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 (AMENDMENT NO. __)
Filed by Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
METLIFE INVESTORS USA SEPARATE ACCOUNT A
(Name of Registrant as Specified in Its Charter)
(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:
5) Total fee paid:
[ ] Fee paid with preliminary materials.
[ ] 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, of the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
METLIFE INVESTORS USA INSURANCE COMPANY
IMPORTANT NEWS FOR CONTRACT OWNERS
QUESTIONS & ANSWERS
We encourage you to read the attached voting information statement in full;
however, the following questions and answers represent some typical concerns you
might have regarding this document.
Q: What is this document and why did we send it to you?
A: This voting information statement is being furnished to you in connection
with the solicitation of votes by MetLife Investors USA Insurance Company
("MetLife Investors USA") from owners of Capital Strategist and Foresight
variable annuity contracts issued by MetLife Investors USA ("Contracts").
MetLife Investors USA is proposing to substitute the MFS Total Return
Portfolio, a series of Metropolitan Series Fund, Inc. (referred to in this
document as "MFS Total Return" or the "Replacement Portfolio"), in place of the
AIM V.I. Balanced Fund, a current funding option under each Contract (referred
to as "AIM Balanced" or the "Current Portfolio").
Your Contract requires that MetLife Investors USA obtain:
(a) approval of the substitution by the Securities and Exchange Commission
(Commission") and
(b) approval of Contract owners investing in the Current Portfolio to allow
the substitution of the account value invested in the Current Portfolio into the
Replacement Portfolio.
For each class of Contract, the vote required is an affirmative vote by
Contract owners representing a majority of outstanding accumulation units in the
subaccount investing in the Current Portfolio (the "Subaccount") in order to
carry out the proposed substitution for that Contract.
It is expected that Commission approval will be received on or about
February 27, 2004.
Q: How will this proposed substitution benefit me?
A: The substitution is expected to provide significant benefits to you as a
Contract owner, including:
o Potential for Better Performance. MetLife Investors USA believes that based
on the historical performance records of the Replacement Portfolio and of
the Current Portfolio, over the long term the performance of the
Replacement Portfolio should (although no guarantee can be given) exceed
that of the Current Portfolio. See page 18.
o Cost Savings: The Replacement Portfolio's annual operating expenses are
lower than those of the Current Portfolio, which in turn could result in
potential greater returns.
Total annual operating expenses were 0.66% for MFS Total Return and 1.17%
for AIM Balanced.
o Operating Efficiencies: Upon the substitution of the Replacement Portfolio
for the Current Portfolio, operating efficiencies may be achieved by the
Replacement Portfolio because it will have a greater level of assets.
Economies of scale could be achieved through the spreading of certain costs
over a larger base of shareholders, including reduction in portfolio
general expenses such as legal, accounting, printing of prospectuses and
trustees fees.
Additional benefits include:
o Lower management fee at the Portfolio level.
o Improved selection of portfolio managers. MetLife Investors USA believes
that the investment subadviser to the Replacement Portfolio is better
positioned to potentially provide consistent above-average performance than
the investment adviser to the Current Portfolio.
o Guaranteed cap on total separate account and Replacement Portfolio
expenses: As a condition of the substitution, total combined annualized
subaccount and Replacement Portfolio net expenses may not exceed the sum of
the 2002 fiscal year combined net expenses for the Current Portfolio and
Subaccount for two years following the substitution.
o No increase in Contract fees and expenses for a period of two years
following the substitution, including mortality and expenses risk fees and
administration and distribution fees charged to Separate Account A.
o No tax liability to Contract owners from the substitution.
Q: How will the substitution be carried out?
A: MetLife Investors USA will purchase shares of MFS Total Return to support
contract values or fund benefits payable under your Contract in place of
AIM Balanced.
The proposed substitution will not be treated as a transfer of Contract
value or an exchange of annuity units for purposes of assessing transfer charges
or for determining the number of remaining permissible transfers (or exchanges)
in a Contract year. In addition, you may make one transfer of Contract value (or
annuity exchange) out of MFS Total Return within 30 days following the proposed
substitution without the transfer (or exchange) counting as a transfer of
Contract value (or an annuity unit exchange) for purposes of assessing transfer
charges or for determining the number of remaining permissible transfers (or
exchanges) in a Contract year.
Q: Why is MetLife Investors USA proposing this change?
A: The proposed substitution is part of an effort by Metropolitan Life
Insurance Company and its affiliates, including MetLife Investors USA, to
make their variable contracts more efficient to administer and oversee, and
therefore more attractive to their customers. MetLife Investors USA
believes that since the Replacement Portfolio's prospects for improved
performance and lower costs are better than for the Current Portfolio, the
proposed substitution is in your best interest.
As described later, the Replacement Portfolio's performance is better than
and its total operating expenses are lower than those of the Current Portfolio.
Please note that past performance is not an indication of future results.
Q: What effect will the substitution have on fees and expenses? Is there a
benefit to me?
A: Yes, the substitution will benefit you as a Contract owner. The total
expenses of the Replacement Portfolio, including the management fee, will
be LOWER than the current expense ratio of the Current Portfolio. Lower
expenses have the potential for generating increased portfolio returns.
Q: Are there differences in the investment objectives of the Current Portfolio
and the Replacement Portfolio?
A: The Current Portfolio and the Replacement Portfolio have substantially
similar investment objectives. MFS Total Return's investment objective is a
favorable total return through investment in a diversified portfolio. The
investment objective of AIM Balanced is to achieve as high a total return
as possible, consistent with preservation of capital.
Q: What happens if the substitution is not approved by Contract owners?
A: In the event that sufficient votes are not received to approve the proposed
substitution for the class of Contract that you hold, the account value you
have invested in the Current Portfolio will remain invested in the Current
Portfolio. However, effective May 1, 2004, the AIM Balanced investment
option will no longer be available under the Contract for allocation of
additional purchase payments or transfers of Contract value. You will be
unable to increase your accumulation units invested in the Current
Portfolio after that date.
Q: Who will bear the cost of any expenses associated with carrying out the
proposed substitution?
A: MetLife Investors USA will pay all of the costs associated with the
proposed substitution. YOU WILL NOT BEAR ANY OF THESE COSTS.
Q: Whom do I call for more information or to place my vote?
A: You may call MetLife Investors USA at 1-800-284-4536, if you have any
questions or for more information.
You can vote in one of four ways:
1) Use the enclosed Voting Instruction Card to record your vote of For,
Against or Abstain, then return the card in the postpaid envelope provided.
or
2) Call 1-866-235-4258 and record your vote by telephone. Please have your
Voting Instruction Card at hand when you call and enter the 14-digit
control number found on the card, then follow the simple in instructions.
or
3) Fax your completed and signed Voting Instruction Card (both front and back
sides) to our vote tabulator at 1-888-796-9932.
or
4) Visit our website at https://vote.proxy-direct.com and following the
instructions for voting via Internet.
Q: How does MetLife Investors USA Insurance Company recommend that I vote?
A: MetLife Investors USA recommends that you vote FOR the proposed
substitution.
Q: Will my vote make a difference?
A: Yes, your vote is very important. Your vote is needed to ensure that the
substitution can be carried out for the Current Portfolio. Your immediate
response on the enclosed Voting Instruction Card will help to save on the
costs of any further solicitations for Contract owner votes.
We urge you to vote FOR the proposed substitution. Please note that an
abstaining vote is in effect a "no" vote since an affirmative vote of more than
50% of account value in a Current Portfolio is required to approve the
substitution.
Q: What is the deadline for voting?
A: In order for your vote to count, we will need to receive your vote no later
than April 23, 2004.
Q: How do I sign the Voting Instruction Card?
A: Please see "Instructions for Signing Voting Instruction Cards" on the next
page.
INSTRUCTIONS FOR SIGNING VOTING INSTRUCTION CARDS
The following general rules for signing Voting Instruction Cards may be of
assistance to you.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the Voting Instruction Card form.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the Voting
Instruction Card.
