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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
New England Funds Trust I
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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PRELIMINARY COPY
NEW ENGLAND
CAPITAL GROWTH FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
APRIL 17, 1998
To the Shareholders:
Notice is hereby given that a Special Meeting of Shareholders of New England
Capital Growth Fund (the "Fund"), a series of New England Funds Trust I (the
"Trust"), will be held at the offices of New England Funds, L.P. ("NEF"), 399
Boylston Street, 4th Floor, Boston, Massachusetts 02116, on Friday, April 17,
1998 at 2:30 p.m. (Eastern time), for the following purposes:
1. To approve or disapprove a new Sub-Advisory Agreement relating to the
Fund between New England Funds Management, L.P. ("NEFM") and Westpeak
Investment Advisors, L.P.
2. To approve or disapprove a proposal with respect to the future operations
of the Fund whereby the Fund may from time to time, to the extent
permitted by any exemption or exemptions granted by the Securities and
Exchange Commission, permit NEFM to enter into new and amended agreements
with sub-advisers with respect to the Fund without obtaining shareholder
approval of such agreements, and to permit such sub-advisers to manage
the assets of the Fund pursuant to such sub-advisory agreements.
3. To consider and act upon any other matters which may properly come before
the meeting or any adjournment thereof.
By order of the President of the Trust,
JOHN E. PELLETIER, Secretary
February 27, 1998
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YOUR VOTE IS IMPORTANT
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PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY 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> 3
NEW ENGLAND CAPITAL GROWTH FUND
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of New England Funds Trust I (the "Trust") for
use at the Special Meeting of Shareholders of New England Capital Growth Fund
(the "Fund"), a series of the Trust, to be held at the offices of New England
Funds, L.P. ("NEF"), 399 Boylston Street, 4th Floor, Boston, Massachusetts
02116, on Friday, April 17, 1998 at 2:30 p.m. (Eastern time), and at any
adjournment or adjournments thereof (the "Meeting"). This proxy statement and
its enclosures are being mailed to shareholders beginning on or about February
27, 1998. A copy of the Fund's Annual Report dated December 31, 1997 may be
obtained without charge by writing to NEF at the above address or by calling
(800) 225-5478.
This Proxy Statement consists of four parts.
PART I contains general information relating to the Meeting.
PART II contains information relating to Proposal 1, the proposed new
Sub-Advisory Agreement for the Fund between New England Funds Management, L.P.
("NEFM") and Westpeak Investment Advisors, L.P. ("Westpeak").
PART III contains information relating to Proposal 2, whereby the Fund may,
to the extent permitted by any exemption or exemptions granted by the Securities
and Exchange Commission (the "SEC"), permit NEFM to enter into new and amended
agreements with sub-advisers with respect to the Fund without obtaining
shareholder approval of such agreements, and to permit such sub-advisers to
manage the assets of the Fund pursuant to such sub-advisory agreements.
PART IV contains information about the Trust, NEFM, Westpeak and certain
brokerage and other miscellaneous matters.
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I. GENERAL INFORMATION
All shareholders of record on February 17, 1998, the record date for
determining shareholders entitled to vote at the Meeting (the "Record Date"),
are entitled to one vote for each share of beneficial interest of the Fund held
as of that date. The number of shares of beneficial interest of the Fund issued
and outstanding as of the Record Date was [ ].
Timely, properly executed proxies will be voted as you instruct. If you
return a proxy and no choice is indicated, your proxy will be voted in favor of
Proposals 1 and 2 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 the Fund.
Solicitation of proxies by personal interview, mail, telephone and telegraph may
be made by officers and Trustees of the Trust and employees of NEF. In addition,
the firm of D.F. King has been retained to assist in the solicitation of
proxies, at a cost to the Fund which is not expected to exceed $21,000, plus
reimbursement of such firm's out-of-pocket expenses.
