NEW ENGLAND ZENITH FUND, DEFS14A, 1995-03-07

NEW ENGLAND ZENITH FUND
DEFS14A, 1995-03-07

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<PAGE>

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [_]

Filed by a Party other than the Registrant [X]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14A-6(E)(2))

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

New England Zenith Fund
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

New England Zenith Fund
------------------------------------------------------------------------
(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:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[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>

NEW ENGLAND ZENITH FUND

BACK BAY ADVISORS MONEY MARKET SERIES
BACK BAY ADVISORS BOND INCOME SERIES
BACK BAY ADVISORS MANAGED SERIES
CAPITAL GROWTH SERIES
LOOMIS SAYLES AVANTI GROWTH SERIES
LOOMIS SAYLES SMALL CAP SERIES
LOOMIS SAYLES BALANCED SERIES
WESTPEAK VALUE GROWTH SERIES
WESTPEAK STOCK INDEX SERIES
DRAYCOTT INTERNATIONAL EQUITY SERIES
SALOMON BROTHERS U.S. GOVERNMENT SERIES
SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES SERIES
VENTURE VALUE SERIES
ALGER EQUITY GROWTH SERIES
CS FIRST BOSTON STRATEGIC EQUITY OPPORTUNITIES SERIES

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

April 10, 1995

To the Shareholders:

Notice is hereby given that a Special Meeting of Shareholders of New England
Zenith Fund (the "Trust") will be held at the offices of New England Mutual
Life Insurance Company ("The New England"), 501 Boylston Street, Boston,
Massachusetts 02116, on April 10, 1995 at 2:00 p.m. (Boston time) for the
following purposes:

With respect to all series of the Trust:
---------------------------------------

1. To fix the number of and elect Trustees.

With respect to the Back Bay Advisors Money Market Series:
---------------------------------------------------------

2. To approve or disapprove a new Advisory Agreement with TNE
Advisers, Inc. ("TNE Advisers"); and

3. To approve or disapprove a related Sub-Advisory Agreement between
TNE Advisers and Back Bay Advisors, L.P. ("Back Bay Advisors").

With respect to the Back Bay Advisors Bond Income Series:
--------------------------------------------------------

4. To approve or disapprove a new Advisory Agreement with TNE
Advisers; and

5. To approve or disapprove a related Sub-Advisory Agreement between
TNE Advisers and Back Bay Advisors.

With respect to the Back Bay Advisors Managed Series:
----------------------------------------------------

6. To approve or disapprove a new Advisory Agreement with TNE
Advisers; and
<PAGE>

7. To approve or disapprove a related Sub-Advisory Agreement between
TNE Advisers and Back Bay Advisors.

With respect to the Loomis Sayles Avanti Growth Series:
------------------------------------------------------

8.To approve or disapprove a new Advisory Agreement with TNE Advisers;
and

9. To approve or disapprove a related Sub-Advisory Agreement between
TNE Advisers and Loomis, Sayles & Company, L.P. ("Loomis Sayles").

With respect to the Loomis Sayles Small Cap Series:
--------------------------------------------------

10. To approve or disapprove a new Advisory Agreement with TNE
Advisers; and

11. To approve or disapprove related Sub-Advisory Agreement between TNE
Advisers and Loomis Sayles.

With respect to the Westpeak Value Growth Series:
------------------------------------------------

12. To approve or disapprove a new Advisory Agreement with TNE
Advisers; and

13. To approve or disapprove a related Sub-Advisory Agreement between
TNE Advisers and Westpeak Investment Advisors, L.P. ("Westpeak").

With respect to the Westpeak Stock Index Series:
-----------------------------------------------

14. To approve or disapprove a new Advisory Agreement with TNE
Advisers; and

15. To approve or disapprove a related Sub-Advisory Agreement between
TNE Advisers and Westpeak.

With respect to all series of the Trust:
---------------------------------------

16. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.

By order of the President,

Sheila M. Barry, Secretary pro tem

March 6, 1995

- --------------------------------------------------------------------------------

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 ZENITH FUND

PROXY STATEMENT

This statement is furnished in connection with the solicitation of proxies by
the Board of Trustees of New England Zenith Fund (the "Trust") for use at the
Special Meeting of Shareholders of the Trust to be held at the offices of New
England Mutual Life Insurance Company ("The New England"), 501 Boylston Street,
Boston, Massachusetts 02116 on April 10, 1995 at 2:00 p.m. (Boston time) and at
any adjournment or adjournments thereof (the "Meeting"). This statement and its
enclosures are being mailed to contractholders beginning or on about March 6,
1995. A copy of the Annual Report of the Trust for the fiscal year ended
December 31, 1994 may be obtained without charge by calling (800) 325-6765.

This Proxy Statement consists of three parts.

Part I contains general information relating to the Meeting and a summary of
the matters being proposed for shareholder consideration at the Meeting.

Part II contains information relating to Proposal 1, the election of the
Trustees of the Trust. All shareholders of the Trust of record on February 10,
1995 (the "Record Date") are entitled to vote on Proposal 1.

Part III contains information relating to Proposals 2-15, the restructuring
of management arrangements for seven of the series of the Trust. Only the
shareholders of an affected series are entitled to vote on these proposals with
respect to such series.
<PAGE>

I. GENERAL

The Trust consists of fifteen series of shares. Each of the series is
referred to herein as a "Fund" and they are referred to collectively as the
"Funds." The following table illustrates which of the Proposals described in
this Proxy Statement relate to which of the Funds:

<TABLE>
<CAPTION>
PROPOSAL RELEVANT FUNDS
-------- --------------------------------------
<S> <C>
PROPOSAL 1: Election of Trustees All Funds
PROPOSAL 2: Approval or disapproval of Back Bay Advisors Money Market Series
new Advisory Agreement relating to the
Back Bay Advisors Money Market Series
PROPOSAL 3: Approval or disapproval of Back Bay Advisors Money Market Series
new Sub-Advisory Agreement relating to
the Back Bay Advisors Money Market
Series
PROPOSAL 4: Approval or disapproval of Back Bay Advisors Bond Income Series
new Advisory Agreement relating to the
Back Bay Advisors Bond Income Series
PROPOSAL 5: Approval or disapproval of Back Bay Advisors Bond Income Series
new Sub-Advisory Agreement relating to
the Back Bay Advisors Bond Income
Series
PROPOSAL 6: Approval or disapproval of Back Bay Advisors Managed Series
new Advisory Agreement relating to the
Back Bay Advisors Managed Series
PROPOSAL 7: Approval or disapproval of Back Bay Advisors Managed Series
new Sub-Advisory Agreement relating to
the Back Bay Advisors Managed Series
PROPOSAL 8: Approval or disapproval of Loomis Sayles Avanti Growth Series
new Advisory Agreement relating to the
Loomis Sayles Avanti Growth Series
PROPOSAL 9: Approval or disapproval of Loomis Sayles Avanti Growth Series
new Sub-Advisory Agreement relating to
the Loomis Sayles Avanti Growth Series
PROPOSAL 10: Approval or disapproval of Loomis Sayles Small Cap Series
new Advisory Agreement relating to the
Loomis Sayles Small Cap Series
PROPOSAL 11: Approval or disapproval of Loomis Sayles Small Cap Series
new Sub-Advisory Agreement relating to
the Loomis Sayles Small Cap Series
PROPOSAL 12: Approval or disapproval of Westpeak Value Growth Series
new Advisory Agreement relating to the
Westpeak Value Growth Series
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
PROPOSAL RELEVANT FUNDS
-------- --------------------------------------
<S> <C>
PROPOSAL 13: Approval or disapproval of new Sub- Westpeak Value Growth Series
Advisory Agreement relating to the Westpeak
Value Growth Series
PROPOSAL 14: Approval or disapproval of new Westpeak Stock Index Series
Advisory Agreement relating to the Westpeak
Stock Index Series
PROPOSAL 15: Approval or disapproval of new Sub- Westpeak Stock Index Series
Advisory Agreement relating to the Westpeak
Stock Index Series
</TABLE>

All shareholders of record on the Record Date are entitled to one vote for
each share of beneficial interest of the Trust held as of that date. The number
of shares of beneficial interest of each Fund issued and outstanding as of the
Record Date are as follows:

<TABLE>
<CAPTION>
SHARES OUTSTANDING ON
FUND RECORD DATE
---- ---------------------
<S> <C>
Back Bay Advisors Money Market Series..................... 739,416
Back Bay Advisors Bond Income Series...................... 1,322,702
Back Bay Advisors Managed Series.......................... 924,321
Capital Growth Series..................................... 2,144,589
Loomis Sayles Avanti Growth Series........................ 233,939
Loomis Sayles Small Cap Series............................ 57,981
Loomis Sayles Balanced Series............................. 349,070
Westpeak Stock Index Series............................... 502,119
Westpeak Value Growth Series.............................. 223,568
Draycott International Equity Series...................... 455,021
Salomon Brothers U.S. Government Series................... 202,008
Salomon Brothers Strategic Bond Opportunities Series...... 354,325
Venture Value Series...................................... 563,088
Alger Equity Growth Series................................ 428,436
CS First Boston Strategic Equity Opportunities Series..... 307,344
---------
TOTAL................................................. 8,807,927
</TABLE>

As of the Record Date, the following persons owned beneficially (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934) the following
numbers of shares of the following Funds, representing the indicated percentage
of the outstanding shares of such Funds: Frederick W. Forman (400 Madison
Street, #1808, Alexandria, VA 22314)--23,388 shares (11.8%) of Salomon Brothers
U.S. Government Series; David B. Kramer (2525 Sand Hill Road, Ellicott City, MD
21042)--10,844 shares (5.4%) of Salomon Brothers U.S. Government Series; Harry
W. Castleman (4125 Massie Avenue, Louisville, KY 40207)--19,874 shares (5.7%)
of Loomis Sayles Balanced Series; Gertrude M. Dean (12 Satucket Road,
Harwichport, MA 02646)--19,861 shares (5.7%) of Loomis Sayles Balanced Series.

3
<PAGE>

As of the Record Date, all of the shares of each Fund (except the Loomis
Sayles Balanced Series) were owned by either: (1) New England Variable Life
Separate Account ("NEVLICO Separate Account"), a separate account of New
England Variable Life Insurance Company ("NEVLICO"), a wholly-owned life
insurance subsidiary of The New England; (2) The New England Variable Account,
a separate account of The New England; or (3) The New England's general
investment account. In the case of the Loomis Sayles Balanced Series, all
shares not owned of record by the foregoing insurance company accounts were
owned by the Loomis-Sayles Funded Pension Plan. The shares and percentage of
each Fund held by these entities is set forth below:

<TABLE>
<CAPTION>
SHARES OWNED
SHARES OWNED BY THE NEW
SHARES OWNED BY THE NEW ENGLAND'S
BY NEVLICO ENGLAND GENERAL
SEPARATE % OF VARIABLE % OF INVESTMENT % OF
FUND ACCOUNT OUTSTANDING ACCOUNT OUTSTANDING ACCOUNT OUTSTANDING
---- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Back Bay Advisors
Money Market Series..... 196,432 26.5% 542,505 73.4% 479 0.1%
Back Bay Advisors
Bond Income Series...... 220,814 16.7% 1,101,139 83.2% 749 0.1%
Back Bay Advisors
Managed Series.......... 131,428 14.2% 792,893 85.8% -- --
Capital Growth Series... 998,213 46.5% 1,146,376 53.5% -- --
Loomis Sayles Avanti
Growth Series........... 79,578 34.0% 154,282 66.0% 79 --
Loomis Sayles
Small Cap Series........ 13,249 22.9% 44,732 77.1% -- --
Loomis Sayles
Balanced Series/1/...... -- -- 286,942 82.2% -- --
Westpeak Stock Index
Series.................. 161,286 32.1% 340,833 67.9% -- --
Westpeak Value
Growth Series........... 53,796 24.1% 169,683 75.9% 89 --
Draycott International
Equity Series........... -- -- 455,021 100% -- --
Salomon Brothers
U.S. Government Series.. -- -- 99,876 49.4% 102,132 50.6%
Salomon Brothers
Strategic Bond
Opportunities Series.... -- -- 193,455 54.6% 160,870 45.4%
Venture Value Series.... -- -- 563,088 100% -- --
Alger Equity Growth
Series.................. -- -- 428,436 100% -- --
CS First Boston
Strategic Equity
Opportunities Series.... -- -- 307,344 100% -- --
--------- ----- --------- ----- ------- -----
TOTAL................. 1,854,796 21.1% 6,626,605 75.2% 264,398 3.0%
</TABLE>
- ---------------------
/1/ As of the Record date, the Loomis-Sayles Funded Pension Plan owned of record
62,128 shares of the Loomis Sayles Balanced Series, representing 17.8% of
the outstanding shares of that fund.

