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
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MetLife Investors USA Separate Account A
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(Name of Registrant as Specified in its Charter)
MetLife Investors USA Insurance Company
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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0-11.
(1) Title of each class of securities to which transaction
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transaction applies: N/A
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computed pursuant to Exchange Act Rule 0-11 (set forth the
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METLIFE INVESTORS USA INSURANCE COMPANY
11365 W. Olympic Blvd.
Los Angeles, California 90064
[Name]
March 31, 2003
Dear Contract Owner:
You are an owner of a variable annuity contract (a "Contract") issued by MetLife
Investors USA Insurance Company ("MetLife Investors USA"). Shares of the Index
500 Portfolio (Initial Class) ("Index 500 Portfolio"), a series of the Fidelity
Variable Insurance Products Fund II, have been purchased at your direction by
MetLife Investors USA through its Separate Account A to support contract values
or fund benefits payable under your Contract. MetLife Investors USA is the
record owner of Index 500 Portfolio shares held in connection with your
Contract.
MetLife Investors USA is seeking your approval for the substitution of Class A
shares of the MetLife Stock Index Portfolio, a series of the Metropolitan Series
Fund, Inc., (the "MetLife Portfolio") for Initial Class shares of the Index 500
Portfolio. 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.
Certain of the Contracts and all of the prospectuses for the variable annuity
Contracts issued by MetLife Investors USA through Separate Account A (the
MetLife Investors Contracts) condition MetLife Investors USA's ability to carry
out the proposed substitution on its obtaining the approval of a majority of
Contract owners, as well as the approval of the Securities and Exchange
Commission (the "Commission"). The Commission's approval of the proposed
substitution is subject to certain conditions, including that MetLife Investors
USA receive, for each class of Contracts, approval from a majority of the
Contract owners entitled to vote (those owners who have Contract value invested
in the Index 500 Portfolio as of January 31, 2003). Since you had Contract value
invested in the Index 500 Portfolio on January 31, 2003, you are entitled to
vote the number of accumulation units you own in the subaccount of Separate
Account A investing in shares of the Index 500 Portfolio. We are writing to you
to ask that you cast your vote in order that we may effect the proposed
substitution. You may cast your vote by: (1) filling out the enclosed Voting
Form 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.
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 unit exchange) out of the MetLife Portfolio 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.
We have enclosed the following to assist you in giving us your vote:
o Voting Information Statement
o Voting Form
o Postage-paid return envelope
o Toll-free number for the telephone voting facility and website
address for the website voting facility
Please read carefully the enclosed Voting Information Statement for details
about the proposed substitution. In order for your vote to be given effect, we
must receive a properly executed Voting Form or a telephone or website vote no
later than April 24, 2003 at 4:00 p.m. Pacific Time.
Please complete, sign, and date the enclosed Voting Form and promptly return it
in the enclosed postage-paid envelope or complete the telephone voting or
website voting process by following the instructions available at either
facility. Your vote and participation are very important, and we appreciate your
return of the form as soon as possible. Thank you for your cooperation.
Very truly yours,
Richard C. Pearson
Secretary
MetLife Investors USA Insurance Company
METLIFE INVESTORS SEPARATE ACCOUNT A
A separate account of MetLife Investors USA Insurance Company
VOTING INFORMATION STATEMENT
March 31, 2003
MetLife Investors USA Insurance Company ("MetLife Investors USA"), on behalf of
MetLife Investors Separate Account A ("Separate Account A"), a separate account
of MetLife Investors USA, is furnishing this Voting Information Statement to
solicit votes from owners of variable annuity contracts (the "Contracts") issued
by MetLife Investors USA having contract values allocated to the subaccount of
Separate Account A investing in shares of the Index 500 Portfolio of Fidelity
Variable Insurance Products Fund II (the "Subaccount") on January 31, 2003 (the
"Record Date"). MetLife Investors USA is requesting a vote to approve or
disapprove the following proposal:
The substitution of Class A shares of the MetLife Stock Index
Portfolio ("MetLife Portfolio"), a series of the Metropolitan Series
Fund, Inc., for Initial Class shares of the Index 500 Portfolio
("Index 500 Portfolio"), a series of the Fidelity Variable Insurance
Products Fund II.
As an owner of a Contract (an "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 above
proposal.
