Board of Directors of the Corporation may hold meetings, both
regular and special, either within or without the State of Delaware. The
Directors may designate a Director as the Chairman of the Board of Directors.
The Chairman of the Board of Directors shall not be an officer of the
Corporation.
SECTION 5. 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 legally to 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 6. 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 7. Special meetings of the Board of Directors may be called by the Chief
Executive Officer, the President or the Secretary, and shall be called upon the
written request of any two or more Directors. Notice of the time and place of
such meetings shall be served upon or telephoned to each Director at least 24
hours, or mailed (postage prepaid) or telegraphed (charges prepaid) to each
Director at his address as shown on the books of the Corporation at least 48
hours, prior to the time of the meeting, and if such notice is mailed or
telegraphed as above provided, the notice shall be deemed to have been given at
the time it is deposited in the United States mail or with the telegraph office
for transmission, as the case may be.
SECTION 8. At all meetings of the Board six (6) 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 9. 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.
COMMITTEES OF DIRECTORS
SECTION 10. 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
two 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. Any such committee, to
the extent provided in the resolution, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; provided, however, that in the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he 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. 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.
Unless otherwise provided by the Board of Directors, a majority of the members
of any committee appointed by the Board of Directors pursuant to this Section
shall constitute a quorum at any meeting thereof and the act of a majority of
the members present at a meeting at which a quorum is present shall be the act
of such committee. Any such committee shall, subject to any rules prescribed by
the Board of Directors, prescribe its own rules for calling, giving notice of
and holding meetings and its method of procedure at such meetings and shall keep
a written record of all action taken by it.
SECTION 11. Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required.
SECTION 12. In the absence or disqualification of one or more members of any
Committee, the member or members present at any meeting and not disqualified
from voting, whether or not such member or members 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 members.
COMPENSATION OF DIRECTORS
SECTION 13. The Directors may be paid their expenses, if any, of attendance at
each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated fee as
Director. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
<PAGE>
ARTICLE IV. NOTICE.
SECTION 1. 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, it shall not be construed to mean personal notice, but
such notice may be given in writing, by mail, addressed to such Director or
stockholder, at his address as it appears on the records of the Corporation,
with postage thereon prepaid, and such notice 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 or telephone.
SECTION 2. 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. The officers of the Corporation shall be chosen by the Board of
Directors and shall be a Chief Executive Officer, Secretary and Chief Financial
Officer. The Board of Directors may also choose a President and one or more Vice
Presidents. The Board of Directors may designate one or more of the Vice
Presidents as Senior Vice President or Executive Vice President and may use
descriptive words or phrases to designate the standing, seniority or area of
special competence of the Vice Presidents. Any number of offices may be held by
the same person, unless the Certificate of Incorporation or these By-Laws
otherwise provide.
SECTION 2. The Board of Directors at its first meeting after each annual meeting
of stockholders shall choose a Chief Executive Officer, a Chief Financial
Officer and a Secretary.
SECTION 3. The Board of Directors may appoint such other officers and agents as
it shall deem necessary 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.
SECTION 4. The Board of Directors shall fix the compensation of the Chief
Executive Officer and, unless otherwise established by the Board of Directors or
a committee appointed by the Board of Directors, the Chief Executive Officer
shall fix the compensation of any or all other officers of the Corporation.
SECTION 5. The officers of the Corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the Board
of Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the Corporation
shall be filled by the Board of Directors.
CHIEF EXECUTIVE OFFICER
SECTION 6. The Chief Executive Officer shall be the chief executive officer of
the Corporation and shall have general and active control of its business and
affairs. He shall preside at the meetings of the stockholders and the Board of
Directors, and may exercise any and all of the powers of a chief executive
officer. The Chief Executive Officer shall have such other powers and duties as
may be assigned to or vested in him from time to time by the Board of Directors
or by the Executive Committee.
SECTION 7. The Chief Executive Officer may execute bonds, mortgages and other
contracts requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other officer or agent of the Corporation.