4
<PAGE>

The Trust is subject to special voting provisions. As of the Record Date, the
Trust served as an investment vehicle for use only in connection with (1)
variable life insurance contracts offered by NEVLICO and (2) certain variable
annuity contracts issued by The New England. All shares of the Trust owned by
NEVLICO are attributable to the variable life insurance policies issued by
NEVLICO or to charges assessed by NEVLICO against those policies. NEVLICO has
agreed that each owner of such a policy (a "Policy Owner") will be permitted to
instruct NEVLICO as to how shares of the Trust attributable to the policies
owned by such Policy Owner should be voted at meetings of Trust shareholders.
All shares of the Trust held by The New England Variable Account are
attributable to variable annuity contracts issued by The New England or to
charges assessed by The New England against such contracts. The holder of each
such contract (a "Contractholder") has the right to instruct The New England as
to how to vote the shares of the Trust attributable to such contract. All
shares of the Trust attributable to variable life insurance policies for which
no Policy Owner instructions have been received by NEVLICO and all shares of
the Trust attributable to charges assessed by NEVLICO against those policies
will be voted for, voted against or withheld from voting on any proposal in the
same proportions as are the shares for which Policy Owner instructions have
been received by NEVLICO. All shares of the Trust held in The New England
Variable Account for which no Contractholder instructions have been received by
The New England and any shares of the Trust attributable to charges assessed by
The New England against variable annuity contracts will be voted for, voted
against or withheld from voting on any proposal in the same proportions as are
the shares for which Contractholder instructions have been received by The New
England. All shares of the Trust held by The New England's general investment
account as a result of investments made in connection with the commencement of
operations of any of the Funds will be voted for, voted against or withheld
from voting on any proposal in the same proportions as are the aggregate of (i)
all shares for which voting instructions are received and (ii) all other shares
that are voted in proportion to such voting instructions.

Timely, properly executed proxies will be voted as you instruct. If no choice
is indicated, proxies 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 Trust, by properly executing a later-dated proxy or by
attending the Meeting, requesting return of any previously delivered proxy and
voting in person.

The costs of solicitation of proxies will be borne by TNE Advisers, Inc.
("TNE Advisers"). Solicitation of proxies by personal interview, mail,
telephone and telegraph may be made by officers and trustees of the Trust and
employees of The New England, NEVLICO, TNE Advisers, Inc., Back Bay Advisors,
L.P. ("Back Bay Advisors"), Loomis Sayles & Company, L.P. ("Loomis Sayles"),
and Westpeak Investment Advisors, L.P. ("Westpeak"), investment advisers to the
Funds, and New England Securities Corporation ("NESCO"), the principal
underwriter of the Trust.

SUMMARY OF PROPOSALS

Election of Trustees. Proposal 1 relates to the election of the Trustees of
the Trust.

The Trust currently has a board of 12 Trustees, all of whom also serve on the
governing boards of New England Variable Annuity Fund I ("NEVA") and of the 20
mutual funds in the New England group of mutual funds (the "New England
Funds").

5
<PAGE>

The 20 New England Funds are conventional mutual funds that are offered for
sale directly to investors. All of the New England Funds employ as investment
advisers companies in which New England Investment Companies, L.P. ("NEIC")
owns a majority economic interest. New England Funds, L.P. ("NEF") serves as
principal underwriter and transfer agent of the New England Funds.

By contrast, the 15 Funds of the Trust, and NEVA, serve exclusively as the
funding vehicles for variable life insurance or annuity contracts issued by The
New England or its subsidiary, NEVLICO. The Funds of the Trust are available
for purchase only by separate investment accounts of The New England and
NEVLICO; the Funds are not offered for direct purchase by the investing public.
NESCO, a wholly-owned subsidiary of The New England, serves as the principal
underwriter of the Funds of the Trust and of NEVA. Another wholly-owned
subsidiary of The New England, TNE Advisers, currently serves as investment
adviser to seven of the Funds of the Trust, and is proposed to become
investment adviser to seven additional Funds of the Trust (see "Restructuring
of Management Arrangements" below and Part III of this Proxy Statement).

In recognition of (1) the rapid increase in recent years in the number of
funds under their supervision and (2) the distinct purposes and marketing
channels of the Funds of the Trust, on the one hand, and the New England Funds,
on the other, the Trustees are recommending changes in the composition of the
governing boards of the Trust, NEVA and the New England Funds. As described in
more detail in Section II of this Proxy Statement, five of the Trust's current
Trustees would continue to serve as such (and as members of NEVA's governing
board), but would cease to serve on the boards of the New England Funds. Four
new Trustees of the Trust (including two who are officers of The New England or
TNE Advisers) would also be elected (and would also be elected to NEVA's
governing board). Seven current Trustees of the Trust (including the chief
executive officers of NEIC and NEF) would continue to serve on the governing
boards of the New England Funds, but would cease to serve on the boards of the
Trust and NEVA.

The Trustees believe that the proposed reconfiguration of the boards would
permit the persons who are proposed for election as Trustees of the Trust to
concentrate their attention on the affairs of the Trust and NEVA. The change is
especially appropriate in light of the recent increase in the number of Funds
of the Trust (from seven on January 1, 1994 to 15 currently). If approved by
the Trust's shareholders at the Meeting, their proposed changes in the
composition of the board would be effective on May 1, 1995.

Part II of this Proxy Statement contains additional information relating to
the proposed election of Trustees.

Restructuring of Management Arrangements. Proposals 2-15 relate to the
proposed restructuring of the management arrangements for certain Funds.

Seven of the Trust's Funds currently employ TNE Advisers as adviser. In each
case, TNE Advisers has delegated day-to-day portfolio management responsibility
to another firm that acts as sub-adviser to the Fund. The seven Funds that
currently employ this adviser/sub-adviser structure are the Loomis Sayles
Balanced Series, the Draycott International Equity Series, the Salomon Brothers
U.S. Government Series, the Salomon Brothers Strategic Bond Opportunities
Series, the Venture Value Series, the Alger Equity Growth Series and the CS
First Boston Strategic Equity Opportunity Series (collectively, the "New
Funds"), all of which commenced operations on October 31, 1994.

6
<PAGE>

Proposals 2-15 propose that seven other Funds of the Trust adopt a similar
adviser/sub-adviser structure. The seven affected Funds are the Back Bay
Advisors Money Market Series, the Back Bay Advisors Bond Income Series, the
Back Bay Advisors Managed Series, the Loomis Sayles Avanti Growth Series, the
Loomis Sayles Small Cap Series, the Westpeak Value Growth Series, and the
Westpeak Stock Index Series (collectively, the "Affected Funds"). It is
proposed that each Affected Fund engage TNE Advisers to serve as investment
adviser, on substantially the same terms, and for the same fee rate, as such
Fund's current investment adviser. The current investment adviser would in turn
be retained by TNE Advisers as sub-adviser, and would continue to be
responsible for the Fund's day-to-day investment operations. Each Fund's
investment objective, policies and strategies would be unaffected by the
proposed change. Similarly, the proposed change would not increase the fees or
expenses borne by any Fund.

The Trustees have unanimously approved the proposed new advisory agreements
with TNE Advisers and the related sub-advisory agreements. In deciding to
approve the agreements, the Trustees considered that the Trust currently
consists of 15 Funds, which employ a total of nine different investment
management firms (not counting TNE Advisers) as investment advisers or sub-
advisers. This represents an increase from seven Funds and four investment
management firms (all affiliated with NEIC) in early 1994. The Trustees believe
that it is appropriate and desirable, in the interests of consistent,
centralized management and oversight of the Trust's operations, to appoint TNE
Advisers as investment adviser and adopt the proposed adviser/sub-adviser
structure for the seven Affected Funds. In voting to approve the proposed
arrangements, the Trustees noted that the proposal involves no reduction in the
scope of services to be provided to the Affected Funds, and no increase in the
fees and expenses to be borne by the Affected Funds.

The Trustees also noted that the firms that currently serve as investment
advisers to the Affected Funds would receive lower compensation under the
proposed sub-advisory agreements than they receive under their existing
investment advisory agreements with the Affected Funds. This reduction in
compensation reflects, among other things, that, as sub-advisers, these firms
would be responsible for providing only portfolio management services to the
Affected Series, and would be relieved of their current responsibilities to
provide administrative and general management services to the Affected Funds.
(Under the proposed new arrangements, TNE Advisers would be responsible to
provide these administrative and general management services. TNE Advisers has
indicated to the Trustees that it intends to delegate to NEF the responsibility
to provide certain of these services. NEF currently provides administrative and
general management services to the Affected Funds, under subcontract to the
Affected Funds' current investment advisers.) The Trustees also considered
that, in addition to the compensation payable by TNE Advisers to the Affected
Funds' current investment advisers under the proposed sub-advisory agreements,
TNE Advisers will compensate NEIC, the parent company of the existing
investment advisers of the Affected Series, at the annual rate of $694,000
during the period from May 1, 1995 through June 30, 2004. This compensation
will be paid in recognition of the fact that the proposed adviser/sub-adviser
structure will result in reduced revenues to NEIC and its sub-advisers, as
compared to the Affected Funds' existing investment advisory arrangements. The
compensation payable to NEIC is subject to reduction if any of the proposed
sub-advisers ceases for any reason to be a sub-adviser to any Affected Fund
before June 30, 2004.

In determining to recommend the proposed Sub-Advisory Agreement for each
Affected Fund, the Trustees considered the policies of each such Fund's
proposed sub-adviser with respect to the placing of

7
<PAGE>

portfolio transactions for the Fund with brokers or dealers who furnish
brokerage and research services to the proposed sub-advisers. These policies
are described in Part III of this Proxy Statement.

The terms and provisions of the proposed new Advisory and Sub-Advisory
Agreements for the Affected Funds are explained more fully in Part III of this
Proxy Statement. The form of new Advisory Agreement, which is substantially the
same for each Affected Fund (apart from differences in fee rates), is set forth
in Appendix A to this Proxy Statement. The form of the New Sub-Advisory
Agreement, which is substantially the same for each Affected Fund (apart from
differences in fee rates, and the inclusion, in the proposed Sub-Advisory
Agreements with Westpeak, of certain additional provisions relating to the
payment of brokerage commissions), is set forth in Appendix B to this Proxy
Statement.

II. ELECTION OF TRUSTEES (ALL FUNDS)

It is proposed that nine persons be elected as Trustees of the Trust. The
nominees, their ages and their principal occupations and other affiliations are
listed below. Messrs. Hinchey, Humphrey, Kittredge, MacLure and Turley are
currently Trustees of the Trust and have served as such since the dates
indicated. Each of these persons is also a Trustee of New England Funds Trust
I, New England Funds Trust II, New England Cash Management Trust and New
England Tax Exempt Money Market Trust but each is expected to resign from those
positions after the Meeting. Each of these persons is also a member of the
Board of Managers of NEVA. Seven other current Trustees, Kenneth J. Cowan,
Sandra O. Moose, Henry L.P. Schmelzer, James H. Scott, John A. Shane, Peter S.
Voss and Pendleton P. White, are not nominees for election at the Meeting and
will cease to be Trustees when the persons elected at the Meeting take office.

The term of office of each elected Trustee will begin on or about May 1, 1995
and continue until the next Meeting held for the purpose of electing Trustees
and until his or her successor is elected and qualified. The Trust's Agreement
and Declaration of Trust does not provide for the annual election of Trustees.
However, in accordance with the Investment Company Act of 1940 (the "1940
Act"), (i) the Trust will hold a shareholders' meeting for the election of
Trustees at such time as less than a majority of the Trustees holding office
have been elected by shareholders, and (ii) if, after filling a vacancy on the
Board of Trustees, less than two-thirds of the Trustees holding office would
have been elected by the shareholders, that vacancy may only be filled by a
vote of the shareholders. In addition, Trustees may be removed from office by a
written consent signed by the holders of two-thirds of the outstanding shares
of the Trust and filed with the Trust's custodian, or by a vote of the holders
of two-thirds of the outstanding shares of the Trust at a meeting duly called
for such purpose, which meeting shall be held upon the written request of the
Trust holders of not less than 10% of the Trust's outstanding shares.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION; BUSINESS EXPERIENCE TRUSTEE
NAME AND AGE FOR AT LEAST THE PAST FIVE YEARS SINCE
- ------------ ----------------------------------------- -------
<S> <C> <C>
Joseph M. Hinchey (69).. Retired; formerly, Senior Vice President-Finance, 1993
Analog Devices, Inc. (manufacturer of electronic
devices). Trustee, Union College and Citizens
Scholarship Foundation of America, Inc.; Director,
New England Security Insurance a Chemet
Corporation (manufacturer of metallurgical
products).
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION; BUSINESS EXPERIENCE TRUSTEE
NAME AND AGE FOR AT LEAST THE PAST FIVE YEARS SINCE
- ------------ ----------------------------------------- -----------
<S> <C> <C>
Richard S. Humphrey, Jr.
(69)................... Retired; formerly, Chairman of the Board, 1993
HBM/Creamer (advertising agency). Director, RYKA,
Inc. (manufacturer of athletic footwear for
women).

