-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NmFZ3JE+IYoNUy6DDI4mEMAerfVmx69SGmYy/sJ6cpMnjxu+poH6urpu+1P8xqsy /cICv2dgbnf7XxlHvOH2nw== 0000950136-04-000413.txt : 20040213 0000950136-04-000413.hdr.sgml : 20040213 20040213165447 ACCESSION NUMBER: 0000950136-04-000413 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040414 FILED AS OF DATE: 20040213 EFFECTIVENESS DATE: 20040213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY VARIABLE INVESTMENT SERIES CENTRAL INDEX KEY: 0000716716 IRS NUMBER: 133178476 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-03692 FILM NUMBER: 04599980 BUSINESS ADDRESS: STREET 1: C/O MORGAN STANLEY TRUST STREET 2: HARBORSIDE FINANCIAL CENTER, PLAZA TWO CITY: JERSEY CITY STATE: NJ ZIP: 07311 BUSINESS PHONE: (212) 869-6397 MAIL ADDRESS: STREET 1: C/O MORGAN STANLEY TRUST STREET 2: HARBORSIDE FINANCIAL CENTER, PLAZA TWO CITY: JERSEY CITY STATE: NJ ZIP: 07311 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES DATE OF NAME CHANGE: 19980622 FORMER COMPANY: FORMER CONFORMED NAME: DEAN WITTER VARIABLE INVESTMENT SERIES DATE OF NAME CHANGE: 19930209 FORMER COMPANY: FORMER CONFORMED NAME: WITTER DEAN VARIABLE INVESTMENT SERIES DATE OF NAME CHANGE: 19920703 DEF 14A 1 file001.txt DEFINITIVE PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ___) Filed by the Registrant [ ] Filed by a Party other than the Registrant [X] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [X] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 MORGAN STANLEY VARIABLE INVESTMENT SERIES (Name of Registrant as Specified In Its Charter) STUART M. STRAUSS MAYER, BROWN, ROWE & MAW LLP 1675 BROADWAY NEW YORK, NY 10019-5820 (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: MORGAN STANLEY VARIABLE INVESTMENT SERIES PACIFIC GROWTH PORTFOLIO 1221 Avenue of the Americas New York, NY 10020 Toll Free (800) 869-NEWS ------------------------------------------ NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 14, 2004 ------------------------------------------ A Special Meeting of Shareholders of the Pacific Growth Portfolio (the "Portfolio"), a series of MORGAN STANLEY VARIABLE INVESTMENT SERIES (the "Fund"), will be held at 1221 Avenue of the Americas, Room 209, New York, NY on Wednesday, April 14, 2004, (the "Meeting") at 9:00 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 February 3, 2004 are entitled to notice of, and to vote, at the Meeting. If you cannot be present in person, 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, SHELDON WINICOUR Assistant Secretary February 12, 2004 - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- 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 VOTING INSTRUCTIONS ARE IMPORTANT! MORGAN STANLEY VARIABLE INVESTMENT SERIES PACIFIC GROWTH PORTFOLIO 1221 AVENUE OF THE AMERICAS NEW YORK, NY 10020 TOLL FREE (800) 869-NEWS -------------------- PROXY STATEMENT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 14, 2004 -------------------- 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 Pacific Growth Portfolio (the "Portfolio") to be held on Wednesday, April 14, 2004 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 February 19, 2004. 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 February 3, 2004, 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 February 3, 2004, the Record Date, the Portfolio had 6,027,190 Class X shares and 1,971,096 Class Y shares outstanding. The shares of the Portfolio are currently offered exclusively to life insurance companies in connection with particular life insurance and/or annuity contracts they offer. Currently, the following life insurance companies are shareholders: (1) Allstate Life Insurance Company, which also includes accounts formerly held with Northbrook Life Insurance Company ("Allstate") for allocation to certain separate accounts established to fund the benefits under certain flexible premium deferred variable annuity contracts and certain single premium variable life insurance contracts issued by Allstate; (2) Allstate Life Insurance Company of New York ("Allstate NY") for allocation to certain separate accounts established to fund the benefits under certain flexible premium deferred variable annuity contracts issued by Allstate NY; and (3) Paragon Life Insurance Company ("Paragon") for allocation to certain separate accounts established to fund the benefits under certain flexible premium variable life insurance contracts it issues in connection with an employer-sponsored insurance program offered only to certain employees of Morgan Stanley, 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 Allstate and Allstate NY are sometimes referred to as the "Variable Annuity Contracts." The variable life insurance contracts issued by Allstate 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." 2 The address of Allstate is 3100 Sanders Road, M2A, Northbrook, IL 60062. The address of Allstate NY is 100 Motor Parkway, Hauppauge, New York 11788-5107. The address of Paragon is 190 Carondelet Plaza, St. Louis, MO 63105-3433. The table below sets forth the ownership of the shares of the Pacific Growth Portfolio on the Record Date. 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 outstanding.
