SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Morgan Stanley Variable Investment Series
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than 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)(1) 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 previously 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, or 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:
PRELIMINARY PROXY
MORGAN STANLEY VARIABLE INVESTMENT SERIES
CAPITAL GROWTH PORTFOLIO
c/o Morgan Stanley Trust
Harborside Financial Center, Plaza Two, Jersey City, NJ 07311
Toll Free (800) 869-NEWS
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AUGUST 20, 2002
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A Special Meeting of Shareholders of the Capital Growth Portfolio (the
"Portfolio"), a series of MORGAN STANLEY VARIABLE INVESTMENT SERIES (the
"Fund"), will be held at Harborside Financial Center, Plaza Two, Jersey City,
NJ on Tuesday, August 20, 2002, (the "Meeting") at 10:00 a.m., Eastern Time,
for the following purposes:
1. To approve or disapprove a Plan of Liquidation and Dissolution
pursuant to which the Portfolio's assets will be liquidated, known
liabilities satisfied and remaining proceeds distributed to Shareholders;
and
2. To consider and act upon any other matters which may properly come
before the Meeting or any adjournments thereof.
Shareholders of record at the close of business on June 4, 2002 are
entitled to notice of, and to vote, at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that
purpose.
In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting with
respect to the Portfolio, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the Portfolio's shares present in person or by proxy at the Meeting. The
persons named as proxies will vote in favor of such adjournment those proxies
they are entitled to vote in favor of the Proposal and will vote against any
such adjournment those proxies to be voted against the Proposal.
By order of the Board of Trustees,
BARRY FINK
Secretary
, 2002
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IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE UNABLE TO
BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY IN
ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING. THE ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU CAST YOUR VOTE FOR
APPROVAL OF THE PLAN OF LIQUIDATION AND DISSOLUTION PURSUANT TO WHICH THE
PORTFOLIO'S ASSETS WILL BE LIQUIDATED, KNOWN LIABILITIES SATISFIED AND REMAINING
PROCEEDS DISTRIBUTED TO SHAREHOLDERS.
YOUR VOTE IS IMPORTANT
MORGAN STANLEY VARIABLE INVESTMENT SERIES
CAPITAL GROWTH PORTFOLIO
C/O MORGAN STANLEY TRUST
HARBORSIDE FINANCIAL CENTER, PLAZA TWO, JERSEY CITY, NJ 07311
TOLL FREE (800) 869-NEWS
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
AUGUST 20, 2002
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This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Trustees") of Morgan Stanley Variable Investment
Series (the "Fund") for use at the Special Meeting of Shareholders of the
Capital Growth Portfolio (the "Portfolio") to be held on August 20, 2002 and
any adjournments thereof (the "Meeting") for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders (the "Notice of Special
Meeting"). The first mailing of this Proxy Statement is expected to be made on
or about June 27, 2002.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted in favor of the Proposal for which they are
entitled to vote, as set forth in the attached Notice of Special Meeting. A
proxy may be revoked at any time prior to its exercise by any of the following:
written notice of revocation to the Secretary of the Fund, execution and
delivery of a later dated proxy to the Secretary of the Fund (if returned and
received in time to be voted), or attendance and voting at the Meeting.
Attendance at the Meeting will not in and of itself revoke a proxy.
The holders ("Shareholders") of Class X shares and Class Y shares
(collectively, the "Shares") of the Portfolio as of the close of business on
June 4, 2002, the record date for the determination of Shareholders entitled to
notice of and to vote at the Meeting (the "Record Date"), are entitled to one
vote for each share held and a fractional vote for a fractional share. As of
June 4, 2002, the Record Date, the Portfolio had 6,959,179.59 Class X shares
and 563,256.57 Class Y shares outstanding. The table below sets forth those
persons known to the Fund to own of record or beneficially more than 5% of the
outstanding shares of each Class of the Portfolio. The percentage ownership of
shares of the Portfolio changes from time to time depending on purchases and
redemptions by Shareholders and the total number of shares of each class of
shares outstanding.