II. NEW SUB-ADVISORY AGREEMENT
The Trustees have approved, and recommend that the shareholders of the Fund
approve, a new Sub-Advisory Agreement (the "New Sub-Advisory Agreement") for the
Fund between NEFM and Westpeak (Proposal 1). The New Sub-Advisory Agreement
would be substantially similar to the sub-advisory agreement dated August 30,
1996 (the "Previous Sub-Advisory Agreement") which was until recently in effect
between NEFM and Loomis, Sayles & Company, L.P. ("Loomis Sayles"), except: (i)
references to Loomis Sayles would be changed to references to Westpeak and (ii)
the sub-advisory fee paid by NEFM to Westpeak under the New Sub-Advisory
Agreement would be lower than the fee paid by NEFM to Loomis Sayles under the
Previous Sub-Advisory Agreement. The
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New Sub-Advisory Agreement would not affect the management fee
paid by the Fund to NEFM.
ADVISORY AGREEMENT
NEFM has acted as the Fund's adviser since January 2, 1996, and currently
acts as the Fund's adviser pursuant to an advisory agreement dated August 30,
1996 (the "Advisory Agreement"). The Trustees of the Trust approved the Advisory
Agreement at a meeting held on October 27, 1995, and the Fund's shareholders
approved the Advisory Agreement at a meeting held on December 28, 1995. The
purpose of the submission of the Advisory Agreement for shareholder approval at
such time was for its initial approval and to approve its continuation following
the merger of NEFM's former parent company, New England Mutual Life Insurance
Company, with and into Metropolitan Life Insurance Company ("MetLife"), with
MetLife as the surviving company, which merger was consummated on August 30,
1996 (the "MetLife Merger").
Under the Advisory Agreement, NEFM has overall advisory and administrative
responsibility with respect to the Fund. The Advisory Agreement also provides
that NEFM will, subject to NEFM's rights to delegate such responsibilities to
other parties, provide to the 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) and (2)
administrative services (defined to mean furnishing or paying the expenses of
the Fund for office space, facilities and equipment, services of executive and
other personnel of the Trust and certain other administrative and general
management services). Under the Advisory Agreement, the annual management fee
rate payable by the Fund to NEFM is 0.75% of the first $200 million of the
Fund's average daily net assets, 0.70% of the next $300 million of such assets
and 0.65% of any such assets in excess of $500 million. For the fiscal year
ended December 31, 1997, the aggregate management fee payable by the Fund to
NEFM under the Advisory Agreement was $[ ].
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PREVIOUS SUB-ADVISORY AGREEMENT
Until February 15, 1998, NEFM delegated to Loomis Sayles its responsibility
under the Advisory Agreement to provide portfolio management services to the
Fund pursuant to the Previous Sub-Advisory Agreement. The Previous Sub-Advisory
Agreement was approved by the Trustees of the Trust at a meeting held on October
27, 1995 and was last submitted to the Fund's shareholders for approval on
December 28, 1995. The purpose of the submission of the Previous Sub-Advisory
Agreement for shareholder approval at such time was for its initial approval and
to approve its continuance following the MetLife Merger. The Trustees of the
Trust, at a meeting held on May 9, 1997, approved the continuation of the
Previous Sub-Advisory Agreement for a one-year period beginning on June 1, 1997.
Under the terms of the Previous Sub-Advisory Agreement, Loomis Sayles was
authorized to effect portfolio transactions for the Fund, using its own
discretion and without prior consultation with NEFM. Loomis Sayles was also
required to report periodically to NEFM and the Trustees of the Trust.
The Previous Sub-Advisory Agreement provided for sub-advisory fees payable
by NEFM to Loomis Sayles at an annual rate of 0.60% of the first $25 million of
the Fund's average daily net assets, 0.55% of the next $75 million of such
assets, 0.50% of the next $100 million of such assets, 0.35% of the next $300
million of such assets and 0.30% of any such assets in excess of $500 million.
