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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
New England Variable Annuity Fund I
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New England Variable Annuity Fund I
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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NEW ENGLAND VARIABLE ANNUITY FUND I
NOTICE OF SPECIAL MEETING OF CONTRACTHOLDERS
October 30, 2000
To the Contractholders:
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 Life Insurance Company ("New England Financial"), 501 Boylston
Street, Boston, Massachusetts 02116, on October 30, 2000 at (Boston time)
for the following purposes:
1. To approve a new investment advisory agreement between Capital Growth
Management Limited Partnership and the Fund.
2. To fix the number of members of the Board of Managers at eight
members.
3. To elect a Board of Managers.
4. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
By order of the President,
Thomas M. Lenz, Secretary
September , 2000
YOUR VOTE IS IMPORTANT
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED INSTRUCTION FORM PROMPTLY
IN THE ENCLOSED POSTAGE-PAID 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 the Special Meeting of
Contractholders of the Fund called to be held at the offices of New England
Life Insurance Company ("New England Financial"), 501 Boylston Street, Boston,
Massachusetts 02116 on October 30, 2000 at (Boston time) and at any
adjournment or adjournments thereof (the "Meeting"). The Fund is a separate
account of Metropolitan Life Insurance Company ("MetLife").
This statement and its enclosures are being mailed to Contractholders
beginning on or about September , 2000. A copy of the 1999 Annual Report to
Contractholders and the Fund's semiannual report for the six months ended June
30, 2000 may be obtained without charge from New England Financial by writing
to the above address or by calling (800) 356-5015.
This Proxy Statement consists of three parts.
Part I contains information relating to Proposal 1, the proposal to approve
a new investment advisory agreement between Capital Growth Management Limited
Partnership ("CGM") and the Fund (the "New Agreement").
Part II contains information relating to Proposals 2 and 3, the election of
the members of the Board of Managers of the Fund (the "Managers").
Part III contains information about the Fund and other matters.
Each timely, properly executed proxy will be voted as you instruct. If no
choice is indicated, the proxy will be voted in favor of the proposals set
forth in the attached Notice of Meeting. At any time before it has been voted,
the enclosed proxy may be revoked by the signer by a written revocation
received by 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 the proxy and voting in person.
Proxies will be solicited primarily by mailing this Proxy Statement and its
enclosures beginning on or about September , 2000, but supplementary
solicitations may also be made by personal interview, mail, telephone and
telegraph by officers or Managers of the Fund or by officers, employees or
agents of New
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England Financial, which supplies administrative services to the Fund, and its
subsidiaries. The entire cost of the solicitation will be borne by Nvest
Companies, L.P. ("Nvest")
VOTING
The Board of Managers of the Fund has fixed the close of business on August
31, 2000 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 that 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 [ ] votes eligible to be cast by Contractholders at the meeting.
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 any persons who have the right to instruct such
Contractholder with respect to votes attributable to such Contractholder's
contract. Neither the Fund, New England Financial nor MetLife shall be under a
duty to inquire as to (1) the receipt by a Contractholder of instructions from
persons, if any, who may have the right to instruct the Contractholder with
respect to votes attributable to the Contractholder's contract, (2) the
validity or effect of any voting instructions received by a Contractholder or
(3) the authority of the Contractholder to cast votes. Except to the extent
that the Fund, New England Financial or MetLife has actual knowledge to the
contrary, the votes cast by the Contractholders shall be valid and effective as
they affect the Fund, New England Financial, MetLife and any others having
voting rights with respect to the Fund.
I. THE NEW AGREEMENT (PROPOSAL 1)
The reason the Managers are proposing the New Agreement for the Fund is that
the current advisory agreement of the Fund (the "Current Agreement") will
terminate when CGM's parent company, Nvest, is acquired by a new parent
company, CDC Asset Management ("CDC AM"). (A federal law, the Investment
Company Act of 1940 (the "Investment Company Act"), provides generally that
3
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the advisory agreements of mutual funds, including advisory agreements such as
the Current Agreement, automatically terminate when the investment adviser
(including CGM) or its parent company undergo a significant change of
ownership.) The Managers have carefully considered the matter, and have
concluded that it is appropriate to enter into the New Agreement, so that CGM
can continue to manage the Fund on the same terms as are now in effect,
following the acquisition of Nvest by CDC AM.
The acquisition of Nvest by CDC AM will occur only if various conditions are
satisfied (or waived by the parties, if permitted by law). These conditions
include, among others, certain government approvals of the acquisition and
approval of the acquisition by vote of the unit holders of Nvest and Nvest,
L.P. ("Nvest, L.P."), Nvest's advising general partner. Nvest currently expects
that the acquisition will occur during the fourth calendar quarter of 2000, but
the acquisition could be delayed. If the acquisition does not occur, the New
Agreement would not be needed because the automatic termination of the Current
Agreement would not occur.
No change in the advisory fee rate paid by the Fund to CGM is being proposed.
Description of the New Agreement
The New Agreement is identical to the Current Agreement, except that the New
Agreement will be dated as of the date that CDC AM acquires Nvest. The Current
Agreement was most recently approved by the Managers at meetings on June 17,
1999 and June 15, 2000, and was most recently submitted for Contractholder
approval [at a meeting held of December 28, 1995. The Current Agreement was
submitted at that time to approve its continuance following a change in control
of New England Financial's former parent company, New England Mutual Life
Insurance Company (which also controlled Nvest), with and into MetLife, with
MetLife as the surviving company, which merger was consummated on August 30,
1996].
The advisory fee rate under the New Agreement--which is the same as the
advisory fee rate under the Current Agreement--is .0084% daily (.3066% on an
annual basis) of the current value of the total net assets of the Fund, payable
monthly in arrears or at such other intervals, not less frequently than
quarterly, as the Board of Managers may from time to time determine and specify
in writing to CGM. Appendix A to this Proxy Statement contains the form of the
New Agreement, which is the same as the Current Agreement, except for the date.