Robert B. Kittredge
(74)................... Retired; formerly, Vice President, General Counsel 1989
and Director, Loomis Sayles. Trustee, CGM Trust
and CGM Capital Development Fund.

Laurens MacLure (69).... Retired; formerly, President and Chief Executive 1983a
Officer, New England Deaconess Hospital and
President, NEDH Corp. (health care holding
company). Trustee, CGM Trust and CGM Capital
Development Fund.

Joseph F. Turley (69)... Retired; formerly President and Chief Operating 1983a
Officer, The Gillette Company (manufacturers of
personal care products). Director, The Gillette
Company and EG&G, Inc. (diversified technical
company).

Anne M. Goggin* (46).... Vice President and Counsel, The New England, since New Nominee
1994. Vice President, General Counsel, Secretary
and Clerk, NESCO, since 1993. Previously, Second
Vice President and Counsel, The New England.

Nancy Hawthorne (43).... Senior Vice President and Chief Financial Officer, New Nominee
Continental Cablevision, Inc. (cable television
operator), since 1993. Previously, Senior Vice
President and Treasurer, Continental Cablevision,
Inc. Director, Perini Corporation (construction).

Dale Rogers Marshall
(57)................... President, Wheaton College. Formerly, Academic New Nominee
Dean, Wellesley College.

Frederick K. Zimmermann*
(42)................... Executive Vice President (since 1993) and Chief New Nominee
Investment Officer (since 1992), The New England.
Previously, Senior Vice President, The New
England. Chairman of the Board and President, TNE
Advisers. Director and Vice President-Investments,
NEVLICO. Chairman of the Board and President, New
England Pension and Annuity Company. Senior Vice
President of the Trust.
</TABLE>
- ---------------------
* "Interested person" of the Trust. As used in this Proxy Statement, the term
"interested person" has the meaning defined in the 1940 Act. Ms. Goggin and
Mr. Zimmermann are interested persons of the Trust by reason of their
positions with The New England, TNE Advisers, NESCO and NEVLICO.
a Includes period of service as a director of the New England Zenith Fund,
Inc., a corporate predecessor of the Trust which was reorganized into the
Trust in 1987.

9
<PAGE>

If any of the above nominees should not be available for election as
contemplated, it is the intention of the persons named in the proxy to fix the
number of Trustees at such lesser number as are available to serve, or to vote
for such other person or persons as the Trustees may recommend. All of the
nominees have agreed to serve if elected.

COMMITTEES OF THE BOARD. The Trustees have delegated certain functions to two
committees, each of which consists of certain Trustees who are not interested
persons of the Trust. The two committees currently have the same members
(Messrs. Hinchey, Humphrey, Kittredge, MacLure and Turley).

The Audit Committee's responsibilities include review of financial and
accounting controls and procedures; recommendations as to the selection of the
independent accountants; review of the scope of the audit; review of financial
statements and audit reports; and 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. The Audit Committee met
four times in 1994. Mr. Hinchey currently serves as chairman of the Audit
Committee.

The Contract Review and Governance Committee reviews and makes
recommendations to the board as to contracts requiring approval of a majority
of the Trustees who are not interested persons of the Trust and any other
contracts which may be referred to it by the board. The Committee also
recommends to the board nominees for election as Trustees of the Trust and
recommends the compensation of the Trustees who are not interested persons of
the Trust. The Committee will consider nominees recommended by shareholders.
Written recommendations together with supporting information should be directed
to the Committee in care of the Trust. The Contract Review and Governance
Committee met five times in 1994. Mr. MacLure currently serves as chairman of
the Committee.

In 1994, the Trust held six Board meetings. In 1994, each Trustee of the
Trust attended at least 75% of the aggregate of (1) meetings of the Board of
Trustees and (2) meetings of committees of the board on which the Trustee was
then serving, except Ms. Moose, who attended 73% of such meetings.

BOARD COMPENSATION. The Trust does not pay any remuneration to officers or
Trustees who are directors, officers or employees of the Funds' investment
advisers or sub-advisers or of affiliated companies of the advisers or sub-
advisers.

Each Trustee who is not an interested person of the Trust currently receives,
in the aggregate for serving on the boards of the Trust, NEVA and the New
England Funds, a retainer fee at the annual rate of $40,000 and meeting
attendance fees of $2,000 for each meeting of the boards he or she attends and
$1,500 for each meeting he or she attends of a committee of the board of which
he or she is a member. Each committee chairman receives an additional retainer
fee at the annual rate of $2,500. These fees are allocated among the funds of
the Trust, NEVA and the New England Funds based on a formula that takes into
account, among other factors, the net assets of each fund.

Beginning May 1, 1995, a new fee structure will be in effect. Under the new
structure, Trustees of the Trust and members of the Board of Managers of NEVA
who are not "interested persons" will receive a retainer at the annual rate of
$20,000, an attendance fee of $2,000 for each board meeting attended and a

10
<PAGE>

special, one-time fee of $5,000 relating to the services of the board in
conjunction with the restructuring of the boards of the Trust, NEVA and the New
England Funds. In addition, the chairman of the Contract Review and Governance
Committee will receive a retainer at the annual rate of $3,000, and the
chairman of the Audit Committee will receive a retainer at the annual rate of
$2,000. These fees will be allocated among the Trust and NEVA 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, 1994, the current Trustees of the
Trust received the amounts set forth below for serving as a Trustee of the
Trust and for also serving on the governing boards of NEVA and the New England
Funds. As of December 31, 1994, there were a total of 36 funds in the Trust,
the New England Funds and NEVA combined.

<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM THE TRUST, NEVA AND THE
NAME FROM THE TRUST IN NEW ENGLAND FUNDS
OF TRUSTEE 1994 IN 1994
- ---------- ---------------------- ----------------------------
<S> <C> <C>
Kenneth J. Cowan............ $14,459 $59,375
Joseph M. Hinchey........... $13,790 $56,875
Richard S. Humphrey, Jr. ... $13,790 $56,875
Robert B. Kittredge......... $14,179 $89,279(a)
Laurens MacLure............. $14,848 $91,779(a)
Sandra O. Moose............. $12,728 $52,875
James H. Scott.............. $13,790 $56,875
John A. Shane............... $13,531 $55,875
Joseph F. Turley............ $14,179 $58,375
Pendleton P. White.......... $14,179 $58,375
</TABLE>
- ---------------------
(a) Also includes compensation paid by the 5 CGM Funds, a group of mutual funds
for which Capital Growth Management Limited Partnership, the investment
adviser of the Trust's Capital Growth Series, serves as investment adviser.

The Trust provides no pension or retirement benefits to Trustees, but has
adopted a deferred payment arrangement under which each Trustee may elect not
to receive fees from the Trust on a current basis but to receive in a
subsequent period an amount equal to the value that such fees would have if
they had been invested in each Fund on the normal payment date for such fees.
As a result of this method of calculating the deferred payments, each Fund,
upon making the deferred payments, will be in the same financial position as if
the fees had been paid on the normal payment dates.

EXECUTIVE OFFICERS OF THE TRUST. The following table lists the executive
officers of the Trust. Each such person has been elected to the indicated
office by the Trust's Trustees. Each such person's principal occupation is as
an employee or officer of, and each such person serves as an officer of the
Trust at the request of, one or more of the Trust's investment advisers or sub-
advisers, NESCO, NEF or their parent companies. Each officer's current
principal occupation is listed; similar prior positions within the same company
(or with corporate predecessors) are omitted.

11
<PAGE>

<TABLE>
<CAPTION>
NAME AND OFFICE WITH OFFICE WITH TRUST PRINCIPAL OCCUPATION; BUSINESS EXPERIENCE
TRUST (AGE) HELD SINCEA FOR AT LEAST THE PAST FIVE YEARS
-------------------- ----------------- -------------------------------------------
<S> <C> <C>
Peter S. Voss 1992 President and Chief Executive Officer,
Chairman of the Board NEIC; Chairman of the Board, Director,
and Chief Executive President and Chief Executive Officer, New
Officer England Investment Companies, Inc.;
(48) Chairman of the Board and Director, NEF
Corporation; Chairman of the Board and
Director, Back Bay Advisors, Inc.; Chairman
of the Board and Director, Westpeak
Investment Advisors, Inc.; Director,
Loomis, Sayles & Company, Inc.; Director,
The New England; formerly Group Head of
International Banking, Trading and
Securities, Security Pacific, and Chief
Executive Officer, Security Pacific
Investment Group.
Henry L.P. Schmelzer 1991 President and Chief Executive Officer, NEF;
Trustee and President Director, NESCO.
(51)
G. Kenneth Heebner 1988 Associate, Capital Growth Management
Senior Vice President Limited Partnership ("CGM").
(54)
Robert L. Kemp 1988 Associate, CGM.
Senior Vice President
(62)
Gerald H. Scriver 1993 President and Chief Executive Officer,
Senior Vice President Westpeak; formerly, Senior Vice President,
(54) INVESCO Funds Group.
Donald R. Shepherd 1993 Chief Executive Officer, Loomis Sayles.
Senior Vice President
(58)
Charles T. Wallis 1988 President and Chief Executive Officer, Back
Senior Vice President Bay Advisors.
(53)
Frederick K. Zimmermann 1994 Executive Vice President (since 1993) and
Senior Vice President Chief Investment Officer (since 1992), The
(42) New England. Previously, Senior Vice
President, The New England. Chairman of the
Board and President, TNE Advisers. Director
and Vice President-Investments, NEVLICO.
Chairman of the Board and President, New
England Pension and Annuity Company.
Harold Bjornson 1991 Vice President, Back Bay Advisors;
Vice President formerly, Assistant Vice President, The New
(38) England.
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
NAME AND OFFICE WITH OFFICE WITH TRUST PRINCIPAL OCCUPATION; BUSINESS EXPERIENCE
TRUST (AGE) HELD SINCEA FOR AT LEAST THE PAST FIVE YEARS
-------------------- ----------------- -------------------------------------------
<S> <C> <C>
Catherine L. Bunting 1990 Vice President, Back Bay Advisors.
Vice President
(36)
Philip J. Cooper 1993 Vice President, Westpeak; formerly,
Vice President Portfolio Manager, United Asset Management
(36) Services.
Christine A. Creelman 1987 Vice President, Back Bay Advisors;
Vice President formerly, Investment Officer, The New
(48) England.
Barbara C. Friedman 1994 Vice President, Loomis Sayles; formerly,
Vice President Partner and Portfolio Manager, Harvard
(48) Management Company.
John F. Guthrie, Jr. 1994 Vice President, The New England. Senior
Vice President Vice President and Director, TNE Advisers.
(51)
Richard W. Hurckes 1993 Vice President, Loomis Sayles.
Vice President
(61)
J. Scott Nicholson 1987 Senior Vice President, Back Bay Advisors.
Vice President
(44)
Peter Palfrey 1994 Vice President, Back Bay Advisors;
Vice President formerly, Investment Vice President, MONY
(34) Capital Management.
Scott Pape 1993 Vice President, Loomis Sayles; formerly,
Vice President Equity Portfolio Manager, Illinois State
(38) Board of Investments.
Jeffrey C. Petherick 1994 Vice President, Loomis Sayles; formerly,
Vice President Analyst, Masco Corporation.
(32)
Bruce R. Speca 1987 Senior Vice President, NEF.
Vice President
(39)
Frank Nesvet 1993 Senior Vice President and Chief Financial
Treasurer Officer, NEF; formerly, Executive Vice
(51) President, SuperShare Services Corporation.
</TABLE>

13
<PAGE>

- ---------------------
(1) Also an officer of New England Funds Trust I, a Massachusetts business
trust consisting of 10 funds.
(2) Also an officer of New England Funds Trust II, a Massachusetts business
trust consisting of 7 funds.
(3) Also an officer of New England Cash Management Trust, a Massachusetts
business trust consisting of two funds.
(4) Also an officer of New England Tax Exempt Money Market Trust.
(5) Also an officer of NEVA.
a For persons who have held the indicated office since before February 27,
1987, includes period of service in the same office with the New England
Zenith Fund, Inc., a corporate predecessor of the Trust which was
reorganized into the Trust on that date.

