UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
The Continental Corporation
(Name of Issuer)
Common Stock, par value $1.00 per share
(Title of Class of Securities)
211327101
(CUSIP Number)
Donald M. Lowry
General Counsel and Secretary
CNA Financial Corporation
CNA Insurance Companies
CNA Plaza
Chicago, Illinois 60685
(312) 822-5000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 9, 1994
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box | |.
Check the following box if a fee is being paid with the state-
ment |X|. <PAGE>
SCHEDULE 13D
CUSIP No. 211327101
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CONTINENTAL CASUALTY COMPANY
IRS Identification No.: 36-2114545
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 10,615,556 shares (including 10,515,556
REPORTING shares to be issued upon the exchange
PERSON of Series T Preferred Shares for
WITH Series E Preferred Shares and the
conversion thereof)
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
10,615,556 shares (including 10,515,556
shares to be issued upon the exchange
of Series T Preferred Shares for Series
E Preferred Shares and the
conversion thereof)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
10,615,556 shares (including 10,515,556 shares to be
issued upon the exchange of Series T Preferred Shares
for Series E Preferred Shares and the conversion
thereof)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES <PAGE>
SCHEDULE 13D
CUSIP No. 211327101
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.1%
14 TYPE OF REPORTING PERSON*
IC
<PAGE>
SCHEDULE 13D
CUSIP No. 211327101
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CNA FINANCIAL CORPORATION
IRS Identification No.: 36-6169860
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 10,615,556 shares (including 10,515,556
REPORTING shares to be issued upon the exchange
PERSON of Series T Preferred Shares for Series
WITH Series E Preferred Shares and the
conversion thereof)
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
10,615,556 shares (including 10,515,556
shares to be issued upon the exchange
of Series T Preferred Shares for Series
E Preferred Shares and the conversion
thereof)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
10,615,556 shares (including 10,515,556 shares to be
issued upon the exchange of Series T Preferred Shares
for Series E Preferred Shares and the conversion
thereof)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES <PAGE>
SCHEDULE 13D
CUSIP No. 211327101
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.1%
14 TYPE OF REPORTING PERSON*
HC, CO
<PAGE>
SCHEDULE 13D
CUSIP No. 211327101
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
LOEWS CORPORATION
IRS Identification No.: 13-2646102
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 10,615,556 shares (including 10,515,556
REPORTING shares to be issued upon the exchange
PERSON of Series T Preferred Shares for Series
WITH E Preferred Shares and the conversion
thereof)
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
10,615,556 shares (including 10,515,556
shares to be issued upon the exchange
of Series T Preferred Shares for Series
E Preferred Shares and the conversion
thereof)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
10,615,556 shares (including 10,515,556 shares to be
issued upon the exchange of Series T Preferred Shares
for Series E Preferred Shares and the conversion
thereof)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES <PAGE>
SCHEDULE 13D
CUSIP No. 211327101
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.1%
14 TYPE OF REPORTING PERSON*
HC, CO
<PAGE>
Item 1. Security and Issuer.
This Statement relates to the common stock, par value
$1.00 per share ("Continental Common Stock"), of The Conti-
nental Corporation, a New York corporation ("Continental"),
whose principal executive offices are located at 180 Maiden
Lane, New York, New York 10038.
Item 2. Identity and Background.
This Statement is filed by CNA Financial Corporation
("CNA") on behalf of CNA, Loews Corporation ("Loews") and
Continental Casualty Company ("CCC"). Loews and CNA are
Delaware corporations and CCC is an Illinois domestic insurance
company. Loews, CNA and CCC are hereinafter referred to col-
lectively as the "Companies."
The principal executive offices of CNA are located at
CNA Insurance Companies, CNA Plaza, Chicago, Illinois 60685.
CNA is one of the largest insurance holding companies in the
United States. CNA principally operates through its insurance
company subsidiaries, CCC and Continental Assurance Company
("CAC"). CNA's property and casualty insurance operations are
conducted by CCC and its property and casualty insurance af-
filiates, and its life insurance operations are conducted by
CAC and its life insurance affiliates. As multiple-line in-
surers, CNA's insurance companies underwrite property, casu-
alty, life, and accident and health coverages, principally in
the United States.