The next several paragraphs briefly summarize some important provisions of the
New Agreement, but for a complete understanding of this agreement you should
read Appendix A.
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Under the New Agreement, CGM has overall advisory and administrative
responsibility for the Fund.
The New Agreement provides that it will continue in effect until August 30,
2001 (beginning on the date CDC AM acquires Nvest). After that, it will
continue in effect from year to year as long as the continuation is approved at
least annually (i) by the Managers or by vote of a majority of the outstanding
voting securities of the Fund, and (ii) by vote of a majority of the Managers
who are not "interested persons," as that term is defined in the Investment
Company Act, of the Fund or any investment adviser to the Fund. These Managers
who are not "interested persons" are referred to below as the "Independent
Managers."
The New Agreement may be terminated without penalty (i) by vote of the
Managers or by vote of a majority of the votes which may be cast by all of the
Contractholders, on sixty days' written notice to CGM, or (ii) by CGM, upon
ninety days' written notice to the Fund, and each terminates automatically in
the event of its "assignment" as defined in the Investment Company Act. The
Investment Company Act defines "assignment" to include, in general,
transactions in which a significant change in the ownership of an investment
adviser, including CGM, or its parent company occur (such as the acquisition of
Nvest by CDC AM).
In addition, the New Agreement will automatically terminate if New England
Financial requires the Fund to eliminate all references to the words "New
England," unless the continuance of such New Agreement after such change is
approved by the affirmative vote of the lesser of (1) Contractholders who hold
67 percent or more of all the votes which may be cast by such Contractholders
as are present (in person or by proxy) and entitled to vote at such meeting,
provided that Contractholders holding more than 50 percent of all votes of the
Fund entitled to be cast at such meeting are present (in person or by proxy),
or (2) the holders of more than 50 percent of all votes which may be cast by
all Contractholders of the Fund entitled to vote at such meeting.
The New Agreement provides that CGM will not be liable to the Fund or the
Contractholders, except for liability arising from CGM's willful misfeasance,
bad faith, gross negligence or reckless disregard of duty.
Basis for the Managers' Recommendation
The Managers determined at a meeting held on August 3, 2000 to recommend that
the Contractholders vote to approve the New Agreement.
In coming to this recommendation, the Managers considered a wide range of
information of the type they regularly consider when determining whether to
5
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continue the Fund's advisory agreement as in effect from year to year. The
Managers considered information about, among other things:
. CGM and its personnel (including particularly those personnel with
responsibilities for providing services to the Fund), resources and
investment process;
. the terms of the advisory agreement (in this case, the New Agreement);
. the scope and quality of the services that CGM has been providing to
the Fund;
. the investment performance of the Fund and of similar funds advised or
subadvised by other advisers;
. the advisory fee rates payable to CGM by the Fund and by similar funds
managed or subadvised by CGM, and payable by similar funds managed by
other advisers. During the year ended December 31, 1999, the Fund paid
CGM advisory fees of $229,509 (Appendix B to this Proxy Statement
contains information comparing CGM's advisory or subadvisory fee
schedule to the fee schedule for other funds managed or subadvised CGM
that have investment objectives similar to those of the Fund);
. the total expense ratios of the Fund and of similar funds managed by
other advisers;
. CGM's practices regarding the selection and compensation of brokers
and dealers that execute portfolio transactions for the Fund, and the
brokers' and dealers' provision of brokerage and research services to
CGM (see "Certain Brokerage Matters" below for more information about
these matters); and
. compensation payable by the Fund to affiliates of CGM for other
services. During the year ended December 31, 1999, there was no such
compensation.
In addition to reviewing these kinds of information, which the Managers
regularly consider on an annual or more frequent basis, the Managers gave
particular consideration to matters relating to the possible effects on CGM and
the Fund of the acquisition of Nvest by CDC AM. Among other things, the
Managers considered:
. the stated intention of Nvest and CDC AM that CGM will continue to
have a high degree of managerial autonomy from their parent
organizations and from other subsidiaries of Nvest;
. the stated intention of Nvest, CDC AM and CGM that the acquisition not
change the investment approach or process used by CGM in managing the
Fund;
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. representations of senior executives of CGM and the portfolio managers
of the Fund that they have no intention of terminating their
employment with CGM as a result of CDC AM's acquisition of Nvest, and
representations of CGM, Nvest and CDC AM that they have no intention
of terminating the employment of these executives or portfolio
managers as a result of the acquisition;
. certain actions taken by CDC AM, Nvest and CGM to help retain and
incent key personnel of Nvest and CGM; and
. the general reputation and the financial resources of CDC AM and its
parent organizations.
In addition, the Managers considered that the agreement relating to the
acquisition of Nvest by CDC AM provides that CDC AM and its immediate parent
company will (subject to certain qualifications) use their reasonable best
efforts to assure compliance with Section 15(f) of the Investment Company Act.
Section 15(f) provides that a mutual fund investment adviser (including CGM) or
its affiliates can receive benefit or compensation in connection with a change
of control of the investment adviser (such as CDC AM's acquisition of CGM's
parent, Nvest) if two conditions are satisfied.
First, for three years after the change of control, at least 75% of the
members of the board of any registered investment company advised by the
adviser must consist of persons who are not "interested persons," as defined in
the Investment Company Act, of the adviser. If the acquisition of Nvest by CDC
AM is completed before January 1, 2001, the 75% test of Section 15(f) will be
satisfied upon the resignations of Anne M. Goggin and Mary Ann Brown, two
Managers who are interested persons of the Fund, simultaneously with the
acquisition. On January 1, 2001, Edward A. Benjamin will become an Independent
Manager, as discussed in Part II below, and Mses. Goggin and Brown will then be
able to rejoin the Board (either pursuant to the Contractholder vote as
described in Proposal 3 or upon resolution by the then-current Managers)
without violating the 75% test in Section 15(f) of the Investment Company Act.