Certain of the Contracts and all of the prospectuses for the variable annuity
Contracts issued by MetLife Investors USA through Separate Account A condition
MetLife Investors USA's ability to carry out the proposed substitution on its
obtaining, for each class of Contracts, the approval of Owners representing a
majority of the outstanding accumulation units as of the Record Date, as well as
the approval of the Securities and Exchange Commission (the "Commission"). The
Commission's approval of the proposed substitution is subject to certain
conditions, including that MetLife Investors USA receive approval from Owners.
GENERAL VOTING INFORMATION
This Voting Information Statement and the accompanying Voting Form are being
furnished to Owners on or about March 31, 2003. An 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 Contracts and entitled to vote was:
1
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Class of Contract Number of Subaccount Units
Flexible Bonus 129,851,248.65
Ultimate Annuity 4,357,624.30
Flexible Value 19,994,642.95
Investors Choice 31,875,342.18
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For each class of Contracts, approval of the proposed substitution requires the
affirmative vote of a majority of the Subaccount's outstanding accumulation
units 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 for their class of Contract 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.
If you properly execute and return the enclosed Voting Form to MetLife Investors
USA at 11365 W. Olympic Blvd., Los Angeles, California 90064 by April 24, 2003
at 4:00 p.m. (the "Voting Deadline"), MetLife Investors USA will count your vote
when calculating the results of the solicitation. MetLife Investors USA will
disregard any Voting Forms received after the Voting Deadline. Votes
attributable to Voting Forms that are properly executed and returned but are not
marked to "Approve" or "Disapprove" the proposed substitution, will be counted
as "Approve." A vote to "Abstain" will have the effect of a vote to "Disapprove"
the proposed substitution.
You also may vote by telephone by calling 1-866-235-4258 and following the
instructions or by visiting our voting agent's website
https://vote.proxy-direct.com and following the instructions. If you cast your
telephone or website vote by the Voting Deadline, MetLife Investors USA will
count your vote when calculating the results of the solicitation. MetLife
Investors USA will disregard any votes cast by telephone or at the website after
the Voting Deadline (or any extension of the Voting Deadline). The 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 or website voting facilities. Your voting authentication number is
found on the accompanying Voting Form.
Any Owner who has submitted a Voting Form 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 Form that MetLife Investors USA receives at
the above address on or before the Voting Deadline. If, for any class of
Contracts, 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,
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employees, and agents of MetLife Investors USA or its affiliates. MetLife
Investors USA will bear the cost of soliciting votes.
THE PROPOSED SUBSTITUTION
The Transaction
On October 25, 2002, MetLife Investors USA and Separate Account A submitted an
application to the Commission requesting approval of the proposed substitution
of shares of the MetLife Portfolio for shares of the Index 500 Portfolio. If
completed, the proposed substitution will result in MetLife Investors USA's
redemption, in cash or "in-kind" (i.e., for portfolio securities of the Index
500 Portfolio), of shares of the Index 500 Portfolio. MetLife Investors USA will
then use the proceeds (either cash or portfolio securities) of such redemption
to purchase shares of the MetLife Portfolio.
If approved, the proposed substitution will take place at relative net asset
value with no change in the amount of an Owner's Contract value or death benefit
or in the dollar value of an Owner's investment in the Subaccount. Owners will
not incur any fees or charges as a result of the proposed substitution and
Owners' rights and MetLife Investors USA's obligations under the 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 Owners to any federal income tax
liability.
The fees and charges that an Owner pays under his or her Contract will not
increase as a result of the proposed substitution. To the extent that the
annualized expenses of the MetLife Portfolio during the twenty-four months
following the substitution exceeds the 2002 net expense level of the Index 500
Portfolio, MetLife Investors USA will reduce Subaccount expenses under the
Contracts. Therefore, for such Contracts, for two years following the proposed
substitution, combined net expenses for the MetLife Portfolio and the Subaccount
will not exceed the combined net expenses of the Index 500 Portfolio and the
Subaccount for the 2002 fiscal year. Nonetheless, after two years following the
proposed substitution, the net expense levels for the MetLife Portfolio may be
higher than the 2002 net expense level for the Index 500 Portfolio, but would
not be offset by a reduction in Subaccount expenses. In such an event, Owners
may bear greater expenses than they would had the proposed substitution not
occurred.