THE PRESIDENT
SECTION 8. The President, if one shall be chosen, shall have general supervision
and direction of all other officers of the Corporation, subject to the direction
of the Board of Directors, and shall carry into effect the orders of the Board
of Directors and Chief Executive Officer of the Board of Directors. The
President shall also have such other duties and powers as may be assigned to or
vested in him from time to time by the Board of Directors or by the Executive
Committee.
<PAGE>
THE VICE PRESIDENTS
SECTION 9. The Vice Presidents shall assist the Chief Executive Officer, and
shall perform such other duties as may from time to time be directed by the
Board of Directors, the Chief Executive Officer or the President.
THE SECRETARY AND ASSISTANT SECRETARY
SECTION 10. The Secretary shall attend all meetings of the Board of Directors
and all meetings of the stockholders and record all the proceedings of the
meetings of the Corporation and of the Board of Directors in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or President,
under whose supervision he shall be. He shall have custody of the corporate seal
of the Corporation and he, or an assistant secretary, shall have authority to
affix the same to any instrument requiring it and when so affixed it may be
attested by his signature or by the signature of such assistant secretary. The
Board of Directors may give general authority to any other officer to affix the
seal of the Corporation and to attest the affixing by his signature.
SECTION 11. The Assistant Secretary, or if there be more than one, the Assistant
Secretaries in the order determined by the Board of Directors (or if there be no
such determination, then in the order of their election), shall, in the absence
of the Secretary or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the Secretary and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
THE CHIEF FINANCIAL OFFICER AND ASSISTANT TREASURER
SECTION 12. The Chief Financial Officer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors.
SECTION 13. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account of all his transactions as
treasurer and of the financial condition of the Corporation.
SECTION 14. If required by the Board of Directors, he shall give the Corporation
a bond (which shall be renewed every six years) in such sum and with such surety
or sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
SECTION 15. The Assistant Treasurer, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board of Directors (or if
there be no such determination, then in the order of their election), shall, in
the absence of the Chief Financial Officer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
ARTICLE VI. CERTIFICATES OF STOCK.
SECTION 1. Except as otherwise provided in the Certificate of Incorporation,
every holder of stock in the Corporation shall be entitled to have a
certificate, signed by, or in the name of the Corporation by, the Chief
Executive Officer, the President or a Vice President and the Chief Financial
Officer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of
the Corporation, certifying the number of shares owned by him in the
Corporation.
<PAGE>
SECTION 2. If the Corporation shall be authorized to issue more than one class
or more than one series of any class, the designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided in Section
202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock, a
statement that the Corporation will furnish without charge to each stockholder
who so requests the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.
SECTION 3. Where a certificate is countersigned (1) by a transfer agent other
than the Corporation or its employees, or, (2) by a registrar other than the
Corporation or its employees, the signatures of the officers of the Corporation
may be facsimiles. In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Corporation
with the same effect as if he were such officer at the date of issue.
LOST CERTIFICATES
SECTION 4. 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 the 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 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.
TRANSFER OF STOCK
SECTION 5. 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 cause to be issued a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books.
FIXING RECORD DATE
SECTION 6. 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.
REGISTERED STOCKHOLDERS
SECTION 7. 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.
<PAGE>
ARTICLE VII. GENERAL PROVISIONS.
DIVIDENDS
SECTION 1. Dividends upon the capital stock of the Corporation, subject to the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors, or a duly constituted Committee thereof, 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.
SECTION 2. 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.
ANNUAL STATEMENT
SECTION 3. The Board of Directors shall present at each annual meeting, and at
any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
Corporation.
CHECKS
SECTION 4. All checks or demands for money and notes of the Corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
FISCAL YEAR
SECTION 5. The fiscal year of the Corporation shall be fixed by resolution of
the Board of Directors.
SEAL
SECTION 6. The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII. AMENDMENTS.
SECTION 1. These By-Laws may be altered or repealed at any regular meeting of
the stockholders or of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such alteration or repeal
be contained in the notice of such special meeting.
ARTICLE IX. MISCELLANEOUS.