The principal executive offices of Loews are located
at 667 Madison Avenue, New York, New York 10021. Loews,
through its subsidiaries, is engaged in the production and sale
of cigarettes; the operation of hotels and offshore drilling
rigs; through its approximately 84% ownership of CNA, the in-
surance business; and through its approximately 97% ownership
of Bulova Corporation, the distribution and sale of watches and
the production and sale of other timing devices. Loews is a
"controlling" person of CNA as defined in the General Rules and
Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Laurence A. Tisch and Preston B. Tisch, Co-Chairmen
of the Board and Co-Chief Executive Officers of Loews, each own
9,449,956 shares of common stock of Loews, constituting an
aggregate of 18,899,912 shares, or approximately 31.5%, of the
total number of shares of Loews common stock outstanding. As a
result, they may be deemed to be "controlling" persons of Loews
as that term is defined in the General Rules and Regulations
under the Exchange Act.
- 1 -<PAGE>
The principal executive offices of CCC are located at
CNA Insurance Companies, CNA Plaza, Chicago, Illinois 60685.
CCC is an Illinois domestic insurance company engaged in the
property and casualty insurance business. CCC is a wholly
owned subsidiary of CNA.
Information with respect to the executive officers
and directors of each of the Companies, including name, busi-
ness address, present principal occupation or employment, and
the name, principal business and address of any corporation or
other organization in which such employment is conducted, is
listed on the schedules attached hereto as Annexes A through C,
which are incorporated herein by reference.
None of the Companies nor, to the best of their
knowledge, any executive officer or director of any of the Com-
panies, has during the last five years been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or been a party to a civil proceeding of a judi-
cial or administrative body of competent jurisdiction and as a
result of such proceedings was or is subject to a judgement,
decree or final order enjoining future violations of, or pro-
hibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws.
To the best knowledge of the Companies, all of their
respective executive officers and directors are United States
citizens.
Item 3. Source and Amount of Funds or Other Consideration.
100,000 of the shares of Continental Common Stock
(the "Investment Shares") beneficially owned by the Companies
were purchased by CCC with cash from working capital. In addi-
tion, pursuant to the Securities Purchase Agreement (as here-
inafter defined), CCC consummated the purchase of the Series T
Preferred Shares (as hereinafter defined), representing
10,515,556 of the shares of Continental Common Stock which the
Companies may be deemed to beneficially own, on December 9,
1994 with cash from working capital.
Item 4. Purpose of Transaction.
The Investment Shares.
The Investment Shares were acquired for investment
purposes in the ordinary course of business more than 60 days
prior to the date hereof.
- 2 -<PAGE>
The Series T Preferred Shares.
On December 6, 1994, CNA and Continental entered into
a Securities Purchase Agreement (the "Securities Purchase
Agreement") pursuant to which CCC, as CNA's designee, purchased
certain securities (the "Securities") of Continental for ag-
gregate cash consideration of $275,000,000 on December 9, 1994.
The Securities consist of: (1) 828,100 shares of Continental's
Series T Preferred Stock (the "Series T Preferred Shares")
having an aggregate liquidation preference of $165,620,000,
which shares are exchangeable (the "Exchange"), subject to the
terms and conditions specified in the Securities Purchase
Agreement and in the Certificate of Amendment (the "Certificate
of Amendment") to Continental's Certificate of Incorporation
relating to the Securities, for 828,100 shares of Continental's
Series E Convertible Voting Preferred Stock (the "Series E
Preferred Shares") having an aggregate liquidation preference
of $165,620,000; (2) 171,900 shares of Continental's Series F
Preferred Stock (the "Series F Preferred Shares") having an
aggregate liquidation preference of $34,380,000; (3) 375,000
shares of Continental's Series H Preferred Stock (the "Series H
Preferred Shares" and together with the Series T Preferred
Shares, the Series E Preferred Shares and the Series F Pre-
ferred Shares, the "Chicago Preferred Shares") having an ag-
gregate liquidation preference of $75,000,000; and (4) an op-
tion (the "Option") to acquire, subject to the terms and con-
ditions specified therein, 625,000 shares of Continental's
Series G Preferred Stock (the "Series G Preferred Shares")
having an aggregate liquidation preference of $125,000,000.
Simultaneously with the execution of the Securities
Purchase Agreement, CNA, Chicago Acquisition Corp. ("Merger
Sub"), a wholly owned subsidiary of CNA, and Continental en-
tered into a merger agreement (the "Merger Agreement") pursuant
to which, among other things, Merger Sub will be merged (the
"Merger") with and into Continental. Pursuant to the Merger
Agreement, each share of Continental Common Stock outstanding
at the effective time (the "Effective Time") of the Merger,
subject to the terms and conditions set forth therein, will be
converted into the right to receive $20 in cash. Consummation
of the Merger is subject to certain conditions customary for
transactions of this nature including, among other things, the
receipt of requisite regulatory approvals and the receipt of
the approval of Continental's shareholders.