Alternatively, if CDC AM's acquisition of Nvest occurs on or after January 1,
2001, the composition of the Managers at the time of the acquisition will
satisfy the 75% test, and therefore no resignations will be necessary. A more
complete description of the potential upcoming resignations of Mses. Goggin and
Brown, and the nominations and proposed election of all the Managers, is set
forth in Part II of this Proxy Statement.
Second, no "unfair burden" may be imposed on any such registered investment
company as a result of the change of control transaction or any express or
implied terms, conditions or understandings applicable to the transaction.
"Unfair burden" means any arrangement, during the two years after the
transaction, by which the investment adviser or any "interested person" of the
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adviser receives or is entitled to receive any compensation, directly or
indirectly, from such investment company or its security holders (other than
fees for bona fide investment advisory or other services) or from any other
person in connection with the purchase or sale of securities or other property
to, from or on behalf of such investment company.
After carefully considering the information summarized above, the Managers,
including the Independent Managers, unanimously voted to approve the New
Agreement and to recommend that the Contractholders vote to approve the New
Agreement.
Information About the Ownership of CGM, Nvest and the CDC AM/Nvest Transaction
CGM. CGM is a limited partnership whose sole general partner, Kenbob, Inc.,
is a corporation owned in equal shares by Robert L. Kemp and G. Kenneth
Heebner. Mr. Kemp and Mr. Heebner are the principal executive officers of CGM,
and their principal occupations are their positions with CGM. The address of
CGM, Kenbob, Inc. and Messrs. Kemp and Heebner is One International Place,
Boston Massachusetts, 02110. Nvest owns a majority limited partnership interest
in CGM. As of June 30, 2000, CGM had assets under management of approximately
$7.2 billion.
Nvest. Nvest's managing general partner, Nvest Corporation, is a direct
wholly-owned subsidiary of MetLife New England Holdings, Inc. MetLife New
England Holdings, Inc. is a direct wholly-owned subsidiary of Metropolitan Life
Insurance Company ("MetLife"). Nvest Corporation is also the sole general
partner of Nvest, L.P. Nvest, L.P., Nvest's advising general partner, is a
publicly traded company listed on the New York Stock Exchange. In addition to
owning Nvest Corporation, MetLife owns, directly or indirectly, approximately a
48% limited partnership interest in Nvest. Nvest, L.P. owns approximately 14%
of Nvest. (These percentages do not reflect the vesting and exercise, described
below, of various options held by personnel of Nvest and of its affiliates,
including CGM, to acquire limited partnership units of Nvest, L.P.) If the
proposed acquisition is completed, Nvest Corporation will cease to be the
managing general partner of Nvest and the general partner of Nvest, L.P., and
MetLife will cease to own any partnership interest in Nvest. MetLife is a
wholly-owned subsidiary of MetLife, Inc., a publicly traded company listed on
the New York Stock Exchange. The address of Nvest, Nvest Corporation and Nvest,
L.P. is 399 Boylston Street, Boston, Massachusetts 02116. The address of
MetLife New England Holdings, Inc., MetLife and MetLife, Inc. is One Madison
Avenue, New York, New York 10010.
The Transaction. On June 16, 2000, Nvest and CDC AM announced that they and
certain of their respective affiliated companies had entered into an
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Agreement and Plan of Merger (the "Merger Agreement"). Under the Merger
Agreement, CDC AM would acquire all of the outstanding units of partnership
interest in both Nvest and Nvest, L.P., at a price of $40 per unit. This price
is subject to reduction (but not below $34 per unit) based in part on a formula
that takes into account the investment advisory fees payable to CGM and other
Nvest affiliates by their mutual fund and other investment advisory clients
that have consented to the transaction. Assuming a transaction price of $40 per
unit, and the number of units and options outstanding as of June 30, 2000, the
aggregate price payable by CDC AM to acquire all of the units of Nvest will be
approximately $1.5 billion, and the aggregate price payable by CDC AM to
acquire all of the units of Nvest, L.P. (including payments with respect to
units subject to options) will be approximately $375 million.
The transaction will not occur unless various conditions are satisfied (or
waived by the parties, if permitted by law). One of these conditions is
obtaining approval or consent from investment advisory clients of CGM and other
Nvest affiliates (including mutual fund clients) whose advisory fees represent
a specified percentage of the total advisory fee revenues of the Nvest
organization. Because of this condition, approval or disapproval by the
Contractholders of the New Agreement, taken together with other clients'
consents or approvals, could affect whether or not the transaction occurs. The
transaction will result in the automatic termination of the Current Agreement.
If for some reason the transaction does not occur, the automatic termination of
the Current Agreement will not occur, and the New Agreement will not be entered
into, even if it has been approved by the Contractholders.
As a result of the acquisition, Nvest and Nvest, L.P. would become indirect
wholly-owned subsidiaries of CDC AM, which in turn is 60% owned by CDC Finance,
a wholly-owned subsidiary of Caisse des depots et Consignations ("CDC").
Founded in 1816, CDC is a major diversified financial institution with a strong
global presence in the banking, insurance, investment banking, asset management
and global custody industries. In addition to its 60% ownership of CDC AM
through CDC Finance, CDC owns 40% of CNP Assurances, the leading French
insurance company, which itself owns 20% of CDC AM. CDC also owns 35% of Caisse
National des Caisses d'Epargne, which also owns 20% of CDC AM. CDC is 100%
owned by the French state. The main place of business of CDC AM is 7, place des
Cinq Martyrs du Lycee Buffon, 75015 Paris, France. The registered address of
CDC Finance is 56, rue de Lille, 75007 Paris, France. The registered address of
CDC is 56, rue de Lille, 75007 Paris, France. The registered address of CNP
Assurances is 4, place Raoul Dautry, 75015 Paris, France. The registered
address of Caisse National des Caisses d'Epargne is 5, rue Masseran, 75007
Paris, France. Following the acquisition, it is expected that Nvest will be
renamed CDC Asset Management-North America.