SECTION 1. Unless otherwise ordered by the Board of Directors, the Chief
Executive Officer or the President, or any Vice President, or the Secretary or
the Chief Financial Officer in person or by proxy or proxies appointed by any of
them shall have full power and authority on behalf of the Corporation to vote,
act and consent with respect to any shares of stock issued by other corporations
which the Corporation may own or as to which the Corporation otherwise has the
right to vote, act or consent.
SECTION 2. In the event the protective conditions or restrictions of any
outstanding series of Preferred Stock, fixed by the Board of Directors pursuant
to the authority conferred upon the Board of Directors by the Certificate of
Incorporation and Section 151 of Title 8 of the Delaware Code of 1953, are
inconsistent with any provision of these By-Laws, such provision shall be deemed
to be amended to remove any inconsistency.
<PAGE>
SECTION 3. Business Combinations with interested Stockholders. Pursuant to the
provisions of Section 203(a)(2) of the General Corporation Law of Delaware, the
Corporation, by action of the Board, expressly elects not to be governed by
Section 203 of the General Corporation Law of Delaware, dealing with the
business combinations with interested stockholders. Notwithstanding anything to
the contrary in these By-Laws, the provisions of this Section may not be further
amended by the Board except as may be specifically authorized by the General
Corporation Law.
Article X. INDEMNIFICATION
1. The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative(other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a Director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
2. The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or was a Director, officer,
employee or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought
shall determine upon application that despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem proper.
3. To the extent that any person referred to in paragraphs 1 and 2 of this
Article TEN has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to therein or in defense or any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
4. Any indemnification under paragraphs 1 and 2 of this Article TEN, (unless
ordered by a court) shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of the
Director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in paragraphs 1 and
2 of this Article TEN. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum (as defined in the By-Laws of the
Corporation) consisting of Directors who were not parties to such action,
suit or proceeding, or (b) if such quorum is not obtainable, or, even if
obtainable a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (c) by the stockholders.
<PAGE>
5. Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board
of Directors in the manner provided in paragraph one of this Article TEN
upon receipt of an undertaking by or on behalf of the Director, officer,
employee or agent to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation as provided in
this Article TEN.
6. The indemnification and advancement of expenses provided by or granted
pursuant to the other provisions of this Article TEN shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any statute, by-law, agreement, vote of stockholders or disinterested
Director or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
7. The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a Director, officer, employee or agent
of the Corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the provisions
of this Article TEN.
8. For purposes of this Article references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any
excess taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the Corporation" shall
include any service as a director, officer, employee or agent of the
Corporation which imposes duties on or involves services by such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the Corporation" as
referred to in this Article.
9. The indemnification and advancement of expenses provided by, or granted
pursuant to this Article TEN shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit
of the heirs, executors and administrators of such a person.
Exhibit 4.1
CNA FINANCIAL CORPORATION
OFFICER STOCK OWNERSHIP PLAN
October 8, 1998
This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933.
<PAGE>
CNA FINANCIAL CORPORATION
OFFICER STOCK OWNERSHIP PLAN
1. PURPOSE
The CNA Financial Officer Stock Ownership Plan (the "Plan") is
intended to promote the long-term growth and financial success of CNA Financial
Corporation (the "Company") in the interests of the Company and its stockholders
and to strengthen the link between management and stockholders by providing
officers of the Company and its Subsidiaries (as hereinafter defined) with an
opportunity to increase their ownership of Common Stock (as hereinafter defined)
to a significant degree.
2. DEFINITIONS
Except where the context otherwise indicates, the following definitions apply:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Plan Administration Committee of this Plan which shall be
appointed by the Chief Executive Officer of the insurance subsidiaries of the
Company unless, and until, the Board appoints another committee of the Board.
"Common Stock" means the Common Stock, $2.50 par value per share, of the
Company.
"Effective Date" means October 1, 1998.
"Interest Rate" means the "applicable federal rate" in effect on the Purchase
Date with interest compounded semi-annually, as determined by Section 7872 of
the Code or any successor provision to that section.