Owners are entitled to approve or disapprove the proposed substitution. The
proposed substitution will not take place for any class of Contracts without the
approval of Owners representing a majority of the accumulation units of the
Subaccount for that class of Contracts as of the Record Date.
MetLife Investors USA intends to effect the proposed substitution on or about
April 28, 2003, following the issuance of an order of approval by the
Commission, the approval of the proposed substitution by Owners, and any
approval required by state insurance regulators.
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Reasons for the Proposed Substitution
The proposed substitution reflects a determination by MetLife Investors USA to
coordinate underlying investment options with other life insurance companies
affiliated with Metropolitan Life Insurance Company, an affiliate of MetLife
Investors USA. At the current time, most variable life insurance and variable
annuity contracts being actively marketed by life insurance companies affiliated
with Metropolitan Life Insurance Company that offer an S&P 500 Index investment
portfolio, offer the MetLife Portfolio. Standardizing the investment options
across similar products offered by several affiliated life insurance companies
will make such contracts more efficient to administer and oversee, thereby
reducing costs to the companies and improving service to owners of all of the
contracts. For example, one variable annuity operations center provides contract
administration and contract owner services for most of the affiliated life
insurance companies. Standardizing product features, such as investment options,
will foster more efficient administration of the Contracts, thereby improving
quality control and Owner satisfaction. Similarly, as part of this
standardization process, several other mutual funds managed by companies
affiliated with Metropolitan Life Insurance Company are being merged into
investment portfolios of Metropolitan Series, including the MetLife Portfolio.
This should, as with the proposed substitution, increase the Portfolio's net
assets and lead to lower overall expenses for the Portfolio. MetLife Investors
USA believes that replacing the Index 500 Portfolio with the MetLife Portfolio
is appropriate and in the best interests of Owners.
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 that affiliated person.
MetLife Investors USA believes that replacing the Substituted Portfolio with the
Replacement Portfolio is appropriate and in the best interests of Contract
owners because the Replacement Portfolio is larger than the Substituted
Portfolio and has excellent prospects for future growth. Although almost all
equity mutual funds have declined in size over the last two years (due primarily
to equity market declines, but also as a result of investor redemptions), the
Replacement Portfolio has, on a percentage basis, declined in size less than the
Substituted Portfolio. In large part this is because it has gained new
investors. As indicated above, MetLife Investors USA anticipates that, through
mergers with affiliated funds and being added as an investment option in
variable annuity and life insurance contracts of insurance companies affiliated
with Metropolitan Life Insurance Company, the Replacement Portfolio will
continue to add new investors.
Size and continued growth are important factors in the performance of an index
portfolio because they have a critical impact on expense levels. The Replacement
Portfolio had an expense ratio in 2002 of 0.31%. MetLife Investors USA believes
that with the growth anticipated for the Portfolio, it has excellent prospects
of maintaining or even lowering that ratio in future years. Although the
Substituted Portfolio had an actual expense ratio of 0.28% for 2002, it achieved
that ratio only after a reimbursement of 0.05% from FMR, its investment adviser.
The reimbursement is voluntary and FMR may cease reimbursing the Portfolio at
any time. In
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addition, FMR has the ability to seek repayment of the reimbursed amounts under
certain circumstances in future years.
MetLife Investors USA also believes that replacing the Substituted Portfolio
with the Replacement Portfolio is appropriate and in the best interests of
Contract owners because the Replacement Portfolio has had better performance
than the Substituted Portfolio. Although, being index portfolios, performance
differences are very small, the Replacement Portfolio has consistently
outperformed the Substituted Portfolio in recent years.
In the event that the proposed substitution does not occur (because it is not
approved by Owners or the Commission or for another reason), effective May 1,
2003, the Subaccount will no longer be available under the Contracts for
allocation of purchase payments or transfers of Contract value. (Transfers of
Contract value to the Subaccount pursuant to the "dollar-cost" averaging and
portfolio rebalancing arrangements in effect on May 1, 2003, will, however,
continue.)
Both the MetLife Portfolio and the Index 500 Portfolio have assets of more than
$2.4 billion as of December 31, 2002. The Index 500 Portfolio's asset base,
however, has declined from $5.5 billion as of December 31, 1999.