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Various personnel of Nvest and of its affiliates, including CGM, have
previously been granted options to purchase limited partnership units of Nvest,
L.P. ("Nvest L.P. Units"). The Merger Agreement provides that these options
will vest and become fully exercisable immediately before CDC AM's acquisition
of Nvest and Nvest, L.P., even though some of these options would not otherwise
have vested or been exercisable at that time. Each option will be converted
into the right to receive cash from Nvest in an amount equal to the difference
between the option's exercise price and the transaction price of $40 per unit
(subject to reduction, but not below $34 per unit, as explained above).
Certain Brokerage Matters
In their consideration of the New Agreement, the Managers took account of
CGM's practices regarding the selection and compensation of brokers and dealers
that execute portfolio transactions for the Fund, and the brokers' and dealers'
provision of brokerage and research services to CGM. CGM has informed the
Managers that it does not expect to change these practices as a result of CDC
AM's acquisition of Nvest. A summary of these practices for CGM is set forth in
Appendix C.
The Managers recommend that the Contractholders vote to approve the New
Agreement.
Required Vote. The required vote for approval the New Agreement is the lesser
of (1) 67% of the voting interests of the Fund represented at the Meeting, if
more than 50% of the outstanding voting interests of the Fund are represented
at the Meeting, or (2) more than 50% of the outstanding voting interests of the
Fund. If the Proposal is not approved by the Fund, the Manager's will consider
what actions may be in the best interests of the Contractholders.
II. ELECTION OF MANAGERS (PROPOSALS 2 and 3)
The Rules and Regulations of the Fund provide that the number of members of
the Board shall be fixed by the Contractholders at any number not less than
three nor more than 15. The Board recommends that the size of the Board be
fixed at eight members and it is proposed that eight persons be elected as
Board of Managers of the Fund, effective as of January 1, 2001. All the
nominees are currently Managers, although, as described in detail below, Mses.
Goggin and Brown intend to resign from office simultaneously with the
acquisition of Nvest by CDC AM, unless the acquisition occurs on or after
January 1, 2001 (in which case Mses. Brown and Goggin will not resign). The
nominees, their ages at July 30, 2000 and their principal occupations and
directorships during the past five years are listed below; similar prior
positions within the same company (or with corporate predecessors and
affiliates) are omitted.
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<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupations for Last Five Years
--------------- --- ------------------------------------------------------
<C> <C> <S>
John J. Arena 63 Manager of the Fund since 1996; formerly, Vice
Chairman of the Board of Directors of Bay Banks, Inc.
and President, Bay Banks Investment Management
Edward A. Benjamin* 62 Manager of the Fund since 1999; Director, Precision
Optics Corporation (optics manufacturer); formerly,
Partner, Ropes & Gray (law firm) until 1999;
Mary Ann Brown* 48 Manager of the Fund since 1999; President, New England
Products and Services, New England Financial; Head of
Individual Business Product Management, MetLife;
Chairman, Security First Group; Director, Chairman,
Chief Executive Officer and President, New England
Pension and Annuity Company; Senior Vice President,
New England Life Holdings, Inc.; formerly, President
and Chief Executive Officer, Atlantic International
Reinsurance Company; formerly, Director, SRNM Swiss
Reinsurance Company, 1996-1998; formerly, Principal,
Tillinghast/Towers Perrin (consulting) until 1996
John W. Flynn 61 Manager of the Fund since 1996; formerly, Vice
Chairman, Chief Financial Officer, Fleet Financial
Group (banking)
Anne M. Goggin* 51 Manager of the Fund since 1995; Chairman of the Board
and President of the Fund; Senior Vice President and
General Counsel, New England Financial; Chief
Counsel--Individual Business, MetLife; Director,
Chairman and President, New England Investment
Management, Inc.; Director, New England Securities
Corporation; Director, New England Pension and Annuity
Company; Senior Vice President, New England Life
Holdings, Inc.
Nancy Hawthorne 49 Manager of the Fund since 1995; Chairman of the Board,
WorldClinic (a distance medicine company); Director,
Perini Corporation (construction); Director, Avid
Technologies (computer software company); Director,
CGU (property and casualty insurance company);
formerly, Chief Executive Officer and Managing
Partner, Hawthorne, Krauss and Associates (corporate
financial advisor); formerly, Chief Financial Officer
and Executive Vice President, Continental Cablevision,
subsequently renamed MediaOne (a cable television
company)
John T. Ludes 64 Manager of the Fund since 1996; formerly, Vice
Chairman, President and Chief Operating Officer,
American Brands (global conglomerate); formerly,
President and CEO, Acushnet Company (athletic
equipment)
Dale R. Marshall 63 Manager of the Fund since 1995; President, Wheaton
College; formerly, Academic Dean, Wellesley College
</TABLE>
-----------
* Mr. Benjamin is an "interested person" of the Fund, as defined in the
Investment Company Act, because until December 1998 he was a partner of Ropes
& Gray, a law firm that acted as counsel to the Fund and certain of its
affiliated companies. He will continue to be classified as an "interested
person" of the Fund until December 31, 2000. Mr. Benjamin receives the same
remuneration from the Fund as is received by the Managers who are not
"interested persons" of the Fund. Mses. Goggin and Brown are considered
11
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"interested persons" of the Fund due to their positions with New England
Financial, and, in the case of Ms. Goggin, with the Fund. Mses. Brown and
Goggin do not receive remuneration from the Fund for their service as
Managers.