"Market Price" with respect to a given Security shall mean, for any given date
(or in the event such date is not a Trading Day with respect to such Security,
the last Trading Day prior to such date), the closing sale price of such
Security on such date, as reported as the New York Stock Exchange-Composite
Transactions for such day in The Wall Street Journal, mid-west edition, or, if
such Security ceases to be listed on such exchange, as reported on the principal
national securities exchange or national automated stock quotation system on
which such Security is traded or quoted.
"Participant" means each eligible employee of the Company or any of its
Subsidiaries who is designated by the Committee to receive a Purchase Award.
<PAGE>
"Participation Agreement" means the written agreement entered into between the
Company and a Participant to carry out the Plan with respect to the Participant
concerning a particular Purchase Award in accordance with the Plan's terms and
conditions. The Agreements need not be identical and shall be in the form
approved by the Committee.
"Purchase Award" means an award to a Participant permitting such Participant to
purchase shares of Common Stock pursuant to Section 6 of this Plan at the
Purchase Price, together with any related Purchase Loan.
"Purchase Date" means the date a Participant purchases shares of Common Stock
pursuant to a Purchase Award.
"Purchase Loan" means an extension of credit to the Participant by the Company
evidenced by the Purchase Note and secured by a pledge of the shares of Common
Stock purchased by the Participant and any proceeds from the sale of the Common
Stock.
"Purchase Note" means a full recourse promissory note including the terms
determined by the Committee.
"Purchase Price" of a share of the Common Stock means the average of the highest
and lowest sales prices of the Common Stock on the Purchase Date, as reported as
the New York Stock Exchange-Composite Transactions for such day, or if the
Common Stock was not traded on the New York Stock Exchange on such day then on
the next preceding day on which the Common Stock was traded, all as reported by
The Wall Street Journal, mid-west edition under the heading New York Stock
Exchange-Composite Transactions, or, if the Common Stock ceases to be listed on
such exchange, as reported on the principal national securities exchange or
national automated stock quotation system on which the Common Stock is traded or
quoted, but in no event shall the price be less than the par value of the Common
Stock.
"Regulation U" shall mean Regulation U issued by the Board of Governors of the
Federal Reserve System of the United States of America, or any successor to
Regulation U.
"Security" shall mean the Common Stock.
"Service" means employment with the Company or its Subsidiaries.
"Subsidiary" means a corporation (or partnership, joint venture, or other
enterprise) of which the Company owns or controls, directly or indirectly, 50%
or more of the outstanding shares of stock normally entitled to vote for the
election of directors (or comparable equity participation or voting power).
<PAGE>
"Total Purchase Price" means, with respect to each Participant, the total of i)
the Purchase Price multiplied by that Participant's pro rata share of the number
of shares of Common Stock purchased from the Company's treasury stock plus ii)
the price per share negotiated by the Company in open market or direct
transactions multiplied by that Participant's pro rata share of the number of
shares of Common Stock negotiated in open market or direct transactions in
addition to any expenses and commissions relating to such purchase. The total
dollar amount of such purchases by each Participant shall be no greater than the
dollar amount exercised by the Participant pursuant to the Purchase Award.
"Trading Day" means, with respect to a Security, a day on which such Security is
publicly traded.
3. SHARES SUBJECT TO THE PLAN
The aggregate number of shares of Common Stock that may be awarded and exercised
under the Plan at any time shall not exceed 9.9% of the outstanding voting
shares of the Company and no Participant shall be awarded a single Purchase
Award with respect to more than 2.0% of the outstanding voting shares of the
Company during any one calendar year period; provided, however, that in the
event that at any time after the Effective Date a stock dividend, stock split,
recapitalization, merger, consolidation, or other change in capitalization, or a
sale by the Company of all or part of its assets, or any separation from the
Company, including any spin-off or other distribution to stockholders other than
an ordinary cash dividend, results in (a) the outstanding shares of Common
Stock, or any securities exchanged therefor or received in their place, being
exchanged for a different number or class of shares of stock or other securities
of the Company, or for shares of stock or other securities of any other
corporation; or (b) new, different or additional shares or other securities of
the Company or of any other corporation being received by the holders of
outstanding shares of Common Stock, then the total number of shares of Common
Stock authorized under this Plan, and the maximum number of shares with respect
to which a Purchase Award may be awarded to a Participant, shall be
appropriately adjusted by the Committee in its discretion. Shares of Common
Stock that have been included in a Purchase Award but not exercised by a
Participant on the Purchase Date may again be awarded under the Plan.
