<PAGE>
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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
NEW ENGLAND VARIABLE ANNUITY FUND I
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NEW ENGLAND VARIABLE ANNUITY FUND I
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Beneficial interest in Variable Annuity Contracts of New England
Variable Annuity Fund I
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: $125.00 per Registrant
[X] 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:
Notes:
<PAGE>
501 Boylston Street
Boston, MA 02116-3700
617-578-2000
[LOGO APPEARS HERE] NEW ENGLAND ANNUITIES
A Business Unit of The New England
November 28, 1995
TO OWNERS OF NEW ENGLAND VARIABLE ANNUITY FUND I CONTRACTS:
A Special Meeting of Contractholders of New England Variable Annuity Fund I
(the "Fund") will be held on December 28, 1995. You are now being asked how
shares of the Fund deemed attributable to your Contract should be voted at the
Contractholders Meeting.
Enclosed you will find a copy of the Notice of Meeting and Proxy Statement
relating to the Contractholders Meeting. After reviewing this material, please
complete and execute the Proxy/Instruction Form and return it in the enclosed,
postage-paid, self-addressed envelope. Your vote is important. Please return
your Proxy/Instruction Form as quickly as possible.
The enclosed Proxy Statement describes matters affecting the Fund as a result
of The New England's agreement to merge with Metropolitan Life Insurance
Company ("Metropolitan Life"). Upon consummation of the merger, the Fund will
become a separate account of Metropolitan Life. The Contracts issued by the
Fund will thereafter be deemed to be variable annuity contracts issued by
Metropolitan Life, and the insurance obligations under the Contracts will be
backed by the assets of Metropolitan Life. It is possible, however, that in
light of the merger, the Contracts issued by the Fund will be transferred to
New England Variable Life Insurance Company ("NEVLICO") pursuant to a separate
arrangement. NEVLICO is currently a subsidiary of The New England, but will
become a subsidiary of Metropolitan Life as a consequence of the merger. If the
Contracts are transferred to NEVLICO, your Contract will thereafter be deemed
to be a variable annuity contract issued by NEVLICO, and the insurance
obligations under your Contract will be backed by the assets of NEVLICO. In
connection with any such transfer, you will receive more information about the
transaction and how it affects your Contract. In either event, you will receive
more information about the company assuming the insurance obligations under
your Contract.
New England Mutual Life Insurance
Company
<PAGE>
501 Boylston Street
Boston, MA 02116-3700
617-578-2000
[LOGO APPEARS HERE] NEW ENGLAND ANNUITIES
A Business Unit of The New England
November 28, 1995
TO OWNERS OF NEW ENGLAND VARIABLE ANNUITY FUND I CONTRACTS:
A Special Meeting of Contractholders of New England Variable Annuity Fund I
(the "Fund") will be held on Thursday, December 28, 1995. You are now being
asked how shares of the Fund deemed attributable to your Contract should be
voted at the Contractholders Meeting. Under certain circumstances, however,
annuitants have the right to instruct Contractholders as to how all or a
portion of the votes attributable to a Contract are to be cast, and
Contractholders are required to cast such votes as instructed.
IN ORDER FOR THE VOTES UNDER YOUR CONTRACTS TO BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS GIVEN BY YOU AND YOUR ANNUITANTS, YOU MUST RETURN A COMPLETED,
EXECUTED PROXY/INSTRUCTION FORM.
Enclosed you will find a copy of the Notice of Meeting and Proxy Statement
relating to the Contractholders Meeting, as well as voting instruction forms
with the name of the annuitant entitled to instruct the Contractholder.
Please forward promptly (1) one Notice of Meeting and Proxy Statement and (2)
one Proxy/Instruction Form to each person entitled to give voting instructions.
One Proxy/Instruction Form is enclosed for each Contract under which votes are
subject to instruction.
The Proxy/Instruction Form is to be used by each annuitant to convey
instructions to you as Contractholder. FORMS COMPLETED BY YOUR ANNUITANTS
SHOULD NOT BE RETURNED. AFTER YOU HAVE RECEIVED INSTRUCTIONS FROM AN ANNUITANT,
YOU SHOULD TRANSFER THESE INSTRUCTIONS TO THE ANNUITANT LISTING PROVIDED.
RETURN ONLY THE SINGLE PROXY/INSTRUCTION FORM IN YOUR NAME, SIGNED BY YOU,
ALONG WITH THE APPROPRIATELY CHECKED ANNUITANT LIST.