Anticipated Resignations from the Board
Part I of the Proxy Statement describes in detail the acquisition of Nvest by
CDC AM, which will occur only if certain conditions are satisfied by Nvest and
CDC AM. As discussed in Part I, Nvest has a substantial ownership interest in
CGM. The proposed acquisition of Nvest by CDC AM will result in a change in
ownership of several investment advisory businesses. The Investment Company Act
provides that a mutual fund investment adviser (including CGM) or its
affiliates can receive benefit or compensation in connection with a change of
control of the investment adviser (such as CDC AM's acquisition of CGM's
parent, Nvest) if certain conditions are satisfied. One of those conditions
relates to the composition of the board of such mutual funds, and in this case,
to the Managers.
In order for CGM, MetLife, and each other person selling his, her or its
interest in Nvest to CDC AM to receive benefit or compensation in connection
with the acquisition of Nvest by CDC AM, at least 75% of the Managers must
consist of persons who are not "interested persons," as defined in the
Investment Company Act, of CGM. This condition will be satisfied upon the
resignations of Mses. Goggin and Brown, two Managers who are interested persons
of Nvest and CGM, simultaneously with the acquisition of Nvest by CDC AM. After
these resignations, the Managers will consist of 6 persons, five of whom (or
83.3%) are not "interested persons" of Nvest and CGM. Mr. Benjamin will be an
"interested person" of Nvest and CGM until January 1, 2001 because until
December 1998 he was a partner of Ropes & Gray, a law firm that acted as
counsel to Nvest (as well as to the Fund) and certain of Nvest's affiliated
companies.
On January 1, 2001, when Mr. Benjamin becomes an Independent Manager (and is
no longer an "interested person" of Nvest or CGM), all six Managers will be
Independent Managers. At that time, if Contractholders approve these Proposals
2 and 3, Mses. Goggin and Brown will be re-elected to the Board, as will all
the current Managers, pursuant to the vote recommended below. Mses. Goggin and
Brown will be able to rejoin the Board without violating the 75% test in
Section 15(f) of the Investment Company Act because after they rejoin the
Board, 6 of 8 (or 75%) of the Managers will not be "interested persons" of
Nvest or CGM. If the Contractholders do not approve Proposals 2 and 3, the six
Independent Managers may, and have the current intention to, appoint Mses.
Goggin and Brown as Managers on January 1, 2001 by resolution of the Managers.
If the CDC AM acquisition of Nvest does not occur on or before January 1,
2001, neither Ms. Goggin nor Ms. Brown will resign in order to comply with the
12
<PAGE>
Section 15(f) 75% test. As discussed above, Mr. Benjamin will be an Independent
Manager on and after January 1, 2001, and 6 of 8 (or 75%) of the Managers will
not be "interested persons" of Nvest or CGM on and after that date (unless
there are other changes in the composition of the Managers). Therefore, Mses.
Goggin and Brown will not be required to resign in connection with the Nvest
acquisition, because the composition of the Board will already satisfy the
Section 15(f) 75% test.
Term and Certain Interests of the Managers
Each current Manager will serve as Manager until the next meeting held for
the purpose of electing Managers and until his or her successor is elected and
qualified, or until his or her earlier death, resignation, removal or
retirement. If any of the Managers should be unavailable for election at the
time of the Meeting (which is not presently anticipated), the persons named as
proxies may vote for other persons in their discretion, or the Managers may
vote to fix the number of Managers at less than eight.
The Fund's Rules and Regulations do not provide for the annual election of
Managers. However, in accordance with the 1940 Act, (i) the Fund will hold a
shareholders' meeting for the election of Managers at such times as less than a
majority of the Managers holding office have been elected by shareholders, and
(ii) if, after filling a vacancy on the Board of Managers, less than two-thirds
of the Managers holding office would have been elected by the shareholders,
that vacancy may only be filled by a vote of the shareholders. In addition, the
Fund's Rules and Regulations provide that a Manager (including persons elected
by the Managers to fill vacancies in the Board of Managers) may be removed from
office (a) with or without cause by the vote of a majority of all votes
entitled to be cast at a meeting of Contractholders or (b) for cause by a
majority of the Managers then in office.
As of June 30, 2000, none of the nominees is a Contractholder, annuitant or
other payee with respect to Contracts issued by the Fund.
Committees of the Board
The Managers have delegated certain functions to two committees, the Audit
Committee and the Contract Review and Governance Committee, each of which
consists of certain Managers who are Independent Managers. Currently, the
members of both the Audit Committee and the Contract Review and Governance
Committee are Messrs. Arena, Flynn and Ludes and Mses. Hawthorne and Marshall.
The Audit Committee's responsibilities include (i) review of financial and
accounting controls and procedures; (ii) recommendations as to the selection of
the independent accountants; (iii) review of the scope of the audit; (iv)
review of
13
<PAGE>
financial statements and audit reports; and (v) review of the independence of
the independent accountants and approval of fees and assignments relating to
both audit and non-audit activities of the independent accountants. Mr. Flynn
currently serves as chairman of the Audit Committee, which met twice in 1999.
This Committee met twice between January 1, 2000 and July 30, 2000.
The Contract Review and Governance Committee reviews and makes
recommendations to the Board as to contracts requiring approval of a majority
of the Managers who are not interested persons of the Fund or the adviser to
the Fund, and any other contracts which may be referred to it by the Board.