The shares for the Plan may be authorized and unissued shares of Common Stock,
issued shares held as treasury shares or shares purchased for the Participants
on the open market or in negotiated purchases. If the shares of Common Stock are
purchased for the Participants on the open market or in negotiated purchases,
the Company shall negotiate the purchase of the shares on behalf of the
Participants directly or through a designated broker. The shares then will be
purchased by the Participants on the settlement date at the negotiated purchase
price or the open market price in addition to any expenses and commissions
relating to such purchase, as the case may be.
<PAGE>
4. TERM OF THE PLAN
The Plan shall become effective on October 1, 1998. The Plan shall be terminated
on December 31, 2020; provided, that Purchase Loans outstanding as of such date
shall not be affected or impaired by the termination of the Plan; provided
further that no Purchase Awards will be granted after December 31, 2019.
5. ELIGIBLE EMPLOYEES
All employees of the Company and its Subsidiaries who are Grade 91 or above and,
in the opinion of the Committee, can materially influence the long-term
performance of the Company or its Subsidiaries are eligible to receive a
Purchase Award. The Committee shall have the power and complete discretion to
select those eligible employees who are to receive Purchase Awards.
6. STOCK PURCHASE
(a) Grant of Purchase Award. The number of shares or maximum dollar amount of
Common Stock purchasable under a Purchase Award for any Participant and the
Purchase Date shall be determined by the Committee. The Committee shall, with
respect to each Purchase Award, give written notice to each Participant
receiving such Purchase Award stating (i) the maximum number of shares or
maximum dollar amount of Common Stock that may be purchased under the Purchase
Award, (ii) the Purchase Date, (iii) the performance criteria, if any, relating
to the Purchase Award and (iv) the Interest Rate and other terms pertaining to
the Purchase Loan.
(b) Exercise of Purchase Award. A Participant shall exercise a Purchase Award by
delivering to the Company on or prior to the Purchase Date (i) a notice stating
the number of shares (less than or equal to the maximum number specified in the
Purchase Award) such Participant elects to purchase on the Purchase Date, and
(ii) an executed Participation Agreement, Purchase Note in the amount of the
Total Purchase Price and any other documents required relating to the Purchase
Loan or pursuant to the Plan, or in lieu of a Purchase Note, a Participant may
deliver cash in the amount of the Total Purchase Price for the shares of Common
Stock purchased pursuant to the Purchase Award. To be eligible to exercise a
Purchase Award, a Participant must be employed by the Company or a Subsidiary of
the Company on the Purchase Date.
(c) Closing Time. The exercise of the Purchase Award, the delivery of the
Purchase Note and the issuance by the Company of the Common Stock purchased
pursuant to the Purchase Award shall be effective at 8:15 a.m., Chicago time, on
the business day following the Purchase Date (the "Closing Time"). After the
Closing Time, such Participant shall be deemed a stockholder of the Company and
shall be entitled to all the rights as a stockholder, but subject to the terms
of the Plan, the Purchase Loan and related documents, to transfer the Common
Stock. Notwithstanding anything herein to the contrary, the Committee shall have
the absolute right, in its sole discretion, to revoke any Purchase Award,
including, without limitation, any right to receive a Purchase Loan related to
such Purchase Award, prior to the Closing Time, provided, that the failure to
make such Purchase Loan shall be deemed to revoke the exercise of the related
Purchase Award unless otherwise specified by the Participant.