The beneficial ownership of shares of Continental
Common Stock attributable to the Securities as reflected in
this Schedule 13D relates to the shares of Continental Common
Stock issuable upon the conversion of the Series E Preferred
Shares. The Series E Preferred Shares for which the Series T
- 3 -<PAGE>
Preferred Shares are exchangeable are convertible, upon the
terms and conditions specified in the Certificate of Amendment,
into 10,515,556 shares of Continental Common Stock at a con-
version price of $15.75 per share, subject to customary anti-
dilution adjustments. As indicated above, the Companies do not
presently hold any Series E Preferred Shares, and will only
become the holder of such shares upon the Exchange of the Se-
ries T Preferred Shares. The conditions to the Exchange in-
clude the expiration or termination of any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and the receipt of regulatory approvals. CNA has
agreed in the Securities Purchase Agreement not to seek in-
surance regulatory approvals for the Exchange, which are
generally required prior to acquiring ownership of 10% or more
of the voting securities of an insurance holding company such
as Continental, prior to the termination of the Merger Agree-
ment. Accordingly, the Companies may not be deemed to ben-
eficially own or have the right to beneficially own all or a
portion of the shares of Continental Common Stock into which
the Series E Preferred Shares are convertible within the
meaning of Rule 13d-3 under the Exchange Act at the current
time.
None of the Chicago Preferred Shares (other than the
Series E Preferred Shares) are convertible into shares of
Continental Common Stock or have general voting rights to vote
with the shares of Continental Common Stock in the election of
directors and other general corporate matters. The Certificate
of Amendment provides, however, that the Series T Preferred
Shares, the Series F Preferred Shares and the Series G Pre-
ferred Shares are redeemable at the option of the holder under
certain circumstances, including upon the occurrence of certain
business transactions (a "Specified Corporate Action," as set
forth in the Certificate of Amendment) at a premium amount
which is a function of the price of a share of Continental
Common Stock above $15.75, in the case of the Series T Pre-
ferred Shares and the Series F Preferred Shares, or $17.75, in
the case of the Series G Preferred Shares.
The Securities Purchase Agreement provides that in
certain circumstances, subject to the terms and conditions set
forth therein, including the receipt of requisite regulatory
approvals, CNA will have the right to designate up to four
persons to become members of Continental's Board of Directors
(such number to be dependent on the size of Continental's Board
of Directors and on CNA's and its affiliates' holdings of Con-
tinental securities), of which up to two such designees will be
appointed to the Nominating Committee and other committees of
Continental's Board of Directors. In addition, the Certificate
of Amendment provides for the holder of the Chicago Preferred
- 4 -<PAGE>
Shares to have the right to designate up to two persons to
become members of Continental's Board of Directors upon the
occurrence of certain defaults under the Chicago Preferred
Shares as set forth in the Certificate of Amendment.
The descriptions of the Securities Purchase Agree-
ment, the Certificate of Amendment and the Merger Agreement
contained herein are qualified in their entirety by reference
to the Securities Purchase Agreement, the Certificate of
Amendment and the Merger Agreement filed as exhibits hereto,
which are incorporated herein by reference.
Item 5. Interest in Securities of the Issuer.
In the Merger Agreement, Continental represented that
55,484,091 shares of Continental Common Stock were issued and
outstanding as of November 30, 1994. As of the date hereof,
each of the Companies may be deemed to beneficially own an
aggregate of 10,615,556 shares of Continental Common Stock, or
approximately 19.1% of the shares of Continental Common Stock
outstanding as of November 30, 1994, through CCC's ownership of
the Investment Shares and the Series T Preferred Shares.
(a) CNA and CCC share the power to vote or direct
the voting of, and to dispose or direct the disposition of, the
Investment Shares and the Series T Preferred Shares. Loews,
through its interest in CNA, may be deemed to also share the
power to vote or direct the voting of, and to dispose or direct
the disposition of, the Investment Shares and the Series B
Preferred Shares.
(b) The Series T Preferred Shares were purchased by
CCC from Continental on December 9, 1994 pursuant to the Secu-
rities Purchase Agreement.
(c) No other persons have the right to receive or
the power to direct the receipt of interest from, or the pro-
ceeds from the sale of, the Investment Shares or the Series T
Preferred Shares.
(d) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relation-
ships with Respect to Securities of the Issuer.