This Committee also makes recommendations to the Board regarding nominees for
election as Managers of the Fund and the compensation of the Managers who are
not directors, officers or employees of the Fund's investment adviser. The
Committee will consider nominees recommended by Contractholders. Written
recommendations together with supporting information should be directed to the
Committee in care of the Fund. Mr. Arena currently serves as chairman of the
Contract Review and Governance Committee, which met two times in 1999. This
Committee met two times between January 1, 2000 and July 30, 2000.
During 1999, the Board of Managers of the Fund held five meetings. The Board
held four meetings between January 1, 2000 and July 30, 2000. Each of the
Managers attended all of his/her Board and Committee meetings in 1999 except
Mr. Hinchey, who attended 75% of these meetings. Each of the Managers attended
all of his/her Board and Committee meetings between January 1, 2000 and July
30, 2000 except Mr. Flynn, who attended 88% of these meetings due to surgery,
Mr. Ludes, who attended 75% of these meetings, and Ms. Hawthorne, who attended
88% of these meetings.
Board Compensation
The Fund does not pay any remuneration to its officers or to its Managers who
are directors, officers or employees of the Fund's investment adviser.
Each Manager other than Mses. Brown and Goggin currently receives, in the
aggregate for serving on the boards of the Fund and New England Zenith Fund
(the "Zenith Fund"), a retainer fee at the annual rate of $22,000 and meeting
attendance fees of $3,500 for each Board meeting he or she attends. Committee
chairmen also receive an additional retainer fee at the annual rate of $6,000
for the Contract Review and Governance Committee chairman and $4,000 for the
Audit Committee chairman. These fees are allocated among the Fund and the
Zenith Fund based on a formula that takes into account, among other factors,
the net assets of each, or in such other manner as the board deems appropriate.
During the fiscal year ended December 31, 1999, the current Board of Managers
of the Fund received the amounts set forth below for serving as Board
14
<PAGE>
of Managers of the Fund and also for serving on the governing board of the
Zenith Fund, which as of December 31, 1999, had sixteen funds.
Compensation Table
for the fiscal period ended December 31, 1999
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Total
Pension or Compensation
Aggregate Retirement as Estimated from Fund and
Compensation Part of Annual Benefits Fund Complex*
Name of Person, Position from Fund Fund Expenses Upon Retirement Paid to Manager
------------------------ ------------ ------------- --------------- ---------------
<S> <C> <C> <C> <C>
John J. Arena........... $1,525 -- -- $43,500
Edward A. Benjamin (a).. 216 -- -- 7,500
Mary Ann Brown.......... 0 -- -- 0
John W. Flynn........... 1,280 -- -- 36,000
Anne M. Goggin.......... 0 -- -- 0
Nancy Hawthorne......... 1,433 -- -- 37,500
Joseph M. Hinchey (b)... 1,161 -- -- 36,500
Robert B. Kittredge
(b).................... [ ] -- -- [72,000(c)]
John T. Ludes........... 12,66 -- -- 35,000
Dale R. Marshall........ 1,433 -- -- 37,500
</TABLE>
-----------
* The current Managers who are not directors, officers or employees of the
Fund's investment adviser receive compensation for serving on the board of
the Fund and, subject to requirements imposed by the Zenith Fund, for
serving of the board of the Zenith Fund.
(a) Mr. Benjamin was elected to the Board by shareholders on October 15, 1999.
(b) Messrs. Hinchey and Kittredge retired from the Board as of December 31,
1999.
(c) Mr. Kittredge's compensation includes amounts paid to him as a Manager of
the CGM Fund, an affiliate of the Fund.
Executive Officers of the Fund
The following table lists the executive officers of the Fund. Each such
person has been elected to the indicated office by the Fund's Managers, and
each such person's term is until his or her successor is elected and qualified,
or earlier resignation, retirement or removal. Each such person's principal
occupation is as an employee or officer of, and each such person serves as an
officer of the Fund at the request of, one or more of CGM, New England
Securities, New England Financial or the parent companies of one or more of the
foregoing. Each officer's current principal occupation is listed; similar prior
positions within the same company (or with corporate predecessors) are omitted.
15
<PAGE>
<TABLE>
<CAPTION>
Office with Principal Occupation; Business
Name and Office With the Fund Experience for at Least the Past
Fund (Age at July 30, 2000) Held Since Five Years
--------------------------- ---------------- ---------------------------------
<C> <C> <S>
Anne M. Goggin, June 17, 1999 Manager of the Fund since 1995;
Chairman of the Board, Chairman of the Board and
Chief Executive Officer, President of the Fund; Senior
President (51) Vice President and General
Counsel, New England Financial;
Chief Counsel--Individual
Business, MetLife; Director,
Chairman and President, New
England Investment Management,
Inc. ("NEIM"); Director, New
England Securities Corporation;
Director, New England Pension and
Annuity Company; Senior Vice
President, New England Life
Holdings, Inc.
Thomas M. Lenz, February 1, 2000 Counsel, New England Financial;
Secretary (42) General Counsel, Secretary and
Clerk, NEIM; formerly, Vice
President, State Street Bank and
Trust Company; Senior Vice
President, U.S./Offshore Product
Development and Associate General
Counsel, Signature Financial
Group, Inc.; Attorney, Ropes &
Gray
</TABLE>
The address of each of the officers of the Fund is 501 Boylston Street,
Boston, Massachusetts 02116.
Manager Recommendation
The current Board of Managers of the Fund unanimously recommends that the
Contractholders vote FOR fixing the number of Managers at eight and FOR the
election of each of the nominees.
Fixing the number of Managers and electing the Board of Managers will each be
by a majority of the votes represented at the Meeting either in person or by
proxy, assuming that a quorum (30% of all votes which may be cast by
Contractholders) is present either in person or by proxy.
III. 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 each Proposal,
abstentions from voting will have the effect of a negative vote in that
Proposal.