3. All Other Accounts: The capacity of the individual signing the Voting
Instruction Card should be indicated unless it is reflected in the form of
registration. For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. . . . . . . . . . . . ABC Corp.
(2) ABC Corp. . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer . . . . John Doe
(4) ABC Corp. Profit Sharing Plan . John Doe, Trustee
Trust Accounts
(1) ABC Trust . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 . . . . . . . . .Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA . John B. Smith
(2) Estate of John B. Smith . . . . John B. Smith, Jr., Executor
METLIFE INVESTORS USA INSURANCE COMPANY
22 Corporate Plaza Drive
Newport Beach, California 92660
[Name]
IMMEDIATE ACTION REQUESTED
Dear Contract Owner:
You are the owner of a variable annuity contract (a "Contract") issued by
MetLife Investors USA Insurance Company ("MetLife Investors USA" or "we"). At
your previous direction, MetLife Investors USA through its Separate Account A
purchased shares of AIM V.I. Balanced Fund (the "Current Portfolio") to support
contract values or fund benefits payable under your Contract.
MetLife Investors USA seeks your approval to substitute Class A shares of
MFS Total Return Portfolio, a series of Metropolitan Series Fund, Inc., for the
shares of the Current Portfolio held to fund your Contract or the benefits
payable under such Contract. The proposed substitution is part of an effort by
MetLife Investors USA to make its variable contracts more efficient to
administer and oversee, and therefore more attractive to its customers.
In proposing to substitute the MFS Total Return Portfolio, we believe that
this exchange will potentially result in better long-term performance, will
reduce expenses for current Contract owners, allow Separate Account A's assets
to be more efficiently managed and potentially lead to improved returns due to
economies of scale. Accordingly, such a substitution would be beneficial to you
and other Contract owners.
Separate Account A of MetLife Investors USA is the record owner of the
Current Portfolio. However, as a Contract owner, you are entitled to vote the
number of accumulation units you own in the subaccount of Separate Account A
that invests in the Current Portfolio.
MetLife Investors USA recommends that you vote FOR the proposed
substitution.
We realize that this voting information statement will take time to review,
but your vote is very important. We ask that you cast your vote in order that we
may effect the proposed substitution.
We have made every effort to make the voting process easy. You may cast
your vote by:
(1) filling out the enclosed Voting Instruction Card and returning it to us;
(2) using our toll-free telephone voting facility (1-866-235-4258); or
(3) visiting our website https://vote.proxy-direct.com; or
(4) faxing your completed Voting Instruction Card to 1-888-796-9932.
Please read the enclosed voting information statement carefully for details
about the proposed substitution. In order for your vote to be given effect, we
must receive a properly executed Voting Instruction Card or a telephone, fax, or
website vote no later than April 23, 2004 at 4:00 p.m. Pacific Time.
Please complete, sign, and date the enclosed Voting Instruction Card and
promptly return it in the enclosed postage-paid envelope or complete the
telephone or facsimile voting or website voting process by following the
instructions available at each facility. If we do not receive your completed
Voting Instruction Card after a few weeks, you may be contacted by our vote
solicitor, Alamo Direct. The vote solicitor will remind you to vote. We
apologize in advance for this potential disruption of your affairs but this vote
is important to future benefits under your Contract.
Your vote and participation are very important, and we appreciate your
return of the form as soon as possible. You may call MetLife Investors USA at
1-800-284-4536, if you have any questions.
Thank you for your cooperation and for participating in this important
process.
Very truly yours,
Richard C. Pearson
Secretary
MetLife Investors USA Insurance Company
METLIFE INVESTORS USA SEPARATE ACCOUNT A
A Separate Account of MetLife Investors USA Insurance Company
22 Corporate Plaza Drive
Newport Beach, California 92660
VOTING INFORMATION STATEMENT
What is this document and why did we send it to you?
MetLife Investors USA Insurance Company ("MetLife Investors USA" or "we"),
on behalf of its MetLife Investors USA Separate Account A ("Separate Account
A"), is furnishing this Voting Information Statement to you in connection with
the solicitation of proxies from owners of Capital Strategist and Foresight
variable annuity contracts (the "Contracts") issued by MetLife Investors USA
having contract values allocated to the subacccount of Separate Account A (the
"Subaccount") investing in Series I shares of AIM V.I. Balanced Fund, a series
of AIM Variable Insurance Funds ("AIM Balanced" or the "Current Portfolio") as
of January 30, 2004 (the "Record Date").
This Voting Information Statement contains information that you should
consider before voting on the proposal before you relating to the substitution
of Class A shares of the MFS Total Return Portfolio, a series of Metropolitan
Series Fund, Inc. ("MFS Total Return " or the "Replacement Portfolio", and
together with the Current Portfolio, the "Portfolios"), for the Current
Portfolio as an investment option under your Contract. Please read it carefully.
This Voting Information Statement is being mailed to you and the other
Contract owners with Contract values allocated to the Subaccount as of the
Record Date on or about ___________, 2004.
What is the proposal that I am being asked to consider?
MetLife Investors USA requests that you consider the following proposal:
"To approve the substitution of Class A shares of the MFS Total Return
Portfolio, a series of Metropolitan Series Fund, Inc., for Series I shares of
AIM V.I. Balanced Fund, a portfolio currently included as an investment option
under certain variable insurance contracts offered by MetLife Investors USA
Insurance Company."
Why is my vote being solicited?
As a Contract owner having accumulation units representing an investment of
Contract value in the Subaccount as of the close of business on the Record Date,
you are entitled to vote such accumulation units on the proposed substitution.
The Contracts and the prospectus for such Contracts condition MetLife
Investors USA's ability to carry out the proposed substitution for each Contract
on its obtaining, for each class of Contract, the approval of the Contract
owners representing the majority of the outstanding accumulation units in the
Subaccount as of the Record Date, as well as the approval of the Securities and
Exchange Commission (the "Commission"). It is anticipated that the Commission
will approve the substitution on or about February 27, 2004.
SUMMARY OF PROPOSED SUBSTITUTION
This section summarizes the primary features and consequences of the
substitution. It may not contain all of the information that is important to
you. To understand the substitution, you should read this entire Voting
Information Statement.
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Voting Information Statement.
Why is MetLife Investors USA proposing the substitution?
MetLife Investors USA believes that the proposed substitution will
potentially result in better long-term performance, will reduce expenses for
current Contract owners, allow Separate Account A's assets to be more
efficiently managed and potentially could lead to improved returns due to
economies of scale.
The substitution is part of a restructuring designed to eliminate the
offering of overlapping funds with similar investment objectives and similar
investment strategies that serve as funding vehicles for insurance contracts
issued by Metropolitan Life Insurance Company ("MetLife") and its affiliates.
The proposed substitution is part of an effort by MetLife and its affiliates,
including MetLife Investors USA, to standardize investment options across
similar products thereby making its variable contracts more efficient to
administer and oversee, and therefore more attractive to its customers. MetLife
Investors USA believes that because the Replacement Portfolio's prospects for
improved performance and lower costs are better than for the Current Portfolio,
the proposed substitution is in your best interests as a Contract owner.
MetLife Investors USA considered the fact that MFS Total Return's
historical performance is better than that of AIM Balanced. MFS Total Return's
performance for the one-, three- and five- year periods ended December 31, 2003
exceeded that of AIM Balanced. Please note that past performance is not an
indication of future results.
MetLife Investors USA also considered the fact that total expenses for the
Replacement Portfolio are lower than those of the Current Portfolio, including a
lower management fee.
MetLife Investors USA also considered the future growth prospects of the
Replacement Portfolio. At the current time, various variable life insurance and
variable annuity contracts being actively marketed by MetLife and its affiliates
offer the Replacement Portfolio. Similarly, as part of the standardization
process, the Replacement Portfolio is also being substituted for another mutual
fund invested in by another subaccount of MetLife Investors USA. This should,
along with the proposed substitution, further increase the Replacement
Portfolio's net assets, which are currently at approximately $178.3 million as
of December 31, 2003. Economies of scale could be achieved through the spreading
of certain costs over a larger base of shareholders, including reduction in
portfolio general expenses such as legal, accounting, printing of prospectuses
and trustees fees.
