<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Continental Assurance Company Separate Account (B)
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (B)
CNA PLAZA, CHICAGO, ILLINOIS 60685
------------------
NOTICE OF ANNUAL MEETING -- APRIL 28, 2000
TO THE PARTICIPANTS OF
CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (B)
You are hereby notified that, pursuant to the regulations for government of
Continental Assurance Company Separate Account (B), the 2000 Annual Meeting of
its Participants will be held in Room 305, CNA Plaza, 333 South Wabash Avenue,
Chicago, Illinois, on April 28, 2000, at 10:00 A.M., Chicago Time, for the
following purposes:
(1) To elect five Committee Members;
(2) To approve the continuation of the Investment Advisory Agreement with
Continental Assurance Company;
(3) To ratify the selection of Deloitte & Touche LLP as independent
certified public accountants for Continental Assurance Company Separate
Account (B) for the fiscal year ending December 31, 2000; and
(4) To transact such other business as may properly come before the
meeting.
Only Participants of record at the close of business on both February 23,
2000 and on the date of the meeting are entitled to notice of and to vote at the
meeting.
It is important that as many Participants as practicable be represented at
the meeting. Consequently, whether or not you expect to be present, you are
requested to date and sign the enclosed Proxy and return it promptly.
By Order of the Committee,
LYNNE GUGENHEIM
Secretary
March 7, 2000
<PAGE> 3
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (B)
CNA PLAZA
CHICAGO, ILLINOIS 60685
(800) 351-3001
ANNUAL MEETING -- APRIL 28, 2000
PROXY STATEMENT
The accompanying Proxy is solicited on behalf of the Committee of
Continental Assurance Company Separate Account (B) to be voted at the 2000
Annual Meeting of Participants (the "Annual Meeting") to be held on April 28,
2000, at 10:00 A.M., Chicago Time, in Room 305, CNA Plaza, 333 South Wabash
Avenue, Chicago, Illinois, and at any and all adjournments thereof. PROXIES WILL
BE VOTED AS SPECIFIED. HOWEVER, IF NO CONTRARY SPECIFICATIONS ARE MADE IN A
PROXY, IT WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 HEREINAFTER SET FORTH.
Abstentions are considered as shares present and entitled to vote and therefore
have the same legal effect as a vote against a matter presented at the meeting.
Each Proxy may be revoked at any time before its exercise by the execution of a
subsequent Proxy and the delivery thereof to the Secretary of the Committee at
the above address or by written notice to the Secretary of the Committee at the
above address, and any Participant attending the meeting may vote in person
whether or not he has previously executed a Proxy.
This Proxy Statement and the Proxy were first sent to the Participants of
Separate Account (B) on or about March 7, 2000. This solicitation is being made
by use of the mails, but further solicitations may be made by mail, telephone,
telecopier or personal interview. The cost of soliciting Proxies will be paid by
the investment adviser to Separate Account (B), Continental Assurance Company
("CAC"), CNA Plaza, Chicago, Illinois 60685, as one of the items of expense for
which CAC receives a monthly service fee (at the annual rate of 0.33% of the
average daily net asset value of Separate Account (B)) from Separate Account (B)
pursuant to CAC's Investment Advisory Agreement with Separate Account (B). See
"Approval of the Continuation of the Investment Advisory Agreement with
Continental Assurance Company".
There are 7,907,064 votes eligible to be cast by the Participants. Each
Participant who is a Participant on both February 23, 2000 (at the close of
business) and on the date of the Annual Meeting is entitled to vote. A
Participant is entitled to cast the number of votes equal to (1) if not retired,
the number of accumulation units held by such Participant under the particular
contract concerned, or (2) if retired, a number equal to the monetary value of
the actuarial reserve maintained by CAC in Separate Account (B) for the annuity
of that Participant divided by the monetary value of an accumulation unit.
Separate Account (B)'s 1999 annual report was mailed to Participants. Any
Participant who desires additional copies may obtain them upon written request
to the Secretary of the Committee at the above address.