In the event that sufficient votes in favor of any Proposal are not received
by October 28, 2000, 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
16
<PAGE>
which they are entitled to vote in favor of such Proposal. They will vote
against any such adjournment those proxies required to be voted against such
Proposal 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 are Proposals 1 through 3
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.
17
<PAGE>
Appendix A
Form of New Agreement
ADVISORY AGREEMENT
AGREEMENT made as of this [ ] by and between NEW ENGLAND VARIABLE
ANNUITY FUND I (the "Fund"), a separate investment account of Metropolitan
Life Insurance Company and a registered investment company under the
Investment Company Act of 1940 (the "1940 Act"), and CAPITAL GROWTH MANAGEMENT
LIMITED PARTNERSHIP, a Massachusetts partnership (the "Adviser").
WITNESSETH:
WHEREAS, the Fund and the Adviser wish to enter into an agreement setting
forth the terms upon which the Adviser will perform certain services for the
Fund;
NOW THEREFORE, in consideration of the premises and covenants hereinafter
contained, the parties agree as follows:
1. The Fund hereby employs the Adviser to manage, subject to the supervision
of the Board of Managers of the Fund, the investment and reinvestment of the
assets held in the Fund in a manner consistent with the investment policies
and restrictions set forth in its registration statement and prospectus filed
under the Securities Act of 1933, as from time to time amended, and in
accordance with all other applicable provisions of law. The Adviser shall
perform the services herein set forth for the period and on the terms in this
Agreement set forth. The Adviser hereby accepts such employment and agrees
during such period, at its own expense, to render the services and to assume
the obligations herein set forth, but no other services or obligations with
respect to the management of the affairs of the Fund, for the compensation
herein provided. The Adviser shall, for all purposes herein, be deemed to be
an independent contractor and shall, unless otherwise expressly provided or
authorized, have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
2. In carrying out its obligations to manage the investment and reinvestment
of the assets belonging to the Fund, the Adviser shall at its own expense:
(a) obtain and evaluate such economic, statistical and financial data
and information and undertake such additional investment research as it
shall believe necessary or advisable for the management of the investment
and reinvestment of the assets belonging to the Fund in accordance with
the Fund's investment objective and policies;
(b) take such steps as are necessary to implement the investment
policies of the Fund, including the placing of orders for purchase and
sale of securities; and
A-1
<PAGE>
(c) regularly report to the Board of Managers with respect to the
implementation of the investment policies of the Fund. Nothing herein
shall require the Adviser to bear the cost of or reimburse the Fund for
brokers' commissions and issue and transfer taxes payable in connection
with the purchase or sale of the Fund's investments.
3. All activities in connection with the management of the affairs of the
Fund undertaken by the Adviser pursuant to this Agreement shall at all times
be subject to the supervision and control of the Board of Managers, any duly
constituted committee thereof or any officer of the Fund acting pursuant to
like authority.
4. The services of the Adviser to the Fund hereunder are not to be deemed
exclusive and the Adviser shall be free to render similar services to others,
so long as its services hereunder are not impaired thereby.
5. As compensation for its services hereunder, the Fund shall pay the
Adviser compensation equal to a daily deduction of .0084% (.3066% on an annual
basis) of the current value of the total net assets of the Fund (it being
understood that the phrase "total net assets" means total assets less all
accrued expenses including, if any, accrued tax liabilities and reserves for
taxes arising from the income and realized and unrealized capital gains on the
assets of the Fund). Such compensation shall be payable monthly in arrears or
at such other intervals, not less frequently than quarterly, as the Board of
Managers of the Fund may from time to time determine and specify in writing to
the Adviser. The current value of the total assets of the Fund on any day
shall be the value of such assets as of the close of trading on the New York
Stock Exchange on such day, or, if said Exchange is closed on such day, as of
the close of trading on the next day on which said Exchange is open.
6. It is understood that any of the variable annuity Contractholders,
Managers, trustees, officers, employees and agents of the Fund may be a
partner, shareholder, director, officer, employee or agent of, or be otherwise
interested in, the Adviser, any affiliated person of the Adviser, any
organization in which the Adviser may have an interest or any organization
which may have an interest in the Adviser; that the Adviser, any such
affiliated person or any such organization may have an interest in the Fund;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Rules and Regulations of the Fund or the Partnership Agreement of the Adviser,
or by specific provisions of applicable law.
7. This Agreement shall become effective as of the date above first written
and shall remain in full force and effect continuously thereafter provided,
however, that:
(a) unless otherwise terminated, this Agreement shall continue in until
August 30, 2001, and from year to year thereafter so long as such
continuance
A-2
<PAGE>
is specifically approved at least annually (i) by the Board of Managers of
the Fund or by vote of the variable annuity Contractholders by the
affirmative vote of a majority of the votes which may be cast by all
variable annuity Contractholders, and (ii) by vote of a majority of the
Managers of the Fund who are not interested persons of the Fund or the
Adviser, cast in person at a meeting called for the purpose of voting on
such approval;
(b) this Agreement may at any time be terminated on sixty days' written
notice to the Adviser either by vote of the Board of Managers of the Fund
or by vote of a majority of the votes which may be cast by all of the
variable annuity Contractholders;
(c) this Agreement shall automatically terminate in the event of its
assignment by the Adviser;
(d) this Agreement may be terminated by the Adviser on ninety days'
written notice to the Fund;
(e) if New England Life Insurance Company requires the Fund to change
its name so as to eliminate all references to the words "New England,"
then this Agreement shall automatically terminate at the time of such
change unless the continuance of this Agreement after such change shall
have been specifically approved by the variable annuity Contractholders of
the Fund by the affirmative vote of a majority of the votes which may be
cast by all variable annuity Contractholders.
Termination of this Agreement pursuant to this Section 7 shall be without
payment of any penalty.