INTERIM AND NEW SUB-ADVISORY AGREEMENTS
Based on a review of the investment approach used by Loomis Sayles in
managing the Fund's portfolio, the Fund's performance record under Loomis
Sayles' management, the performance record of Westpeak and its portfolio
management personnel in managing other equity mutual funds and the performance
of other equity funds, NEFM recommended and the Trustees of the Trust determined
that it would be appropriate for Westpeak to assume responsibility for the
day-to-day management of the Fund's portfolio. Thus, upon the recommendation of
NEFM, the Trustees voted on January 30, 1998 to terminate the Previous
Sub-Advisory Agreement as of the close of
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business on February 15, 1998 and to approve both (i) a sub-advisory agreement
between NEFM and Westpeak dated February 16, 1998 (the "Interim Sub-Advisory
Agreement"), by which NEFM appointed Westpeak to act as sub-adviser to the Fund
beginning February 16, 1998, and (ii) the New Sub-Advisory Agreement, by which
Westpeak would, following approval of the New Sub-Advisory Agreement by the
Fund's shareholders (assuming such approval is obtained), continue to act as
sub-adviser to the Fund. The New Sub-Advisory Agreement is substantially
identical to the Interim Sub-Advisory Agreement, except that the rate of fees
payable by NEFM to Westpeak is lower under the New Sub-Advisory Agreement. The
terms of the Interim Sub-Advisory Agreement are substantially identical to those
of the Previous Sub-Advisory Agreement, except that references to Loomis Sayles
in the Previous Sub-Advisory Agreement have been changed to references to
Westpeak in the Interim Sub-Advisory Agreement. The fee rate payable by NEFM to
Westpeak under the Interim Sub-Advisory Agreement is 0.60% of the first $25
million of the average daily net assets of the Fund, 0.55% of the next $75
million of such assets, 0.50% of the next $100 million of such assets, 0.35% of
the next $300 million of such assets and 0.30% of any such assets in excess of
$500 million. This is identical to the fee rate payable by NEFM to Loomis Sayles
under the Previous Sub-Advisory Agreement. The fee rate payable to Westpeak
under the New Sub-Advisory Agreement is set forth below. Loomis Sayles consented
to the termination of the Previous Sub-Advisory Agreement as of the close of
business on February 15, 1998. Westpeak has agreed to waive payment of its
entire sub-advisory fee by NEFM under the Interim Sub-Advisory Agreement from
February 16, 1998 until April 2, 1998, and NEFM will pay such waived fees to
Loomis Sayles. This waiver by Westpeak will not affect the management fee paid
by the Fund to NEFM.
The New Sub-Advisory Agreement is subject to approval by the Fund's
shareholders, which approval ordinarily must be obtained before such an
agreement takes effect. However, the Interim Sub-Advisory Agreement went into
effect on February 16, 1998, pursuant to a rule of the SEC which under certain
circumstances allows such agreements to take effect, and to remain in effect for
up to 120 days,
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without receiving prior shareholder approval, as long as the fees payable under
such agreement do not exceed the fees payable under the predecessor agreement.
If the New Sub-Advisory Agreement is approved by the Fund's shareholders, it
will take effect at the close of business on the date such approval is obtained.
It is expected that such approval will be obtained on or soon after April 17,
1998, at which time the Interim Sub-Advisory Agreement would terminate and
Westpeak would begin earning sub-advisory fees at a lower rate under the New
Sub-Advisory Agreement. The Trustees recommend that the shareholders approve the
New Sub-Advisory Agreement.
WESTPEAK AS SUB-ADVISER
In determining to approve the appointment of Westpeak as sub-adviser to the
Fund and to recommend the New Sub-Advisory Agreement for shareholder approval,
the Trustees considered the qualifications of Westpeak and its personnel to
provide portfolio management services to the Fund. The Trustees also reviewed
information about Westpeak's proposed approach to managing the Fund's portfolio.