If no annuitants transmit voting instructions, or if the annuitants do not have
the right to instruct, cast all votes at your sole discretion by completing and
signing the Proxy/Instruction Form.
In order to cast votes under the Contracts you must return a PROXY/INSTRUCTION
FORM signed by you, the Contract Owner.
If you have any questions concerning these procedures, please call collect,
Peter Zucker, Consultant, New England Mutual Life Insurance Company (617) 578-
3566.
The enclosed Proxy Statement describes matters affecting the Fund as a result
of The New England's agreement to merge with Metropolitan Life Insurance
Company ("Metropolitan Life"). Upon consummation of the merger, the Fund will
become a separate account of Metropolitan Life. The Contracts issued by the
Fund will thereafter be deemed to be variable annuity contracts issued by
Metropolitan Life, and the insurance obligations under the Contracts will be
backed by the assets of Metropolitan Life. It is possible, however, that in
light of the merger, the Contracts issued by the Fund will be transferred to
New England Variable Life Insurance Company ("NEVLICO") pursuant to a separate
arrangement. NEVLICO is currently a subsidiary of The New England, but will
become a subsidiary of Metropolitan Life as a consequence of the merger. If the
Contracts are transferred to NEVLICO, your Contract will thereafter be deemed
to be a variable annuity contract issued by NEVLICO, and the insurance
obligations under your Contract will be backed by the assets of NEVLICO. In
connection with any such transfer, you will receive more information about the
transaction and how it affects your Contract. In either event, you will receive
more information about the company assuming the insurance obligations under
your Contract.
<PAGE>
NEW ENGLAND VARIABLE ANNUITY FUND I
NOTICE OF SPECIAL MEETING OF CONTRACTHOLDERS
December 28, 1995
Notice is hereby given that a Special Meeting of Contractholders of New
England Variable Annuity Fund I (the "Fund") will be held at the offices of
New England Mutual Life Insurance Company, 501 Boylston Street, Boston,
Massachusetts, on December 28, 1995 at 2:00 p.m. Boston time in conference
room 2, 10th floor, for the following purposes:
1. To approve or disapprove a new investment advisory agreement between
the Fund and Capital Growth Management Limited Partnership to be
effective upon the merger of New England Mutual Life Insurance Company
into Metropolitan Life Insurance Company, such agreement to be in
substance identical to the investment advisory agreement currently in
effect for the Fund.
2. To consider and act upon any other matter incidental to the foregoing
purpose and any other matters that may properly come before the
meeting or any adjournment thereof.
By order of the Chairman of the
Board of Managers,
Marie C. Swift, Secretary
November 21, 1995
- -------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
- -------------------------------------------------------------------------------
PLEASE FILL IN, DATE, SIGN AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED
STAMPED ENVELOPE WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING. YOU MAY
STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE>
NEW ENGLAND VARIABLE ANNUITY FUND I
501 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02116
PROXY STATEMENT
The enclosed Proxy is solicited on behalf of the Board of Managers of New
England Variable Annuity Fund I (the "Fund") for use at a Special Meeting of
Contractholders of the Fund to be held at the offices of New England Mutual
Life Insurance Company ("The New England"), 501 Boylston Street, Boston,
Massachusetts 02116, in conference room 2, 10th floor, on December 28, 1995 at
2:00 p.m. Boston time, and at any adjournment thereof (the "Meeting"). A copy
of the 1994 Annual Report to Contractholders, and the Fund's semiannual report
for the six months ended June 30, 1995, may be obtained without charge from
The New England by writing to the above address or by calling (800) 777-5897.
At any time before it has been exercised, each Proxy may be revoked by the
signers by a written revocation delivered to the Secretary of the Board of
Managers of the Fund (c/o New England Variable Annuity Fund I, 501 Boylston
Street, Boston, Massachusetts 02116), by properly executing a later-dated
proxy or by attending the Meeting, requesting return of any previously
delivered proxy and voting in person.
This Proxy Statement contains information relating to the Merger (the
"Merger") of New England Mutual Life Insurance Company into Metropolitan Life
Insurance Company ("Metropolitan Life"). The Merger is being treated, for
purposes of the Investment Company Act of 1940 (the "1940 Act"), as a change
of control of Capital Growth Management Limited Partnership ("CGM"), which
serves as adviser to the Fund. Under the 1940 Act, a change in control of the
Fund's adviser results in the automatic termination of the Fund's advisory
agreement, effective at the time of the change of control. The Board of
Managers has approved and recommends that the Contractholders approve a new
advisory agreement. This proposed new agreement would be in substance
identical to the advisory agreement currently in effect and would take effect
at the time of the Merger. Under the new agreement, CGM would continue to
perform advisory services for the Fund after the Merger, on the same terms as
are currently in effect.