The address of Messrs. Voss, Schmelzer and Wallis, Ms. Bunting, Ms. Creelman
and Messrs. Bjornson, Nicholson, Palfrey, Speca and Nesvet, and the address of
NESCO, is 399 Boylston Street, Boston, Massachusetts 02116. The address of
Messrs. Heebner and Kemp is One International Place, Boston, Massachusetts
02110. The address of Messrs. Scriver and Cooper is 1050 Walnut Street,
Boulder, Colorado 80302. The address of Mr. Shepherd is 595 Fifth Street West,
Sonoma, California 95476. The address of Messrs. Zimmermann and Guthrie is 501
Boylston Street, Boston, Massachusetts 02116. The address of Ms. Friedman is
One Financial Center, Boston, Massachusetts 02111. The address of Messrs.
Hurckes and Pape is Three First National Plaza, Chicago, Illinois. The address
of Mr. Petherick is 1533 North Woodward, Suite 300, Bloomfield Hills, Michigan
48304.

As of the Record Date, the Trustees and officers of the Trust as a group
owned less than 1% of the outstanding shares of the Trust.

For additional information relevant to Proposal 1, see "Summary of
Proposals--Election of Trustees" in Part I of this Proxy Statement.

REQUIRED VOTE

The election of Trustees will be by a plurality of the shares of the Trust
(all Funds voting together as a single class) present at the Meeting in person
or by proxy.

THE TRUSTEES UNANIMOUSLY RECOMMEND ELECTION OF EACH NOMINEE FOR TRUSTEE
LISTED ABOVE.

III. APPROVAL OR DISAPPROVAL OF NEW ADVISORY AND SUB-ADVISORY AGREEMENTS (BACK
BAY ADVISORS MONEY MARKET SERIES, BACK BAY ADVISORS BOND INCOME
SERIES,BACK BAY ADVISORS MANAGED SERIES, LOOMIS SAYLES AVANTI GROWTH
SERIES, LOOMIS SAYLES SMALL CAP SERIES, WESTPEAK VALUE GROWTH SERIES AND
WESTPEAK STOCK INDEX SERIES ONLY)

As discussed above under "Summary of Proposals--Restructuring of Management
Arrangements," the Trustees are proposing that shareholders of each of the
Affected Funds approve a new Advisory Agreement (a "New Advisory Agreement")
with TNE Advisers, and a Sub-Advisory Agreement between TNE Advisers and such
Fund's current investment adviser.

14
<PAGE>

Each Affected Fund currently employs its investment adviser under an Advisory
Agreement (an "Old Agreement") that obligates the current adviser to provide
both portfolio management services and administrative and general management
services to such Fund. The Old Agreements permit the current advisers to
delegate their administrative and general management responsibilities to third
parties, and each Affected Fund's current adviser in fact delegates these
responsibilities to NEF. As a result, the current advisers are themselves
directly furnishing the Affected Funds with portfolio management services only.
The proposed new arrangement would more accurately reflect the fact that the
Affected Fund's current advisers are engaged primarily in the investment
management business, and are not in the business of themselves rendering
comprehensive administrative and general management services to mutual funds.
The proposed arrangements would also conform the seven Affected Funds'
management arrangements to those already in effect for seven other Funds of the
Trust.

Under the proposed arrangements, each Affected Fund would engage TNE Advisers
under a New Advisory Agreement that is in all substantive respects (including
the scope of services to be provided, fee rates and termination provisions)
substantially the same as such Fund's Old Agreement. TNE Advisers, in turn,
would engage such Fund's current investment adviser to furnish, at the expense
of TNE Advisers, under the proposed Sub-Advisory Agreement relating to such
Fund, the same portfolio management services as the current adviser is
currently providing under the Old Agreement. TNE Advisers would itself provide
the Affected Funds with certain administrative and general management services,
and would engage NEF to provide, at the expense of TNE Advisers, certain other
such services. TNE Advisers would also oversee the operations and affairs of
each Fund as conducted by the Fund's sub-adviser, NEF and other service
providers (such as the Funds' custodian, legal counsel and independent
accountants). The proposed new arrangements thus would reallocate, among
various entities affiliated with The New England, responsibility for providing
the services currently furnished under the Old Agreements. THE PROPOSED
ARRANGEMENTS WOULD NOT CHANGE THE NATURE OR SCOPE OF THE SERVICES TO BE
FURNISHED TO THE AFFECTED FUNDS, AND WOULD NOT CHANGE THE FEE RATES OR OTHER
EXPENSES PAYABLE BY THE AFFECTED FUNDS. Also, under the proposed arrangements,
each Affected Fund's current adviser would continue to be responsible for the
management of such Fund's investments. The proposed arrangements would have no
effect on any Fund's investment objectives or policies.

BRIEF DESCRIPTION OF THE OLD AGREEMENTS, THE PROPOSED NEW ADVISORY AGREEMENTS
AND THE PROPOSED SUB-ADVISORY AGREEMENTS

The form of the New Advisory Agreements is set forth in Appendix A to this
Proxy Statement, and the form of the Sub-Advisory Agreements is set forth in
Appendix B. The following summary descriptions are qualified in their entirety
by reference to the forms of the Agreements as so set forth.

THE NEW ADVISORY AGREEMENTS AND THE OLD AGREEMENTS

Services and Fees. The New Advisory Agreement relating to each Affected Fund
provides that TNE Advisers will, subject to its rights to delegate such
responsibilities to sub-advisers, provide to such Fund both (1) Portfolio
Management Services (defined to mean managing the investment and reinvestment
of the assets of the Fund, subject to the supervision and control of the
Trustees of the Trust) and (2) Administrative Services (defined to mean
furnishing or paying the expenses of the applicable Fund for office space,
facilities

15
<PAGE>

and equipment, services of executive and other personnel of the Trust and
certain other administrative and general management services). Under the New
Advisory Agreements, TNE Advisers will receive from the relevant Fund
compensation at the annual percentage rates of the corresponding levels of such
Fund's net asset value set forth in the table below.

The Old Agreements in substance require each Fund's current adviser to
provide the same services as TNE Advisers will be required to provide under the
proposed New Advisory Agreements. (The Old Agreements do not, however, contain
provisions authorizing the current advisers to delegate responsibilities for
Portfolio Management Services to third parties.) The Old Agreement for each
Affected Fund provides for the same fee rates as that Fund's proposed New
Advisory Agreement. The table below also sets forth the net assets of each
Affected Fund as of December 31, 1994, and the amount of fees paid by each
Affected Fund to its current adviser during the fiscal year ended December 31,
1994.

<TABLE>
<CAPTION>
FEES PAID TO
CURRENT ADVISERS
AVERAGE NET NET ASSETS (IN THOUSANDS)
ANNUAL FEE ASSET VALUE (IN MILLIONS) AT CURRENT FOR FISCAL
FUND RATES LEVELS DECEMBER 31, 1994 ADVISER 1994A
---- ---------- ----------- ----------------- ------- ----------------
<S> <C> <C> <C> <C> <C>
Back Bay Advisors .35% of first $500 million $ 74 Back Bay $231
Money Market Series .30% of next $500 million
.25% of excess over $1 billion
Back Bay Advisors .40% of first $400 million $126 Back Bay $515
Bond Income Series .35% of next $300 million
.30% of next $300 million
.25% of excess over $1 billion
Back Bay Advisors
Managed Series .50% of all assets $122 Back Bay $613
Loomis Sayles
Avanti Growth Series .70% of first $200 million $ 26 Loomis Sayles $138
.65% of next $300 million
.60% of excess over $500 million
Loomis Sayles
Small Cap Series 1.00%b of all assets $ 3 Loomis Sayles $ 13
Westpeak Value
Growth Series .70% of first $200 million $ 23 Westpeak $118
.65% of next $300 million
.60% of excess over $500 million
Westpeak Stock
Index Series .25% of all assets $ 37 Westpeak $ 83
</TABLE>
- ---------------------
a Fees do not reflect fee waivers and expense assumptions by The New England
or the current advisers of (dollars in thousands) $6 for the Westpeak Stock
Index Series, $6 for the Westpeak Value Growth Series, $6 for the Loomis
Sayles Avanti Growth Series and $18 for the Loomis Sayles Small Cap Series.
The Loomis Sayles Small Cap Series commenced investment operations on May 1,
1994.

16
<PAGE>

b This fee rate is higher than that paid by most mutual funds, but is the same
rate as the Fund pays under its Old Agreement and is comparable to the rates
paid by some other mutual funds with similar investment objectives and
policies.

Under each New Advisory Agreement, if the total ordinary business expenses of
a Fund or the Trust as a whole for any fiscal year exceed the lowest applicable
limitation (based on percentages of average net assets or income) prescribed by
any state in which the shares of the Fund or Trust are qualified for sale, TNE
Advisers shall pay such excess. TNE Advisers will not be required to reduce its
fee or pay such expenses to an extent or under circumstances which might result
in a Fund's inability to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code"). The term "expenses" is
defined in each New Advisory Agreement and excludes brokerage commissions,
taxes, interest, distribution-related expenses and extraordinary expenses. The
Old Agreement for each Affected Fund contains a substantially identical
provision obligating the Fund's current adviser to bear expenses in excess of
those permitted by relevant state law.

The New Advisory Agreements do not require TNE Advisers to delegate
responsibility for Portfolio Management Services to any sub-adviser. TNE
Advisers and the Trust will not enter into the proposed New Advisory Agreement
for any Affected Fund unless the proposed Sub-Advisory Agreement relating to
that Fund with the Fund's current investment adviser is also entered into at
the same time. Each New Advisory Agreement would, however, permit TNE Advisers
to continue as the Fund's investment adviser (subject to the Fund's rights to
terminate the New Advisory Agreement as described below under "Other
Provisions"), even after any termination of the proposed Sub-Advisory
Agreement. If at any time the Sub-Advisory Agreement relating to any Affected
Fund is terminated without simultaneous termination of the Fund's New Advisory
Agreement with TNE Advisers, the Trustees of the Trust would consider whether
to appoint a new sub-adviser or adviser (subject in each case to approval of
the relevant Fund's shareholders).

OTHER PROVISIONS. Each New Advisory Agreement provides that it will continue
in effect for two years from its date of execution and thereafter from year to
year if its continuance is approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the relevant Fund and (ii) by vote of a majority of the Trustees
who are not "interested persons" of the Trust, as that term is defined in the
1940 Act, cast in person at a meeting called for the purpose of voting on such
approval. Any amendment to a New Advisory Agreement must be approved by vote of
a majority of the outstanding voting securities of the relevant Fund, and by
vote of a majority of the Trustees who are not such interested persons, cast in
person at a meeting called for the purpose of voting on such approval. Each New
Advisory Agreement may be terminated without penalty by vote of the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
relevant Fund, upon sixty days' written notice, or by TNE Advisers upon ninety
days' written notice, and each terminates automatically in the event of its
assignment. In addition, each New Advisory Agreement will automatically
terminate if the Trust or the relevant Fund shall at any time be required by
NESCO to eliminate all reference to the words "TNE" or "New England" in the
name of the Trust or such Fund, unless the continuance of the New Advisory
Agreement after such change of name is approved by a majority of the
outstanding voting securities of the relevant Fund and by a majority of the
Trustees who are not interested persons of the Trust or NESCO. Each New
Advisory Agreement provides that TNE Advisers 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 and duties.

17
<PAGE>

EXPENSE LIMITATIONS. Pursuant to a voluntary expense agreement, effective
November 1, 1994, relating to the Back Bay Advisors Money Market, Back Bay
Advisors Bond Income, Back Bay Advisors Managed and Westpeak Stock Index Series
and, beginning December 1, 1994, relating to the Loomis Sayles Small Cap,
Loomis Sayles Avanti Growth and Westpeak Value Growth Series, The New England
currently bears the expenses (other than the advisory fees and any brokerage
costs, interest, taxes or extraordinary expenses) of those Series (except the
Loomis Sayles Small Cap Series) in excess of 0.15% annually of the respective
Series' average daily net assets. In the case of the Loomis Sayles Small Cap
Series, The New England bears all expenses of the Series in excess of 1.00%
annually of the Series' average daily net assets. The New England may terminate
this voluntary expense agreement at any time. At such time as TNE Advisers
becomes adviser to each Affected Fund, TNE Advisers expects to enter into a
similar voluntary expense arrangement with respect to such Fund. This
arrangement will replace the existing arrangement with The New England, and
will be terminable by TNE Advisers at any time.

Prior to November 1, 1994, The New England had agreed to pay the Trust's
charges and expenses of preparing, printing and distributing prospectuses and
reports to shareholders, custodial and transfer agent charges and expenses,
auditing, accounting and legal fees and certain other expenses in connection
with the affairs of the Trust and the expenses of shareholders' and trustees'
meetings. This agreement terminated on October 31, 1994

CERTAIN OTHER INFORMATION ABOUT THE OLD AGREEMENTS. On April 29, 1994, the
Trustees of the Trust approved the Old Agreement relating to the Loomis Sayles
Small Cap Series for an initial period of two years. On May 19, 1994, the
Trustees of the Trust voted to approve the continuation, for a one-year period
beginning June 1, 1994, of the Old Agreements relating to the Back Bay Advisors
Money Market Series, the Back Bay Advisors Bond Income Series, the Back Bay
Advisors Managed Series, the Loomis Sayles Avanti Growth Series and the
Westpeak Value Growth Series.