Other than the Merger Agreement described in Item 4
above and the provisions of the Securities Purchase Agreement
and the related agreements and instruments referenced therein,
there are no contracts, arrangements, understandings or rela-
tionships between the Companies or, to the best of their
- 5 -<PAGE>
knowledge, any executive officer or director of the Companies,
and any other person with respect to any securities of Conti-
nental, including any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any se-
curities of Continental, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of
proxies.
The Securities Purchase Agreement contains certain
restrictions (the "Standstill Restrictions") which will be
effective until the expiration of the Standstill Period (as
defined in the Securities Purchase Agreement and which will end
on the date on which CNA holds less than 5% of the Continental
Common Stock outstanding on a fully diluted basis, taking into
account any Continental Common Stock issuable upon the conver-
sion of other securities held by CNA, or earlier upon the oc-
currence of certain specified events as set forth in the Se-
curities Purchase Agreement). The Standstill Restrictions (a)
will not prohibit CNA from taking any actions in furtherance of
the Merger as contemplated by the Merger Agreement prior to the
termination thereof or (b) if Continental's Board of Directors
withdraws, modifies or changes its approval or recommendation
of the Merger Agreement or the Merger in a manner adverse to
CNA or Merger Sub or if any person acquires beneficial owner-
ship or the right to acquire beneficial ownership of or any
"group" (as such term is defined under Section 13(d) of the
Exchange Act and the rules and regulations promulgated there-
under) has been formed which beneficially owns, or has the
right to acquire beneficial ownership of, more than 20% of the
then outstanding shares of Continental Common Stock, will not
prevent CNA from making a proposal to acquire 100% of the
outstanding Continental Common Stock at a price equal to or
greater than $20 per common share.
Pursuant to the Securities Purchase Agreement, during
the Standstill Period, CNA has agreed that it will not, nor
will it permit any of its affiliates to, directly or indi-
rectly, unless specifically requested in advance to do so by
Continental's Board of Directors: (a) acquire, offer to ac-
quire, or agree to acquire by purchase or by joining a part-
nership, limited partnership, syndicate or other "group" (as
such term is used in Section 13(d)(3) of the Exchange Act,
hereinafter referred to as "13D Group"), any securities of
Continental entitled to vote generally in the election of di-
rectors, or securities convertible into or exercisable or ex-
changeable for such securities (collectively, "Restricted Se-
curities") or any material portion of the assets or businesses
of Continental and its subsidiaries, other than pursuant to
certain specified transactions and exceptions; (b) participate
- 6 -<PAGE>
in, or encourage, the formation of any 13D Group which owns or
seeks to acquire beneficial ownership of, or otherwise acts in
respect of, Restricted Securities; (c) make, or in any way
participate in, directly or indirectly, any "solicitation" of
"proxies" (as such terms are defined or used in Regulation 14A
under the Exchange Act) or become a "participant" in any
"election contest" (as such terms are defined or used in Rule
14a-11 under the Exchange Act) with respect to Continental, or
initiate, propose or otherwise solicit stockholders for the
approval of one or more stockholder proposals with respect to
Continental or induce or attempt to induce any other person to
initiate any stockholder proposal, other than pursuant to
certain specified transactions and exceptions; (d) except as
permitted by the Certificate of Amendment or the Securities
Purchase Agreement, call or seek to have called any meeting of
Continental's stockholders; or (e) otherwise act, directly or
indirectly, alone or in concert with others, to seek to control
the management, Board of Directors, policies or affairs of
Continental, or solicit, propose, seek to effect or negotiate
with Continental or any other person with respect to any form
of business combination transaction with Continental or any
affiliate thereof or any restructuring, recapitalization or
similar transaction with respect to Continental or any affil-
iate thereof, or solicit, make or propose or encourage or nego-
tiate with any other person with respect to, or announce an
intent to make, any tender offer or exchange offer for any
Restricted Securities or disclose an intent, purpose, plan or
proposal with respect to Continental or any Restricted Secu-
rities inconsistent with the Standstill Restrictions, or as-
sist, participate in, facilitate, encourage or solicit any
effort or attempt by any person to do or seek to do any of the
foregoing, other than pursuant to certain specified transac-
tions and exceptions. The Securities Purchase Agreement pro-
vides that the Standstill Restrictions shall not preclude CNA
or its affiliates (a) from exercising the voting and other
rights granted to CNA pursuant to the Securities Purchase
Agreement or any of the related agreements or the Certificate
of Amendment or (b) in the case of any proposed merger, sale of
assets or similar transaction that under the Certificate of
Amendment requires a vote of the holders of Restricted Secu-
rities and has been approved or recommended by the Board of
Directors of Continental or, in the case of a tender or ex-
change offer made without encouragement by or the participation
of CNA or any of its affiliates (if the Board of Directors of
Continental shall send to shareholders a statement that the
Board of Directors (i) recommends approval of such tender or
exchange offer or (ii) is neutral with respect to such tender
or exchange offer) from making an offer to the Board of Direc-
tors of Continental, in respect of such transaction, upon terms
- 7 -<PAGE>
more favorable to Continental or its stockholders than those of
the other transaction, as proposed.