In contrast, MetLife Investors USA believes that there is little likelihood
that significant additional assets, if any, will be allocated to the Current
Portfolio under the Contract. Because of the cost of maintaining this Portfolio
as an investment option under the Contracts, it is therefore in the interest of
Contract owners to substitute the Replacement Portfolio with its potential for
economies of scale. Further, in the event that the proposed substitution does
not occur (because either Contract owners or the Commission does not approve it
or for another reason), the Subaccount will no longer be available under that
Contract for allocation of purchase payments or transfers of Contract value as
of May 1, 2004. Therefore, you will be unable to increase your accumulation
units in the Subaccount investing in the Current Portfolio after that date.
Though not a principal reason for the proposed substitution, the
substitution would have the effect of transferring Contract values to an
investment portfolio managed by an affiliated person of MetLife Investors USA,
thereby increasing the management fees received by this affiliated person.
How will the substitution be accomplished?
The substitution will take place at relative net asset value with no change
in the amount of your Contract's value, cash value or death benefit or in the
dollar value of your investment in Separate Account A. The Series I shares of
the Current Portfolio will be either redeemed for cash or for portfolio
securities, which will be used to purchase Class A shares of the Replacement
Portfolio. MetLife Investors USA will pay all of the costs associated with the
substitution, including the costs of solicitation such as the preparation and
mailing of this Voting Information Statement and the Voting Information Card,
the solicitation of votes, and legal and other expenses. YOU WILL NOT BEAR ANY
OF THESE COSTS.
The substitution is expected to be completed on or about April 30, 2004.
How will the substitution affect me?
It is anticipated that the substitution will provide certain benefits to
you.
The most significant of these benefits are as follows:
o POTENTIAL FOR Better Performance: MetLife Investors USA believes that based
on the historical performance records of the Portfolios, over the long term
the performance of the Replacement Portfolio should (although no guarantee
can be given) exceed that of the Current Portfolio.
o COST SAVINGS: The total annual operating expenses of the Replacement
Portfolio are less than those of the Current Portfolio. MFS Total Return's
total annual operating expense ratio was 0.66% for its Class A shares
compared to 1.17% for the Series I shares of AIM Balanced.
o OPERATING EFFICIENCIES: Upon the substitution of the Replacement Portfolio
for the Current Portfolio, operating efficiencies may be achieved by the
Replacement Portfolio because it will have a greater level of assets. As of
December 31, 2003, the Replacement Portfolio's total net assets were
approximately $178.3 million.
Economies of scale may be achieved through the spreading of certain costs
over a larger base of shareholders, including reduction in portfolio
general expenses such as legal, accounting, printing of prospectuses and
trustees fees.
Other benefits resulting from the substitution include:
o MFS Total Return's management fee is lower than the management fee of the
Current Portfolio.
o You will not incur any fees or charges as a result of the substitution.
o You will have no tax liability resulting from the substitution.
o The substitution will result in an improved selection of portfolio
managers. MetLife Investors USA believes that the investment subadviser to
the Replacement Portfolio is better positioned to potentially provide
consistent above-average performance than the investment adviser to the
Current Portfolio.
o As a condition of the substitution, combined annualized net expenses of
Separate Account A (or the subaccount) and the Replacement Portfolio may
not exceed the total combined 2002 fiscal year net expenses for the Current
Portfolio and the Separate Account A (or the Subaccount) for two years
following the substitution.
o No increase in Contract fees and expenses for a period of two years
following the substitution, including mortality and expenses risk fees and
administration and distribution fees charged to Separate Account A.
The substitution will not cause your Contract rights or MetLife Investors
USA's responsibilities under the Contracts to be altered in any way. The value
of your Contract, the amount of your death benefit and the dollar value of your
investments in any of the subaccounts of Separate Account A will remain the same
immediately following the substitution. Your Contract values will remain
allocated to Separate Account A, which will invest in the Replacement Portfolio
after the substitution. After the substitution your Contract values will depend
on the performance of the Replacement Portfolio rather than that of the Current
Portfolio.
Like the Current Portfolio, the Replacement Portfolio will declare and pay
dividends from net investment income and will distribute net realized capital
gains, if any, to Separate Account A (not to you) once a year. These dividends
and distributions will continue to be reinvested by MetLife Investors USA in
additional Class A shares of the Replacement Portfolio.
What will be the primary federal tax consequences of the substitution?
We believe that you will not be subjected to any federal tax liabilities as
a result of the substitution.
SUMMARY OF PORTFOLIO INFORMATION
The following discussion is primarily a summary of certain parts of the
prospectuses for the Current Portfolio and the Replacement Portfolio. As a
Contract owner invested in the Current Portfolio, you should already have a
current prospectus for the Current Portfolio. You may request the current
prospectus for the Replacement Portfolio, free of charge, by calling MetLife
Investors USA at 1-800-284-4536, or by writing to MetLife Investors USA at 22
Corporate Plaza Drive, Newport Beach, California 92660. Information contained in
this Voting Information Statement is qualified by more complete information set
forth in such prospectuses, which are incorporated by reference herein.
How do the Portfolios' investment objectives, principal investment
strategies and risks compare?
The investment objective of the Replacement Portfolio is substantially
similar to that of the Current Portfolio, and the investment strategies and
risks of each Portfolio are similar.
The investment objective of each Portfolio is non-fundamental, which means
that it may be changed by vote of its respective Board of Trustees without
shareholder approval.
The following tables summarize a comparison of the Replacement Portfolio to
the Current Portfolio with respect to their investment objectives and principal
investment strategies, as set forth in each Portfolio's prospectus and statement
of additional information.
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MFS Total Return (the Replacement Portfolio)
----------------------------- --------------------------------------------------------------------------
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Investment Objective The Portfolio's investment objective is a favorable total return through
investment in a diversified portfolio.
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Principal Investment The Portfolio normally invests at least 40%, but not more than 75% of
Strategies its net assets in common stocks and related securities, such as
preferred stock and bonds, warrants or rights convertible into stock.
The Portfolio focuses on undervalued equity securities of large
capitalization companies ($5 billion or more).
At least 25% of the Portfolio's net assets is normally invested in
non-convertible fixed-income securities, such as corporate bonds, U.S.
government securities, mortgage-backed and asset-backed securities.
The fixed income portion of the Portfolio invests primarily in
investment grade fixed-income securities but may invest up to 20% of its
net assets in lower quality, high yield debt securities.
The Portfolio may invest up to 20% of its net assets in foreign
securities
----------------------------- --------------------------------------------------------------------------
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AIM Balanced
----------------------------- --------------------------------------------------------------------------
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Investment Objective To achieve as high a total return as possible, consistent with
preservation of capital.
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Principal Investment The Portfolio normally invests a minimum of 50% and a maximum of 70% of
Strategies its total assets in equity securities and a minimum of 30% and a maximum
of 70% of its total assets in non-convertible debt securities.
The Portfolio may invest up to 25% of its total assets in convertible
securities and up to 25% of its assets in foreign securities.
The equity securities the Portfolio invests in are primarily chosen for
growth of capital.