PERCENTAGE OF PERCENTAGE OF CLASS X CLASS Y NUMBER OF OUTSTANDING NUMBER OF OUTSTANDING SHAREHOLDER CLASS X SHARES SHARES CLASS Y SHARES SHARES - ------------- ---------------- --------------- ---------------- -------------- Allstate 5,518,435 91.56% 1,917,519 97.28% Allstate NY 278,361 4.62% 53,578 2.72% Paragon 230,394 3.82% -- -- ------ ------ Total 100.00% 100.00%
PROXIES In accordance with their view of currently applicable law, Allstate, Allstate NY 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 Allstate, Allstate NY and Paragon will furnish a copy of this Proxy Statement to contractholders and that Allstate, Allstate NY and Paragon will furnish to contractholders one or more instruction cards by which the contractholders may provide their instructions to Allstate, Allstate NY and Paragon. Shares for which no instructions are received in time to be voted will be voted by Allstate, Allstate NY 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 Company Inc., Morgan Stanley DW Inc. and Morgan Stanley Trust, without special compensation PROPOSAL (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 Class X shares of the Portfolio commenced operations on February 23, 1994. Class Y shares of the Portfolio commenced operations on June 5, 2000. Since those dates through December 31, 2003, the Portfolio's net assets have only grown to approximately $32.4 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. 3 At a meeting on January 30, 2004, 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"), a copy of which is attached as Exhibit A. 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 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. 4 THE TRUSTEES OF THE FUND RECOMMEND THAT THE SHAREHOLDERS APPROVE THE PLAN OF LIQUIDATION AND DISSOLUTION TO TERMINATE THE PORTFOLIO. QUORUM AND REQUIRED VOTE The holders of a majority of the shares issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at the Meeting. 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. SHAREHOLDER PROPOSALS The Portfolio does 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 fiscal year ended December 31, 2002 and the succeeding Semi-Annual Report for the six months ended June 30, 2003 have been sent previously to Shareholders and are 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, SHELDON WINICOUR Assistant Secretary 5 EXHIBIT A PLAN OF LIQUIDATION AND DISSOLUTION The following Plan of Liquidation and Dissolution (the "Plan") of the Pacific 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, as amended from time to time (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 January 30, 2004, 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, 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 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 YOUR VOTE IS IMPORTANT PLEASE DETACH AT PERFORATION BEFORE MAILING. - -------------------------------------------------------------------------------- MORGAN STANLEY VARIABLE INVESTMENT SERIES SPECIAL MEETING OF SHAREHOLDERS OF PACIFIC GROWTH PORTFOLIO TO BE HELD ON APRIL 14, 2004 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-Pacific Growth Portfolio to be held in Conference Room 209, 2nd floor, 1221 Avenue of the Americas, New York, New York 10020 on Wednesday, April 14, 2004 at 9:00 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. NOTE: Please sign exactly as your name appears on this voting instruction card. Please mark, sign, date and mail your voting instruction card in the enclosed postage-paid envelope. If joint owners, each should sign. When signing as executor, trustee, etc., give full title as such. _____________________________________ Signature (if held jointly) _____________________________________ Signature Date ________________________ , 2004 (PLEASE SEE REVERSE SIDE) YOUR 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 PROVIDE VOTING INSTRUCTIONS, PLEASE COMPLETE AND RETURN THIS CARD. PLEASE MARK YOUR VOTING INSTRUCTIONS 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. [PARAGON LIFE LOGO] __________, 2004 Dear Contract Owner: We would like to take this opportunity to inform you of the proposed closing of the Pacific Growth Portfolio (the "Pacific Growth Portfolio") of Morgan Stanley Variable Investment Series and to request your voting instructions on this matter. As the owner of a variable life contract issued by Paragon Life Insurance Company who has invested in the Pacific 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 Pacific Growth Portfolio since its net assets have grown to only $32.4 million. As explained in the enclosed Proxy Statement, the Pacific 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 Pacific Growth Portfolio have been higher than the ratios of most similar, but larger, portfolios, and the Pacific Growth Portfolio does not have the investment flexibility that larger funds have. Management does not believe that the Portfolio's assets will grow sufficiently to reduce expenses. In order to liquidate the Pacific Growth Portfolio, the Fund must obtain the consent of its Shareholders. Currently the Portfolio's Shareholders are three insurance