8. (a) For the purposes of this Agreement, the phrase "affirmative vote of a
majority of the votes which may be cast by all variable annuity
Contractholders" means the affirmative vote, at a duly called and held meeting
of the variable annuity Contractholders of the Fund, (1) of variable annuity
Contractholders who hold 67 percent or more of all the votes which may be cast
by such Contractholders of the Fund as are present (in person or by proxy) and
entitled to vote at such meeting, provided that variable annuity
Contractholders holding more than 50 percent of all votes of the Fund entitled
to be cast at such meeting are present (in person or by proxy), or (2) of the
holders of more than 50 percent of all votes which may be cast by all variable
annuity Contractholders of the Fund entitled to vote at such meeting,
whichever is less.
(b) For the purpose of this Agreement, the terms "vote of a majority of the
outstanding voting securities", "interested person", "affiliated person" and
"assignment" shall have their respective meanings defined in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; and the term "variable annuity
Contractholder" shall mean the owner of a variable annuity contract which
A-3
<PAGE>
depends in whole or in part upon the investment performance of the Fund, and
shall to the extent provided in the Rules and Regulations of the Fund include
Metropolitan Life Insurance Company.
9. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Fund shall have been
approved by the affirmative vote of a majority of the votes which may be cast
by all of the variable annuity Contractholders.
10. In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Adviser, or reckless disregard of its obligations and duties
hereunder, the Adviser shall not be subject to any liability to the Fund, to
any variable annuity Contractholder of the Fund or to any other person, firm
or organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
11. This Agreement is and shall be subject to the provisions of the 1940
Act, as amended, and the rules and regulations promulgated by the Securities
and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
NEW ENGLAND VARIABLE ANNUITY FUND I
By _________________________
Name:
Title:
CAPITAL GROWTH MANAGEMENT LIMITED PARTNERSHIP
By: Kenbob, Inc., as General Partner
By _________________________
Name:
Title:
A-4
<PAGE>
Appendix B
Certain Other Mutual Funds Advised by CGM
CGM acts as investment adviser or subadviser to the following other mutual
funds that have investment objectives similar to the Fund's, for compensation
at the annual percentage rates of the corresponding average net asset levels
of those funds set forth below.
<TABLE>
<CAPTION>
Relationship
Net Assets of to Other
Other Fund
Other Fund(s) with Funds at (Adviser or
Similar Objectives June 30, 2000 Fee Rate Subadviser)
------------------ -------------- -------- ------------
<S> <C> <C> <C>
Capital Growth Series... $1,825,626,422 0.70% of first $200 million Adviser
0.65% of next $300 million
0.60% of next $1.5 billion
0.55% of amounts in excess of $2 billion
Nvest Growth Fund....... $1,688,410,971 0.75% of first $200 million Adviser
0.70% of next $300 million
0.65% of next $1.5 billion
0.60% of amounts in excess of $2 billion
</TABLE>
B-1
<PAGE>
Appendix C
Certain Brokerage Matters
In placing orders for the purchase and sale of portfolio securities for the
Fund, CGM always seeks the best price and execution. Transactions in unlisted
securities will be carried out through broker-dealers that 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.
Receipt of research services from brokers may sometimes be a factor in
selecting a broker that CGM believes will provide the best price and execution
for a 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. Such services may be
used by CGM in servicing 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 brokers.
C-1
<PAGE>
VOTING INSTRUCTION FORM
THIS VOTING INSTRUCTION FORM IS SOLICITED ON BEHALF OF THE
MANAGERS OF NEW ENGLAND VARIABLE ANNUITY FUND I.
The undersigned hereby instructs that all shares of New England Variable Annuity
Fund I (the "Fund") deemed attributable to the undersigned's variable annuity
contracts with the issuing insurance company to be voted at the Special Meeting
of Contractholders of the Fund on October 30, 2000 (the Notice and Proxy
Statement with respect to which have been received by the undersigned), and at
all adjournments thereof, on each proposal described in said Notice as set forth
on the reverse side hereof.
The issuing insurance company is authorized to vote in its discretion on any
other matters which may properly come before the meeting.
YOUR VOTE IS IMPORTANT. Please vote as soon as possible
PLEASE SEE REVERSE SIDE
THE BOARD OF MANAGERS RECOMMENDS A VOTE FOR EACH [X] Please mark your
OF THE PROPOSALS BELOW. --------------------
vote as in this example.
IF NO SPECIFICATION IS MADE FOR A PROPOSAL, THE PROXY SHALL BE VOTED FOR THAT
-----------------------------------------------------------------------------
PROPOSAL.
--------
<TABLE>
<CAPTION>
<S> <C>
[_] To vote FOR all Proposals, mark this box and NOTE: Please sign exactly as your name appears on this Proxy.
sign, date and return this instruction form. When signing in a fiduciary capacity, such as executor, administrator,
(No additional vote is necessary.) trustee, attorney, guardian, etc., please so indicate.
[If you wish to vote by telephone, please Corporate and partnership proxies should be signed by an
see the enclosed instruction card.] authorized person indicating the person's title.
</TABLE>
Date ____________________________, 2000
____________________________________________________
Signature(s), Title(s), (if applicable)
PLEASE SIGN, DATE, AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
1. To approve a new investment advisory agreement between Capital Growth
Management Limited Partnership and the Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. To fix the number of members of the Board of Managers at eight members.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To elect a Board of Managers.
FOR ALL WITHHOLD FOR ALL
(except as noted below)
[_] [_]
Managers: John J. Arena, Edward A. Benjamin, Mary Ann Brown, John W. Flynn, Anne
M. Goggin, Nancy Hawthorne, Joseph M. Hinchey, Robert B. Kittredge,
John T. Ludes and Dale Rogers Marshall.
Instruction: To withhold authority to vote for any individual Manager, strike a
line through the Manager's name in the list above.