Each Old Agreement was last approved by shareholders of the relevant Fund on
the date set forth below, when it was submitted to shareholder vote for the
purpose set forth below:

<TABLE>
<CAPTION>
DATE OF DATE OF LAST PURPOSE FOR SUBMITTING
FUND OLD AGREEMENT SHAREHOLDER APPROVAL TO SHAREHOLDER VOTE
---- ------------- -------------------- ----------------------
<S> <C> <C> <C>
Back Bay
Advisors
Money Market
Series February 27, 1987 February 27, 1987 Reorganization of Trust
from corporate form
Back Bay
Advisors
Bond Income
Series February 27, 1987 February 27, 1987 Reorganization of Trust
from corporate form
Back Bay
Advisors
Managed Series April 30, 1987 April 30, 1987 Initial approval of
agreement
Loomis Sayles
Avanti Growth
Series April 30, 1993 April 29, 1993 Initial approval of
agreement
Loomis Sayles
Small Cap
Series April 29, 1994 April 29, 1994 Initial approval of
agreement
</TABLE>
18
<PAGE>

<TABLE>
<CAPTION>
DATE OF DATE OF LAST PURPOSE FOR SUBMITTING
FUND OLD AGREEMENT SHAREHOLDER APPROVAL TO SHAREHOLDER VOTE
---- ------------- -------------------- ----------------------
<S> <C> <C> <C>
Westpeak
Value Growth Series April 30, 1993 April 29, 1993 Initial approval of
agreement
Westpeak
Stock Index Series August 1,1993 July 14, 1993 Appointment of new
investment adviser
</TABLE>

THE SUB-ADVISORY AGREEMENTS

The proposed Sub-Advisory Agreement for each Fund requires the relevant sub-
adviser to manage the investment and reinvestment of the assets of the Fund,
subject to the supervision of TNE Advisers. The sub-adviser is authorized to
effect portfolio transactions for the relevant Fund in the discretion of the
sub-adviser and without prior consultation with TNE Advisers. The sub-adviser
is required to report periodically to TNE Advisers, its agents and the Trustees
of the Trust.

The Sub-Advisory Agreements provide that TNE Advisers shall compensate the
relevant sub-adviser at the annual percentage rates of the corresponding levels
of the Funds' average net assets set forth in the table below. The compensation
to the subadvisers is payable by TNE Advisers, and not by the Funds.

<TABLE>
<CAPTION>
FUND SUB-ADVISER ANNUAL FEE RATE AVERAGE NET ASSET LEVELS
---- ----------- --------------- ------------------------
<S> <C> <C> <C>
Back Bay
Advisors Back Bay Advisors .15% of first $100 million
Money Market
Series .10% of excess over $100 million
Back Bay
Advisors Back Bay Advisors .25% of first $50 million
Bond Income
Series .20% of next $200 million
.15% of excess over $250 million
Back Bay
Advisors Back Bay Advisors .25% of first $50 million
Managed Series .20% of excess over $50 million
Loomis Sayles Loomis Sayles .50% of first $25 million
Avanti Growth
Series .40% of next $75 million
.35% of next $100 million
.30% of excess over $200 million
Loomis Sayles Loomis Sayles .55% of first $25 million
Small Cap Series .50% of next $75 million
.45% of next $100 million
.40% of excess over $200 million
Westpeak Westpeak .10% of all assets
Stock Index
Series
Westpeak Westpeak .50% of first $25 million
Value Growth
Series .40% of next $75 million
.35% of next $100 million
.30% of excess over $200 million
</TABLE>

19
<PAGE>

OTHER PROVISIONS. Each Sub-Advisory Agreement provides that it will continue
in effect for two years from its date of execution and thereafter from year to
year if its continuance is approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the relevant Fund and (ii) by vote of a majority of the Trustees
who are not "interested persons," as that term is defined in the 1940 Act, of
the Trust, TNE Advisers or the relevant sub-adviser, cast in person at a
meeting called for the purpose of voting on such approval. Any amendment to a
Sub-Advisory Agreement must be approved by TNE Advisers, by the relevant sub-
adviser, by vote of a majority of the outstanding voting securities of the
relevant Fund, and by vote of a majority of the Trustees who are not such
interested persons, cast in person at a meeting called for the purpose of
voting on such approval. Each Sub-Advisory Agreement may be terminated without
penalty by vote of the Board of Trustees or by vote of a majority of the
outstanding voting securities of the relevant Fund, upon sixty days' written
notice, or by the relevant sub-adviser or (if approved by the Trustees) by TNE
Advisers upon ninety days' written notice, and each terminates automatically in
the event of its assignment. Each Sub-Advisory Agreement will automatically
terminate if the New Advisory Agreement relating to the relevant Fund is
terminated. In addition, each Sub-Advisory Agreement will automatically
terminate if the relevant Fund shall at any time be required by the sub-adviser
to eliminate all reference to the name of the sub-adviser in the name of such
Fund, unless the continuance of the Sub-Advisory Agreement after such change of
name is approved by a majority of the outstanding voting securities of the
relevant Fund and by a majority of the Trustees who are not interested persons
of the Trust or the sub-adviser. Each Sub-Advisory Agreement provides that the
relevant sub-adviser 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 and duties.

INFORMATION ABOUT TNE ADVISERS

TNE Advisers is a wholly-owned subsidiary of The New England. Frederick K.
Zimmermann is the principal executive officer of TNE Advisers; Mr. Zimmermann
and John F. Guthrie, Jr. are the company's directors and Mr. Zimmermann serves
as the chairman. The address of TNE Advisers, The New England and Messrs.
Zimmermann and Guthrie is 501 Boylston Street, Boston, Massachusetts 02116.
Additional information about Messrs. Zimmermann and Guthrie is set forth in
Part II of this Proxy Statement under "Executive Officers of the Fund."

TNE Advisers currently acts as investment adviser to seven Funds of the
Trust. In each case, it has delegated responsibility for portfolio management
to a sub-adviser. The following table identifies the seven Funds, their net
assets at December 31, 1994, the annual rate of advisory fees payable to TNE
Advisers, the sub-adviser and the annual rate of sub-advisory fees payable by
TNE Advisers to the relevant sub-adviser. All fee rates are stated as
percentages of the corresponding average net asset levels of the relevant Fund.

20
<PAGE>

<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE ANNUAL RATE OF
(IN MILLIONS) AT OF FEE TO SUB-
FUND DECEMBER 31, 1994 TNE ADVISERS/1/ SUB-ADVISER ADVISORY FEE AVERAGE NET ASSET LEVELS
---- ----------------- --------------- ----------- -------------- ------------------------
<S> <C> <C> <C> <C> <C>
Loomis Sayles $ 3 .70% Loomis Sayles .50% of first $25 million
Balanced Series .40% of next $75 million
.30% of excess over $100 million
Draycott $ 3 .90% Draycott Partners, .75% of first $10 million
International Equity Ltd .60% of next $40 million
Series .45% of excess over $50 million
Salomon Brothers $ 2 .55% Salomon Brothers .225% of first $200 million
U.S. Government Asset Management .15% of next $300 million
Series Inc .10% of excess over $500 million
Salomon Brothers $ 3 .65% Salomon Brothers .35% of first $50 million
Strategic Bond Asset Management .30% of next $150 million
Opportunities Series Inc .25% of next $300 million
.20% of excess over $500 million
Venture Value $ 3 .75% Selected/Venture 45% of first $100 million
Series Advisers, L.P .40% of next $400 million
.35% of excess over $500 million
Alger Equity $ 2 .70% Fred Alger 45% of first $10 million
Growth Series Management, Inc .40% of next $90 million
.35% of next $150 million
.30% of next $250 million
.25% of excess over $500 million
CS First Boston $ 2 .80% CS First Boston .45% of first $200 million
Strategic Equity Investment .40% of next $300 million
Opportunities Series Management .35% of next $500 million
Corporation .30% of excess over $1 billion
</TABLE>
- ---------------------
/1/These fee rates are payable with respect to the total net assets of the
relevant Fund.

In the case of the CS First Boston Strategic Equity Opportunities Series, TNE
Advisers will pay the sub-adviser, in addition to the sub-advisory fee set
forth in the table above, an amount equal to three times a fee (the "Fulcrum
Fee"), which Fulcrum Fee shall be the following percentage of the average daily
net assets of the Series during the first three years of the Series's
operations: if the average annual return of the Series during such three-year
period is greater than or equal to the average annual return of the Standard &
Poor's 500 Stock Index (the "Index") during the same period plus 0.40% but less
than the Index plus 0.50%, the Fulcrum Fee shall be 0.01%; if the average
annual return of the Series during the three-year period is greater than or
equal to that of the Index plus 0.50% but less than that of the Index plus
0.60%, the Fulcrum Fee shall be 0.03%; and if the average annual return of the
Series during the three-year period is greater than or equal to that of the
Index plus 0.60%, the Fulcrum Fee shall be 0.05%. At the end of each full year
subsequent to the third full year of operations of the CS First Boston
Strategic Equity Opportunities Series, TNE Advisers will pay the Series's sub-
adviser the Fulcrum Fee as described in the previous sentence as a percentage
of the Series's average daily net assets over the immediately previous three-
year period and based on the average annual return of the Series relative to
the Index during the same three-year period.

21
<PAGE>

Pursuant to an expense deferral arrangement in effect beginning November 1,
1994, relating to the Loomis Sayles Balanced Series, the Draycott International
Equity Series, the Salomon Brothers U.S. Government Series, the Salomon
Brothers Strategic Bond Opportunities Series, the Venture Value Series, the
Alger Equity Growth Series and the CS First Boston Strategic Equity
Opportunities Series, which TNE Advisers may terminate at any time, TNE
Advisers has agreed to pay the expenses of the Series's operations (exclusive
of any brokerage costs, interest, taxes or extraordinary expenses) in excess of
stated expense limits, which limits vary from Series to Series, subject to the
obligation of the Series to repay TNE Advisers such expenses in future years,
if any, when a Series's expenses fall below the stated expense limit that
pertains to that Series; such deferred expenses may be charged to a Series in a
subsequent year to the extent that the charge does not cause the total expenses
in such subsequent year to exceed the Series's stated expense limit; provided,
however, that no Series is obligated to repay an expense paid by TNE Advisers
more than two years after the end of the fiscal year in which such expense was
incurred. For the Loomis Sayles Balanced Series, TNE Advisers has agreed to
defer such expenses in excess of .85% of net assets until a subsequent year, if
any, when total expenses are less than .85% of net assets; for the Draycott
International Equity Series, TNE Advisers has agreed to defer such expenses in
excess of 1.30% of net assets until a subsequent year, if any, when total
expenses are less than 1.30% of net assets; for the Salomon Brothers U.S.
Government Series, TNE Advisers has agreed to defer such expenses in excess of
.70% of net assets until a subsequent year, if any, when total expenses are
less than .70% of net assets; for the Salomon Brothers Strategic Bond
Opportunities Series, TNE Advisers has agreed to defer such expenses in excess
of .85% of net assets until a subsequent year, if any, when total expenses are
less than .85% of net assets; for the Venture Value Series, TNE Advisers has
agreed to defer such expenses in excess of .90% of net assets until a
subsequent year, if any, when total expenses are less than .90% of net assets;
for the Alger Equity Growth Series, TNE Advisers has agreed to defer such
expenses in excess of .85% of net assets until a subsequent year, if any, when
total expenses are less than .85% of net assets; for the CS First Boston
Strategic Equity Opportunities Series, TNE Advisers has agreed to defer such
expenses in excess of 1.05% of net assets until a subsequent year, if any, when
total expenses are less than 1.05% of net assets. These expense limits can be
prospectively discontinued by TNE Advisers but any expenses that were deferred
while a Series's expense limit was in place can never be charged to that Series
unless that Series's expenses fall below the limit.

INFORMATION ABOUT BACK BAY ADVISORS

Back Bay Advisors is a limited partnership. Its sole general partner, Back
Bay Advisors, Inc., is a wholly-owned subsidiary of NEIC Holdings, Inc., which
is a wholly-owned subsidiary of NEIC. NEIC also owns the entire limited
partnership interest in Back Bay Advisors. The principal executive officer of
Back Bay Advisors is Charles T. Wallis, who is a Senior Vice President of the
Trust and whose principal occupation is his position with Back Bay Advisors.
The sole general partner of NEIC is New England Investment Companies, Inc.
("NEIC Inc."), which is a wholly-owned subsidiary of The New England. The
address of Back Bay Advisors, Back Bay Advisors, Inc., NEIC, NEIC Holdings,
Inc., NEIC Inc. and Mr. Wallis is 399 Boylston Street, Boston, Massachusetts
02116.