----------------------------- --------------------------------------------------------------------------
The principal risks of investing in the Replacement Portfolio are similar
to those of investing in the Current Portfolio. They include:
o Market risk - a Portfolio's share price can fall because of weakness in the
broad market, a particular industry, or specific holdings
o Market capitalization risk - investments primarily in issuers in one market
capitalization category (large, medium or small) carry the risk that due to
current market conditions that category may be out of favor; larger more
established companies may be unable to respond quickly to new competitive
challenges such as changes in technology and consumer tastes and may not be
able to obtain the high growth rate of successful smaller companies;
investments in medium and small capitalization companies may be subject to
special risks which cause them to be subject to greater price volatility
and more significant declines in market downturns than securities of larger
companies
o Investment style risk - different investment styles such as growth or value
investing tend to shift in or our of favor, depending on market and
economic conditions as well as investor sentiment; growth stocks may be
more volatile than other stocks and may lack the dividends of value stocks
that can cushion stock prices in a falling market; value stocks carry the
risk that the market will not recognize a security's inherent value for a
long time, or that a stock judged to be undervalued may actually be
appropriately priced or overvalued
o Interest Rate Risk-- the value of investments in debt securities may
decline when prevailing interest rates rise or increase when interest rates
go down
o Credit Risk-- the value of investments in debt securities may be adversely
affected if an issuer fails to pay principal and interest on an obligation
on a timely basis
o Foreign investment risk-- investments in foreign securities involve risks
relating to political, social and economic developments abroad, as well as
risks resulting from differences between the regulations to which U.S. and
foreign issuers and markets are subject; all of the risks of investing in
foreign securities are heightened by investing in emerging markets
countries
AIM Balanced may invest up to 25% of its total assets in convertible
securities and is therefore subject to the risks associated with such
securities. Traditionally, convertible securities have paid dividends or
interest rates higher than common stocks but lower than nonconvertible
securities. They generally participate in the appreciation or depreciation of
the underlying stock into which they are convertible, but to a lesser degree.
These securities are also subject to market risk, interest rate risk and credit
risk. Additionally, an issuer may have the right to buy back certain of the
convertibles securities at a time and at a price that is unfavorable to the
Portfolio. MFS Total Return may also invest in convertible securities.
The Current Portfolio and the Replacement Portfolio may invest some or all
of their assets in money market instruments or utilize other investment
strategies as a temporary defensive measure during, or in anticipation of,
adverse market conditions. This strategy, which would be employed only in
seeking to avoid losses, is inconsistent with the Portfolios' principal
investment objectives and strategies, and could result in lower returns and loss
of market opportunities. For a detailed discussion of the Portfolios' risks, see
the section entitled "Risks of the Portfolios" below.
For a detailed discussion of the Portfolios' risks, see the section
entitled "Risks of the Portfolios" below.
The Portfolios have other investment policies, practices and restrictions
which, together with their related risks, are also set forth in each Portfolio's
prospectus and statement of additional information.
How do the Portfolios' fees and expenses compare?
MFS Total Return has a lower total expense ratio than AIM Balanced,
including a lower management fee.
You will not incur any fees or charges as a result of the substitution.
The following tables allow you to compare the various fees and expenses
that you would pay as a result of Separate Account A buying and holding shares
of each of the Portfolios. The amounts for the shares of the Portfolios set
forth in the following tables and in the examples are based on the expenses for
the Portfolios for the fiscal year ended December 31, 2002 and are expressed as
a percentage of each Portfolio's average daily net assets.
The Series I shares of the Current Portfolio and of the Class A shares of
the Replacement Portfolio are not charged any initial or deferred sales charge,
or any other transaction fees. The Replacement Portfolio's Class A shares and
the Series I shares of the Current Portfolio are not subject to Rule 12b-1 fees.
THESE TABLES DO NOT REFLECT THE CHARGES AND FEES ASSESSED BY METLIFE
INVESTORS USA UNDER YOUR CONTRACT.
Fees and Expenses (as a percentage of average daily net assets)
----------------------------------------------- --------------------- --------------------
AIM Balanced MFS Total Return
(Series I shares) (Class A shares)
----------------------------------------------- --------------------- --------------------
----------------------------------------------- --------------------- --------------------
Management Fees 0.75% 0.50%
----------------------------------------------- --------------------- --------------------
----------------------------------------------- --------------------- --------------------
12b-1 Fees ---- ----
----------------------------------------------- --------------------- --------------------
----------------------------------------------- --------------------- --------------------
Other Expenses 0.42% 0.16%
----------------------------------------------- --------------------- --------------------
----------------------------------------------- --------------------- --------------------
Total Annual Portfolio Operating Expenses 1.17% 0.66%
----------------------------------------------- --------------------- --------------------
The tables below show examples of the total expenses you would pay on a
$10,000 investment over one-, three-, five- and ten-year periods. The examples
are intended to help you compare the cost of investing in the Current Portfolio
versus the Replacement Portfolio. The examples assume a 5% average annual
return, that you redeem all of your shares at the end of each time period and
that you reinvest all of your dividends. The following tables also assume that
total annual operating expenses remain the same. The examples are for
illustration only, and your actual costs may be higher or lower.
THE EXAMPLES DO NOT REFLECT THE FEES, EXPENSES OR WITHDRAWAL CHARGES
IMPOSED BY YOUR CONTRACT. IF THOSE FEES AND EXPENSES HAD BEEN INCLUDED, YOUR
COSTS WOULD BE HIGHER.
Examples of Portfolio Expenses
----------------- ---------------------------------------------------------------------------------
MFS Total Return
One Year Three Years Five Years Ten Years
Class A $67 $211 $368 $822
shares
----------------- -------------------- ------------------- -------------------- -------------------
----------------- ---------------------------------------------------------------------------------
AIM Balanced
One Year Three Years Five Years Ten Years
Series I shares $119 $372 $644 $1,420
----------------- -------------------- ------------------- -------------------- -------------------
How do the Portfolios' performance records compare?
MFS Total Return's performance for the one-, three-, and five-year periods
ended December 31, 2003 exceeded that of AIM Balanced. Please note that past
performance is not an indication of future results.
The following table shows how the Class A shares of the Replacement
Portfolio and the Series I shares of the Current Portfolio have performed in the
past. Past performance is not an indication of future results.
PERFORMANCE DOES NOT REFLECT THE FEES, EXPENSES OR WITHDRAWAL CHARGES
IMPOSED BY YOUR CONTRACT. IF THOSE FEES AND EXPENSES HAD BEEN INCLUDED,
PERFORMANCE WOULD BE LOWER.
The table lists the average annual total return of the Class A shares of
MFS Total Return for the past one, three, five and ten years and of the Series I
shares of AIM Balanced for the past one, three and five years and since
inception through December 31, 2003. This table includes the effects of
portfolio expenses and is intended to provide you with some indication of the
risks of investing in each Portfolio by comparing its performance to the returns
of its respective benchmarks. A description of such benchmarks follows the
table. An index does not reflect fees or expenses. It is not possible to invest
directly in an index.
Average Annual Total Return (for the period ended 12/31/2003)
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
1 Year 3 Years 5 Years 10 Years From Inception Date
----
Ended Ended Ended Ended Inception to
12/31/03 12/31/03 12/31/03 12/31/03 12/31/03
-------- -------- -------- -------- --------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
MFS Total Return -- 17.00% 2.12% 2.50% 9.85% --- 04/01/87
Class A shares
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
S&P 500 Index 28.69% -4.05% -0.57% 11.07% ---
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
Lehman Brothers 8.04% 6.65% 6.98% 4.68% ---
Government/ Credit
Bond Index
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
AIM Balanced--Series I 16.36% -14.55% -2.34% n/a 1.76% 05/01/98
shares
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
S&P 500 Index 28.69% -4.05% -0.57% --- 1.46%(1)
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
Custom Balanced Index 24.43% -1.24% 1.47% --- 2.75%(2)
------------------------ ------------ ------------ -------------- ------------- -------------- ---------------
(1) Date of Index performance is from 05/01/98.
(2) Date of Index performance is from 05/01/98.
The S&P 500 Index is a widely recognized unmanaged index that measures the
stock performance of 500 large- and medium-sized companies and that is often
used to indicate the performance of the overall stock market.
The Lehman Brothers Government/ Credit Bond Index is a combination of the
Lehman Brothers Credit Bond Index and the Lehman Brothers Government Bond Index.
The Lehman Brothers Credit Bond Index includes all publicly issued, fixed-rate,
non-convertible investment grade corporate debt; the index is composed of both
U.S. and Brady bonds. The Lehman Brothers Government Bond Index is composed of
the Treasury Bond and Agency Bond Indices, the 1-3 year Government Index and the
20+ year Treasury Index.