companies, including Paragon Life Insurance Company, whose variable contract owners are invested in the Pacific Growth Portfolio. Each insurance company must give its variable contract owners of record as of the close of business on February 3, 2004, the right to instruct the insurance company as to the manner in which shares of the Pacific 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 April 17, 2004. To assist you in giving us your instructions, a Voting Instruction Card is enclosed that reflects the number of shares of the Pacific 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. Please note that if the Pacific Growth Portfolio is liquidated and you have not transferred your contract value out of the Pacific Growth Portfolio by the date of the liquidation, your contract value invested in shares of the Pacific Growth Portfolio will be automatically transferred to the variable account that invests in the Money Market Portfolio of Morgan Stanley Variable Investment Series. Please note that you may make your transfer on our website, www.ParagonLifeService.com, or by calling 1-800-756-0124. 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 Pacific 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 VOTING INSTRUCTIONS ARE IMPORTANT. Please read the enclosed proxy materials and complete, date and sign the enclosed Voting Instruction Card. It is also important that you consider using your free transfer right to transfer your contract value out of the Pacific Growth Portfolio prior to the date of the liquidation. If you have any questions regarding this matter, please call 1-800-756-0124 for assistance. We look forward to assisting you in your insurance and investment needs in 2004 and beyond. Sincerely, Paragon Life Insurance Company 2 [ALLSTATE NY LOGO] ____________, 2004 Dear Contract Owner: We would like to take this opportunity to inform you of the proposed closing of the Pacific Growth Portfolio (the "Pacific 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 issued by Allstate Life Insurance Company of New York who has invested in the Pacific Growth subaccount which, in turn, invests in the Pacific Growth Portfolio, you are entitled to provide us with your voting instructions. Recently the Board of Trustees of Morgan Stanley Variable Investment Series (the "Board") voted to recommend the liquidation of the Pacific Growth Portfolio since its net assets have grown to only $32.4 million. As explained in the enclosed Proxy Statement, the Board concluded that the Pacific Growth Portfolio is a relatively small investment portfolio when compared with other investment portfolios with similar investment objectives. As a result, the Board found that annual expense ratios for the Pacific Growth Portfolio have been higher than the ratios of most similar, but larger, portfolios, and the Pacific Growth Portfolio does not have the investment flexibility that larger funds have. Management does not believe that the Portfolio's assets will grow sufficiently to reduce expenses. In order to liquidate the Pacific Growth Portfolio, the Fund must obtain the consent of its Shareholders. Currently the Portfolio's Shareholders are three insurance companies, including Allstate Life Insurance Company of New York, whose variable contract owners are invested in the Pacific Growth Portfolio. Each insurance company must give its variable contract owners of record as of the close of business on February 3, 2004, the right to instruct the insurance company as to the manner in which shares of the Pacific 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 April 17, 2004. To assist you in giving us your instructions, a Voting Instruction Card is enclosed that reflects the number of shares of the Pacific 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. Please note that if the Pacific Growth Portfolio is liquidated and you have not transferred your invested amount out of the Pacific Growth subaccount by the date of the liquidation, your amount invested in shares of the Pacific Growth subaccount will be automatically transferred to the variable account that invests in the Money Market Portfolio of Morgan Stanley Variable Investment Series. Similarly, unless you instruct us otherwise prior to the date of liquidation, the Money Market subaccount will replace the Pacific Growth subaccount for purposes of automatic additions, dollar cost averaging, systematic withdrawals and automatic portfolio rebalancing. Because we are currently waiving any transfer fees, you will be able to make any transfers of amounts invested in the Pacific Growth subaccount free of charge. For your convenience, we have enclosed a Variable Annuity Fund Transfer Request. Please consult the variable product prospectus and fund prospectus for details about other investment options. If you need a variable product or fund prospectus, please contact us at 1-800-256-9392. If you decide to use the enclosed transfer request form to transfer Contract Value from the Pacific Growth Portfolio to another investment alternative available under your contract, DO NOT mail your request with your completed proxy ballot. Please mail your transfer request to