[insert name] [insert number]shares
[insert address] [insert %]
[insert address]
The shares of the Portfolio are currently sold only to: (1) Northbrook
Life Insurance Company ("Northbrook") for allocation to certain separate
accounts established to fund the benefits under certain flexible premium
deferred variable annuity contracts and certain flexible premium variable life
insurance contracts issued by Northbrook, (2) Allstate Life Insurance Company
of New York ("Allstate") for allocation to certain separate accounts
established to fund the benefits under certain flexible premium deferred
variable annuity contracts issued by Allstate; (3) Glenbrook Life and Annuity
Company ("Glenbrook") for allocation to certain separate accounts established
to fund the benefits under certain flexible premium deferred variable annuity
contracts issued by Glenbrook; and (4) Paragon Life Insurance Company
("Paragon") for allocation to certain separate accounts established to fund the
benefits under certain flexible premium variable life
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insurance contracts it issues in connection with an employer-sponsored
insurance program offered only to certain employees of Morgan Stanley Dean
Witter & Co., the parent company of the Fund's investment manager, Morgan
Stanley Investment Advisors Inc. (the "Investment Manager"). The separate
accounts are sometimes referred to individually as an "Account" and
collectively as the "Accounts." The variable annuity contracts issued by
Northbrook, Allstate and Glenbrook are sometimes referred to as the "Variable
Annuity Contracts." The variable life insurance contracts issued by Northbrook,
Glenbrook and Paragon are sometimes referred to as the "Variable Life
Contracts." The Variable Annuity Contracts and the Variable Life Contracts are
sometimes referred to as the "Contracts."
PROXIES
In accordance with their view of currently applicable law, Northbrook,
Allstate, Glenbrook and Paragon will vote the shares of the Portfolio held in
the applicable Account based on instructions received from the contractholders
having the voting interest in the corresponding Sub-Accounts of the Account. In
connection with the solicitation of such instructions from such
contractholders, it is understood and expected that Northbrook, Allstate,
Glenbrook and Paragon will furnish a copy of this Proxy Statement to
contractholders and that Northbrook, Allstate, Glenbrook and Paragon will
furnish to contractholders one or more instruction cards by which the
contractholders may provide their instructions to Northbrook, Allstate,
Glenbrook and Paragon. Shares for which no instructions are received in time to
be voted will be voted by Northbrook, Allstate and Paragon in the same
proportion as shares for which instructions have been received in time to be
voted.
All costs of the Meeting, including, but not limited to, the preparation
and mailing of proxy materials and the solicitation of proxies, will be borne
by the Investment Manager. The solicitation of proxies will be by mail, which
may be supplemented by solicitation by telephone or otherwise through Trustees
and officers of the Fund and officers and regular employees of certain
affiliates of the Fund, including Morgan Stanley Services, Morgan Stanley DW
Inc. and Morgan Stanley Trust, without special compensation
(1) APPROVAL OR DISAPPROVAL OF A PLAN OF LIQUIDATION AND DISSOLUTION PURSUANT
TO WHICH THE PORTFOLIO'S ASSETS WILL BE LIQUIDATED, KNOWN LIABILITIES SATISFIED
AND REMAINING PROCEEDS DISTRIBUTED TO SHAREHOLDERS.
BACKGROUND
The Portfolio commenced operations on March 1, 1991 and since that date
through December 31, 2001, the Portfolio's net assets have grown to only $110.4
million. The anticipated growth of the Portfolio's assets through increased
sales of shares has not been achieved.
The Investment Manager and Morgan Stanley Distributors Inc., the
distributor of the Portfolio's shares (the "Distributor") (collectively,
"Management"), believe it is unlikely that the Portfolio will experience
material growth in assets in the foreseeable future. Because of the
inefficiencies, higher costs and disadvantageous economies of scale attendant
with the Portfolio's small asset base, the Portfolio's Management has concluded
that it would be in the best interests of the Portfolio and its Shareholders to
liquidate the Portfolio and has recommended that this course of action be
considered by the Portfolio's Board of Trustees.
At a meeting on April 25, 2002, the Board of Trustees considered whether
it would be appropriate and in the best interests of the Portfolio and its
Shareholders to liquidate the Portfolio and, after careful consideration of the
matter, the Board approved the liquidation and termination of the Portfolio
pursuant to the terms of the Plan of Liquidation and Dissolution (the "Plan").
The Board also directed that the Plan be submitted to Shareholders for
approval. In evaluating the Plan, the Trustees considered a number of factors,
including the
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amount of the Portfolio's total assets, the Portfolio's expense ratio, the
likelihood that additional sales of the Portfolio's shares could increase the
assets to a more viable level and the absence of another investment company
providing an underlying investment for the Contracts that would be appropriate
for a possible merger. Based on consideration of the foregoing and all other
factors deemed relevant by it, the Board of Trustees determined that approval
of the Plan was in the best interests of the Portfolio and its Shareholders.
If Shareholders of the Portfolio fail to approve the Plan, the Portfolio
will not be liquidated and will continue to operate and be managed in
accordance with the investment objective and policies of the Portfolio as
currently in effect. However, in such case, the Trustees would determine what
alternative action, if any, should be taken.