PARTICIPANT PROPOSALS
Participant proposals for inclusion in Proxy Material for the 2001 Annual
Meeting of Participants should be addressed to the Secretary of the Committee at
the above address, and must be received by November 1, 2000. If a Participant
intends to present a proposal at the 2001 Annual Meeting of Participants but
does not seek inclusion of that proposal in Separate Account (B)'s proxy
statement for that meeting, the proxy holders for that meeting will be entitled
to exercise discretionary authority on that proposal if Separate Account (B) has
not received notice of the proposal by January 4, 2001. If notice of any such
proposal is timely received, the proxy holders may exercise discretionary
authority with respect to such proposal only to the extent permitted by the
regulations of the Securities and Exchange Commission.
1
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1. ELECTION OF COMMITTEE MEMBERS
The regulations for government of Separate Account (B) provide for a
Committee of five members, to be elected annually by ballot at the Annual
Meeting of Participants to serve until the next Annual Meeting of Participants
and until their successors have been elected and qualified. The persons named on
the enclosed Proxy are committed to cast the votes represented by the proxies
given to them for the five nominees hereinafter named, all of whom are now
serving as Committee Members, if no contrary instruction is indicated in the
Proxy. In order for such nominees to be elected, they must receive the
affirmative votes of Participants eligible to cast at least a majority of the
votes which may be cast by Participants present at the Annual Meeting in person
or by proxy. All of the nominees listed below have consented to serve if
elected. The Committee presently knows of no reason why any of the nominees
listed below will be unable to serve if elected. If any of the nominees become
unavailable to serve as Committee Members, the persons named in the Proxy will
vote for such persons as the present Committee may select. At the 1999 Annual
Meeting of Participants, five Committee Members were elected all of whom are
standing for re-election. The following information is furnished with respect to
the five persons nominated for election as Committee Members, none of whom is a
Participant in Separate Account (B):
<TABLE>
<CAPTION>
Committee
Principal Occupation for the Last Five Years Member
Name and Address of Nominee and Other Directorships Held Age Since
--------------------------- -------------------------------------------- --- ---------
<S> <C> <C> <C>
Richard W. Dubberke*................... Vice President and Manager of Corporate Bond 62 1992
CNA Plaza Investments of CAC and Continental Casualty
Chicago, Illinois 60685 Company ("Casualty")(1); Vice President,
Treasurer and Director of CNA Income Shares,
Inc. (closed-end investment company)
("CIS").
Richard T. Fox......................... Independent Financial Consultant since 62 1986
661 Sheridan Road October 1995; Chief Executive Officer of
Winnetka, Illinois 60093 21st Century Environmental Management Inc.
(environmental recycling company) ("21EMI")
from August 1994 to September 1995(2).
Marilou R. McGirr*..................... Vice President of CAC and Casualty since 46 1997
CNA Plaza January 1997, Assistant Vice President of
Chicago, Illinois 60685 CAC and Casualty from January 1995 to
January 1997.
William W. Tongue...................... Professor Emeritus of Economics and Finance, 84 1971
1220 Village Drive University of Illinois at Chicago.
Arlington Heights, Illinois 60064
Peter J. Wrenn......................... President of Hudson Technology, Inc. 64 1987
915 Columbian Avenue (tooling and manufacturing).
Oak Park, Illinois 60302
</TABLE>
- ---------------
* An "interested person" within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940, as amended ("1940 Act"), by virtue of his
employment by CAC.
(1) CNA Financial Corporation ("CNA Financial"), CNA Plaza, Chicago, Illinois
60685, owns all of the outstanding stock of Casualty, CNA Plaza, Chicago,
Illinois 60685, which, in turn, owns all of the outstanding stock of CAC.
See "Approval of the Continuation of the Investment Advisory Agreement with
Continental Assurance Company".
(2) Prior to December 27, 1996 CLE, Inc., a wholly owned indirect subsidiary of
Casualty, owned 63% of the non-voting preferred stock of 21EMI. On December
27, 1996, CLE, Inc. sold all of the 21EMI stock that it owned to a third
party unaffiliated with Casualty. Since December 27, 1996, CLE, Inc. has had
no interest in 21EMI.
2
<PAGE> 5
ADDITIONAL INFORMATION REGARDING THE COMMITTEE
STANDING COMMITTEES
The Committee does not have a standing Audit Committee, Nominating
Committee or Compensation Committee.
MEETINGS
The Committee held four meetings in 1999. Each Committee Member attended
all of such meetings.