7. LOAN PROVISIONS
(a) General. The Company may extend a Purchase Loan to a Participant upon
exercise of a Purchase Award subject to the terms and conditions set forth in
this Section 7. The original principal amount of the Purchase Loan shall be
equal to the Total Purchase Price plus any costs or commissions related to the
purchase of the Common Stock. Such Purchase Loan shall be evidenced by the
Purchase Note with full recourse against the maker. The obligations of each
Participant under a Purchase Note shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by any change in the existence, structure or
ownership of the Company, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Company or its assets or the market value of
the Common Stock or any resulting release or discharge of any obligation of the
Company or the existence of any claim, set-off or other rights which any
Participant may have at any time against the Company or any other person,
whether in connection with the Plan or with any unrelated transactions, provided
that nothing herein shall prevent the assertion of any such claim by separate
suit or counterclaim.
<PAGE>
Notwithstanding anything to the contrary in this Section 7, the Company shall
not be required to make any Purchase Loan to a Participant if the making of such
Purchase Loan will (i) cause the Company to violate any covenant or similar
provision in any indenture, loan agreement or other agreement, or (ii) violate
any applicable federal, state or local law, provided, that the failure to make
such Purchase Loan shall be deemed to revoke the exercise of the related
Purchase Award unless otherwise specified by the Participant.
(b) Security. Payment of the Purchase Note shall be secured by a pledge of all
of the shares of Common Stock acquired by the Participant upon the exercise of
the Purchase Award to which the Purchase Loan relates. The Participant shall
effect such pledge by delivering to the Company (i) the certificate or
certificates for the shares of Common Stock acquired pursuant to the Purchase
Award, accompanied by a duly executed stock power in blank (which stock may be
reregistered in the name of the Company as collateral agent for the collateral
for the Purchase Loan), (ii) a properly executed stock pledge agreement, and
(iii) such other documents as may be required by the Committee. A Participant
shall always have the right to sell shares of Common Stock acquired pursuant to
a Purchase Award provided that (i) such sales must be made in open-market
transactions or at a price not less than the Market Price on the Trading Day
prior to the date of sale, (ii) the Company shall have a security interest in
the proceeds of such sale to the extent of any outstanding Purchase Loan and
(iii) any such sales otherwise comply with the terms and provisions of any
documents relating to the Purchase Loan.
(c) Interest. Interest on the principal balance of the Purchase Loan will accrue
semi-annually at the Interest Rate. Except as specified in the Purchase Loan
documents after an event of default, accrued interest shall not be payable
during the term of the Purchase Loan, but shall be added to the principal
balance of the Purchase Loan.
(d) Term. The term of the Purchase Loan for any Participant shall begin on such
Participant's Purchase Date, and absent an Event of Default, shall have a final
maturity date as determined by the Committee.
(e) Terms of the Purchase Loan. All other terms of the Purchase Loan shall be
determined by the Committee.
8. PLAN ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the provisions of
the Plan, the Committee shall interpret the Plan and make such rules and
procedures as it deems necessary for the proper administration of the Plan,
shall make all other determinations necessary or advisable for the
administration of the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan in the manner and to the extent that
the Committee deems desirable to carry the Plan into effect. Any action taken or
determination made by the Committee pursuant to this paragraph and the other
paragraphs of the Plan in which the Committee is given discretion shall be final
and conclusive on all parties. The act or determination of a majority of the
Committee shall be deemed to be the act or determination of the entire
Committee. The Committee may consult with counsel, who may be counsel to the
Company, and such other advisors as the Committee may deem necessary or
desirable, and the members of the Committee shall not incur any liability for
any action taken in good faith in reliance upon the advice of counsel or any
other advisor.
Among other things, the Committee shall have the authority, subject to the terms
of the Plan, to determine (i) the individuals to whom the Purchase Awards are
granted, (ii) the time or times the Purchase Awards are granted, (iii) the
Purchase Dates for such Purchase Awards, (iv) the availability of any direct or
indirect financing by the Company or any of its Subsidiaries and (v) the forms,
terms and provisions of the Participation Agreement and any other documents
under the Plan. The Committee also may designate whether any Purchase Award
being granted to any Participant is intended to be "performance-based
compensation" as that term is used in Section 162(m) of the Code. Any such
Purchase Awards designated as intended to be "performance-based compensation"
shall be conditioned on the achievement of one or more Performance Measures. The
Performance Measures that may be used by the Committee for such Purchase Awards
may include any one or more of the following, as selected by the Committee: cash
generation targets, net income or other profits, revenue and/or market share
targets, profitability targets as measured by return ratios and shareholder
returns, customer satisfaction, net margin as a percentage of revenue, and/or
debt to capitalization. The measurement may be based on absolute Company or
business unit performance and/or on performance as compared with that of other
publicly-traded companies.