Back Bay Advisors acts as investment adviser to the following other mutual
funds that have a similar investment objective to the Back Bay Advisors Money
Market Series, for compensation at the annual percentage 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 funds at December 31,
1994.

22
<PAGE>

<TABLE>
<CAPTION>
NET ASSETS
(IN MILLIONS)
FUND AT DECEMBER 31, 1994 ANNUAL FEE RATE AVERAGE NET ASSETS LEVELS
---- -------------------- --------------- -------------------------------
<S> <C> <C> <C>
New England Cash
Management $644 .425% of the first $500 million
Trust--Money Market
Series .400% of the next $500 million
.350% of the next $500 million
.300% of the next $500 million
.250% of the excess over $2 billion
New England Cash
Management $ 63 .425% of the first $500 million
Trust--U.S. Government
Series .400% of the next $500 million
.350% of the next $500 million
.300% of the next $500 million
.250% of the excess over $2 billion
New England Tax Exempt
Money $ 74 .40% of the first $100 million
Market Trust .30% of the excess over $100 million
</TABLE>

In the case of New England Tax Exempt Money Market Trust, Back Bay Advisors
has voluntarily agreed to reduce its fee and, if necessary, to assume expenses
of that Trust in order to limit the operating expenses of that Trust to the
annual rate of .5625% of that Trust's average net assets. Back Bay Advisors may
terminate this voluntary agreement at any time.

Back Bay Advisors also acts as investment adviser to New England Bond Income
Fund, a mutual fund that has a similar objective to the Back Bay Advisors Bond
Income Series of the Trust, for compensation at the annual rate of .50% of the
first $100 million of New England Bond Income Fund's average net assets and
.375% of the excess of such assets over $100 million. At December 31, 1994, the
net assets of New England Bond Income Fund were $165 million.

INFORMATION ABOUT LOOMIS SAYLES

Loomis Sayles is a limited partnership. Its sole general partner, Loomis,
Sayles & Company, Incorporated ("LSCI"), is a wholly-owned subsidiary of NEIC
Holdings, Inc., which is a wholly-owned subsidiary of NEIC. NEIC also owns the
entire limited partnership interest in Loomis Sayles. The principal executive
officer of Loomis Sayles is Donald R. Shepherd, who is a Senior Vice President
of the Trust and whose principal occupation is his position with Loomis Sayles.
The address of Loomis Sayles and LSCI is One Financial Center, Boston,
Massachusetts 02111. Mr. Shepherd's address is 595 Fifth Street West, Sonoma,
California 95476.

Loomis Sayles acts as investment adviser to the following other mutual funds
that have a similar investment objective to the Loomis Sayles Avanti Growth
Series of the Trust, for compensation at the annual fee rates of the
corresponding average net assets levels of those funds set forth in the table
below. The table also sets forth the net assets of those funds at December 31,
1994.

23
<PAGE>

Loomis Sayles also acts as investment adviser to another mutual fund, the
Loomis Sayles Small Cap Fund, which has an investment objective similar to the
Loomis Sayles Small Cap Series of the Trust. The Loomis Sayles Small Cap Fund
had net assets of $73 million at December 31, 1994. The Loomis Sayles Small
Cap Fund pays Loomis Sayles an advisory fee at the annual rate of 1.00% of the
Fund's average daily net assets.

INFORMATION ABOUT WESTPEAK

Westpeak is a limited partnership. Its sole general partner, Westpeak
Investment Advisors, Inc. ("Westpeak Inc."), is a wholly-owned subsidiary of
NEIC Holdings, Inc., which is a wholly-owned subsidiary of NEIC. NEIC also
owns the entire limited partnership interest in Westpeak. The principal
executive officer of Westpeak is Gerald H. Scriver, who is a Senior Vice
President of the Trust and whose principal occupation is his position with
Westpeak. The address of Westpeak, Westpeak Inc. and Mr. Scriver is 1050
Walnut Street, Boulder, Colorado 80302.

Westpeak does not currently act as investment adviser or sub-adviser to any
mutual funds other than two Funds of the Trust. Westpeak is proposed, however,
to become sub-adviser to New England Growth Opportunities Fund, subject to
approval by the shareholders of that fund. New England Growth Opportunities
Fund has an investment objective similar to the Westpeak Value Growth Series
of the Trust. At December 31, 1994, the net assets of New England Growth
Opportunities Fund were $109 million. The proposed annual sub-advisory fee
rate payable to Westpeak with respect to New England Growth Opportunities Fund
is .50% of the first $25 million of the Fund's average net assets, .40% of the
next $75 million of such assets, .35% of the next $100 million of such assets
and .30% of such assets in excess of $200 million.

CERTAIN BROKERAGE MATTERS

In determining to recommend the proposed New Advisory Agreements and Sub-
Advisory Agreements, the Trustees considered the following policies of the
proposed sub-advisers with respect to certain matters relating to the
execution of portfolio transactions for the Affected Funds:

In placing orders for the purchase and sale of portfolio securities for each
Fund for which they serve as investment adviser, Back Bay Advisors and Loomis
Sayles always seek the best price and execution. Some portfolio transactions
of the Affected Funds for which Back Bay Advisors or Loomis Sayles act as
adviser (and are proposed to act as sub-adviser) are placed with brokers and
dealers who provide Back Bay Advisors or Loomis Sayles with supplementary
investment and statistical information or furnish market quotations to that
Fund, the other Funds or other investment companies or accounts advised by
Back Bay Advisors or Loomis Sayles. The business would not be so placed if the
Funds would not thereby obtain the best price and

24
<PAGE>

execution. Although it is not possible to assign an exact dollar value to these
services, they may, to the extent used, tend to reduce the expenses of Back Bay
Advisors or Loomis Sayles. The services may also be used by Back Bay Advisors
or Loomis Sayles in connection with their other advisory accounts and in some
cases may not be used with respect to the Funds.

In placing orders for the purchase and sale of securities for the Westpeak
Value Growth Series and the Westpeak Stock Index Series, Westpeak always seeks
best execution. Westpeak selects only brokers or dealers which it believes are
financially responsible, will provide efficient and effective services in
executing, clearing and settling an order and will charge commission rates
which, when combined with the quality of the foregoing services, will produce
best price and execution. This does not necessarily mean that the lowest
available brokerage commission will be paid. Westpeak 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
broker in connection with the order, are taken into account. The Sub-Advisory
Agreements relating to the Westpeak Value Growth Series and the Westpeak Stock
Index Series (and the Old Advisory Agreements for those Series) provide that
Westpeak may cause the Series to pay a broker-dealer that provides brokerage
and research services to Westpeak an amount of commission for effecting a
securities transaction for the relevant Series in excess of the amount another
broker-dealer would have charged for effecting that transaction. Westpeak must
determine in good faith that such greater commission is reasonable in relation
to the value of the brokerage and research services provided by the executing
broker-dealer viewed in terms of that particular transaction or Westpeak's
overall responsibilities to the Westpeak Value Growth Series, the Westpeak
Stock Index Series and Westpeak's other clients. Westpeak's authority to cause
the Westpeak Value Growth Series or the Westpeak Stock Index Series to pay such
greater commissions is also subject to such policies as the Trust's Trustees
may adopt from time to time.

The Back Bay Advisors Managed Series may pay brokerage commissions to NESCO
for acting as the Fund's agent on purchases and sales of securities for the
portfolios of the Funds. Securities and Exchange Commission rules require that
commissions paid to NESCO by a Fund for portfolio transactions not exceed
"usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable period of time." The Trustees, including those who are not
"interested persons" of the Trust, have adopted procedures for evaluating the
reasonableness of commissions paid to NESCO and will review these procedures
periodically. The Affected Funds paid no brokerage commissions to NESCO in
1994.

REQUIRED VOTE

Each Affected Fund votes separately from each other Fund with respect to the
New Advisory Agreement and the Sub-Advisory Agreement for that Fund. Although
shareholders of each Affected Fund will vote on the proposed Sub-Advisory
Agreement separately from the proposed New Advisory Agreement, neither the Sub-
Advisory Agreement nor the New Advisory Agreement will take effect unless
shareholders of that Fund

25
<PAGE>

approve both such Agreements. The required vote for each Agreement is the
lesser of (1) 67% of the shares of the relevant Affected Fund represented at
the Meeting, if more than 50% of the shares of that Fund are represented at the
Meeting, or (2) more than 50% of the outstanding shares of the relevant Fund.
If shareholders of any Affected Fund do not approve both the New Advisory
Agreement and the Sub-Advisory Agreement relating to that Fund, the Old
Agreement relating to the Fund will remain in effect.

THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF EACH AFFECTED FUND
VOTE TO APPROVE THE PROPOSED NEW ADVISORY AGREEMENT AND SUB-ADVISORY AGREEMENT
RELATING TO THAT FUND.

VI. OTHER MATTERS

Forty percent of the shares of the Trust outstanding on the Record Date,
present in person or represented by proxy, constitutes a quorum for the
transaction of business with respect to Proposal 1. On all other Proposals, as
to which only the relevant Fund is entitled to vote, forty percent of the
shares of such Fund outstanding on the Record Date, present in person or by
proxy, constitutes a quorum for the transaction of business. Votes cast by
proxy or in person at the meeting will be counted by persons appointed by the
Trust as tellers for the Meeting. With respect to Proposal 1, shares as to
which the proxies are instructed to abstain from voting will have no effect on
the outcome of the voting. With respect to Proposals 2 through 15, shares as to
which the proxies are instructed to abstain from voting will have the effect of
a negative vote on the proposal.

In the event that a quorum is not present for purposes of acting on any
Proposal, or sufficient votes in favor of any of Proposals 2 through 15 with
respect to any relevant Fund are not received by April 10, 1995, the persons
named as proxies may vote on those matters for which a quorum is present and 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 shares
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 Proposals 1 through 15.
They will vote against any such adjournment those proxies required to be voted
against any of Proposals 1 through 15 and will not vote any proxies that direct
them to abstain from voting on such Proposals.

Although the Meeting is called to transact any other business that may
properly come before it, the only business that management intends to present
or knows that others will present is Proposals 1 through 15 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.

Shareholder proposals to be presented at any future meeting of shareholders
of the Trust must be received by the Trust a reasonable time before the Trust's
solicitation of proxies for that meeting in order for such proposals to be
considered for inclusion in the proxy materials relating to that meeting.

March 6, 1995

26
<PAGE>

APPENDIX A

NEW ENGLAND ZENITH FUND

ADVISORY AGREEMENT
(*** SERIES)

AGREEMENT made this 1st day of May, 1995 by and between NEW ENGLAND ZENITH
FUND, a Massachusetts business trust (the "Fund"), with respect to its ***
Series (the "Series"), and TNE ADVISERS, INC., a Massachusetts corporation (the
"Manager").

WITNESSETH:

WHEREAS, the Fund and the Manager wish to enter into an agreement setting
forth the terms upon which the Manager (or certain other parties acting
pursuant to delegation from the Manager) will perform certain services for the
Series;

NOW THEREFORE, in consideration of the premises and covenants hereinafter
contained, the parties agree as follows:

1. (a) The Fund hereby employs the Manager to furnish the Fund with Portfolio
Management Services (as defined in Section 2 hereof) and Administrative
Services (as defined in Section 3 hereof), subject to the authority of the
Manager to delegate any or all of its responsibilities hereunder to other
parties as provided in Sections 1(b) and (c) hereof. The Manager hereby accepts
such employment and agrees, at its own expense, to furnish such services
(either directly or pursuant to delegation to other parties as permitted by
Sections 1(b) and (c) hereof) and to assume the obligations herein set forth,
for the compensation herein provided. The Manager 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.

(b) The Manager may delegate any or all of its responsibilities hereunder
with respect to the provision of Portfolio Management Services (and assumption
of related expenses) to one or more other parties (each such party, a "Sub-
Adviser"), pursuant in each case to a written agreement with such Sub-Adviser
that meets the requirements of Section 15 of the Investment Company Act of 1940
and the rules thereunder (the "1940 Act") applicable to contracts for service
as investment adviser of a registered investment company (including without
limitation the requirements for approval by the trustees of the Fund and the
shareholders of the Series), subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission. Any Sub-Adviser may (but
need not) be affiliated with the Manager. If different Sub-Advisers are engaged
to provide Portfolio Management Services with respect to different segments of
the portfolio of the Series, the Manager shall determine, in the manner
described in the prospectus of the Series from time to time in effect, what
portion of the assets belonging to the Series shall be managed by each Sub-
Adviser.

(c) The Manager may delegate any or all of its responsibilities hereunder
with respect to the provision of Administrative Services to one or more other
parties (each such party, an "Administrator") selected by the Manager. Any
Administrator may (but need not) be affiliated with the Manager.