Proxies will be solicited primarily by mailing this Proxy Statement and its
enclosures beginning on or about November 28, 1995, but supplementary
solicitations may also be made by mail, telephone, telegraph or personal
interview by officers or members of the Board of Managers of the Fund or by
officers, employees or agents of The New England and its subsidiaries. The
entire cost of the solicitation will be borne by The New England, of which the
Fund is a separate account, and by Metropolitan Life.
<PAGE>
VOTING
The Board of Managers of the Fund has fixed October 31, 1995 as the record
date (the "Record Date") for determination of the Contractholders entitled to
receive notice of and to vote at the meeting and of the number of votes to
which such persons are entitled.
Each Contractholder at the close of business on the Record Date is entitled
to cast at the meeting the number of votes attributable to its contract on
such Record Date. The number of votes which the Contractholder is entitled to
cast is shown on the Proxy. The number of votes which a Contractholder may
cast on a contract in the accumulation period is equal to the number of
accumulation units standing to the credit of the contract. During the annuity
period a Contractholder may cast the number of votes equal to (i) the amount
of assets established in the Fund to meet the obligation for future payments
under variable options elected under the contract divided by (ii) the value of
an accumulation unit. (Fractional units are counted.) Based on the foregoing,
there are 3,790,691.951 votes eligible to be cast at the meeting.
Although the Contractholder has the sole right to cast all votes
attributable to its contract, during the accumulation period an annuitant has
the right to instruct the Contractholder as to how such votes shall be cast in
the following circumstances: (i) if the annuitant is covered by a contract
issued in connection with an individual retirement account (involving a trust
or custodial account which meets the requirements of Section 408(a) of the
Internal Revenue Code (the "Code")) or (ii) if the annuitant is an employee
covered by a contract issued in connection with a plan qualified under Section
401(a), 401(k) or 403(a) of the Code, or a retirement plan not qualifying for
favorable Federal tax treatment, then the annuitant may instruct the
Contractholder (a) as to votes attributable to the annuitant's own purchase
payments (voluntary contributions) and (b) to the extent authorized by the
plan, as to any other votes under the contract. Similarly, during the annuity
period, every annuitant or other payee has the right to instruct the
Contractholder with respect to all votes attributable to the amount of assets
established in the Fund to meet the obligations for future payments to such
annuitant or other payee.
If a Contractholder receives instructions from less than all the persons
entitled to instruct it, it is required to cast the votes for which it
receives no instructions in the same proportion as votes for which
instructions have been received. If no instructions are received by the
Contractholder from any person entitled to instruct it, it may vote as it
deems desirable.
In the case of a contract issued pursuant to Section 403(b) of the Code
(annuity purchase plan adopted by a public school system or certain other tax-
exempt organizations) or Section 408(b) of the Code (individual retirement
2
<PAGE>
annuity), the annuitant is the Contractholder for voting and all other
purposes during both the accumulation and annuity periods.
Each annuitant or other payee, if any, having the right to instruct the
Contractholder with respect to any votes is entitled to receive from the
Contractholder a notice of that right and the number of votes to which such
right is applicable. All notices and proxy materials will be provided to the
Contractholders, including such number thereof as are necessary to enable each
Contractholder to distribute copies thereof to all such annuitants and other
payees. Neither the Fund nor The New England shall be under a duty to inquire
as to the instructions received or the authority of any Contractholder to cast
votes. Except to the extent that the Fund or The New England has actual
knowledge to the contrary, the votes cast by the Contractholders shall be
valid and effective as they affect the Fund, The New England and any others
having voting rights with respect to the Fund.
APPROVAL OF NEW ADVISORY AGREEMENT,
TO BE EFFECTIVE AT THE TIME OF THE MERGER
(PROPOSAL 1)
As explained above, the Merger of The New England into Metropolitan Life is
being treated, for purposes of the 1940 Act, as a change of control of CGM,
which serves as adviser to the Fund. The 1940 Act provides that such a change
in control constitutes an "assignment" of the advisory agreement under which
CGM provides advisory services to the Fund. The 1940 Act further provides that
such an "assignment" will result in the automatic termination of that
agreement, at the time of the Merger. Proposal 1 seeks shareholder approval of
a new investment advisory agreement for the Fund, to be effective at the time
of the Merger. The proposed new agreement would be in substance identical to
the agreement currently in effect. THE EFFECT OF PROPOSAL 1 IS TO PERMIT THE
FUND TO CONTINUE TO OPERATE, FOLLOWING THE MERGER, UNDER AN ADVISORY AGREEMENT
SUBSTANTIALLY IDENTICAL TO THAT CURRENTLY IN EFFECT. PROPOSAL 1 WILL NOT
RESULT IN ANY CHANGE IN THE IDENTITY OF THE FIRM OR PERSONNEL PROVIDING
ADVISORY SERVICES TO THE FUND, OR IN THE FEE RATES PAYABLE BY THE FUND. The
Merger is currently expected to occur no earlier than the first calendar
quarter of 1996. The Board of Managers of the Fund unanimously recommends that
Contractholders vote to approve new investment advisory arrangements for the
Fund, to be effective at the time of the Merger.