CERTAIN MATERIAL RELATIONSHIPS OF NOMINEES FOR COMMITTEE MEMBER
No nominee to serve as a Committee Member has served as an officer of
Separate Account (B) or CAC or had any other material interest in or
relationship with Separate Account (B), CAC or any of their respective
affiliates during the past five years, except as noted above in the table
listing the nominees for election as Committee Members of Separate Account (B).
REMUNERATION OF COMMITTEE MEMBERS AND OFFICERS
No Committee Member or officer receives any remuneration from Separate
Account (B). CAC pays Committee Members a fee for their service. The Committee
Member's fee is currently $10,000 per annum. CAC also reimburses Committee
Members for expenses incurred in attending meetings of the Committee. However,
no payments of fees or expenses are made to any Committee Member who is an
officer or employee of or special consultant to the Company, CNA Financial or
any of their affiliated companies. Therefore, neither Mr. Dubberke nor Ms.
McGirr has received or will receive any such payments. During 1999, there was no
reimbursement payable for expenses incurred by Committee Members.
The payment of fees to Committee Members is one of the items of expense for
which CAC receives a monthly investment advisory fee (at the annual rate of 0.5%
of the average daily net asset value of Separate Account (B)) from Separate
Account (B) pursuant to CAC's Investment Advisory Agreement with Separate
Account (B). See "Approval of the Continuation of the Investment Advisory
Agreement with Continental Assurance Company".
The following table sets forth information regarding the compensation of
all Committee Members of Separate Account (B) for services rendered in 1999 to
Separate Account (B) and to funds deemed to be included in the same fund complex
as Separate Account (B). A "fund complex" for this purpose means any two or more
funds that hold themselves out to investors as related companies or that have a
common or related investment adviser.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Aggregate Pension or retirement Total compensation from
compensation benefits accrued as part Estimated Annual fund and fund complex
Name of person, position from fund of fund expenses benefits upon retirement paid to directors
- ------------------------ ------------ ------------------------ ------------------------ -----------------------
<S> <C> <C> <C> <C>
Richard W. Dubberke,
Committee Member*..... None None None None
Richard T. Fox,
Committee Member...... $10,000 None None $10,000
Marilou R. McGirr,
Committee Member*..... None None None None
William W. Tongue,
Committee Member...... $10,000 None None $10,000
Peter J. Wrenn,
Committee Member...... $10,000 None None $10,000
</TABLE>
- ---------------
* An "interested person" (as defined in Section 2(a)(19) of the 1940 Act).
3
<PAGE> 6
EXECUTIVE OFFICERS
Separate Account (B) has three executive officers: Richard W. Dubberke,
Lynne Gugenheim and Marilou R. McGirr. Ms. Gugenheim is 40 years old and has
been Secretary of the Committee and CIS since April 1995. Since January 1996,
she has been a Vice President and Associate General Counsel of CAC and Casualty.
From November 1994 to December 1995, she was an Assistant Vice President and
Assistant General Counsel of CAC and Casualty. Information regarding Mr.
Dubberke and Ms. McGirr is contained in the table on page 2 of this Proxy
Statement. The officers of Separate Account (B) are elected annually for terms
of one year and until their respective successors are elected and qualified.
2. APPROVAL OF THE CONTINUATION OF THE INVESTMENT
ADVISORY AGREEMENT WITH CONTINENTAL ASSURANCE COMPANY
At a meeting held for such purpose on January 28, 2000, the Committee,
including a majority of the members who are not "interested persons" (as defined
in the 1940 Act) of Separate Account (B) or CAC, by votes cast in person,
approved the continuation of the Restated and Amended Investment Advisory
Agreement, dated May 1, 1981, (the "Advisory Agreement") between CAC and
Separate Account (B) for the current year and decided, as a matter of policy, to
submit such continuation to a vote of the Participants. The Participants
approved the continuation of the Advisory Agreement during 1999 at the 1999
Annual Meeting of Participants on April 27, 1999.
For the Advisory Agreement to remain in effect, it must be approved by a
majority of the outstanding voting securities of Separate Account (B). A
majority, for such purposes, means the lesser of (a) 67% of the votes which may
be cast by the Participants of Separate Account (B) present at a meeting in
person or by proxy if Participants holding more than 50% of the votes which may
be cast by all Participants are present in person or by proxy, or (b) more than
50% of the votes which may be cast by all Participants.