A-1
<PAGE>

2. As used in this Agreement, "Portfolio Management Services" means
management of the investment and reinvestment of the assets belonging to the
Series, consisting specifically of the following:

(a) obtaining and evaluating such economic, statistical and financial
data and information and undertaking such additional investment research as
shall be necessary or advisable for the management of the investment and
reinvestment of the assets belonging to the Series in accordance with the
Series' investment objectives and policies;

(b) taking such steps as are necessary to implement the investment
policies of the Series by purchasing and selling of securities, including
the placing of orders for such purchase and sale; and

(c) regularly reporting to the Board of Trustees of the Fund with respect
to the implementation of the investment policies of the Series.

3. As used in this Agreement, "Administrative Services" means the provision
to the Fund, by or at the expense of the Manager, of the following:

(a) office space in such place or places as may be agreed upon from time
to time by the Fund and the Manager, and all necessary office supplies,
facilities and equipment;

(b) necessary executive and other personnel for managing the affairs of
the Series, including personnel to perform clerical, bookkeeping,
accounting, stenographic and other office functions (exclusive of those
related to and to be performed under contract for custodial, transfer,
dividend and plan agency services by the entity or entities selected to
perform such services);

(c) compensation, if any, of trustees of the Fund who are directors,
officers or employees of the Adviser, any Sub-Adviser or any Administrator
or of any affiliated person (other than a registered investment company) of
the Manager, any Sub-Adviser or any Administrator;

(d) all services, other than services of counsel, required in connection
with the preparation of registration statements and prospectuses, including
amendments and revisions thereto, all annual, semiannual and periodic
reports, and notices and proxy solicitation material furnished to
shareholders of the Fund or regulatory authorities, to the extent that any
such materials relate to the business of the Series, to the shareholders
thereof or otherwise to the Series, the Series to be treated for these
purposes as a separate legal entity and fund; and

(e) supervision and oversight of the Portfolio Management Services
provided by each Sub-Adviser, and oversight of all matters relating to
compliance by the Fund with applicable laws and with the Fund's investment
policies, restrictions and guidelines, if the Manager has delegated to one
or more Sub-Advisers any or all of its responsibilities hereunder with
respect to the provision of Portfolio Management Services.

4. Nothing in section 3 hereof shall require the Manager to bear, or to
reimburse the Fund for:

(a) any of the costs of printing and mailing the items referred to in
sub-section (d) of section 3;

(b) any of the costs of preparing, printing and distributing sales
literature;

(c) compensation of trustees of the Fund who are not directors, officers
or employees of the Manager, any Sub-Adviser or any Administrator or of any
affiliated person (other than a registered investment company) of the
Manager, any Sub-Adviser or any Administrator;

A-2
<PAGE>

(d) registration, filing and other fees in connection with requirements
of regulatory authorities;

(e) the charges and expenses of any entity appointed by the Fund for
custodial, paying agent, shareholder servicing and plan agent services;

(f) charges and expenses of independent accountants retained by the Fund;

(g) charges and expenses of any transfer agents and registrars appointed
by the Fund;

(h) brokers' commissions and issue and transfer taxes chargeable to the
Fund in connection with securities transactions to which the Fund is a
party;

(i) taxes and fees payable by the Fund to federal, state or other
governmental agencies;

(j) any cost of certificates representing shares of the Fund;

(k) legal fees and expenses in connection with the affairs of the Fund
including registering and qualifying its shares with Federal and State
regulatory authorities;

(l) expenses of meetings of shareholders and trustees of the Fund; and

(m) interest, including interest on borrowing by the Fund.

5. All activities undertaken by the Manager or any Sub-Adviser or
Administrator pursuant to this Agreement shall at all times be subject to the
supervision and control of the Board of Trustees of the Fund, any duly
constituted committee thereof or any officer of the Fund acting pursuant to
like authority.

6. The services to be provided by the Manager and any Sub-Adviser or
Administrator hereunder are not to be deemed exclusive and the Manager and any
Sub-Adviser or Administrator shall be free to render similar services to
others, so long as its services hereunder are not impaired thereby.

7. As full compensation for all services rendered, facilities furnished and
expenses borne by the Manager hereunder, the Fund shall pay the Manager
compensation at the annual rate of [see rates set forth for each Affected Fund
in Part III of the attached Proxy Statement]. Such compensation shall be
payable monthly in arrears or at such other intervals, not less frequently
than quarterly, as the Board of Trustees of the Fund may from time to time
determine and specify in writing to the Manager. The Manager hereby
acknowledges that the Fund's obligation to pay such compensation is binding
only on the assets and property belonging to the Series.

8. If the total of all ordinary business expenses of the Fund as a whole
(including investment advisory fees but excluding taxes and portfolio
brokerage commissions) for any fiscal year exceeds the lowest applicable
percentage of average net assets or income limitations prescribed by any state
in which shares of the Series are qualified for sale, the Manager shall pay
such excess. Solely for purposes of applying such limitations in accordance
with the foregoing sentence, the Series and the Fund shall each be deemed to
be a separate fund subject to such limitations. Should the applicable state
limitation provisions fail to specify how the average net assets of the Fund
or belonging to the Series are to be calculated, that figure shall be
calculated by reference to the average daily net assets of the Fund or the
Series, as the case may be.

9. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Fund may be a shareholder, director, officer,
employee or agent of, or be otherwise interested in, the Manager, any
affiliated

A-3
<PAGE>

person of the Manager, any organization in which the Manager may have an
interest or any organization which may have an interest in the Manager; that
the Manager, 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 agreement and declaration of trust of the Fund, the
articles of organization of the Manager or specific provisions of applicable
law.

10. This Agreement shall become effective as of the date of its execution,
and

(a) unless otherwise terminated, this Agreement shall continue in effect
for two years from the date of execution, and from year to year thereafter
so long as such continuance is specifically approved at least annually (i)
by the Board of Trustees of the Fund or by vote of a majority of the
outstanding voting securities of the Series, and (ii) by vote of a majority
of the trustees of the Fund who are not interested persons of the Fund or
the Manager, 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 Manager either by vote of the Board of Trustees of the Fund
or by vote of a majority of the outstanding voting securities of the
Series;

(d) this Agreement may be terminated by the Manager on ninety days'
written notice to the Fund;

(e) if New England Securities Corporation, the Fund's principal
underwriter, requires the Fund or the Series to change its name so as to
eliminate all references to the words "New England" pursuant to the
provisions of the Fund's Distribution Agreement relating to the Series with
said principal underwriter, 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 vote of a majority of the
outstanding voting securities of the Series and by vote of a majority of
the trustees of the Fund who are not interested persons of the Fund or the
Manager, cast in person at a meeting called for the purpose of voting on
such approval.

Termination of this Agreement pursuant to this section 10 shall be without
the payment of any penalty.

11. 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 vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the trustees of the Fund who are not
interested persons of the Fund or the Manager, cast in person at a meeting
called for the purpose of voting on such approval.

12. 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 the 1940 Act. References in this Agreement to any
assets, property or liabilities "belonging to" the Series shall have the
meaning defined in the Fund's agreement and declaration of trust as amended
from time to time.

A-4
<PAGE>

13. In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Fund, to
any shareholder 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.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

NEW ENGLAND ZENITH FUND, TNE ADVISERS, INC.
on behalf of its *** Series

By: _________________________________ By: _______________________________

NOTICE

A copy of the Agreement and Declaration of Trust establishing New England
Zenith Fund (the "Fund") is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed with
respect to the Fund's *** Series (the "Series") on behalf of the Fund by
officers of the Fund as officers and not individually and that the obligations
of or arising out of this Agreement are not binding upon any of the trustees,
officers or shareholders individually but are binding only upon the assets and
property belonging to the Series.

A-5
<PAGE>

APPENDIX B

NEW ENGLAND ZENITH FUND

SUB-ADVISORY AGREEMENT
(*** SERIES)

This Sub-Advisory Agreement (this "Agreement") is entered into as of May 1,
1995 by and between TNE Advisers, Inc., a Massachusetts corporation (the
"Manager") and *** (the "Sub-Adviser").

WHEREAS, the Manager has entered into an Advisory Agreement dated May 1, 1995
(the "Advisory Agreement") with New England Zenith Fund (the "Trust"), pursuant
to which the Manager provides portfolio management and administrative services
to the *** Series of the Trust (the "Series");

WHEREAS, the Advisory Agreement provides that the Manager may delegate any or
all of its portfolio management responsibilities under the Advisory Agreement
to one or more sub-advisers;

WHEREAS, the Manager desires to retain the Sub-Adviser to render portfolio
management services in the manner and on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the Manager and the Sub-Adviser agree as follows:

1. Sub-Advisory Services.

a. The Sub-Adviser shall, subject to the supervision of the Manager and in
cooperation with any administrator appointed by the Manager (the
"Administrator"), manage the investment and reinvestment of the assets of the
Series. The Sub-Adviser shall manage the Series in conformity with (1) the
investment objective, policies and restrictions of the Series set forth in the
Trust's prospectus and statement of additional information relating to the
Series, (2) any additional policies or guidelines established by the Manager or
by the Trust's trustees that have been furnished in writing to the Sub-Adviser
and (3) the provisions of the Internal Revenue Code (the "Code") applicable to
"regulated investment companies" (as defined in Section 851 of the Code) and
Section 817 of the Code, all as from time to time in effect (collectively, the
"Policies"), and with all applicable provisions of law, including without
limitation all applicable provisions of the Investment Company Act of 1940 (the
"1940 Act") and the rules and regulations thereunder. Subject to the foregoing,
the Sub-Adviser is authorized, in its discretion and without prior consultation
with the Manager, to buy, sell, lend and otherwise trade in any stocks, bonds
and other securities and investment instruments on behalf of the Series,
without regard to the length of time the securities have been held and the
resulting rate of portfolio turnover or any tax considerations; and the
majority or the whole of the Series may be invested in such proportions of
stocks, bonds, other securities or investment instruments, or cash, as the Sub-
Adviser shall determine. Notwithstanding the foregoing provisions of this
Section 1.a, however, the Sub-Adviser shall, upon written instructions from the
Manager, effect such portfolio transactions for the Series as the Manager shall
determine are necessary in order for the Series to comply with the Policies.

B-1
<PAGE>

b. The Sub-Adviser shall furnish the Manager and the Administrator monthly,
quarterly and annual reports concerning portfolio transactions and performance
of the Series in such form as may be mutually agreed upon, and agrees to review
the Series and discuss the management of the Series with representatives or
agents of the Manager, the Administrator or the Trust at their reasonable
request. The Sub-Adviser shall permit all books and records with respect to the
Series to be inspected and audited by the Manager and the Administrator at all
reasonable times during normal business hours, upon reasonable notice. The Sub-
Adviser shall also provide the Manager, the Administrator or the Trust with
such other information and reports as may reasonably be requested by the
Manager, the Administrator or the Trust from time to time, including without
limitation all material as reasonably may be requested by the Trustees of the
Trust pursuant to Section 15(c) of the 1940 Act.

c. The Sub-Adviser shall provide to the Manager a copy of the Sub-Adviser's
Form ADV as filed with the Securities and Exchange Commission and as amended
from time to time and a list of the persons whom the Sub-Adviser wishes to have
authorized to give written and/or oral instructions to custodians of assets of
the Series.

2. Obligations of the Manager.

a. The Manager shall provide (or cause the Trust's custodian to provide)
timely information to the Sub-Adviser regarding such matters as the composition
of assets in the Series, cash requirements and cash available for investment in
the Series, and all other information as may be reasonably necessary for the
Sub-Adviser to perform its responsibilities hereunder.

b. The Manager has furnished the Sub-Adviser a copy of the prospectus and
statement of additional information of the Series and agrees during the
continuance of this Agreement to furnish the Sub-Adviser copies of any
revisions or supplements thereto at, or, if practicable, before the time the
revisions or supplements become effective. The Manager agrees to furnish the
Sub-Adviser with minutes of meetings of the Trustees of the Trust applicable to
the Series to the extent they may affect the duties of the Sub-Adviser, and
with copies of any financial statements or reports made by the Series to its
shareholders, and any further materials or information which the Sub-Adviser
may reasonably request to enable it to perform its functions under this
Agreement.

3. Custodian. The Manager shall provide to the Sub-Adviser a copy of the
Series's agreement with the custodian designated to hold the assets of the
Series (the "Custodian") and any modifications thereto (the "Custody
Agreement"), copies of such modifications to be provided to the Sub-Adviser a
reasonable time in advance of the effectiveness of such modifications. The
assets of the Series shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement (or any sub-custodian properly appointed as provided in the Custody
Agreement). The Sub-Adviser shall have no liability for the acts or omissions
of the Custodian, unless such act or omission is required by and taken in
reliance upon instruction given to the Custodian by a representative of the
Sub-Adviser properly authorized to give such instruction under the Custody
Agreement. Any assets added to the Series shall be delivered directly to the
Custodian.