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. (formerly, Security First Group, Inc.). MetLife Investors Group, Inc., in
turn, is an indirect wholly-owned subsidiary of MetLife, Inc. ("MetLife"), the
parent of Metropolitan Life Insurance Company ("MLIC"). 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. Separate Account A currently has
60 subaccounts. Each subaccount invests in a corresponding portfolio of an
open-end management investment company. The Contracts that invest in the Index
500 Portfolio have been issued through Separate Account A and interests in the
Account offered through such 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.
MetLife Investors USA is the legal owner of the assets in Separate Account A. To
the extent so provided in the Contracts, that portion of the assets of Separate
Account A equal to its reserves
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and other liabilities under outstanding Contracts will not be charged with
liabilities arising out of any other business MetLife Investors USA may conduct.
Income, gains and losses, realized or unrealized, from the assets of Separate
Account A are credited to or charged against Separate Account A without regard
to the other income, gains, or losses of MetLife Investors USA.
The Portfolios
VIP II Fund
The VIP II Fund is registered as an open-end management investment company under
the 1940 Act and currently offers 5 separate investment portfolios, including
the Index 500 Portfolio. The VIP II Fund issues a separate series of shares of
beneficial interest in connection with each portfolio, and has registered such
shares under the 1933 Act.
Metropolitan Series
The Metropolitan Series is also registered as an open-end management investment
company under the 1940 Act and currently offers 20 separate investment
portfolios, including the MetLife Portfolio. The Metropolitan Series issues a
separate series of shares of beneficial interest in connection with each
portfolio, and has registered such shares under the 1933 Act.
Management of the Portfolios
Index 500 Portfolio
Fidelity Management & Research Company ("FMR") is the investment adviser for the
Index 500 Portfolio (and other portfolios of Fidelity Variable Insurance
Products Fund II). FMR's principal offices are located at 82 Devonshire Street,
Boston, Massachusetts 02109.
FMR and the Index 500 Portfolio also have entered into a subadvisory agreement
with Deutsche Asset Management, Inc. ("DAMI") to provide investment management
services. DAMI chooses the Index 500 Portfolio's investments and places orders
to buy and sell the Index 500 Portfolio's investments. DAMI is a wholly owned
subsidiary of Deutsche Bank AG. DAMI's principal offices are located at 280 Park
Avenue, New York, New York 10017. FMR has also entered into a subadvisory
agreement with FMR Co., Inc. ("FMRC") on behalf of the Index 500 Portfolio,
pursuant to which FMRC may provide investment advisory services to the Index 500
Portfolio. FMRC's principal offices are the same as those of FMR.
For its services, FMR is paid an advisory fee based on the average daily net
assets of the Index 500 Portfolio and FMR pays FMRC and DAMI for services
rendered to the Index 500 Portfolio.
MetLife Stock Index Portfolio
MetLife Advisers is the investment adviser for the MetLife Portfolio. MetLife
Advisers' principal offices are located at 501 Boylston Street, Boston,
Massachusetts 02116. MetLife
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Advisers is an indirect wholly-owned subsidiary of MetLife. MetLife Advisers
also performs general administrative and management services for the
Metropolitan Series Fund, Inc.
MetLife Advisers has contracted with a subadviser, MLIC, to make the day-to-day
investment management decisions for the MetLife Portfolio. MetLife Advisers is
responsible for overseeing MLIC and for making recommendations to the
Metropolitan Series Fund, Inc.'s board of directors relating to hiring and
replacing subadviser(s). MLIC is the Metropolitan Series Fund, Inc.'s principal
underwriter and distributor. MLIC's principal offices are located at One Madison
Avenue, New York, New York 10010.
For its services, MetLife Advisers is paid an advisory fee based on the average
daily net assets of the MetLife Portfolio, and MetLife Advisers pays MLIC for
services rendered to the MetLife Portfolio.
Comparison of the Portfolios
The following discussion is primarily a summary of certain parts of the current
prospectuses and/or annual shareholder reports for 2002 for the MetLife
Portfolio and the Index 500 Portfolio. This Voting Information Statement is
accompanied by a current prospectus for the MetLife Portfolio. The 2002 annual
shareholder report for the MetLife Portfolio is available without charge upon
request. As an Owner invested in the Index 500 Portfolio, you should already
have a current prospectus (including applicable supplements) and should have
recently received the 2002 annual shareholder report for the Index 500
Portfolio. Information contained in this Voting Information Statement is
qualified by the more complete information set forth in such prospectuses and
reports which are incorporated by reference herein.