THE MERGER. In August 1995, The New England and Metropolitan Life entered
into an agreement providing for the Merger of the two companies (the "Merger
Agreement"). Metropolitan Life will be the surviving company following the
Merger. Both The New England and Metropolitan Life are mutual insurance
companies. The Merger will result in the insurance policyholders and
contractholders of The New England (including Contractholders of the Fund)
becoming policyholders and contractholders of Metropolitan Life. The
3
<PAGE>
policyholders and contractholders of The New England will not receive any
other payment, property or consideration in connection with the Merger. It is
also possible that, in light of the Merger, the Contracts issued by the Fund
will be transferred to New England Variable Life Insurance Company ("NEVLICO")
pursuant to a separate arrangement. NEVLICO is currently a subsidiary of The
New England, but will become a subsidiary of Metropolitan Life as a
consequence of the Merger. As of the date of this Proxy Statement, there is no
assurance that any such transfer will occur. In connection with any such
transfer, Contractholders will be provided with more information about the
transaction and how it affects their Contracts.
The Merger will not be effected unless it is approved by the requisite vote
of the policyholders and contractholders of both The New England and
Metropolitan Life. The Merger also requires approval by various government
regulatory agencies. In addition, consummation of the Merger is subject to the
fulfillment of a number of other conditions, although the parties may waive
some or all of these conditions. There is no assurance that the Merger will in
fact be consummated. In addition, because it is impossible to predict with
certainty when the necessary regulatory approvals will be obtained and the
other conditions to the Merger be fulfilled, it is not known with certainty,
as of the date of this Proxy Statement, when the Merger will occur.
CGM is organized as a limited partnership. New England Investment Companies,
L.P. ("NEIC") owns a majority limited partnership interest in CGM. NEIC itself
is also organized as a limited partnership. NEIC's sole general partner, New
England Investment Companies, Inc. ("NEIC Inc."), is a wholly-owned subsidiary
of The New England. The address of NEIC and NEIC Inc. is 399 Boylston Street,
Boston, Massachusetts 02116. As a result of the Merger, NEIC Inc. would become
a direct or indirect wholly-owned subsidiary of Metropolitan Life. The New
England also owns a majority of the outstanding limited partnership interests
in NEIC. The Merger would result in Metropolitan Life becoming the owner
(directly or through a wholly-owned subsidiary) of this limited partnership
interest in NEIC. The Merger Agreement provides that, following the
consummation of the Merger, Metropolitan Life shall have the right to
designate a majority of the board of directors of NEIC Inc.
INFORMATION ABOUT METROPOLITAN LIFE. Metropolitan Life was incorporated
under the laws of New York in 1866 and since 1868 has been engaged in the life
insurance business under its present name. By the early 1900s, it had become
the largest life insurance company in the United States and is currently the
second largest life insurance company in the United States in terms of total
assets. Metropolitan Life's assets as of June 30, 1995 were over $130 billion,
and its adjusted capital as of that date exceeded $8 billion. Subsidiaries of
Metropolitan Life manage over $25 billion of assets for mutual funds,
institutional and other investment advisory clients.
4
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BOARD OF MANAGERS' RECOMMENDATION. The Board of Managers unanimously
recommends that the Contractholders approve a new investment advisory
agreement for the Fund, to be effective at the time of the Merger. This new
agreement will be in substance identical to the agreement currently in effect.
(The only difference will be that the new advisory agreement will be dated the
date of the Merger, whereas the current agreement is dated September 1, 1993.)
The provisions of the current agreement are summarized below under
"Information About The Fund's Investment Adviser."