A copy of the Advisory Agreement is attached hereto as Exhibit A. If
approved by a majority (as defined above) at the Annual Meeting, the Advisory
Agreement will continue from year to year thereafter so long as such continuance
is specifically approved at least annually by (1) the Committee or the vote of a
majority (as defined above) of the outstanding voting securities of Separate
Account (B) and (2) the vote of a majority of the Committee Members who are not
"interested persons" (as defined in the 1940 Act) of CAC cast in person at a
meeting called for the purpose of voting upon such approval.
The Advisory Agreement, by law, will terminate automatically in the event
of its assignment. In addition, it is terminable at any time, without penalty,
by the Committee or by the vote of a majority (as defined above) of the
outstanding voting securities of Separate Account (B) on 60 days' written notice
to CAC or by CAC on 60 days' written notice to Separate Account (B).
CAC is a wholly-owned subsidiary of Casualty, which, in turn, is a
wholly-owned subsidiary of CNA Financial. CAC is a stock life insurance company
organized under the Illinois Insurance Code in 1911 and is an investment adviser
registered under the Investment Advisers Act of 1940. As of December 31, 1999,
CAC reported in its consolidated financial statements total assets of
approximately $14.2 billion and equity of approximately $2.3 billion. CAC
operates eleven other separate accounts which had total assets aggregating
approximately $4.4 billion as of December 31, 1999. As of December 31, 1999,
Laurence A. Tisch and Preston R. Tisch owned approximately 33% of the
outstanding common stock of Loews and may therefore be deemed to be parents of
Loews, and thus of CNA Financial and CAC, within the meaning of the Federal
Securities Laws. Laurence A. Tisch and Preston R. Tisch are brothers.
Loews Corporation, a Delaware corporation, 667 Madison Avenue, New York,
New York 10021-8087, with interests in insurance, hotels, watches and other
timing devices, drilling rigs and tobacco, owned approximately 86.5% of the
outstanding voting stock of CNA Financial as of December 31, 1999.
Pursuant to the Advisory Agreement, the Company provides Separate Account
(B) with an investment program. The investment program complies with the
investment objectives, policies and restrictions of Separate Account (B) and, in
carrying out such program, CAC makes the investment decisions of Separate
4
<PAGE> 7
Account (B) and is responsible for the investment and reinvestment of Separate
Account (B)'s assets. CAC performs research, statistical analysis and continuous
supervision of Separate Account (B)'s investment portfolio, and CAC also
furnishes office space for Separate Account (B) and pays the salaries and fees
of Separate Account (B)'s officers and Committee Members. In return for its
advisory services, Separate Account (B) pays CAC a fee at an annual rate of 0.5%
of the average daily net asset value of Separate Account (B). Fees were accrued
to CAC from Separate Account (B) during the past three years as follows: 1999,
$988,661; 1998, $816,238; and 1997, $704,159. Although the fee is payable
monthly, to date CAC has, with its consent, been paid quarterly. Separate
Account (B)'s net assets on December 31, 1999, 1998 and 1997 were $227,654,341,
$179,345,826 and $152,378,894, respectively. The Advisory Agreement does not
require employees of CAC to devote their exclusive efforts to Separate Account
(B)'s business, and it is expected that they will provide investment management
services for CAC's other accounts and for CNA Financial and its affiliates.
CAC performs various services for Separate Account (B) in addition to those
described above related to Separate Account (B)'s investment program (as set
forth in Section 2 of the Advisory Agreement). As partial compensation for such
services, a service fee is paid by Separate Account (B) to CAC. Under the
Advisory Agreement, the service fee is paid at the annual rate of 0.33% of the
average daily net asset value of Separate Account (B). The service fee is
payable at the established rate regardless of the actual amount of such expenses
incurred; therefore, if such expenses are less than the fee, the difference
accrues to CAC as a profit and if such expenses are more than the fee, the
difference accrues to CAC as a loss. For 1999, 1998 and 1997, the total service
fees were $652,517, $538,717 and $464,745, respectively. Although the fee is
payable monthly, to date CAC has, with its consent, been paid quarterly.
If the continuation of the Advisory Agreement is approved by the
Participants of Separate Account (B), the Advisory Agreement will continue in
effect. If the continuation of the Advisory Agreement is not approved by the
Participants of Separate Account (B), the assets of Separate Account (B) will be
liquidated.