As set forth below, the investment objectives and principal investment
strategies of the two Portfolios are substantially the same, and the types of
investment advisory and administrative services provided to the MetLife
Portfolio are comparable to the types of investment advisory and administrative
services provided to the Index 500 Portfolio.
Comparison of Investment Objective and Principal Investment Policies
Investment Objectives
>> Index 500 Portfolio. The Index 500 Portfolio's investment objective is to
seek investment results that correspond to the total return of common
stocks publicly traded in the United States, as represented by the S&P 500
Index.
>> MetLife Portfolio. The MetLife Portfolio's investment objective is to seek
to equal the performance of the S&P 500 Index.
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Investment Strategies
>> Index 500 Portfolio. The Index 500 Portfolio will normally invest at least
80% of its assets in common stocks included in the S&P 500 Index. The Index
500 Portfolio expects to use statistical sampling techniques to attempt to
replicate the returns of the S&P 500 Index. Statistical sampling techniques
attempt to match the investment characteristics of the S&P 500 Index and
the S&P 500 Portfolio by taking into account such factors as
capitalization, industry exposures, dividend yield, price/earnings ratio,
price/book ratio, and earnings growth. The Index 500 Portfolio also expects
to lend securities to earn income for the portfolio. The Index 500
Portfolio may lend its securities to broker-dealers or other institutions
to earn income. The Index 500 Portfolio may also use various techniques,
such as buying and selling futures contracts, to increase or decrease its
exposure to changing security prices or other factors that affect security
values.
>> MetLife Portfolio. The MetLife Portfolio will normally invest most of its
assets in common stocks included in the S&P 500 Index. The MetLife
Portfolio also expects to invest, as a principal investment strategy, in
securities index futures contracts and/or related options to simulate full
investments in the S&P 500 Index while retaining liquidity to facilitate
trading, to reduce transaction costs, or to seek higher return when these
derivatives are priced more attractively than the underlying security.
Also, since the MetLife Portfolio attempts to keep transaction costs low,
the portfolio manager generally will rebalance the MetLife Portfolio only
if it deviates from the S&P 500 Index by a certain percent. The subadviser
monitors the tracking performance of the MetLife Portfolio through
examination of the "correlation coefficient." A perfect correlation would
produce a coefficient of 1.00. The MetLife Portfolio will attempt to
maintain a target correlation coefficient of at least .95.
The investment objectives of the two portfolios are virtually identical. Both
portfolios seek to mirror the performance of the S&P 500 Index. Further, both
portfolios' principal investment strategies are substantially the same in that
both portfolios are managed by investing portfolio assets in the common stocks
comprising the S&P 500 Index. Unlike the MetLife Portfolio, however, the Index
500 Portfolio may not always hold all of the same securities as the S&P 500
Index. Further, although the Index 500 Portfolio may use various techniques,
such as buying and selling futures contracts, to increase or decrease the its
exposure to changing security prices, the MetLife Portfolio invests, as a
principal investment strategy, in stock index futures contracts and/or related
options when such derivatives are priced more attractively than the underlying
security or to simulate full investment in the S&P 500 Index - a strategy of
potential benefit to Contract owners.
Comparison of Advisory Fees and Other Expenses
The following chart compares the total operating expenses (before and after any
waivers and reimbursements) for the year ended December 31, 2002, expressed as
an annual percentage of average daily net assets, of the Index 500 Portfolio and
the MetLife Portfolio. Neither the Initial Class shares of the Index 500
Portfolio nor Class A shares of the MetLife Portfolio has adopted any plan
pursuant to Rule 12b-1 under the 1940 Act.
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- --------------------------------- --------------------------------- ----------------------------------
Index 500 Portfolio (Initial MetLife Portfolio (Class A)
Class)
- --------------------------------- --------------------------------- ----------------------------------
Management Fees 0.24% 0.25%
Other Expenses 0.09% 0.06%
Total Operating Expenses 0.33% 0.31%
Less Expense Waivers and
Reimbursements 0.05%/1/ N/A
Net Operating Expenses 0.28% 0.31%
- --------------------------------- --------------------------------- ----------------------------------
Comparison of Advisory and Subadvisory Services
The following chart compares the fees paid for advisory and subadvisory services
for the fiscal year ending December 31, 2002, expressed as an annual percentage
of average daily net assets, by the Index 500 Portfolio and the MetLife
Portfolio.