In coming to the recommendation set forth above, the Board of Managers
reviewed extensive information about the Fund, CGM, NEIC and Metropolitan
Life. The Board of Managers also considered the policies of CGM with respect
to the placing of portfolio transactions for the Fund with brokers or dealers
who furnish brokerage and research services to CGM. (Those policies are
described in this Proxy Statement under "Information About The Fund's
Investment Adviser.")
The Board of Managers noted that, for purposes of the 1940 Act, the Merger
constitutes a change in control of NEIC. The Merger may also constitute a
change in control of CGM, the adviser to the Fund. To avoid any uncertainty
over whether the advisory agreement between the Fund and CGM would be deemed
to terminate with the change of control of NEIC, it is proposed (and the Board
of Managers recommends) that the Contractholders approve a new advisory
agreement, identical in substance to the existing agreement, to be effective
at the time of the Merger.
Although the Merger is being treated as a change in control of NEIC and of
CGM, the Merger is not expected to result in any change in the personnel,
operations or financial condition of NEIC or of CGM. CGM will continue to be
independently managed, as has historically been the case. Thus, the Merger is
not expected to result in any changes in the investment approach or style of
CGM.
The Board of Managers accordingly concluded that it is appropriate and
desirable for the Fund to enter into a new advisory agreement with CGM,
effective at the time of the Merger, in substantially the form of the current
advisory agreement. Under the 1940 Act, approval of the new advisory agreement
requires the approval of the Fund's Contractholders, by vote of the lesser of
(1) 67% of the votes represented at the Meeting, if more than 50% of the votes
are represented at the Meeting, or (2) more than 50% of the outstanding votes.
In order that the Fund may continue to receive investment advisory services
following the Merger, on the same basis as currently, the Board of Managers
unanimously recommends that Contractholders vote in favor of Proposal 1.
If the Contractholders do not approve Proposal 1, the current advisory
agreement relating to the Fund will terminate at the time of the Merger, and
the Board of Managers will consider such alternative actions as are in the
best interest of the Fund.
5
<PAGE>
INFORMATION ABOUT THE FUND'S INVESTMENT ADVISER
ADVISORY AGREEMENT. CGM, One International Place, Boston, Massachusetts,
serves as investment adviser to the Fund under an advisory agreement dated
September 1, 1993. CGM has served as the Fund's investment adviser since March
1, 1990. Prior to March 1, 1990, the Fund was managed by Loomis Sayles &
Company, Incorporated ("Loomis Sayles"), whose Capital Growth Management
Division was reorganized into CGM on that date. The general partner of CGM is
a corporation controlled equally by Robert L. Kemp and G. Kenneth Heebner. CGM
provides discretionary investment management services to mutual funds and
other clients.
CGM, subject to the supervision of the Fund's Board of Managers, manages the
investment and reinvestment of Fund assets. For providing such services, the
Fund pays CGM an annual fee of .3066% of the average net assets of the Fund
(which assets exclude any accrued tax liabilities and reserves for taxes
arising from the income and realized and unrealized capital gains on the
assets of the Fund). This fee is computed on a daily basis and is payable
monthly. During the years ended December 31, 1992, 1993 and 1994, the Fund
paid CGM advisory fees of $191,920, $184,658 and $173,070, respectively.
The advisory agreement was last submitted to a vote of the Contractholders
on August 20, 1993, in connection with a change of control of CGM. The Fund's
Board of Managers approved the continuation of the advisory agreement on
May 31, 1995.
The advisory agreement provides that it shall continue in effect for an
initial term of two years from the date of its execution and thereafter from
year to year so long as its continuance is approved at least annually by (i)
the Board of Managers of the Fund or by the affirmative vote of a majority of
the votes which may be cast by all contractholders (a "majority vote of the
Contractholders") and (ii) by the vote of a majority of the Board of Managers
who are not interested persons of the Fund or of CGM, cast at a meeting called
for that purpose. (A majority vote of the Contractholders for this purpose
means 67% or more of the votes entitled to be cast at a meeting at which
Contractholders entitled to cast more than 50% of the votes entitled to be
cast by all Contractholders are present (in person or by proxy), or more than
50% of the votes entitled to be cast by all Contractholders, whichever is
less.) Any amendment to the advisory agreement must be approved by majority
vote of the Contractholders and by vote of a majority of the Managers who are
not interested persons of the Fund or CGM. The agreement may be terminated
without penalty by the Board of Managers or the Contractholders upon 60 days'
written notice to CGM or by CGM upon 90 days' written notice to the Fund, and
it terminates automatically in the event of its assignment. In addition, the
agreement will automatically terminate if the Fund shall at any time be
required by The New
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England to eliminate all reference to the phrase "New England" in its name,
unless the continuance of the agreement after such change of name is approved
by majority vote of the Contractholders and by a majority of the Managers who
are not interested persons of the Fund or CGM. The agreement also provides
that CGM shall not be subject to any liability in connection with the
performance of its services thereunder in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or
duties.