The Custom Balanced Index is an index created by the investment adviser of
AIM Balanced to benchmark the Portfolio. It is 60% Russell 3000/40% Lehman
Brothers U.S. Aggregate Bond Index. The Russell 3000 Index is a widely
recognized index of common stocks that measures the performance of the 3,000
largest U.S. companies based on total market capitalization. The Lehman Brothers
U.S. Aggregate Bond Index is a widely recognized unmanaged index which is a
broad measure of the taxable bonds in the U.S. market, with maturities of at
least one year.
--------------------
For a detailed discussion of the manner of calculating total return, please
see each Portfolio's statement of additional information. Generally, the
calculations of total return assume the reinvestment of all dividends and
capital gain distributions on the reinvestment date and the deduction of all
recurring expenses that were charged to shareholders' accounts.
Will I be able to purchase and redeem shares, change my investment options,
annuitize and receive distributions the same way?
The substitution will not affect your right to purchase and redeem shares,
to change among MetLife Investors USA's subaccount options, to annuitize, and to
receive distributions as permitted by your Contract. After the substitution, you
will be able under your current Contract to purchase additional Class A shares
of the Replacement Portfolio.
MetLife Investors USA will not exercise any right it may have under the
Contracts to impose restrictions or additional restrictions on, or charges for,
Contract value transfers or annuity unit exchanges made under the Contracts for
a period of at least 30 days following the proposed substitution (other than
with respect to market timing activity).
In addition, you will:
o before the proposed substitution occurs, be permitted to make a transfer of
Contract value (or annuity unit exchange) from the Subaccount to any other
subaccount without charge and without that transfer (or exchange) counting
towards the number permitted or the number permitted without charge under
your Contract; and
o during the 30 days after the proposed substitution, be permitted to make a
transfer of Contract value (or annuity unit exchange) from the subaccount
investing in the Replacement Portfolio to any other subaccount without
charge and without that transfer (or exchange) counting towards the number
permitted or the number permitted without charge under your Contract.
Effective May 1, 2004, the Subaccount investing in AIM Balanced will no
longer be available under the Contracts for allocation of additional purchase
payments or transfers of Contract value regardless of whether or not the
substitution is approved.
Who will be the Subadviser and Portfolio Manager of my Portfolio after the
substitution? What will the management and subadvisory fees be after the
substitution?
The types of investment advisory and administrative services provided to
the Replacement Portfolio are comparable to the types of investment advisory and
administrative services provided to the Current Portfolio.
Management of the Portfolios
The overall management of the Replacement Portfolio is the responsibility
of, and is supervised by, the Board of Directors of Metropolitan Series Fund,
Inc.
Adviser
MetLife Advisers, LLC (the "Adviser") is the investment adviser for the
Replacement Portfolio. The Adviser selects and pays the fees of Massachusetts
Financial Services Company (MFS Total Return's investment subadviser) and
monitors its investment program.
Facts about the Adviser:
------------------------------------------------------------------------------
The Adviser is an affiliate of MetLife.
The Adviser manages a family of investment portfolios sold to separate
accounts of MetLife and its affiliates to fund variable life insurance
contracts and variable annuity certificates and contracts, with assets of
approximately $___ billion as of December 31, 2003.
The Adviser is located at 501 Boylston Street, Boston, Massachusetts 02116.
------------------------------------------------------------------------------
The Adviser and Metropolitan Series Fund, Inc. have received an exemptive
order from the Commission that permits the Adviser, subject to certain
conditions, and without the approval of shareholders to: (a) employ a new
unaffiliated subadviser for a portfolio of Metropolitan Series Fund, Inc.
(including the Replacement Portfolio) pursuant to the terms of a new investment
subadvisory agreement, in each case either as a replacement for an existing
subadviser or as an additional subadviser; (b) change the terms of any
investment subadvisory agreement; and (c) continue the employment of an existing
subadviser on the same advisory contract terms where a contract has been
assigned because of a change in control of the subadviser. In such
circumstances, Contract owners would receive notice of such action, including
the information concerning the new subadviser that normally is provided in a
proxy statement.
The substitution will permit the Advisor, under this exemptive order, to
hire, monitor and replace subadvisers as necessary to seek optimal performance
and to ensure a consistent investment style.
Subadviser
Massachusetts Financial Services Company (the "Subadviser") is the
investment subadviser to MFS Total Return. Pursuant to a Subadvisory Agreement
with the Adviser, the Subadviser continuously furnishes an investment program
for MFS Total Return, makes day-to-day investment decisions on behalf of the
Portfolio, and arranges for the execution of Portfolio transactions.
Facts about the Subadviser:
----------------------------------------------------------------------
The Adviser is America's oldest mutual fund organization and has a history
of money management dating from 1924.
The Adviser had assets under management of approximately $___ billion as of
December 31, 2003.
The Adviser is located at 500 Boylston Street, Boston, Massachusetts 02116.
----------------------------------------------------------------------
Management Fees
For its management and supervision of the daily business affairs of MFS
Total Return, the Adviser receives a fee at the annual rate of 0.50% of the
Portfolio's average daily assets.
Subadvisory Fees
Under the terms of the Subadvisory Agreement, the Subadviser is paid by the
Adviser for providing subadvisory services to the Replacement Portfolio. The
Portfolio does not pay a fee to the Subadviser.
THE PROPOSED SUBSTITUTION
How will the substitution be carried out?
MetLife Investors USA and Separate Account A have submitted an application
to the Commission requesting approval of the proposed substitution of Class A
shares of MFS Total Return for Series I shares of AIM Balanced. If completed,
the proposed substitution will result in MetLife Investors USA's redemption, in
cash or "in-kind", of shares of the Current Portfolio. MetLife Investors USA
will then use the proceeds (either cash or portfolio securities) of such
redemption to purchase shares of the Replacement Portfolio. We anticipate that
the Commission will approve the substitution on or about February 27, 2004.
If approved, the proposed substitution will take place at relative net
asset value with no change in the amount of your Contract value or death benefit
or in the dollar value of your investment in the Subaccount that is presently
invested in the Current Portfolio. You will not incur any fees or charges as a
result of the proposed substitution and your rights and MetLife Investors USA's
obligations under your Contract will not be altered in any way. All applicable
expenses incurred in connection with the proposed substitution will be paid by
MetLife Investors USA. In addition, the proposed substitution will not subject
you to any federal income tax liability.
The fees and charges that you pay under your Contract will not increase as
a result of the proposed substitution. To the extent that the annualized
expenses of the Replacement Portfolio during the twenty-four months following
the substitution exceeds, for each fiscal period, the 2002 net expense level of
the Current Portfolio, MetLife Investors USA will reduce Separate Account A (or
subaccount) expenses under the Contract. Therefore, for two years following the
proposed substitution, combined net expenses for the Replacement Portfolio and
Separate Account A (or the subaccount invested in the Portfolio) will be no
greater than the sum of the net expenses of the Current Portfolio and of
Separate Account A (or the Subaccount) for the 2002 fiscal year. Nonetheless,
after two years following the proposed substitution, the net expense levels for
the Replacement Portfolio could be but are not anticipated to be higher than the
2002 net expense level for the Current Portfolio, but would not be offset by a
reduction in subaccount expenses. In such an event, you may bear greater
expenses than you would had the proposed substitution not occurred.
You are entitled to approve or disapprove the proposed substitution. The
proposed substitution will not take place for a class of Contract without the
approval of Contract owners representing a majority of the accumulation units of
the Subaccount for that class of Contract as of the Record Date.
MetLife Investors USA intends to effect the proposed substitution on or
about April 30, 2004, following the issuance of an order of approval by the
Commission, the approval of the proposed substitution by Contract owners, and
any approval required by state insurance regulators.
RISKS OF THE PORTFOLIOS
Are the risk factors for the Portfolios similar?
Yes. The risk factors are similar due to the substantially similar
investment objectives and similar investment policies of the Current Portfolio
and the Replacement Portfolio. The risks of the Replacement Portfolio are
described in greater detail in the Portfolio's Prospectus.