COMMITTEE'S REVIEW OF THE INVESTMENT ADVISORY AGREEMENT
Before approving the continuation of the Advisory Agreement, the Committee
Members of Separate Account (B) reviewed the material factors relating to its
evaluation of CAC and the Advisory Agreement. The Committee Members examined the
performance of Separate Account (B) in relation to its unit value over various
periods of time and in comparison to other comparable separate accounts and the
Standard & Poor's 500 composite index (with dividend reinvestment). In addition,
the Committee Members reviewed the list of and cost for services provided by CAC
and compared them to services and costs of investment advisers of other separate
accounts of various sizes. The Committee Members also noted that CAC receives
research services from brokerage firms at no additional cost to CAC or Separate
Account (B). These services are available to be used by CAC in its management of
Separate Account (B)'s portfolio as well as CAC's other accounts. At the
conclusion of its review of these factors, the Committee Members approved the
continuation of the Advisory Agreement on its present terms and conditions. The
Committee Members recommend that the Participants of Separate Account (B) vote
FOR approval of this proposal.
GENERAL INFORMATION
The rate of portfolio turnover for Separate Account (B) during the past
three years has been as follows: 1999, 34%; 1998, 41%; and 1997, 45%. Separate
Account (B) paid brokerage fees and commissions in connection with portfolio
transactions in the following aggregate amounts during the past three years:
1999, $159,497; 1998, $181,096; and 1997, $191,320. In selecting brokers to
execute portfolio transactions, CAC's primary criterion is the expected ability
of such brokers to make the best possible execution on orders. If several
brokers are expected to be able to provide equally good execution, preference is
given to those brokers who provide statistical research, assistance in pricing
portfolio securities, or other services. Commissions on all transactions are
negotiated, and the primary basis of the commission agreed to by CAC is the
quality of execution. Research services, to the extent provided to
5
<PAGE> 8
CAC, may be used by CAC in servicing its other accounts, and not all such
services are used in connection with Separate Account (B).
In connection with the purchase and sale of portfolio securities for
Separate Account (B), CAC does not bunch orders for such transactions with
orders for other accounts under the management of CAC, CNA Financial or other
subsidiaries of CNA Financial unless such other accounts are registered
investment companies and unless such bunching would not have adverse
consequences for Separate Account (B) and such other accounts. Under no
circumstances are orders bunched with orders for CAC's own account or for the
account of Loews, CNA Financial or other subsidiaries of CNA Financial. No
bunching of orders occurred during 1999.
Under separate agreements with Separate Account (B), CAC acts as principal
underwriter and performs all sales and administrative functions relative to
Separate Account (B) and the variable annuity contracts of Separate Account (B).
The amounts earned by CAC for sales and administrative functions rendered to
Separate Account (B) for each of the years 1999, 1998 and 1997 were $7,961,
$10,428, and $11,417, respectively. The agreement covering sales and
administrative services does not cover the services covered by the Advisory
Agreement.
CAC has an affiliate, CNA Investor Services, Inc. ("Investor Services"),
(the successor by merger to CNA Securities Corp.), which is a member of the
National Association of Securities Dealers, Inc. CAC and Separate Account (B)
are parties to an agreement under which Separate Account (B) receives credit
from CAC in the form of a reduction of the investment advisory fee to the extent
that services of Investor Services are utilized in connection with Separate
Account (B)'s portfolio transactions. In 1975, the securities laws were amended
to abolish fixed brokerage commissions on securities transactions. Prior to such
changes, it was mutually advantageous to Separate Account (B) and to CNA
Securities Corp. for the services of CNA Securities Corp. to be utilized in
connections with certain of Separate Account (B)'s portfolio transactions. The
advantage of such arrangement was reduced significantly by the above-mentioned
changes in the securities laws. Separate Account (B) had no transactions with
Investor Services during 1999, 1998 and 1997.
The Chase Manhattan Trust Company of Illinois acts as custodian for
Separate Account (B). The custodian performs no managerial or policy making
functions for Separate Account (B).