Certain personnel of CGM who have portfolio management authority with
respect to the Fund also serve as officers, directors or trustees of other
investment companies advised by CGM or of other corporate or fiduciary clients
of CGM or have portfolio management authority with respect to such other
investment companies or clients. Such clients include certain accounts of The
New England and its affiliates ("The New England accounts"). The other
investment companies and clients served by CGM sometimes invest in securities
in which the Fund also invests. If the Fund and such other investment
companies or clients advised by CGM (including The New England accounts)
desire to buy or sell the same portfolio securities at about the same time,
purchases and sales will be allocated to the extent practicable on a pro rata
basis in proportion to the amounts desired to be purchased or sold for each.
It is recognized that in some cases the practices described in this paragraph
could have a detrimental effect on the price or amount of the securities which
the Fund purchases or sells. In other cases, however, it is believed that
these practices may benefit the Fund. It is the opinion of the Board of
Managers that the desirability of retaining CGM as adviser to the Fund
outweighs the disadvantages, if any, which might result from these practices.
PARTNERSHIP AGREEMENT. CGM is a Massachusetts limited partnership organized
on December 7, 1989. Its operations are governed by a Second Amended and
Restated Limited Partnership Agreement, dated as of June 23, 1993 (the "Second
Partnership Agreement").
CGM's sole general partner, Kenbob, Inc. ("Kenbob"), One International
Place, Boston, Massachusetts 02110, is a corporation controlled equally by G.
Kenneth Heebner and Robert L. Kemp. Messrs. Heebner and Kemp are employees of
CGM. Messrs. Heebner and Kemp are the Directors of Kenbob and also serve as
its Chairman and President, respectively. As of September 30, 1995, NEIC owned
a 54% limited partnership interest in CGM. The Second Partnership Agreement
provides for the sale of part of NEIC's interest in CGM to Kenbob in annual
increments.
7
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CERTAIN OTHER MUTUAL FUNDS ADVISED BY CGM. CGM acts as investment adviser to
the following other mutual funds that have similar investment objectives to
the Fund, for compensation at the annual fee rates of the corresponding
average net asset levels of those funds set forth in the table below. The
table also sets forth the net assets of those other funds at September 30,
1995.
<TABLE>
<CAPTION>
NET ASSETS OF
OTHER FUND
(IN MILLIONS) ANNUAL AVERAGE
FUND AT 9/30/95 FEE RATE NET ASSET LEVELS
---- ------------- -------- ----------------
<S> <C> <C> <C>
New England $1,209 0.75% of the first $200 million
Growth Fund 0.70% of the next $300 million
0.65% of amounts in excess of $500 million
New England Ze-
nith $903 0.70% of the first $200 million
Fund--Capital 0.65% of the next $300 million
Growth Series 0.60% of amounts in excess of $500 million
CGM Capital $502 0.75% of the first $200 million
Development 0.70% of the next $300 million
Fund 0.65% of amounts in excess of $500 million
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS. In buying and selling
portfolio securities for the Fund, CGM always seeks the best price and
execution. Transactions in unlisted securities are carried out through brokers
or dealers who make the primary market for such securities unless, in the
judgment of CGM, a more favorable price can be obtained by carrying out such
transactions through other brokers or dealers.
CGM selects only brokers which it believes are financially responsible, will
provide efficient services in executing, clearing and settling the order and
will charge commission rates which, when combined with the quality of the
foregoing services, will produce the best price and execution for the
transaction. This does not necessarily mean that the lowest available
brokerage commissions will be paid. However, the commissions are believed to
be competitive with generally prevailing rates. CGM will use its best efforts
to obtain information as to the general level of commission rates being
charged by the brokerage community from time to time and will evaluate the
overall reasonableness of brokerage commissions paid on transactions by
reference to such data. In making such evaluation, all factors affecting
liquidity and execution of the order, as well as the amount of the capital
commitment by the brokers in connection with the order, are taken into
account. The Fund will not pay a broker a commission at a higher rate than
otherwise available for the same transaction in recognition of the value of
any other services provided by the broker which do not contribute to the best
price and execution of the transaction.