- ----------------------------------------------------------- -----------------------------------------------------
Index 500 Portfolio (Initial Class) MetLife Portfolio (Class A)
- ----------------------------------------------------------- -----------------------------------------------------
- ---------------------------- ------------------------------ ------------------------- ---------------------------
Annual Advisory Fees Annual Subadvisory Fees Annual Advisory Fees Annual Subadvisory Fees
(paid by the Adviser) (paid by the Adviser)
- ---------------------------- ------------------------------ ------------------------- ---------------------------
0.24% DAMI 0.006% 0.25% At Cost/2/
------------------------------
FMRC 0.12%/3/
- ---------------------------- ------------------------------ ------------------------- ---------------------------
- -----------------------------
/1/ FMR has voluntarily agreed to reimburse the Initial Class of the Index 500
Portfolio if and to the extent that the Index 500 Portfolio's aggregate
operating expenses, including management fees, exceed an annual rate of 0.28% of
average net assets. This voluntary reimbursement arrangement may be revised or
terminated at any time. Further, FMR retains the ability to be repaid for these
expense reimbursements in the amount that expenses fall below the 0.28% limit
prior to the end of the fiscal year.
/2/ MetLife Advisers pays MetLife a subadvisory fee equal to the costs incurred
by MetLife in providing subadvisory services to the MetLife Portfolio. This fee
is expected to range from 0.03% to 0.05% annually.
/3/ Under the terms of the subadvisory agreement for the Index 500 Portfolio,
FMR pays FMRC fees equal to 50% of the advisory fee payable to FMR with respect
to that portion of the Index 500 Portfolio's assets that is managed by FMRC.
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Comparison of Asset Levels and Performance
The following table compares the respective asset levels, expense ratios, and
performance data of the two portfolios, as well as the performance data for the
S&P 500 Index.
- -------------------------- ------------------ ---------------------- -----------------------------------------------
Portfolios Asset Levels Expense Ratios Performance
(as of 12/31/02) (for the year ended (as of 12/31/02)
(millions) 12/31/02)
- -------------------------- ------------------ ---------------------- -----------------------------------------------
- -------------------------- ------------------ ---------------------- ---------------------------- ------------------
Index 500 Portfolio $2,497 0.28% o 1 YEAR: -22.25%
o 5 YEAR: -0.84%
o 10 YEAR: 9.04%
- -------------------------- ------------------ ---------------------- ---------------------------- ------------------
- -------------------------- ------------------ ---------------------- ---------------------------- ------------------
MetLife Portfolio $2,840 0.31% o 1 YEAR: -22.10%
o 5 YEAR: -0.66%
o 10 YEAR: 9.15%
- -------------------------- ------------------ ---------------------- ---------------------------- ------------------
- -------------------------- ------------------ ---------------------- ---------------------------- ------------------
S&P 500 Index N/A o 1 YEAR: -22.09%
N/A o 5 YEAR: -0.58%
o 10 YEAR: 9.34%
- -------------------------- ------------------ ---------------------- ---------------------------- ------------------
Comparison of Investment Risks
Each portfolio attempts to match the return of the S&P 500 Index. Because the
portfolios have virtually identical investment objectives, and investment
strategies that are substantially the same, each portfolio generally invests in
the same types of securities (i.e., equity securities of relatively large
companies), and thus, is subject to substantially the same types of risks. These
include:
Investing in larger companies. Larger more established companies may 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 rates of successful smaller
companies, especially during extended periods of economic expansion.
Index Investing. Unlike actively managed portfolios, portfolios that
attempt to match the return of an index generally will not use any
defensive strategies. The investor bears the risk of adverse market
conditions with respect to the market segment that the index seeks to
match. In addition, transaction costs, other portfolio or fund
expenses, brief delays that occur until a portfolio can invest cash it
receives and other tracking errors may result in the portfolio's return
being lower than the return of the applicable index.
Stock Market Volatility. Stock markets are volatile and can decline
significantly in response to adverse issuer, political, regulatory,
market, or economic developments. Different parts of the market can
react differently to these developments.