The Securities Purchase Agreement contains certain
additional restrictions (the "Transfer Restrictions") on the
ability of CNA (or CCC, as its designee under the Securities
Purchase Agreement) to transfer the Series E Preferred Shares,
the Series T Preferred Shares and certain securities issuable
upon exchange or conversion of such shares ("Covered Securi-
ties"). The Transfer Restrictions provide that (a) CNA will
not effect any transfer (including any transfer upon foreclo-
sure of a pledge or other security interest), pledge, mortgage,
hypothecation or grant of a security interest of or in any
Covered Security that under applicable law requires prior
regulatory approval until such regulatory approval has been
obtained; (b) CNA will not transfer, pledge, mortgage, hypo-
thecate or grant a security interest in any Covered Security
(unless, with respect to such Covered Security, such Covered
Security was previously issued pursuant to an effective reg-
istration statement under the Securities Act of 1933, as
amended (the "Act") except pursuant to (i) an effective regis-
tration statement under the Act or (ii) an applicable exemption
from registration under the Act; and (c) until the earlier of
(i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms, it will not transfer
any Series T Preferred Shares, Series E Preferred Shares or
shares of Continental Common Stock issuable upon the conversion
of Series E Preferred Shares other than to an affiliate of CNA
who agrees to be bound by the Transfer Restrictions. The
Transfer Restrictions provide that during the Restricted Period
(as defined in the Securities Purchase Agreement and which will
end on December 9, 1997, or earlier upon the occurrence of
certain specified events as set forth in the Securities Pur-
chase Agreement), CNA will not transfer any Covered Security
except (a) to an affiliate of CNA who agrees to be bound by the
Transfer Restrictions, (b) to a person or entity who agrees to
be bound by the Transfer Restrictions, the transfer to whom has
been approved in advance by Continental's Board of Directors,
(c) to a person or entity who after such transfer will ben-
eficially own less than 5% of the Continental Common Stock on a
fully diluted basis, (d) pursuant to Rule 144 under the Act,
(e) in a public offering registered under the Act pursuant to
which, if such offering is not an underwritten offering, no one
person or entity obtains more than 5% of the Continental Common
Stock on a fully diluted basis or (f) pursuant to a tender
offer (i) commenced by Continental or (ii) commenced by any
other person or entity with respect to which the Board of Di-
rectors of Continental shall send to shareholders a statement
that the Board of Directors (x) recommends approval of such
- 8 -<PAGE>
tender offer or (y) is neutral with respect to such tender
offer.
The Option provides that, subject to the terms and
conditions set forth therein, upon the exercise thereof, which
exercise may not occur unless and until the Merger Agreement is
terminated, Continental will sell to CNA 625,000 Series G
Preferred Shares having an aggregate liquidation preference of
$125,000,000 for aggregate consideration of $125,000,000. The
Option also provides that it may be exercised on a cashless
basis, at any time that the underlying Series G Preferred
Shares could be redeemed at the holder's option (including upon
the occurrence of a Specified Corporate Action), upon which
exercise the Option holder would receive an amount representing
the amount which would have been received had the holder pur-
chased the underlying Series G Preferred Shares and elected an
optional redemption of such shares.
In connection with CCC's purchase of the Securities,
CCC and Continental entered into a Registration Rights Agree-
ment, dated as of December 9, 1994 (the "Registration Rights
Agreement"), pursuant to which CCC, subject to the terms and
conditions set forth therein, will have the right (a) on or
before eleven months following the termination of the Merger
Agreement pursuant to the terms thereof, at CCC's request, to
require Continental to file a shelf registration statement with
respect to certain of the Securities and certain securities
issuable upon conversion or exchange of such Securities, and
Continental will be required to use its best efforts to keep
such shelf registration statement continuously effective for
the time period specified in the Registration Rights Agreement;
and (b) at any time after termination of the Merger Agreement
pursuant to the terms thereof, if CCC holds any Series T Pre-
ferred Shares, to make one written request that Continental
effect the registration of such shares and Series E Preferred
Shares exchangeable therefor so that such Series T Preferred
Shares may be sold in a widely distributed, underwritten public
offering, which shares will be exchanged for Series E Preferred
Shares in connection with such public offering. The Regis-
tration Rights Agreement also includes provisions granting CCC
the right to require the incidental registration of Continental
securities held by CCC in connection with a registration
statement filed by Continental other than at CCC's request.