B-2
<PAGE>

4. Expenses. Except for expenses specifically assumed or agreed to be paid by
the Sub-Adviser pursuant hereto, the Sub-Adviser shall not be liable for any
expenses of the Manager or the Trust including, without limitation, (a)
interest and taxes, (b) brokerage commissions and other costs in connection
with the purchase or sale of securities or other investment instruments with
respect to the Series, and (c) custodian fees and expenses. The Sub-Adviser
will pay its own expenses incurred in furnishing the services to be provided by
it pursuant to this Agreement.

5. Purchase and Sale of Assets. Absent instructions from the Manager to the
contrary, the Sub-Adviser shall place all orders for the purchase and sale of
securities for the Series with brokers or dealers selected by the Sub-Adviser,
which may include brokers or dealers affiliated with the Sub-Adviser, provided
such orders comply with Rule 17e-1 under the 1940 Act in all respects. To the
extent consistent with applicable law, purchase or sell orders for the Series
may be aggregated with contemporaneous purchase or sell orders of other clients
of the Sub-Adviser. The Sub-Adviser shall use its best efforts to obtain
execution of transactions for the Series at prices which are advantageous to
the Series and at commission rates that are reasonable in relation to the
benefits received. However, the Sub-Adviser may select brokers or dealers on
the basis that they provide brokerage, research or other services or products
to the Series and/or other accounts serviced by the Sub-Adviser. [Bracketed
language applies only to Series advised by Westpeak: To the extent consistent
with applicable law, the Sub-Adviser may pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission or dealer spread another broker or dealer would have charged for
effecting that transaction if the Sub-Adviser determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research products and/or services provided by such broker or
dealer. This determination, with respect to brokerage and research services or
products, may be viewed in terms of either that particular transaction or the
overall responsibilities which the Sub-Adviser and its affiliates have with
respect to the Series or to accounts over which they exercise investment
discretion.] Not all such services or products need to be used by the Sub-
Adviser in managing the Series.

6. Compensation of the Sub-Adviser. As full compensation for all services
rendered, facilities furnished and expenses borne by the Sub-Adviser hereunder,
the Manager shall pay the Sub-Adviser compensation at the annual rate of [see
rates set forth for each Affected Fund in Part III of the attached Proxy
Statement]. Such compensation shall be payable monthly in arrears or at such
other intervals, not less frequently than quarterly, as the Manager is paid by
the Series pursuant to the Advisory Agreement. The Manager may from time to
time waive the compensation it is entitled to receive from the Trust; however,
any such waiver will have no effect on the Manager's obligation to pay the Sub-
Adviser the compensation provided for herein.

7. Non-Exclusivity. The Manager and the Series agree that the services of the
Sub-Adviser are not to be deemed exclusive and that the Sub-Adviser and its
affiliates are free to act as investment manager and provide other services to
various investment companies and other managed accounts, except as the Sub-
Adviser and the Manager or the Administrator may otherwise agree from time to
time in writing before or after the date hereof. This Agreement shall not in
any way limit or restrict the Sub-Adviser or any of its directors, officers,
employees or agents from buying, selling or trading any securities or other
investment instruments for its or their own account or for the account of
others for whom it or they may be acting, provided that such activities do not
adversely affect or otherwise impair the performance by the Sub-Adviser

B-3
<PAGE>

of its duties and obligations under this Agreement. The Manager and the Series
recognize and agree that the Sub-Adviser may provide advice to or take action
with respect to other clients, which advice or action, including the timing and
nature of such action, may differ from or be identical to advice given or
action taken with respect to the Series. The Sub-Adviser shall for all purposes
hereof be deemed to be an independent contractor and shall, unless otherwise
provided or authorized, have no authority to act for or represent the Trust or
the Manager in any way or otherwise be deemed an agent of the Trust or the
Manager.

8. Liability. Except as may otherwise be provided by the 1940 Act or other
federal securities laws, neither the Sub-Adviser nor any of its officers,
directors, employees or agents (the "Indemnified Parties") shall be subject to
any liability to the Manager, the Trust, the Series or any shareholder of the
Series for any error of judgment, any mistake of law or any loss arising out of
any investment or other act or omission in the course of, connected with, or
arising out of any service to be rendered under this Agreement, except by
reason of willful misfeasance, bad faith or gross negligence in the performance
of the Sub-Adviser's duties or by reason of reckless disregard by the Sub-
Adviser of its obligations and duties. The Manager shall hold harmless and
indemnify the Sub-Adviser for any loss, liability, cost, damage or expense
(including reasonable attorneys fees and costs) arising from any claim or
demand by any past or present shareholder of the Series that is not based upon
the obligations of the Sub-Adviser with respect to the Series under this
Agreement. The Manager acknowledges and agrees that the Sub-Adviser makes no
representation or warranty, express or implied, that any level of performance
or investment results will be achieved by the Series or that the Series will
perform comparably with any standard or index, including other clients of the
Sub-Adviser, whether public or private.

9. Effective Date and Termination. This Agreement shall become effective as
of the date of its execution, and

a. unless otherwise terminated, this Agreement shall continue in effect for
two years from the date of execution, and from year to year thereafter so long
as such continuance is specifically approved at least annually (i) by the Board
of Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Series, and (ii) by vote of a majority of the trustees of the
Trust who are not interested persons of the Trust, the Manager or the Sub-
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 Sub-Adviser either by vote of the Board of Trustees of the Trust or by
vote of a majority of the outstanding voting securities of the Series;

c. this Agreement shall automatically terminate in the event of its
assignment or upon the termination of the Advisory Agreement;

d. this Agreement may be terminated by the Sub-Adviser on ninety days'
written notice to the Manager and the Trust, or, if approved by the Board of
Trustees of the Trust, by the Manager on ninety days' written notice to the
Sub-Adviser; and

B-4
<PAGE>

e. if the Sub-Adviser requires the Series to change its name so as to
eliminate all references to [the name of the Sub-Adviser], 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
vote of a majority of the outstanding voting securities of the Series and by
vote of a majority of the Trustees of the Trust who are not interested persons
of the Trust or the Sub-Adviser, cast in person at a meeting called for the
purpose of voting on such approval.

Termination of this Agreement pursuant to this Section 10 shall be without
the payment of any penalty.

10. Amendment. This Agreement may be amended at any time by mutual consent of
the Manager and the Sub-Adviser, provided that, if required by law, such
amendment shall also have been approved by vote of a majority of the
outstanding voting securities of the Series and by vote of a majority of the
trustees of the Trust who are not interested persons of the Trust, the Manager
or the Sub-Adviser, cast in person at a meeting called for the purpose of
voting on such approval.

11. Certain Definitions. 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 the 1940 Act.

12. General.

a. The Sub-Adviser may perform its services through any employee, officer or
agent of the Sub-Adviser, and the Manager shall not be entitled to the advice,
recommendation or judgment of any specific person; provided, however, that the
persons identified in the prospectus of the Series shall perform the portfolio
management duties described therein until the Sub-Adviser notifies the Manager
that one or more other employees, officers or agents of the Sub-Adviser,
identified in such notice, shall assume such duties as of a specific date.

b. If any term or provision of this Agreement or the application thereof to
any person or circumstances is held to be invalid or unenforceable to any
extent, the remainder of this Agreement or the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the fullest extent permitted by law.

c. This Agreement shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Massachusetts.

TNE ADVISERS, INC. ***

By: _________________________________ By: _________________________________

Frederick K. Zimmermann
President Name: _______________________________

Title: ______________________________

B-5
<PAGE>

INSTRUCTION FORM

THE PROXY TO WHICH THESE INSTRUCTIONS RELATE IS SOLICITED ON BEHALF OF THE
TRUSTEES OF NEW ENGLAND ZENITH FUND.

The undersigned hereby instructs that all shares of any series (each a "Series,"
and collectively, the "Series") of New England Zenith Fund (the "Fund") deemed
attributable to the undersigned's contracts with the issuing insurance company
be voted at the Special Meeting of Shareholders of the Fund on April 10, 1995
(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 set forth below:

THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR ALL OF THE ITEMS BELOW
PERTAINING TO THE RELEVANT SERIES.
- --------------------------------------------------------------------------------
1. (With respect to all Series) To fix the number of trustees at nine and elect
trustees. Nominees: Anne M. Goggin, Nancy Hawthorne, Joseph M. Hinchey,
Richard S. Humphrey, Jr., Robert B. Kittredge, Laurens MacLure, Dale Rogers
Marshall, Joseph F. Turley, Frederick K. Zimmermann.
[_] For all nominees [_] For all nominees except
--------------------------
[_] Vote withheld for all nominees

<TABLE>
<CAPTION>
TO APPROVE THE PROPOSED: NEW ADVISORY SUB-
AGREEMENT ADVISORY AGREEMENT
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
RELATING TO THE FOLLOWING SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Back Bay Advisors Money Market
Series 2. [_] [_] [_] 3. [_] [_] [_]
Back Bay Advisors Bond Income
Series 4. [_] [_] [_] 5. [_] [_] [_]
Back Bay Advisors Managed Series 6. [_] [_] [_] 7. [_] [_] [_]
Loomis Sayles Avanti Growth Series 8. [_] [_] [_] 9. [_] [_] [_]
Loomis Sayles Small Cap Series 10. [_] [_] [_] 11. [_] [_] [_]
Westpeak Value Growth Series 12. [_] [_] [_] 13. [_] [_] [_]
Westpeak Stock Index Series 14. [_] [_] [_] 15. [_] [_] [_]
</TABLE>

16.To consider and act upon any other matters which may properly come before
the meeting or any adjournment thereof.

(Continued and to be signed on reverse side)
<PAGE>

If this form is signed and returned with no choices indicated as to any
proposal on which the shares represented by the undersigned's contract are
entitled to be voted, such shares shall be voted FOR such proposal. With
respect to each of Proposals 2-15, only shares of the indicated Series are
entitled to vote. Any voting instructions submitted by the undersigned with
respect to proposals on which the undersigned is not entitled to give voting
instructions shall be disregarded.
-----------------------------------

To vote for all
items AS RECOMMENDED
BY THE BOARD OF
TRUSTEES, mark this
[_] box, sign, date and
return this
instruction form.
(NO ADDITIONAL VOTE
IS NECESSARY.)

-----------------------------------

DATED _______________________, 1995

___________________________________
Signature of the Contractholder

___________________________________

Please sign exactly as your name(s)
appear(s) on this instruction form. Only
one signature is required in case of a
joint account. When signing in a
representative capacity, please give
title.

YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN AND RETURN THIS CARD AS SOON AS
POSSIBLE.
<PAGE>

INSTRUCTION FORM

THE PROXY TO WHICH THESE INSTRUCTIONS RELATE IS SOLICITED ON BEHALF OF THE
TRUSTEES OF NEW ENGLAND ZENITH FUND.

The undersigned hereby instructs that all shares of any series (each a
"Series," and collectively, the "Series") of New England Zenith Fund (the
"Fund") deemed attributable to the undersigned's contracts with the issuing
insurance company be voted at the Special Meeting of Shareholders of the Fund
on April 10, 1995 (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 set forth below:

<TABLE>
<CAPTION>
TO APPROVE THE PROPOSAL: NEW ADVISORY SUB-
AGREEMENT ADVISORY AGREEMENT
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
RELATING TO THE FOLLOWING SERIES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Back Bay Advisors Money Market
Series 2. [_] [_] [_] 3. [_] [_] [_]
Back Bay Advisors Bond Income
Series 4. [_] [_] [_] 5. [_] [_] [_]
Back Bay Advisors Managed Series 6. [_] [_] [_] 7. [_] [_] [_]
Loomis Sayles Avanti Growth Series 8. [_] [_] [_] 9. [_] [_] [_]
Loomis Sayles Small Cap Series 10. [_] [_] [_] 11. [_] [_] [_]
Westpeak Value Growth Series 12. [_] [_] [_] 13. [_] [_] [_]
Westpeak Stock Index Series 14. [_] [_] [_] 15. [_] [_] [_]
</TABLE>

16.To consider and act upon any other matters which may properly come before
the meeting or any adjournment thereof.

(Continued and to be signed on reverse side)
<PAGE>

- ---------------------------------------- -----------------------------------
IF YOU WISH TO VOTE BY TELEPHONE, PLEASE To vote for all items AS
SEE THE BLUE INSTRUCTION CARD. RECOMMENDED BY THE BOARD OF
- ---------------------------------------- TRUSTEES, mark this box, sign,
[_] date and return this instruction
Personal Identification Number form. (NO ADDITIONAL VOTE IS
NECESSARY.)

-----------------------------------

DATED _______________________, 1995

___________________________________
Signature of the Contractholder

___________________________________

Please sign exactly as your
name(s) appear(s) on this
instruction form. Only one
signature is required in case of a
joint account. When signing in a
representative capacity, please
give title.

YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN AND RETURN THIS CARD AS SOON AS
POSSIBLE.