Receipt of research services from brokers may sometimes be a factor in
selecting a broker which CGM believes will provide best price and execution
for a
8
<PAGE>
transaction. These research services include not only a wide variety of
reports on such matters as economic and political developments, industries,
companies, securities, portfolio strategy, account performance, daily prices
of securities, stock and bond market conditions and projections, asset
allocation and portfolio structure, but also meetings with management
representatives of issuers and with other analysts and specialists. Although
it is not possible to assign an exact dollar value to these services, they
may, to the extent used, tend to reduce CGM's expenses. These services may be
used by CGM in managing other client accounts and in some cases may not be
used with respect to the Fund. Receipt of services or products other than
research from brokers is not a factor in the selection of broker.
OTHER MATTERS
Votes cast by proxy or in person at the Meeting will be counted by persons
appointed by the Fund as tellers of the Meeting. With respect to Proposal 1,
abstentions from voting will have the effect of a negative vote on the
proposal.
In the event that sufficient votes in favor of Proposal 1 are not received
by December 28, 1995, the persons named as proxies may vote on those matters
as to which sufficient votes have been received and may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of the voting
interest present in person or by proxy at the session of the Meeting to be
adjourned. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of Proposal 1. They
will vote against any such adjournment those proxies required to be voted
against Proposal 1 and will not vote any proxies that direct them to abstain
from voting on such Proposal.
Although the Meeting is called to transact any other business that may
properly come before it, the only business that the Board of Managers intends
to present or knows that others will present is Proposal 1 mentioned in the
Notice of Special Meeting. However, you are being asked on the enclosed proxy
to authorize the persons named therein to vote in accordance with their
judgment with respect to any additional matters which properly come before the
Meeting, and on all matters incidental to the conduct of the Meeting.
New England Securities Corporation, 399 Boylston Street, Boston,
Massachusetts 02116, is the Fund's principal underwriter.
Contractholder proposals will be included in the Fund's proxy material for
any future meetings of Contractholders of the Fund provided that they are
received by the Fund within a reasonable time before the Fund solicits proxies
relating to such future meetings, and provided that they are otherwise
appropriate for inclusion.
November 21, 1995
9
<PAGE>
Page 1
NEW ENGLAND VARIABLE ANNUITY FUND I
PROXY FOR THE SPECIAL MEETING OF CONTRACTHOLDERS
DECEMBER 28, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF MANAGERS OF THE FUND
THE UNDERSIGNED HEREBY APPOINTS FREDERICK K. ZIMMERMANN, MARIE C. SWIFT AND
ANNE M. GOGGIN, AND EACH OF THEM, WITH POWER OF SUBSTITUTION, OR IF ONLY ONE OF
THEM IS PRESENT AND VOTING THEN THAT ONE, THE PROXIES OF THE UNDERSIGNED, TO
CAST THE NUMBER OF VOTES TO WHICH THE UNDERSIGNED IS ENTITLED AS CONTRACTHOLDER,
AT THE SPECIAL MEETING OF CONTRACTHOLDERS TO BE HELD AT THE OFFICES OF NEW
ENGLAND MUTUAL LIFE INSURANCE COMPANY, 501 BOYLSTON STREET, BOSTON,
MASSACHUSETTS ON DECEMBER 28, 1995, AT 2:00 P.M. AND AT ANY ADJOURNMENT THEREOF.
THE PROXIES ARE HEREBY AUTHORIZED AND INSTRUCTED AS SET FORTH TO VOTE UPON
THE MATTER SPECIFIED. THE PROXIES MAY VOTE IN THEIR DISCRETION ON ANY OTHER
MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING. IF THIS FORM IS SIGNED AND
RETURNED WITH NO CHOICES INDICATED SUCH SHARES SHALL BE VOTED FOR SUCH PROPOSAL.
(THE BOARD OF MANAGERS HAS RECOMMENDED A VOTE "FOR" THE FOLLOWING PROPOSAL)
1. Proposal to approve a new investment advisory agreement between the Fund and
Capital Growth Management Limited Partnership to be effective upon the merger
of New England Mutual Life Insurance Company into Metropolitan Life Insurance
Company, such agreement be in substance identical to the investment advisory
agreement currently in effect for the Fund.
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY/INSTRUCTION FORM WILL BE VOTED AS DIRECTED.
IF NO CHOICE IS INDICATED AS TO THE PROPOSAL, IT WILL BE VOTED FOR SUCH
PROPOSAL.
PERSONAL IDENTIFICATION
NUMBER
DATED____________________________________________, 1995
-------------------------------------------------------
(Signature)
-------------------------------------------------------
(Signature if jointly held)
Title _________________________________________________
Please sign exactly as name appears hereon. In case of
Joint Life Annuities both joint annuitants must sign.