Pursuant to the Securities Purchase Agreement and the
Certificate of Amendment, the Series T Preferred Shares are
exchangeable for the Series E Preferred Shares, which shares
carry general rights to vote with the shares of Continental
Common Stock in the election of directors and other general
corporate matters, having an equal liquidation preference at
- 9 -<PAGE>
any time and from time to time upon the expiration or termi-
nation of any applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 and the receipt of
all requisite regulatory approvals. Pursuant to the Certifi-
cate of Amendment, the Series E Preferred Shares is convertible
into shares of Continental Common Stock at a conversion price
of $15.75 per share, subject to customary anti-dilution ad-
justments.
Pursuant to the terms of the Securities Purchase
Agreement, in the event the Merger Agreement is terminated
under certain circumstances, and absent the occurrence of a
Specified Corporate Action, Continental has the right, for a
period of up to 120 days, to cause each holder of Chicago
Preferred Shares to sell such shares to a person designated by
Continental at a purchase price equal to the liquidation pre-
ference of such shares plus all accrued and unpaid dividends
thereon, and a premium in respect of such shares (other than
the Series H Preferred Shares) in the event the Merger Agree-
ment has been terminated other than as a result of a breach of
the terms thereof by CNA.
The descriptions of the Securities Purchase Agree-
ment, Certificate of Amendment, Option, Registration Rights
Agreement and Merger Agreement contained herein are qualified
in their entirety by reference to the Securities Purchase
Agreement, the Certificate of Amendment, the Option, the Reg-
istration Rights Agreement and the Merger Agreement filed as
exhibits hereto, which are incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
See Exhibit Index on page 12.
- 10 -<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowl-
edge and belief, I certify that the information set forth in
this Statement is true, complete and correct.
CNA FINANCIAL CORPORATION
By: /s/ Donald M. Lowry
Name: Donald M. Lowry
Title: Senior Vice President,
Secretary and General
Counsel
Date: December 19, 1994
- 11 -<PAGE>
EXHIBIT INDEX
ANNEXES
A Directors and Executive Officers
of Loews Corporation
B Directors and Executive Officers
of CNA Financial Corporation
C Directors and Executive Officers
of Continental Casualty Company
EXHIBITS
1. Securities Purchase Agreement, dated as of December 6,
1994, by and between CNA Financial Corporation and The
Continental Corporation (with exhibits thereto) (incor-
porated by reference to exhibit 1 to CNA Financial
Corporation's Current Report on Form 8-K dated December
9, 1994).
2. Merger Agreement, dated as of December 6, 1994, by and
among CNA Financial Corporation, Chicago Acquisition
Corp. and The Continental Corporation (incorporated by
reference to exhibit 2 to CNA Financial Corporation's
Current Report on Form 8-K dated December 9, 1994).
3. Agreement, dated as of December 16, 1994, by and among
Loews Corporation, CNA Financial Corporation and Conti-
nental Casualty Company.
- 12 -<PAGE>
ANNEX A
LOEWS CORPORATION
DIRECTORS
Name and Business Address
(all business addresses are
Loews Corporation Present Principal
667 Madison Avenue Occupation or Employment
New York, New York 10021 (all with Loews Corporation
unless otherwise indicated) unless otherwise indicated)
Charles B. Benenson President
Benenson Realty Company Benenson Realty Company
708 Third Avenue
New York, New York 10017
John Brademas President Emeritus
New York University New York University
11 West 42nd Street
New York, New York 10036
Bernard Myerson Chairman Emeritus
711 Fifth Avenue Loews Theatre Management
New York, New York 10022 Corporation
Edward J. Noha Chairman of the Board
CNA Financial Corporation CNA Financial Corporation
CNA Insurance Companies
CNA Plaza
Chicago, Illinois 60685
Lester Pollack Partner
One Rockefeller Plaza Lazard Freres & Co.