10
Effects on Owners
Additional facts concerning Owners' rights in connection with the proposed
substitution are as follows:
o Owners will not:
>> experience any change in the amount of Contract value, death benefit,
or dollar value of their investments in any of the subaccounts of
Separate Account A as a result of the proposed substitution;
>> incur any fees or charges as a result of the proposed substitution,
including charges that would otherwise be applied to transfers;
>> experience an increase in the combined Subaccount and Portfolio
expenses for 24 months following the proposed substitution;
>> have their rights, or MetLife Investors USA's obligations, under the
Contracts altered in any way as a result of the proposed substitution;
>> incur any expenses as a result of the proposed substitution; and
>> incur any federal income tax liability as a result of the proposed
substitution.
o Owners will:
>> 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 the Contracts;
>> during the 30 days after the proposed substitution, 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 the Contracts; and
>> before the proposed substitution occurs, receive a copy of the most
recent MetLife Portfolio prospectus.
o MetLife Investors USA will:
pay all expenses incurred in connection with the proposed
substitution, including legal, accounting, transactional, proxy,
brokerage commissions, and other fees and expenses.
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o 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.
METLIFE INVESTORS USA INSURANCE COMPANY RECOMMENDS THAT YOU VOTE TO "APPROVE"
THE PROPOSED SUBSTITUTION.
GENERAL INFORMATION
Cost of Solicitation
MetLife Investors USA the cost of the solicitation, including the preparation
and mailing of the Voting Information Statement and Voting Form, the
solicitation of votes, legal, and other expenses.
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.
Separate Account A has no administrator.
Owner Proposals
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
2002 annual shareholder report for the MetLife Portfolio and additional copies
of the current prospectuses for the MetLife Portfolio and the Index 500
Portfolio and the 2002 annual shareholder report for the Index 500 Portfolio. To
request any of these, please call MetLife Investors USA at 1-800-283-4536
(1-866-2051 for owners of Investors Choice Contracts), or write to MetLife
Investors USA at 11365 W. Olympic Blvd., Los Angeles, California 90064.
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 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 Commission staff limit appraisal rights
of investors in a registered unit investment trust, such as Owners, to those
provided by Rule 22c-1 under the 1940
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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.
Inquiries
Owners may make inquiries by contacting their registered representative or by
writing MetLife Investors USA at 11365 W. Olympic Blvd., Los Angeles, California
90064, or by calling 1-800-283-4536 (1-866-2051 for owners of Investors Choice
Contracts).
METLIFE INVESTORS USA REQUESTS THAT YOU PROMPTLY EXECUTE AND RETURN THE ENCLOSED
VOTING FORM. A PRE-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.
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VOTING FORM
MetLife Investors USA Insurance Company
11365 W. Olympic Blvd.
Los Angeles, California 90064
Name of Contract Owner Voting Authentication Number:
Address
City, ST 00000
Your variable annuity contract entitles you to vote as to the number of
accumulation units you owned in the subaccount of MetLife Investors USA Separate
Account A investing in Initial Class shares of the Index 500 Portfolio of
Fidelity Variable Insurance Products Fund II as of January 31, 2003. To be
counted, Voting Forms must be received by MetLife Investors USA Insurance
Company ("MetLife Investors USA") no later than Thursday, April 24, 2003 at 4:00
p.m. Pacific Time.
METLIFE INVESTORS USA RECOMMENDS THAT YOU VOTE TO "APPROVE" THE PROPOSAL.
I hereby instruct MetLife Investors USA to count the accumulation units as to
which I am entitled to vote as follows:
Approve _______ Disapprove _______ Abstain _______
the following proposal:
the substitution of Class A shares of the MetLife Stock Index Portfolio of
the Metropolitan Series Fund, Inc. for Initial Class shares of the Index
500 Portfolio of Fidelity Variable Insurance Products Fund II.
I hereby revoke any and all votes with respect to the foregoing proposal
previously given by me. I acknowledge receipt of the Voting Information
Statement dated March 31, 2003, which describes the above proposal.
____________________ _______________
Authorized signature Date
_________________________________________
Contract Owner Name
PLEASE COMPLETE, SIGN AND DATE THIS FORM AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. Please use blue or black ink or dark pencil. Signed Voting Forms that
do not indicate a vote, will be treated as a vote to approve the proposal.