What are the primary risks of investing in each Portfolio?
An investment in each Portfolio is subject to certain risks. There is no
assurance that investment performance of either Portfolio will be positive or
that the Portfolios will meet their investment objectives. The following tables
and discussions highlight the primary risks associated with investment in each
of the Portfolios.
- ------------------------------------------------ ---------------------------------------------------------------------
Each of the Portfolios is subject to Market Risk.
- ------------------------------------------------ ---------------------------------------------------------------------
- ------------------------------------------------ ---------------------------------------------------------------------
MFS Total Return Normally invests at least 40%, but not more than 75% of its net
assets in common stocks and related securities, such as preferred
stock and bonds, warrants or rights convertible into stock.
- ------------------------------------------------ ---------------------------------------------------------------------
- ------------------------------------------------ ---------------------------------------------------------------------
AIM Balanced Normally invests a minimum of 50% and a maximum of 70% of its total
assets in equity securities (including up to 25% of its total
assets in convertible securities).
- ------------------------------------------------ ---------------------------------------------------------------------
A Portfolio's share price can fall because of weakness in the broad market,
a particular industry, or specific holdings. The market as a whole can decline
for many reasons, including disappointing corporate earnings, adverse political
or economic developments here or abroad, changes in investor psychology, or
heavy institutional selling. The prospects for an industry or a company may
deteriorate. In addition, an assessment by a Portfolio's investment adviser or
subadviser of particular companies may prove incorrect, resulting in losses or
poor performance by those holdings, even in a rising market. A Portfolio could
also miss attractive investment opportunities if its investment adviser or
subadviser underweights fixed income markets or industries where there are
significant returns, and could lose value if the investment advisor or
subadviser overweights fixed income markets or industries where there are
significant declines.
- ------------------------------------- --------------------------------------------------------------------------------
Each of the Portfolios is subject to Market Capitalization Risk.
- ------------------------------------- --------------------------------------------------------------------------------
- ------------------------------------- --------------------------------------------------------------------------------
MFS Total Return Focuses on equity securities of large capitalization companies ($5 billion or
more).
- ------------------------------------- --------------------------------------------------------------------------------
- ------------------------------------- --------------------------------------------------------------------------------
AIM Balanced Focuses on equity securities of large capitalization companies.
- ------------------------------------- --------------------------------------------------------------------------------
Stocks fall into three broad market capitalization categories--large,
medium and small. Investing primarily in one category carries the risk that due
to current market conditions that category may be out of favor. If valuations of
large capitalization companies appear to be greatly out of proportion to the
valuations of small or medium capitalization companies, investors may migrate to
the stocks of small and mid-sized companies causing a Portfolio that invests in
these companies to increase in value more rapidly than a Portfolio that invests
in larger, fully-valued companies. Larger, more established companies may also
be unable to respond quickly to new competitive challenges such as changes in
technology and consumer tastes. Many larger companies also may not be able to
attain the high growth rate of successful smaller companies, especially during
extended periods of economic expansion. Investing in medium and small
capitalization companies may be subject to special risks associated with
narrower product lines, more limited financial resources, smaller management
groups, and a more limited trading market for their stocks as compared with
larger companies. Securities of smaller capitalization issuers may therefore be
subject to greater price volatility and may decline more significantly in market
downturns than securities of larger companies.
- ------------------------------------------ ---------------------------------------------------------------------------
Each of the Portfolios is subject to Investment Style Risk.
- ------------------------------------------ ---------------------------------------------------------------------------
- ------------------------------------------ ---------------------------------------------------------------------------
MFS Total Return Focuses on undervalued equity securities.
- ------------------------------------------ ---------------------------------------------------------------------------
- ------------------------------------------ ---------------------------------------------------------------------------
AIM Balanced The equity securities the Portfolio invests in are primarily chosen for
growth of capital.
- ------------------------------------------ ---------------------------------------------------------------------------
Different investment styles tend to shift in and out of favor depending
upon market and economic conditions as well as investor sentiment. A Portfolio
may outperform or underperform other funds that employ a different investment
style. A Portfolio may also employ a combination of styles that impact its risk
characteristics. Examples of different investment styles include growth and
value investing. Growth stocks may be more volatile than other stocks because
they are more sensitive to investor perceptions of the issuing company's growth
of earnings potential. Also, since growth companies usually invest a high
portion of earnings in their business, growth stocks may lack the dividends of
value stocks that can cushion stock prices in a falling market. Growth oriented
funds will typically underperform when value investing is in favor. Value stocks
are those which are undervalued in comparison to their peers due to adverse
business developments or other factors. Value investing carries the risk that
the market will not recognize a security's inherent value for a long time, or
that a stock judged to be undervalued may actually be appropriately priced or
overvalued. Value oriented funds will typically underperform when growth
investing is in favor.
- ---------------------------------------- ------------------------------------------------------------------------
Each of the Portfolios is subject to Interest Rate Risk.
- ---------------------------------------- ------------------------------------------------------------------------
- ---------------------------------------- ------------------------------------------------------------------------
MFS Total Return At least 25% of the Portfolio's net assets is normally invested in
non-convertible fixed-income securities, such as corporate bonds, U.S.
government securities, mortgage-backed and asset-backed securities.
- ---------------------------------------- ------------------------------------------------------------------------
- ---------------------------------------- ------------------------------------------------------------------------
AIM Balanced Normally invests a minimum of 30% and a maximum of 70% of its total
assets in non-convertible debt securities.
The Portfolio may invest up to 25% of its total assets in convertible
securities.
- ---------------------------------------- ------------------------------------------------------------------------
The values of debt securities are subject to change when prevailing
interest rates change. When interest rates go up, the value of debt securities
tends to fall. Since each Portfolio invests a significant portion of its assets
in debt securities and interest rates rise, then the value of your investment
may decline. Alternatively, when interest rates go down, the value of debt
securities may rise.
Interest rate risk will affect the price of a fixed income security more if
the security has a longer maturity because changes in interest rates are
increasingly difficult to predict over longer periods of time. Fixed income
securities with longer maturities will therefore be more volatile than other
fixed income securities with shorter maturities. Conversely, fixed income
securities with shorter maturities will be less volatile but generally provide
lower returns than fixed income securities with longer maturities. The average
maturity and duration of a Portfolio's fixed income investments will affect the
volatility of the Portfolio's share price.
- ---------------------------------------- ------------------------------------------------------------------------
Each of the following Portfolios is subject to Credit Risk.
- ---------------------------------------- ------------------------------------------------------------------------
- ---------------------------------------- ------------------------------------------------------------------------
MFS Total Return At least 25% of the Portfolio's net assets is normally invested in
non-convertible fixed-income securities, such as corporate bonds, U.S.
government securities, mortgage-backed and asset-backed securities.
Fixed income portion of the Portfolio invests primarily in investment
grade fixed-income securities but may invest up to 20% of its net
assets in lower quality, high yield debt securities.
- ---------------------------------------- ------------------------------------------------------------------------
- ---------------------------------------- ------------------------------------------------------------------------
AIM Balanced The Portfolio normally invests a minimum of 30% and a maximum of 70%
of its total assets in non-convertible debt securities.
The Portfolio may invest up to 25% of its total assets in convertible
securities.
- ---------------------------------------- ------------------------------------------------------------------------
The value of debt securities is directly affected by an issuer's ability to
pay principal and interest on time. Since each Portfolio invests in debt
securities, the value of your investment may be adversely affected when an
issuer fails to pay an obligation on a timely basis. A Portfolio may also be
subject to credit risk to the extent it engages in transactions, such as
securities loans, repurchase agreements or certain derivatives, which involve a
promise by a third party to honor an obligation to the Portfolio. Such third
party may be unwilling or unable to honor its financial obligations.
- ---------------------------------------- ------------------------------------------------------------------------
Each of the Portfolios is subject to Foreign Investment Risk.
- ---------------------------------------- ------------------------------------------------------------------------
- ---------------------------------------- ------------------------------------------------------------------------
MFS Total Return May invest up to 20% of its net assets in foreign securities.