the address listed at the top of the transfer request form. For your convenience, you can also make transfers by telephone or fax your request by using the numbers provided at the top of the transfer form. YOUR VOTING INSTRUCTIONS ARE IMPORTANT. Please read the enclosed proxy materials and complete, date and sign the enclosed Voting Instruction Card. It is also important that you consider using your free right to transfer your contract value out of the Pacific Growth subaccount prior to the date of the liquidation. Please consult the variable product and fund prospectuses for detailed information. If you have any questions regarding this matter, please contact your Financial Advisor to discuss your options or call 1-800-256-9392. We look forward to assisting you in your insurance and investment needs in 2004 and beyond. Sincerely, Allstate Life Insurance Company of New York 2 [ALLSTATE LOGO] ____________, 2004 Dear Contract Owner: We would like to take this opportunity to inform you of the proposed closing of the Pacific Growth Portfolio (the "Pacific 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 issued by Allstate Life Insurance Company who has invested in the Pacific Growth subaccount which, in turn, invests in the Pacific Growth Portfolio, you are entitled to provide us with your voting instructions. Recently the Board of Trustees of Morgan Stanley Variable Investment Series (the "Board") voted to recommend the liquidation of the Pacific Growth Portfolio since its net assets have grown to only $32.4 million. As explained in the enclosed Proxy Statement, the Board concluded that the Pacific Growth Portfolio is a relatively small investment portfolio when compared with other investment portfolios with similar investment objectives. As a result, the Board found that annual expense ratios for the Pacific Growth Portfolio have been higher than the ratios of most similar, but larger, portfolios, and the Pacific Growth Portfolio does not have the investment flexibility that larger funds have. Management does not believe that the Portfolio's assets will grow sufficiently to reduce expenses. In order to liquidate the Pacific Growth Portfolio, the Fund must obtain the consent of its Shareholders. Currently the Portfolio's Shareholders are three insurance companies, including Allstate Life Insurance Company, whose variable contract owners are invested in the Pacific Growth Portfolio. Each insurance company must give its variable contract owners of record as of the close of business on February 3, 2004, the right to instruct the insurance company as to the manner in which shares of the Pacific 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 April 17, 2004. To assist you in giving us your instructions, a Voting Instruction Card is enclosed that reflects the number of shares of the Pacific 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. Please note that if the Pacific Growth Portfolio is liquidated and you have not transferred your invested amount out of the Pacific Growth subaccount by the date of the liquidation, your amount invested in shares of the Pacific Growth subaccount will be automatically transferred to the variable account that invests in the Money Market Portfolio of Morgan Stanley Variable Investment Series. Similarly, unless you instruct us otherwise prior to the date of liquidation, the Money Market subaccount will replace the Pacific Growth subaccount for purposes of automatic additions, dollar cost averaging, systematic withdrawals and automatic portfolio rebalancing. Because we are currently waiving any transfer fees, you will be able to make any transfers of amounts invested in the Pacific Growth subaccount free of charge. For your convenience, we have enclosed a Variable Annuity Fund Transfer Request. Please consult the variable product prospectus and fund prospectus for details about other investment options. If you need a variable product or fund prospectus, please contact us at 1-800-654-2397. If you decide to use the enclosed transfer request form to transfer Contract Value from the Pacific Growth Portfolio to another investment alternative available under your contract, DO NOT mail your request with your completed proxy ballot. Please mail your transfer request to the address listed at the top of the transfer request form. For your convenience, you can also make transfers by telephone or fax your request by using the numbers provided at the top of the transfer form. YOUR VOTING INSTRUCTIONS ARE IMPORTANT. Please read the enclosed proxy materials and complete, date and sign the enclosed Voting Instruction Card. It is also important that you consider using your free right to transfer your contract value out of the Pacific Growth subaccount prior to the date of the liquidation. Please consult the variable product and fund prospectuses for detailed information. If you have any questions regarding this matter, please contact your Financial Advisor to discuss your options or call 1-800-654-2397. We look forward to assisting you in your insurance and investment needs in 2004 and beyond. Sincerely, Allstate Life Insurance Company 2 -----END PRIVACY-ENHANCED MESSAGE-----