When signing as "Trustee" or "Executor" please give
full title as such.
YOUR VOTE IS IMPORTANT. PLEASE VOTE AS SOON AS POSSIBLE.
<PAGE>
Page 1
NEW ENGLAND VARIABLE ANNUITY FUND I
PROXY FOR THE SPECIAL MEETING OF CONTRACTHOLDERS
DECEMBER 28, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF MANAGERS OF THE FUND
THE UNDERSIGNED HEREBY APPOINTS FREDERICK K. ZIMMERMANN, MARIE C. SWIFT AND
ANNE M. GOGGIN, AND EACH OF THEM, WITH POWER OF SUBSTITUTION, OR IF ONLY ONE OF
THEM IS PRESENT AND VOTING THEN THAT ONE, THE PROXIES OF THE UNDERSIGNED, TO
CAST THE NUMBER OF VOTES TO WHICH THE UNDERSIGNED IS ENTITLED AS CONTRACTHOLDER,
AT THE SPECIAL MEETING OF CONTRACTHOLDERS TO BE HELD AT THE OFFICES OF NEW
ENGLAND MUTUAL LIFE INSURANCE COMPANY, 501 BOYLSTON STREET, BOSTON,
MASSACHUSETTS ON DECEMBER 28, 1995, AT 2:00 P.M. AND AT ANY ADJOURNMENT THEREOF.
THE PROXIES ARE HEREBY AUTHORIZED AND INSTRUCTED AS SET FORTH TO VOTE UPON
THE MATTER SPECIFIED. THE PROXIES MAY VOTE IN THEIR DISCRETION ON ANY OTHER
MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING. IF THIS FORM IS SIGNED AND
RETURNED WITH NO CHOICES INDICATED SUCH SHARES SHALL BE VOTED FOR SUCH PROPOSAL.
(THE BOARD OF MANAGERS HAS RECOMMENDED A VOTE "FOR" THE FOLLOWING PROPOSAL)
1. Proposal to approve a new investment advisory agreement between the Fund and
Capital Growth Management Limited Partnership to be effective upon the merger
of New England Mutual Life Insurance Company into Metropolitan Life Insurance
Company, such agreement be in substance identical to the investment advisory
agreement currently in effect for the Fund.
/ / FOR / / AGAINST / / ABSTAIN
THIS PROXY/INSTRUCTION FORM WILL BE VOTED AS DIRECTED.
IF NO CHOICE IS INDICATED AS TO THE PROPOSAL, IT WILL BE VOTED FOR SUCH
PROPOSAL.
- --------------------------------------------------------------------------------
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE SEE THE INSTRUCTIONS BELOW.
- --------------------------------------------------------------------------------
PERSONAL IDENTIFICATION
NUMBER
DATED __________________________________________, 1995
------------------------------------------------------
(Signature)
------------------------------------------------------
(Signature if jointly held)
Title ________________________________________________
Please sign exactly as name appears hereon. In case of
Joint Life Annuities both joint annuitants must sign
When signing as "Trustee" or "Executor" please give
full title as such.
YOUR VOTE IS IMPORTANT. PLEASE VOTE AS SOON AS POSSIBLE.
- --------------------------------------------------------------------------------
PLEASE DETACH THE ABOVE AND RETURN IN ENVELOPE PROVIDED
<PAGE>
Page 2
TELEPHONE VOTING INSTRUCTIONS
Dear Contractholder:
Your vote is important. We have provided an automated telephone voting option
which you may access 24 hours a day by dialing 800-842-7629 on a touch tone
telephone and keying in your PERSONAL IDENTIFICATION NUMBER.
HOWEVER, IF YOU WISH TO VOTE IN FAVOR OF SOME PROPOSALS AND AGAINST OR ABSTAIN
ON OTHERS, YOU MUST DO SO BY SIGNING THE ENCLOSED INSTRUCTION FORM AND RETURNING
IT IN THE ENVELOPE PROVIDED.
After dialing 800-842-7629, you will hear the following instructions:
Please enter your 7-digit Personal identification number shown above your
name.
Press 1 to vote for all items as recommended by the Board of Managers or
press 9 if you wish to vote against all the Board of Managers'
recommendations.
Once this is completed, the telephone voting option will automatically hang up
and your vote will be cast as you directed. THERE IS NO NEED FOR YOU TO MAIL
BACK YOUR INSTRUCTION FORM.
Thank you for voting.
* * * PLEASE SEE REVERSE SIDE * * *