- ---------------------------------------- ------------------------------------------------------------------------
- ---------------------------------------- ------------------------------------------------------------------------
AIM Balanced May invest up to 25% of its assets in foreign securities.
- ---------------------------------------- ------------------------------------------------------------------------
Investments in foreign securities involve risks relating to political,
social and economic developments abroad, as well as risks resulting from the
differences between the regulations to which U.S. and foreign issuers and
markets are subject. These risks may include the seizure by the government of
company assets, excessive taxation, withholding taxes on dividends and interest,
limitations on the use or transfer of portfolio assets, and political or social
instability. Enforcing legal rights may be difficult, costly and slow in foreign
countries, and there may be special problems enforcing claims against foreign
governments. Foreign companies may not be subject to accounting standards or
governmental supervision comparable to U.S. companies, and there may be less
public information about their operations. Foreign markets may be less liquid
and more volatile than U.S. markets. Foreign securities often trade in
currencies other than the U.S. dollar, and a Portfolio may directly hold foreign
currencies and purchase and sell foreign currencies. Changes in currency
exchange rates will affect a Portfolio's net asset value, the value of dividends
and interest earned, and gains and losses realized on the sale of foreign
securities. An increase in the strength of the U.S. dollar relative to these
other currencies may cause the value of a Portfolio to decline. Certain foreign
currencies may be particularly volatile, and foreign governments may intervene
in the currency markets, causing a decline in value or liquidity of a
Portfolio's foreign currency or securities holdings. Costs of buying, selling
and holding foreign securities, including brokerage, tax and custody costs, may
be higher than those involved in domestic transactions.
Investments in emerging markets include all of the risks of investments in
foreign securities and are subject to severe price declines. The economic and
political structures of developing nations, in most cases, do not compare
favorably with the U.S. or other developed countries in terms of wealth and
stability, and their financial markets often lack liquidity. Such countries may
have relatively unstable governments, immature economic structures, national
policies restricting investments by foreigners and economies based on only a few
industries. For these reasons, all of the risks of investing in foreign
securities are heightened by investing in emerging markets countries. The
markets of developing countries have been more volatile than the markets of
developed countries with more mature economies. These markets often have
provided significantly higher or lower rates of return than developed markets,
and significantly greater risks, to investors.
Are there any other risks of investing in each Portfolio?
The fixed income portion of MFS Total Return invests primarily in
investment grade fixed-income securities but may invest up to 20% of its net
assets in lower quality, high yield debt securities. High yield debt securities,
or junk bonds, are securities which are rated below "investment grade" or are
not rated, but are of equivalent quality. High yield debt securities range from
those for which the prospect for repayment of principal and interest is
predominantly speculative to those which are currently in default on principal
or interest payments. The Portfolio may be more susceptible to credit risk and
market risk than a portfolio that invests only in higher quality debt securities
because these lower-rated debt securities are less secure financially and more
sensitive to downturns in the economy. In addition, the secondary market for
such securities may not be as liquid as that for more highly rated debt
securities. As a result, the Portfolio's investment subadviser may find it more
difficult to sell these securities or may have to sell them at lower prices.
High yield securities are not generally meant for short-term investing. When a
Portfolio invests in high yield securities it generally seeks to receive a
correspondingly higher return to compensate it for the additional credit risk
and market risk it has assumed.
Portfolio Turnover. Each Portfolio's investment adviser or subadviser will
sell a security when it believes it is appropriate to do so, regardless of how
long a Portfolio has owned that security. Buying and selling securities
generally involves some expense to a Portfolio, such as commissions paid to
brokers and other transaction costs. Generally speaking, the higher a
Portfolio's annual portfolio turnover rate, the greater its brokerage costs.
Increased brokerage costs may adversely affect a Portfolio's performance. The
Portfolios generally intend to purchase securities for long-term investment and
therefore will have a relatively low turnover rate. However, MFS Total Return
may have annual turnover rates of 100% or more. Annual turnover rate of 100% or
more is considered high and will result in increased costs to a Portfolio.
The Portfolios have other investment policies, practices and restrictions
which, together with their related risks, are also set forth in the Prospectuses
and Statements of Additional Information of the Portfolios.
GENERAL VOTING INFORMATION
Who is eligible to vote?
A Contract owner is entitled to one vote for each accumulation unit that
the owner owns in the Subaccount.
As of the Record Date, the total number of accumulation units held in the
Subaccount for each class of Contract and entitled to vote was:
- ---------------------------------------- --------------------------------------
Contract Number of Subaccount Units
- ---------------------------------------- --------------------------------------
- ---------------------------------------- --------------------------------------
Capital Strategist
- ---------------------------------------- --------------------------------------
- ---------------------------------------- --------------------------------------
Foresight
- ---------------------------------------- --------------------------------------
For each class of Contract, approval of the proposed substitution requires
the affirmative vote of a majority of the Subaccount's outstanding accumulation
units held by owners of that Contract on the Record Date.
To the knowledge of MetLife Investors USA, no owner beneficially owned,
directly or indirectly, Contracts representing more than 5% of the accumulation
units in the Subaccount as of the Record Date.
To the knowledge of MetLife Investors USA, none of the directors or
officers of MetLife Investors USA, individually or as a group, beneficially own,
directly or indirectly, over 1% of the outstanding accumulation units of the
Subaccount as of the Record Date. Any beneficial financial interest that MetLife
Investors USA may have in the Subaccount is immaterial in relation to the
interests of owners and MetLife Investors USA will not cast any votes.
How do I vote on the substitution proposal?
If you properly execute and return the enclosed Voting Instruction Card to
MetLife Investors USA at 22 Corporate Plaza Drive, Newport Beach, California
92660 by April 23, 2004 at 4:00 p.m. Pacific Time (the "Voting Deadline"),
MetLife Investors USA will count your vote when calculating the results of the
solicitation. MetLife Investors USA may disregard any Voting Instruction Cards
received after the Voting Deadline. Votes attributable to Voting Instruction
Cards that are properly executed and returned but are not marked "For" or
"Against" the proposed substitution, will be counted as "For." A vote to
"Abstain" will have the effect of a vote "Against" the proposed substitution.
You also may vote by telephone by calling 1-866-235-4258 and following the
instructions, faxing your Voting Instruction Card (both front and back) to
1-888-796-9932, or by visiting our voting agent's website
https://vote.proxy-direct.com and following the instructions. If you cast your
telephone, facsimile or website vote by the Voting Deadline, MetLife Investors
USA will count your vote when calculating the results of the solicitation.
MetLife Investors USA may disregard any votes cast by telephone or facsimile or
at the website after the Voting Deadline (or any extension of the Voting
Deadline). MetLife Investors USA or its voting agent will use reasonable
procedures to (such as requiring an identification number) to verify the
authenticity of voters using the telephone, facsimile or website voting
facilities. Your voting authentication number is found on the accompanying
Voting Instruction Card.
Can I change my vote after I have submitted it?
Any Contract owner who has submitted a Voting Instruction Card has the
right to change his or her vote at any time prior to the Voting Deadline by
submitting a letter requesting the change or a later-dated Voting Instruction
Card that MetLife Investors USA receives at the above address on or before the
Voting Deadline. If MetLife Investors USA does not receive sufficient votes to
approve the proposal, it may extend the Voting Deadline and conduct a further
solicitation of votes.
MetLife Investors USA will solicit votes primarily by mail, but may
supplement this effort by telephone calls, telegrams, e-mails, personal
interviews, and other communications by officers, employees, and agents of
MetLife Investors USA or its affiliates. In addition, Alamo Direct has been
retained to assist in the solicitation of votes. It is expected that the cost of
retaining Alamo Direct for such solicitation will be approximately $__________.
The costs for solicitation of votes, like the other costs associated with the
substitution, will be borne by MetLife Investors USA.
METLIFE INVESTORS USA INSURANCE COMPANY RECOMMENDS THAT YOU VOTE TO "APPROVE"
THE PROPOSED SUBSTITUTION.