The names, addresses and principal occupations of the directors of CAC are
as follows:
<TABLE>
<CAPTION>
Name and Address Principal Occupation Director Since
---------------- -------------------- --------------
<S> <C> <C>
Bernard L. Hengesbaugh................. Chairman and Chief Executive Officer of 1999
CNA Plaza CAC and Casualty
Chicago, Illinois 60685
Thomas F. Taylor....................... Executive Vice President of CAC and Casualty 1999
CNA Plaza
Chicago, Illinois 60685
Robert V. Deutsch...................... Senior Vice President and Chief Financial 1999
CNA Plaza Officer of CAC and Casualty
Chicago, Illinois 60685
Jonathan D. Kantor..................... Senior Vice President, Secretary and General Counsel 1997
CNA Plaza of CAC and Casualty
Chicago, Illinois 60685
Carol Dubnicki ........................ Senior Vice President of CAC and Casualty 1999
CNA Plaza
Chicago, Illinois 60685
</TABLE>
6
<PAGE> 9
3. RATIFICATION OF SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
At a meeting held on January 28, 2000, the Committee, including a majority
of the Committee Members who are not "interested persons" (as defined in the
1940 Act) of CAC, selected Deloitte & Touche LLP as auditors for Separate
Account (B) for the fiscal year ending December 31, 2000. Pursuant to the 1940
Act, such selection must be submitted to the Participants for ratification or
rejection at the Annual Meeting. Ratification requires the affirmative votes of
Participants eligible to cast at least a majority of the votes which may be cast
by Participants present at the meeting in person or by proxy. Deloitte & Touche
LLP also served as auditors for Separate Account (B) for the fiscal year of
Separate Account (B) ended December 31, 1999. Deloitte & Touche LLP are the
auditors for CAC and for CNA Financial and Loews. They have no other
relationship, financial or otherwise, with Separate Account (B) or CAC.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so,
and such representatives will be available to respond to appropriate questions.
4. OTHER BUSINESS
As of the date of this Proxy Statement, the Committee does not know of any
other business to come before the meeting. However, if any matters other than
those referred to above come before the meeting, the persons named in the Proxy
will vote thereon in accordance with their best judgment.
By Order of the Committee,
LYNNE GUGENHEIM
Secretary
March 7, 2000
7
<PAGE> 10
EXHIBIT A
RESTATED AND AMENDED INVESTMENT ADVISORY AGREEMENT
RESTATED AND AMENDED AGREEMENT made this 1st day of May, 1981 by and
between CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (B) (the "Separate
Account") and CONTINENTAL ASSURANCE COMPANY (the "Company").
1. The Company will furnish the Separate Account with investment advisory
services, statistical services, research facilities and services, will supervise
the composition of the Separate Account's portfolio continuously and will effect
such changes therein as the Company deems advisable, including the nature,
timing and manner of effectuating such changes. The Company, at its own expense,
shall furnish office space to the Separate Account and shall pay the salaries
and fees of Officers and Committee Members of the Separate Account. The
compensation for those services shall be an investment advisory fee payable
monthly, computed at the annual rate of 1/2 of 1% of the average daily net asset
value of the Separate Account.
2. The Company shall bear the following expenses of the Separate Account
and shall be compensated as provided below:
(a) All costs and expenses incident to compliance with federal and
state regulations applicable to any public offering of Investment Units of
the Separate Account, for cash or otherwise, including those relating to
the registration of Investment Units under the Securities Act of 1933, as
amended, the qualification of Investment Units under state securities laws,
the printing or other reproduction and distribution of any registration
statement (and all amendments thereto) under the Securities Act of 1933, as
amended, the preliminary and final prospectuses included therein (to the
extent such prospectuses are distributed to persons who, at the time of the
distribution of such prospectuses, are participants in the Separate
Account) and any other necessary documents required by federal and state
regulations applicable to any such public offering;
(b) All fees involved in registering and maintaining registrations of
the Separate Account and of its Investment Units with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended;
(c) All charges and expenses of any custodian appointed by the
Separate Account for the safekeeping of its cash, portfolio securities and
other property, other than fees and expenses relating to the lending of
portfolio securities;
(d) All charges and expenses of independent auditors;
(e) All expenses of meetings of the participants and of the Committee
and of preparing, printing and mailing proxy statements and quarterly,
semi-annual and annual reports to participants;
(f) All charges and expenses of legal counsel in connection with
matters relating to the Separate Account, including without limitation,
legal services rendered in connection with the Separate Account's
registrations and qualifications of securities under federal, state and
other laws;
(g) All the expenses of keeping the general accounts and records of
the Separate Account; and
(h) All postage expenses of the Separate Account (other than those
relating to the mailing of prospectuses to persons who, at the time of such
mailing, are not participants in the Separate Account and to the mailing of
sales literature).