Westpeak's investment approach is oriented towards America's premier, large,
recognizable companies. Westpeak employs a valuation-based method to evaluate
potential investments and to identify reasonably priced growth stocks. This
valuation-based method is research-driven and is intended to provide returns
commensurate with returns from higher-risk portfolios.
Gerald H. Scriver, President and Chief Executive Officer of Westpeak, has
primary responsibility for the management of the Fund's portfolio under the
Interim Sub-Advisory Agreement and would continue to be the Fund's portfolio
manager under the New Sub-Advisory Agreement. Mr. Scriver, who is also the
portfolio manager of New England Growth Opportunities Fund, has been with
Westpeak since it was founded in 1991.
RESTRUCTURING COSTS
Westpeak has reviewed the existing portfolio holdings of the Fund to
determine what holdings it would expect to sell in order to conform the Fund's
portfolio to Westpeak's judgment as to stock
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selection. Based on this review, Westpeak has informed the Trustees that it
would expect to sell approximately [ ]% of the dollar value of the Fund's
existing portfolio, and to reinvest the sale proceeds in other stocks. Westpeak
estimates that these transactions would result in brokerage costs of
approximately $[ ] to the Fund. In addition to these commissions costs, the
transactions will involve additional costs to the Fund resulting from the impact
of the transactions on the prices received and paid by the Fund for the
securities being sold and bought. Although these costs cannot be precisely
ascertained, Westpeak estimates that they would be approximately $[ ]. In
addition, Westpeak estimates that the transactions, based on [early 1998] market
prices, would result in the realization of approximately $[ ] million of
long-term capital gains (or approximately $[ ] per share of the Fund). These
gains, together with any other long-term capital gains realized by the Fund in
1998 (reduced by any realized capital losses), would be distributed to Fund
shareholders at the end of the year and would constitute taxable long-term
capital gains in the hands of the recipient Fund shareholders.
The foregoing estimates were prepared in [early 1998] based on then-current
Fund holdings and market information available to Westpeak. The actual costs of
restructuring the Fund's portfolio could be higher or lower, depending on market
conditions and other factors. Westpeak expects that the restructuring will be
completed within a few weeks after Westpeak assumed responsibility for the
Fund's portfolio on February 16, 1998.
DESCRIPTION OF THE NEW SUB-ADVISORY AGREEMENT
A copy of the New Sub-Advisory Agreement is set forth as Appendix A to this
Proxy Statement. The following description of the New Sub-Advisory Agreement is
qualified in its entirety by reference to the full text of the Agreement as set
forth in Appendix A.
The New Sub-Advisory Agreement, which will take effect (assuming
shareholder approval) on or soon after April 17, 1998, requires Westpeak to
manage the investment and reinvestment of the assets of the Fund, subject to the
supervision of NEFM. Under the terms of the New Sub-Advisory Agreement, Westpeak
is authorized
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to effect portfolio transactions for the Fund, using its own discretion and
without prior consultation with NEFM. Westpeak is required to report
periodically to NEFM and the Trustees of the Trust. The New Sub-Advisory
Agreement provides that NEFM shall compensate Westpeak at the annual rate of
0.40% of the first $200 million of the Fund's average daily net assets, 0.35% of
the next $300 million of such assets and 0.30% of any such assets in excess of
$500 million. As of December 31, 1997, the net assets of the Fund were
approximately $[ ] million.
The New 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 Fund
and (ii) by vote of a majority of the Trustees who are not "interested persons,"
as that term is defined in the Investment Company Act of 1940 (the "1940 Act"),
of the Trust, NEFM or Westpeak, cast in person at a meeting called for the
purpose of voting on such approval. Any amendment to the New Sub-Advisory
Agreement must be approved by NEFM and Westpeak and, if required by law, by vote
of a majority of the outstanding voting securities of the Fund and by 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. The New 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 Fund, upon
sixty days' written notice, or by Westpeak or NEFM upon ninety days' written
notice, and will terminate automatically in the event of its assignment. The New
Sub-Advisory Agreement will automatically terminate if the Advisory Agreement is
terminated. The New Sub-Advisory Agreement provides that Westpeak 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.