GENERAL INFORMATION
MetLife Investors USA Insurance Company
MetLife Investors USA is a stock life insurance company organized under
Delaware Law in 1960. MetLife Investors USA is authorized to transact the
business of life insurance, including annuities, in the District of Columbia and
all states except New York. Its principal executive offices are located at 22
Corporate Plaza Drive, Newport Beach, California 92660.
MetLife Investors USA is a wholly-owned subsidiary of MetLife Investors
Group, Inc. MetLife Investors Group, Inc., in turn, is an indirect wholly-owned
subsidiary of MetLife, Inc., the parent of MetLife. MetLife, Inc. is listed on
the New York Stock Exchange and, through its affiliates, is a leading provider
of insurance and other financial products and services to individuals and
groups.
MetLife Investors USA Separate Account A
Separate Account A is a separate investment account of MetLife Investors
USA established under Delaware law on May 29, 1980. Each subaccount invests in a
corresponding portfolio of an open-end management investment company. The
variable annuity contracts that invest in the Current Portfolio, including your
Contract, have been issued through Separate Account A and interests in Separate
Account A offered through such variable annuity contracts have been registered
under the Securities Act of 1933, as amended (the "1933 Act"). Separate Account
A is registered the Commission under the Investment Company Act of 1940, as
amended (the "1940 Act") as a unit investment trust type of investment company.
Metropolitan Series Fund, Inc.
Shares of Metropolitan Series Fund, Inc. are sold exclusively to insurance
company separate accounts to fund benefits under variable annuity contracts and
variable life insurance policies sponsored by MetLife Investors USA and its
affiliates, or employer pension and profit sharing plans. Metropolitan Series
Fund, Inc. is a Maryland corporation organized on November 23, 1982.
Metropolitan Series Fund, Inc. is registered under the 1940 Act as open-end
management investment companies of the series type, and its securities are
registered under the 1933 Act. Metropolitan Series Fund, Inc. currently offers
36 series.
Service Providers
MetLife Investors Distribution Company, an indirect wholly-owned subsidiary
of MetLife Investors Group, Inc. located at 22 Corporate Plaza Drive, Newport
Beach, California 92660, is the principal underwriter for Separate Account A.
MetLife, located at 1 Madison Avenue, New York, New York 10010, is the
distributor for the Metropolitan Series Fund, Inc.
Owner Proposals
Contract owners have no rights under the Contracts to put voting proposals
before the owners.
Prospectuses and Annual Reports
Upon request, MetLife Investors USA will furnish, without charge, a copy of
the most recent annual and semi-annual shareholder reports and current
prospectuses and statements of additional information for the Replacement
Portfolio and for the Current Portfolio, respectively. To request any of these,
please call MetLife Investors USA at 1-800-284-4536, or write to MetLife
Investors USA at 22 Corporate Plaza Drive, Newport Beach, California 92660. Each
of these documents is incorporated by reference in this document. (This means
that it is legally considered to be a part of this Voting Information
Statement.)
You can also obtain copies of any of these documents without charge on the
EDGAR database on the Commission's Internet site at http://www.sec.gov. Copies
are available for a fee by electronic request at the following email address:
publicinfo@sec.gov, or from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549.
Dissenter's Rights of Appraisal
Taken together, Delaware Insurance law and the terms of the Contracts do
not appear to provide appraisal rights to investors, such as Contract owners,
beyond their right to receipt of the cash surrender value of their Contracts.
MetLife Investors USA believes that, for transactions such as the proposed
substitution, this requires, in effect, that accumulation units have a value
equal to their net asset value determined as of 4:00 p.m. on the date of the
proposed substitution.
Interpretations of the 1940 Act by the SEC staff limit appraisal rights of
investors in a registered unit investment trust, such as Contract owners, to
those provided by Rule 22c-1 under the 1940 Act. Rule 22c-1, in effect, requires
for transactions such as the proposed substitution, that accumulation units have
a value equal to their net asset value per share determined as of 4:00 p.m. on
the date of the proposed substitution.
You should note, however, that before the proposed substitution occurs,
Contract owners will be permitted to make a transfer of Contract value (or
annuity unit exchange) from the Subaccount to any other subaccount without
charge and without that transfer (or exchange) counting towards the number
permitted or the number permitted without charge under their Contract. During
the 30 days after the proposed substitution, Contract owners will be permitted
to make a transfer of Contract value (or annuity unit exchange) from the
subaccount investing in the Replacement Portfolio to any other subaccount
without charge and without that transfer (or exchange) counting towards the
number permitted or the number permitted without charge under their Contract.
Inquiries
Owners may make inquiries by contacting their registered representative or
by writing MetLife Investors USA at 22 Corporate Plaza Drive, Newport Beach,
California 92660, or by calling 1-800-284-4536.
METLIFE INVESTORS USA REQUESTS THAT YOU PROMPTLY EXECUTE AND RETURN THE ENCLOSED
VOTING INSTRUCTION CARD. A PRE-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE.
FORM OF
VOTING INSTRUCTION CARD
MetLife Investors USA Insurance Company
22 Corporate Plaza Drive
Newport Beach, California 92660
YOUR VOTE IS VERY IMPORTANT!
PLEASE SIGN, DATE AND RETURN THIS VOTING
INSTRUCTION CARD IN THE ENCLOSED ENVELOPE TODAY!
Name of Contract Owner Voting Control Number:
---------------------
Address
City, ST 00000
I, the undersigned, hereby instruct MetLife Investors USA Insurance Company
("MetLife Investors USA") to count all of the accumulation units that I owned as
of January 30, 2004, in the subaccount(s) of MetLife Investors USA Separate
Account A listed on the reverse side as being voted as indicated on this Voting
Instruction Card.
METLIFE INVESTORS USA RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL(S).
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You may also vote by:
o Telephone:
1. Call toll free 1-866-235-4258.
2. Enter your voting control number (found above).
3. Follow the simple instructions.
o Fax:
After completing and signing this Card, fax it (both front
and back sides) to 1-888-796-9932.
o Internet:
Visit our website at https://vote.proxy-direct.com and
follow the instructions for voting via Internet.
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THESE VOTING INSTRUCTIONS ARE BEING SOLICITED ON BEHALF OF METLIFE
INVESTORS USA. RECEIPT OF THE ACCOMPANYING VOTING INFORMATION STATEMENT(S), AS
APPLICABLE, IS HEREBY ACKNOWLEDGED.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian, or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name, your name and indicate your title. Joint owners should
each sign these instructions. Please sign, date and return.
-------------------------
Signature
------------------------
Signature (if held jointly)
-------------------------
Date
(Please see reverse side to vote.)
ACCUMULATION UNITS HELD ON YOUR BEHALF WILL BE VOTED AS INDICATED BELOW OR AS
"FOR" ANY PROPOSAL FOR WHICH NO CHOICE IS INDICATED.
If this Voting Instruction Card is signed and returned and no specification is
made, MetLife Investors USA will count the vote as "FOR" all of the Proposals.
Please note that a vote to "ABSTAIN" will have the same effect as a "NO" vote.
To be counted, Voting Instruction Cards must be received by MetLife Investors
USA no later than Friday, April 23, 2004 at 4:00 p.m. Pacific Time.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW. EXAMPLE: |X|
SUBACCOUNT(s) UNITS
[Current Subaccount Name]
METLIFE INVESTORS USA RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE FOLLOWING:
To approve the substitution of Class A shares of the Replacement
Portfolio(s) listed below for the shares of the corresponding Current
Portfolio(s) listed below that is currently included as an investment
option under certain variable insurance contracts offered by MetLife
Investors USA Insurance Company.
Replacement Portfolio Current Portfolio
1. [Name of Replacement Portfolio], a series [Class of shares] shares of [Name of
of [Name of Trust] Current Portfolio]
Mark |_| To Vote FOR |_| To Vote AGAINST |_| To ABSTAIN From Voting.
IMPORTANT: PLEASE SIGN AND DATE ON THE REVERSE SIDE BEFORE MAILING OR
FAXING