As compensation for bearing the expenses set forth in this paragraph, the
Company shall be paid a monthly service fee by the Separate Account, computed at
the annual rate of 0.33 of 1% of the average daily net asset value of the
Separate Account.
A-1
<PAGE> 11
3. The Company shall bear, without compensation, the following expenses of
the Separate Account:
(a) All costs and expenses relating to the printing or other
reproduction and distribution of preliminary and final prospectuses to
persons who, at the time of the distribution of such prospectuses, are not
participants in the Separate Account;
(b) All costs and expenses relating to the advertising of Investment
Units of the Separate Account, including without limitation, the overhead
allocated to the supervision of brokers and dealers selling Investment
Units and the printing and mailing of sales literature;
(c) All costs and expenses relating to the printing or other
reproduction and distribution of any underwriting documents incident to a
public offering of Investment Units of the Separate Account, and review by
the National Association of Securities Dealers, Inc. of any underwriting
arrangement; and
(d) All other expenses primarily intended to result in the sale of
Investment Units of the Separate Account.
4. Notwithstanding the provisions of Section 1 hereof, the Separate Account
shall pay all fees and expenses attributable to the lending of its portfolio
securities.
5. This Agreement shall not be materially amended without the affirmative
vote or written consent of the holders of a majority of the outstanding
Investment Units of the Separate Account.
6. This Agreement may be terminated at any time by either party, without
the payment of any penalty, on sixty days written notice. Such action may be
taken by the Company or by either the Committee of the Separate Account or the
holders of a majority of its outstanding Investment Units.
7. This Agreement shall terminate automatically in the event of its
assignment.
8. This Agreement shall become effective at the close of business on May 1,
1981 and shall continue in force for one year from such date and indefinitely
thereafter, but only so long as the continuance after such year shall be
specifically approved at least annually by the vote of a majority of the members
of the Committee of the Separate Account who are not parties to the Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
IN WITNESS WHEREOF, the Separate Account and the Company have caused this
Agreement to be duly executed the day and year above written.
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<S> <C>
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (B)
By: DONALD C. RYCROFT
Chairman
ATTEST: ROBERT E. WETZEL
Secretary
CONTINENTAL ASSURANCE COMPANY
By: DONALD C. RYCROFT
Vice President
ATTEST: THOMAS R. IGLESKI
Corporate Secretary
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A-2
<PAGE> 12
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CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (B)
PROXY SOLICITED BY THE COMMITTEE FOR THE ANNUAL MEETING OF
PARTICIPANTS, APRIL 28, 2000
Lynne Gugenheim, Richard T. Fox, and Marilou R. McGirr or any of
them, with full power of substitution, are hereby authorized to
represent the undersigned and cast the votes of the undersigned as
fully as the undersigned could do if personally present at the 2000
Annual Meeting of Participants of Continental Assurance Company
Separate Account (B) to be held in Room 305, CNA Plaza, 333 South
Wabash Avenue, Chicago, Illinois at 10:00 A.M. Chicago Time on April
28, 2000 and at any and all adjournments thereof, upon the following
matters:
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<S> <C> <C> <C> <C>
1. ELECTION OF COMMITTEE
MEMBERS FOR all nominees listed below WITHHOLD AUTHORITY
[ ] (except as marked to the [ ] to vote for all nominees
contrary below) listed below
R. Dubberke, R. Fox, M. McGirr, W. Tongue and P. Wrenn
(INSTRUCTION: To withhold authority to vote for an individual nominee, write the nominee's name on
the line provided below)
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2. TO APPROVE THE CONTINUATION OF THE INVESTMENT ADVISORY AGREEMENT WITH CONTINENTAL ASSURANCE
COMPANY
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR CONTINENTAL ASSURANCE COMPANY SEPARATE ACCOUNT (B)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other business as may
properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
PARTICIPANT.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
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DATED --------------------------------------- , 2000 PLEASE SIGN EXACTLY AS NAME
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY APPEARS BELOW. WHEN OWNERSHIP
CARD PROMPTLY, USING THE ENCLOSED ENVELOPE. IS BY JOINT TENANTS, BOTH
SHOULD SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN
FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON.
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SIGNATURE
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SIGNATURE, IF OWNED JOINTLY
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