DESCRIPTION OF THE PLAN
The Plan will become effective on the date of its approval by Shareholders
(the "Effective Date"). Following Shareholder approval, the Portfolio will, as
soon as reasonable and practicable after the Effective Date, complete the sale
of the portfolio securities it holds in order to convert its assets to cash and
will not engage in any business activity except for the purpose of winding up
its business and affairs, preserving the value of its assets and distributing
assets to Shareholders after the payment to (or reservation of assets for
payment to) all creditors of the Portfolio. After the distribution of assets to
Shareholders, the Portfolio will be dissolved in accordance with the Plan and
Massachusetts law. The Plan provides that the Trustees may authorize such
variations from, or amendments to, the provisions of the Plan as may be
necessary or appropriate to effect the dissolution, complete liquidation and
termination of the existence of the Portfolio in accordance with the purposes
intended to be accomplished by the Plan.
As soon as practicable after the Effective Date, and in any event within
60 days thereafter, the Portfolio will mail to each Shareholder of record who
has not redeemed its shares a liquidating distribution equal to the
Shareholder's proportionate interest in the remaining assets of the Portfolio
and information concerning the sources of the liquidating distribution.
Except as may be otherwise agreed to between the Portfolio and its
Investment Manager, all expenses incurred by or allocable to the Portfolio in
carrying out this Plan and dissolving the Portfolio, shall be borne by the
Investment Manager.
The adoption of the Plan will not affect the right of Shareholders to
redeem shares of the Portfolio at their then current net asset value per share.
All officers of the Portfolio, as well as all entities serving the Portfolio,
will continue in their present positions and capacities until such time as the
Portfolio is liquidated and dissolved.
The Plan provides for the termination of the Portfolio under the laws of
the Commonwealth of Massachusetts. The Portfolio intends to file an appropriate
notice of termination with the Office of the Secretary of State of
Massachusetts. Such notice will state that the Board of Trustees approved the
termination of the Portfolio pursuant to the Plan and will specify the exact
date of termination. Massachusetts law does not provide rights of appraisal or
similar rights of dissent to Shareholders with respect to the proposed
liquidation and termination.
THE TRUSTEES OF THE FUND RECOMMEND THAT THE SHAREHOLDERS APPROVE THE PLAN OF
LIQUIDATION AND DISSOLUTION TO TERMINATE THE PORTFOLIO.
REQUIRED VOTE
Approval of the Plan is to be determined by the vote of a majority of the
outstanding shares of the Portfolio which means an affirmative vote of the
lesser of (1) a majority of the outstanding shares of the
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Portfolio, or (2) 67% or more of the shares of the Portfolio represented at the
Meeting if more than 50% of the outstanding shares of the Portfolio are present
or represented by proxy.
SHAREHOLDER PROPOSALS
The Portfolios do not hold regular Shareholders' meetings. Proposals of
Shareholders of the Portfolio intended to be presented at the next meeting of
Shareholders must be received a reasonable time prior to the mailing of the
proxy materials sent in connection with the meeting, for inclusion in the proxy
statement for that meeting.
REPORTS TO SHAREHOLDERS
The Fund's most recent Annual Report for the Fund's most recent fiscal
year has been sent previously to Shareholders and is available without charge
upon request by calling (800) 869-NEWS.
OTHER BUSINESS
The management of the Fund knows of no other matters which may be
presented at the Meeting. However, if any matters not now known properly come
before the Meeting, it is the intention of the persons named in the enclosed
form of proxy to vote all shares that they are entitled to vote on any such
matter, utilizing such proxy in accordance with their best judgment on such
matters.
By order of the Board of Trustees,
BARRY FINK
Secretary
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EXHIBIT A
PLAN OF LIQUIDATION AND DISSOLUTION
The following Plan of Liquidation and Dissolution (the "Plan") of the
Capital Growth Portfolio (the "Portfolio"), a series of Morgan Stanley Variable
Investment Series, (the "Fund"), a trust organized and existing under the laws
of the Commonwealth of Massachusetts, which has operated as an open-end
diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), is intended to
accomplish the complete liquidation and dissolution of the Portfolio in
conformity with the provisions of the Fund's Declaration of Trust dated
February 24, 1983 (the "Declaration"), and under Massachusetts law.