New York, New York 10020
Gloria R. Scott President
Bennett College Bennett College
900 E. Washington Street
Greensboro, NC 27401
Andrew H. Tisch Chairman of the Board and
One Park Avenue Chief Executive Officer
New York, New York Lorillard Tobacco Company
James S. Tisch President and Chief Operating
Officer
Jonathan M. Tisch Vice President and Chief
Executive Officer
Loews Hotels Division
Laurence A. Tisch Co-Chairman of the Board and
Co-Chief Executive Officer
A-1<PAGE>
LOEWS CORPORATION, continued
DIRECTORS
Name and Business Address
(all business addresses are
Loews Corporation Present Principal
667 Madison Avenue Occupation or Employment
New York, New York 10021 (all with Loews Corporation
unless otherwise indicated) unless otherwise indicated)
Chief Executive Officer
CNA Financial Corporation
Chairman of the Board,
President and Chief Execu-
tive Officer
CBS, Inc.
Preston R. Tisch Co-Chairman of the Board and
Co-Chief Executive Officer
A-2<PAGE>
LOEWS CORPORATION, continued
EXECUTIVE OFFICERS
Name and Business Address
(all business addresses are
Loews Corporation Present Principal
667 Madison Avenue Occupation or Employment
New York, NY 10021 (all with Loews Corporation
unless otherwise indicated) unless otherwise indicated)
Laurence A. Tisch Co-Chairman of the Board and
Co-Chief Executive Officer
Chief Executive Officer
CNA Financial Corporation
Chairman of the Board,
President and Chief Executive
Officer
CBS, Inc.
Preston R. Tisch Co-Chairman of the Board and
Co-Chief Executive Officer
Kenneth Abrams Vice President
Personnel
Gary W. Garson Vice President, Assistant
Secretary and Deputy General
Counsel
Robert J. Hausman Vice President
Chairman of the Board
Loews Hotels Division
Barry Hirsch Senior Vice President,
Secretary and General Counsel
Herbert C. Hofmann Senior Vice President
President
Bulova Corporation
John J. Kenny Treasurer
One Park Avenue
New York, New York 10016
Guy A. Kwan Controller
One Park Avenue
New York, New York 10016
John G. Malino Vice President
Real Estate
A-2<PAGE>
LOEWS CORPORATION, continued
EXECUTIVE OFFICERS
Name and Business Address Present Principal
(all business addresses are Occupation or Employment
Loews Corporation (all Present Principal
667 Madison Avenue Occupation or Employment
New York, NY 10021 with Loews Corporation
unless otherwise indicated) unless otherwise indicated)
Stuart B. Opotowsky Vice President
One Park Avenue Tax
New York, New York 10016
Richard E. Piluso Vice President
One Park Avenue Internal Audit
New York, New York 10016
Roy E. Posner Senior Vice President and
Chief Financial Officer
Dennis Smith Vice President
One Park Avenue Management Information
New York, New York 10016 Services
James S. Tisch President and Chief Operating
Officer
Jonathan M. Tisch Vice President
Chief Executive Officer
Loews Hotels Division
A-3<PAGE>
ANNEX B
CNA FINANCIAL CORPORATION
DIRECTORS
Name and Business Address
(all business addresses are Present Principal
CNA Financial Corporation Occupation or Employment
CNA Plaza (all with CNA Financial
Chicago, Illinois 60685 Corporation unless otherwise
unless otherwise indicated) indicated)
Antoinette Cook Bush Partner
Skadden, Arps, Slate, Meagher Skadden, Arps, Slate, Meagher
& Flom & Flom
1440 New York Avenue
Washington, D.C. 20005-2107
Dennis H. Chookaszian Chairman and Chief Executive
Officer
CNA Insurance Companies
Philip L. Engel President
CNA Insurance Companies
Robert P. Gwinn Retired Chairman and Chief
Executive Officer
Encyclopedia Britannica
Edward J. Noha Chairman of the Board
Richard L. Thomas Chairman, Audit Committee
The First National Bank of Chairman and Chief Executive
Chicago Officer
One First National Plaza The First National Bank of
Chicago, Illinois 60603 Chicago and First Chicago
Corporation
James S. Tisch President and Chief Operating
Officer
Loews Corporation
Laurence A. Tisch Chief Executive Officer
Co-Chairman of the Board and
Co-Chief Executive Officer
Loews Corporation
Chairman of the Board,
President and Chief Executive
Officer of CBS Inc.