<PAGE>
9. AMENDMENT AND DISCONTINUANCE OF THE PLAN
The Board, upon the recommendation of the Committee, may amend, suspend or
terminate the Plan at any time, subject to the provisions of this Section 9. No
amendment, suspension or termination of the Plan may, without the consent of the
Participant, adversely affect such Participant's rights under the Plan in any
material respect. In addition, no such amendment shall be made without the
approval of the Company's stockholders to the extent such approval is necessary
under Regulation U or any other law or agreement.
10. MISCELLANEOUS PROVISIONS
(a) Unsecured Status of Claim. Participants and their beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests or
claims in any specific property or assets of the Company. No assets of the
Company shall be held under any trust for the benefit of Participants, their
beneficiaries, heirs, successors or assigns, or held in any way as collateral
security for the fulfillment of the Company's obligations under the Plan.
Any and all of the Company's assets shall be, and shall remain, the general
unpledged and unrestricted assets of the Company. The Company's obligations
under the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay employee compensation benefits in the future, if any.
(b) Employment Not Guaranteed. Nothing contained in the Plan nor any related
Agreement nor any action taken in the administration of the Plan shall be
construed as a contract of employment or as giving a Participant any right to be
retained in the Service of the Company or its Subsidiaries.
(c) Nonassignability. No person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or
convey in advance of actual receipt any Purchase Award which is deferred and not
yet exercised, or any part thereof, or any interest therein, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No portion of such deferred Purchase Award shall, prior to actual exercise, be
subject to seizure, attachment, lien or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant or any
other person, nor be transferable by operation of law in the event of the
Participant's or any other person's bankruptcy or insolvency. Any such transfer
or attempted transfer in violation of the preceding provisions shall be
considered null and void.
(d) Disposition of Awards. Once a Participant purchases shares under the Plan,
the timing of sales of those shares is determined by the employee, but remains
subject at all times to the securities laws and any Company securities
compliance policy in effect at any time.
(e) Separability, Validity. In the event that any provision of the Plan, the
Participation Agreement or any agreement or document related to a Purchase Loan
is held to be invalid, void or unenforceable, the same shall not affect, in any
respect whatsoever, the validity of any other provision of the Plan,
Participation Agreement or aspect of any agreement or document related to a
Purchase Loan.
<PAGE>
(f) Withholding Tax. The Company shall withhold from all benefits due under the
Plan an amount sufficient to satisfy any federal, state and local tax
withholding requirements, if any.
(g) Applicable Law. The Plan and any related Agreements shall be governed in
accordance with the laws of the State of Delaware without regard to the
application of the conflicts of law provisions thereof. The obligation of the
Company with respect to the grant and exercise of Purchase Awards shall be
subject to all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation, the
effectiveness of any registration statement required under the Securities Act of
1933, as amended, and the rules and regulations of any securities exchange on
which the Common Stock may be listed.
(h) Inurement of Rights and Obligations. The rights and obligations under the
Plan and any related Agreements shall inure to the benefit of, and shall be
binding upon, the Company, its successors and assigns, and the Participants and
their beneficiaries.
(i) Notice. All notices and other communications required or permitted to be
given under this Plan shall be in writing and shall be deemed to have been duly
given if delivered personally or mailed first class, postage prepaid, as
follows: (A) if to the Company--at its principal business address to the
attention of the Secretary; (B) if to any Participant--at the last address of
the Participant known to the sender at the time the notice or other
communication is sent.