WHEREAS, the Fund's Board of Trustees (the "Board") has deemed that it is
advisable and in the best interests of the Portfolio and its Shareholders to
liquidate and to dissolve the Portfolio, and the Board, on April 25, 2002,
considered the matter and determined to recommend the termination of the
Portfolio pursuant to this Plan;
NOW, THEREFORE, the liquidation and dissolution of the Portfolio shall be
carried out in the manner hereinafter set forth:
1. Effective Date of Plan. This Plan shall be and become effective only
upon the adoption and approval of the Plan at a meeting of
Shareholders of the Portfolio ("Meeting") called for the purpose of
voting upon the Plan. Approval of the Plan is to be determined by the
vote of a majority of the outstanding shares of the Portfolio which
means an affirmative vote of the lesser of (1) a majority of the
outstanding shares of the Portfolio, or (2) 67% or more of the shares
of the Portfolio represented at the Meeting if more than 50% of the
outstanding shares of the Portfolio are present or represented by
proxy. The date of such adoption and approval of the Plan by
Shareholders is hereinafter called the "Effective Date."
2. Dissolution. As promptly as practicable after the Effective Date,
consistent with the provisions of this Plan, the Portfolio shall be
liquidated and dissolved pursuant to applicable provisions of
Massachusetts law.
3. Cessation of Business. After the Effective Date, the Portfolio shall
not engage in any business activities except for the purpose of
winding up its business and affairs, preserving the value of its
assets and distributing its assets to Shareholders in accordance with
the provisions of this Plan after the payment to (or reservation of
assets for payment to) all creditors of the Portfolio; provided that
the Portfolio shall, prior to the making of the final liquidating
distribution, continue to honor requests for the redemption of shares
and may, as determined to be appropriate by the Board, make payment of
dividends and other distributions to Shareholders and permit the
reinvestment thereof in additional shares.
4. Liquidation of Assets. The Portfolio shall cause the liquidation of
its assets to cash form as is practicable consistent with the terms of
the Plan.
5. Payment of Debts. As soon as practicable after the Effective Date, the
Portfolio shall determine and pay (or reserve sufficient amounts to
pay) the amount of all known or reasonably ascertainable liabilities
of the Portfolio incurred or expected to be incurred prior to the date
of the liquidating distribution provided in Section 6 below.
6. Liquidating Distribution. As soon as practicable after the Effective
Date, and in any event within sixty (60) days thereafter, the
Portfolio will mail the following to each Shareholder of record who
A-1
has not redeemed its shares: (i) a liquidating distribution equal to
the Shareholder's proportionate interest in the remaining assets of
the Portfolio (after the payments and creation of the reserves
contemplated by Section 5 above); and (ii) information concerning the
sources of the liquidating distribution.
7. Expenses of Liquidation and Dissolution. Except as may be otherwise
agreed to between the Portfolio and its investment manager, all
expenses incurred by or allocable to the Portfolio in carrying out
this Plan and dissolving the Portfolio, shall be borne by Morgan
Stanley Investment Advisors Inc.
8. Power of the Board of Trustees. The Board and, subject to the general
direction of the Board, the officers of the Portfolio, shall have
authority to do or authorize any and all acts and things as provided
for in this Plan and any and all such further acts and things as they
may consider necessary or desirable to carry out the purposes of this
Plan, including without limitation, the execution and filing of all
certificates, documents, information returns, tax returns, forms, and
other papers which may be necessary or appropriate to implement this
Plan or which may be required by the provisions of the Investment
Company Act, the Securities Act of 1933, as amended, and applicable
Massachusetts law.
The death, resignation or other disability of any Trustee or any
officer of the Portfolio shall not impair the authority of the
surviving or remaining Trustees or officers to exercise any of the
powers provided for in this Plan.
9. Amendment of the Plan. The Board shall have the authority to authorize
such variations from or amendments to the provisions of this Plan
(other than the terms of the liquidating distribution) as may be
necessary or appropriate to effect the dissolution, complete
liquidation and termination of existence of the Portfolio, and the
distribution of assets to Shareholders in accordance with the purposes
intended to be accomplished by this Plan.
A-2
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
Please detach at perforation before mailing.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
MORGAN STANLEY VARIABLE INVESTMENT SERIES
SPECIAL MEETING OF SHAREHOLDERS OF
CAPITAL GROWTH PORTFOLIO
TO BE HELD ON AUGUST 20, 2002
This Instruction Card is solicited by from owners of variable annuity
contracts and/or variable life insurance policies issued by who have
specified that a portion of their investment be allocated to this Portfolio of
Morgan Stanley Variable Investment Series.
The undersigned contract/policy owner hereby instructs that the votes
attributable to the undersigned's interest with respect to the above-referenced
Portfolio be cast as directed on the reverse side at the Special Meeting of
Shareholders of Morgan Stanley Variable Investment Series-Capital Growth
Portfolio on August 20, 2002 at 10:00 a.m., Eastern time. The undersigned, by
completing this Form, does hereby authorize to exercise its discretion in
voting upon such other business as may properly come before the Meeting.