Preston R. Tisch Co-Chairman of the Board and
Co-Chief Executive Officer
Loews Corporation
B-1<PAGE>
CNA FINANCIAL CORPORATION, continued
DIRECTORS
Name and Business Address
(all business addresses are Present Principal
CNA Financial Corporation Occupation or Employment
CNA Plaza (all with CNA Financial
Chicago, Illinois 60685 Corporation unless otherwise
unless otherwise indicated) indicated)
Marvin Zonis Professor of International
University Chicago Political Economy
5828 South University Graduate School of Business
Pick 213 University of Chicago
Chicago, Illinois
B-2<PAGE>
CNA FINANCIAL CORPORATION, continued
EXECUTIVE OFFICERS
Name and Business Address
(all business addresses are Present Principal
CNA Financial Corporation Occupation or Employment
CNA Plaza (all with CNA Financial
Chicago, Illinois 60685 Corporation unless
unless otherwise indicated) otherwise indicated)
Laurence A. Tisch Chief Executive Officer
Co-Chairman of the Board and
Co-Chief Executive Officer
Loews Corporation
Chief Executive Officer
Chairman of the Board,
President and Chief Executive
Officer
CBS, Inc.
Donald M. Lowry Senior Vice President, Secre-
tary and General Counsel
Peter E. Jokiel Senior Vice President and
Chief Financial Officer
Patricia L. Kubera Vice President and Controller
B-3<PAGE>
ANNEX C
CONTINENTAL CASUALTY COMPANY
DIRECTORS
Name and Business Address
(all business addresses are
Continental Casualty Company Present Principal
CNA Insurance Companies Occupation or Employment
CNA Plaza (all with Continental
Chicago, Illinois 60685 Casualty Company unless
unless otherwise indicated) otherwise indicated)
Dennis H. Chookaszian Chairman and Chief Executive
Officer
Philip L. Engel President
Peter E. Jokiel Senior Vice President and
Chief Financial Officer
Donald M. Lowry Senior Vice President and
General Counsel
Donald C. Rycroft Senior Vice President
William H. Sharkey Senior Vice President
C-1<PAGE>
CONTINENTAL CASUALTY COMPANY, continued
EXECUTIVE OFFICERS
Name and Business Address
(all business addresses are
Continental Casualty Company Present Principal
CNA Insurance Companies Occupation or Employment
CNA Plaza (all with Continental
Chicago, Illinois 60685 Casualty Company unless
unless otherwise indicated) otherwise indicated)
Dennis H. Chookaszian Chairman and Chief Executive
Officer
Philip L. Engel President
Carolyn L. Murphy Senior Vice President
Jae L. Wittlich Senior Vice President
Donald M. Lowry Senior Vice President and
General Counsel
Peter E. Jokiel Senior Vice President and
Chief Financial Officer
William H. Sharkey Senior Vice President
Donald C. Rycroft Senior Vice President
Thomas E. Donnelly Vice President
Michael C. Garner Senior Vice President
Bernard L. Hengesbaugh Senior Vice President
Floyd E. Brady Senior Vice President
Wayne R. Smith Senior Vice President
Jack Kettler Senior Vice President
Exhibit 3
AGREEMENT
This Agreement, made as of this 16th day of December,
1994, shall confirm that Loews Corporation ("Loews"), CNA
Financial Corporation ("CNA") and Continental Casualty Company
("CCC") hereby agree that CNA shall file a Schedule 13D under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder, as
permitted by and in accordance with Rule 13d-1(f) under the
Exchange Act, on behalf of Loews, CNA and CCC with respect to
shares of common stock, par value $1.00 per share, of The
Continental Corporation.
Each of Loews, CNA and CCC hereby represents and
warrants to each other that such person is individually eli-
gible to use Schedule 13D and agrees and understands that each
person on whose behalf a Schedule 13D is filed is responsible
for the timely filing of such statement and any amendments
thereto, and for the completeness and accuracy of the infor-
mation concerning such person contained therein and that this
agreement shall be filed as an exhibit to such Schedule 13D.
Each of Loews, CNA and CCC hereby agrees to cooperate
with one another and shall provide CNA with all information
required to effect such filing, agrees to apprise one another
should any information come to such person's attention or any
change in circumstances occur such that an amendment to such
Schedule 13D would be required under the Exchange Act and the
rules and regulation promulgated thereunder and represents and
warrants that all such information provided will not contain
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they are
made, not misleading. <PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement.
LOEWS CORPORATION
By: /s/ Barry Hirsch
Name: Barry Hirsch
Title: Senior Vice President,
Secretary and General
Counsel
CNA FINANCIAL CORPORATION
By: /s/ Donald M. Lowry
Name: Donald M. Lowry
Title: Senior Vice President,
Secretary and General
Counsel
CONTINENTAL CASUALTY COMPANY
By: /s/ Donald M. Lowry
Name: Donald M. Lowry
Title: Senior Vice President,
Secretary and General
Counsel
- 2 -