(j) Exclusion from Pension and Other Benefit Plan Computation. By exercise of a
Purchase Award, each Participant shall be deemed to have agreed that such
Purchase Award, as applicable, is special incentive compensation that will not
be taken into account, in any manner, as salary, compensation or bonus in
determining the amount of any payment under any pension, retirement or other
employee benefit plan of the Company or any of its Subsidiaries; provided,
however, that the amount of any elective reduction or deduction in compensation
used to pay the Total Purchase Price for any exercised Purchase Award shall be
includible for purposes of any such plan to the same extent that it would be in
the absence of such election. In addition, each beneficiary of a deceased
Participant shall be deemed to have agreed that such Purchase Award will not
affect the amount of any life insurance coverage, if any, provided by the
Company or any of its Subsidiaries on the life of the Participant which is
payable to such beneficiary under any life insurance plan covering employees of
the Company or any of its Subsidiaries; provided, however, that the amount of
any elective reduction or deduction in compensation used to pay the Total
Purchase Price for any exercised Purchase Award shall be includible for purposes
of any such plan to the same extent that it would be in the absence of such
election.
Exhibit 5.1
October 8, 1998
CNA Financial Corporation
CNA Plaza
Chicago, Illinois 60685
Ladies and Gentlemen:
We are acting as special counsel to CNA Financial Corporation (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of an aggregate of $60,000,000 of its Common Stock, $2.50 par value
(the "Shares"), to be offered pursuant to the CNA Financial Corporation Officer
Stock Ownership Plan (the "Plan"). In connection therewith, we have examined or
are otherwise familiar with the Company's Certificate of Incorporation, the
Company's By-Laws, the Plan, the Company's Registration Statement on Form S-8
(the "Registration Statement") relating to the Shares, relevant resolutions of
the Board of Directors of the Company, and such other documents and instruments
as we have deemed necessary for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares are duly
authorized for issuance and when issued in accordance with the provisions of the
Plan will be legally issued, fully paid and non-assessable shares of the
Company.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/S/MAYER, BROWN & PLATT
MAYER, BROWN & PLATT
Exhibit 24.1
Powers of Attorney
FURTHER RESOLVED, that each officer and director who may be required to
sign and execute (whether on behalf of the Company, as an officer or
director of the Company or otherwise) such Registration Statements or
any amendment thereto or any document in connection therewith or in
connection with the public offering contemplated thereby or the closing
of a sale of the Registered Shares hereby grants a Power of Attorney
appointing W. James MacGinnitie and Jonathan D. Kantor, or any
successor Chief Financial Officer or Secretary of the Company or either
of them acting individually, his true and lawful attorney to sign in
such officer's or such director's name, place and stead (including in
any such capacity) such Registration Statements, all amendments thereto
and documents in connection therewith; and that each director who signs
below hereby appoints and authorizes each such attorney-in-fact to sign
such Registration Statements, amendments and documents in the name,
place and stead of each such officer and director who shall have
executed this Power of Attorney (whether acting on behalf of the
Company, as an officer or director of the Company or otherwise).
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 6th day of October, 1998.
/s/Antoinette Cook Bush /s/Joseph Rosenberg
- ------------------------ --------------------
Antoinette Cook Bush Joseph Rosenberg
/s/Dennis H. Chookaszian /s/Richard L. Thomas
- ------------------------- --------------------
Dennis H. Chookaszian Richard L. Thomas
/s/Philip L. Engel /s/James S. Tisch
- ------------------ -------------------
Philip L. Engel James S. Tisch
/s/Robert P. Gwinn /s/Laurence A. Tisch
- ------------------ --------------------
Robert P. Gwinn Laurence A. Tisch
/s/Walter F. Mondale /s/Preston R. Tisch
- -------------------- -------------------
Walter F. Mondale Preston R. Tisch
/s/Edward J. Noha /s/Marvin Zonis
- ----------------- -------------------
Edward J. Noha Marvin Zonis
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CNA Financial Corporation on Form S-8, filed on or about October 8, 1998, of our
reports dated February 18, 1998, appearing in or incorporated by reference in
the Annual Report on Form 10-K of CNA Financial Corporation and subsidiaries for
the year ended December 31, 1997.
/S/DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Chicago, Illinois
October 8, 1998