THIS INSTRUCTION CARD, WHEN PROPERLY EXECUTED, WILL BE VOTED BY IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THE VOTES
ATTRIBUTABLE TO THIS INSTRUCTION CARD WILL BE VOTED FOR THE PROPOSAL LISTED ON
THE REVERSE SIDE. INTERESTS IN THE PORTFOLIO FOR WHICH NO INSTRUCTIONS ARE
RECEIVED WILL BE VOTED BY IN THE SAME PROPORTION AS VOTES FOR WHICH
INSTRUCTIONS ARE RECEIVED FOR THE PORTFOLIO.
CONTROL NUMBER:
NOTE: Please sign exactly as your
name appears on this voting
instructions card. Please mark, sign,
date and mail your voting
instructions card in the enclosed
postage-paid envelope. If joint
owners, each should sign. When
signing as executor, trustee, etc.,
give full title as such.
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Signature (if held jointly)
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Signature
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Date
(Please see reverse side)
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR INSTRUCTION CARD TODAY
Please detach at perforation before mailing.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE FOR THE FOLLOWING PROPOSAL.
TO VOTE, PLEASE COMPLETE AND RETURN THIS CARD.
PLEASE MARK VOTE AS IN THE EXAMPLE USING BLUE OR BLACK INK:
1. Approval of a Plan of Liquidation and Dissolution pursuant to which the
Portfolio's assets will be liquidated, known liabilities satisfied and
remaining proceeds distributed to Shareholders.
FOR _______ AGAINST ________ ABSTAIN ________
YOUR VOTE IS IMPORTANT! PLEASE SIGN, DATE AND RETURN YOUR VOTING
INSTRUCTION CARD TODAY IN THE ENCLOSED ENVELOPE.
, 2002
Dear Contract Owner:
I would like to take this opportunity to inform you of the proposed
closing of the Capital Growth Portfolio (the "Capital Growth Portfolio") of
Morgan Stanley Variable Investment Series and to request your voting
instructions on this matter. As the owner of a variable annuity contract and/or
variable life contract issued by [Insurance Company Name] who has invested in
the Capital Growth Portfolio, you are entitled to provide us with your voting
instructions.
Recently the Board of Trustees of Morgan Stanley Variable Investment
Series voted to recommend the liquidation of the Capital Growth Portfolio since
its net assets have grown to only $110.4 million. The Capital Growth Portfolio
is a relatively small investment portfolio when compared with other investment
portfolios with similar investment objectives. As a result, the annual expense
ratios for the Capital Growth Portfolio have been higher than the ratios of
most similar, but larger, portfolios, and the Capital Growth Portfolio does not
have the investment flexibility that larger funds have.
In order to liquidate the Capital Growth Portfolio, the Fund must obtain
the consent of its Shareholders. Currently the Portfolio's Shareholders are
three insurance companies, including [Insurance Company Name], whose variable
contract owners are invested in the Capital Growth Portfolio. Each insurance
company must give its variable contract owners of record as of the close of
business on June 4, 2002, the right to instruct the insurance company as to the
manner in which shares of the Capital Growth Portfolio attributable to the
owner's variable contract should be voted. If approved by Shareholders, the
liquidation is expected to occur on or about August 23, 2002.
To assist you in giving us your instructions, a Voting Instruction Form is
enclosed that reflects the number of shares of the Capital Growth Portfolio for
which you are entitled to give us voting instructions. In addition, a Notice of
Special Meeting of Shareholders and a proxy statement are enclosed which
describe the matters to be voted on at the Special Meeting of Shareholders.
If you have not transferred your contract value out of the Capital Growth
Portfolio by the date of the liquidation, your contract value invested in
shares of the Capital Growth Portfolio will be automatically transferred to the
variable account that invests in the Money Market Portfolio of Morgan Stanley
Variable Investment Series. From the date of this letter until 30 days after
the date of the liquidation, you will be permitted to make one free transfer of
all contract value that you have invested in the Capital Growth Portfolio to
other variable investment funds available under your contract. Any limitations
on transfers under your contract will not be affected by this free transfer.
YOUR VOTE IS IMPORTANT. Please read the enclosed proxy materials and
complete, date and sign the enclosed voting instruction forms. It is also
important that you consider using your free transfer right to transfer your
contract value out of the Capital Growth Portfolio prior to the date of the
liquidation.
If you have any questions regarding this matter and you are the owner of a
variable annuity contract, please call . Owners of a variable life
contract may call for assistance. We look forward to assisting you in
your insurance and investment needs in 2002 and beyond.
Sincerely,