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EFFECTS OF THE PREVIOUS, INTERIM AND NEW SUB-ADVISORY AGREEMENTS
For the fiscal year ended December 31, 1997, NEFM paid sub-advisory fees of
$[ ] to Loomis Sayles under the Previous Sub-Advisory Agreement. If the
Interim Sub-Advisory Agreement had been in effect during 1997, NEFM would have
paid this same amount in sub-advisory fees to Westpeak. If the New Sub-Advisory
Agreement had been in effect during 1997, NEFM would have paid sub-advisory fees
of $[ ] to Westpeak, or [ ]% less than the sub-advisory fees paid to
Loomis Sayles under the Previous Sub-Advisory Agreement. All sub-advisory fees
under the Previous Sub-Advisory Agreement, the Interim Sub-Advisory Agreement
and the New Sub-Advisory Agreement are paid by NEFM and not by the Fund.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUND VOTE TO
APPROVE THE PROPOSED NEW SUB-ADVISORY AGREEMENT.
The required vote for approval of the New Sub-Advisory Agreement is the
lesser of (1) 67% of the shares of the Fund represented at the Meeting, if more
than 50% of the shares of the Fund are represented at the Meeting, or (2) more
than 50% of the outstanding shares of the Fund. If the shareholders of the Fund
do not approve the New Sub-Advisory Agreement at the Meeting, the Trustees will
consider alternative arrangements for the management of the Fund's portfolio,
and the Interim Sub-Advisory Agreement will be terminated not later than 120
days after it took effect.
III. FUTURE SUB-ADVISORY AGREEMENTS WITHOUT SHAREHOLDER VOTE
The Fund proposes, to the extent permitted by any exemption or exemptions
granted by the SEC, to permit NEFM to enter into new and amended agreements with
sub-advisers with respect to the Fund without obtaining shareholder approval of
such agreements, and to permit such sub-advisers to manage the assets of the
Fund pursuant to such sub-advisory agreements (Proposal 2).
The 1940 Act generally provides that an investment adviser or sub-adviser
to a mutual fund may act as such only pursuant to a
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written agreement which has been approved by a vote of the fund's shareholders,
as well as by a vote of a majority of the trustees of the fund who are not
parties to such agreement or interested persons of any party to such agreement.
The Trust and NEFM, however, have received from the SEC an exemption from the
shareholder approval voting requirement in certain circumstances (the "SEC
Exemption"). Under the SEC Exemption, NEFM is permitted, under specified
conditions, to enter into new and amended sub-advisory agreements for the
management of the Fund, including agreements with new sub-advisers and
agreements with existing sub-advisers if there is a material change in the terms
of the sub-advisory agreement or if there is an "assignment," as defined in the
1940 Act, or other event causing termination of the existing sub-advisory
agreement, without obtaining the approval of the Fund's shareholders of such new
or amended sub-advisory agreement. Such agreements must nevertheless be approved
by the Trustees, in accordance with the requirements of the 1940 Act. One of the
conditions of the SEC Exemption is that within 90 days after entering into a new
or amended sub-advisory agreement without shareholder approval, the Fund must
provide to shareholders an information statement setting forth substantially the
information that would be required to be contained in a proxy statement for a
meeting of shareholders to vote on the approval of the agreement. Furthermore,
the Fund would still require shareholder approval to amend its Advisory
Agreement with NEFM (including any amendment to raise the management fee rate
payable under such agreement) or to enter into a new advisory agreement with
NEFM or any other adviser.
The Trust is requesting shareholder approval of this Proposal for several
reasons. As described under Proposal 1, the Fund utilizes an adviser/sub-adviser
management structure, where NEFM acts as the Fund's investment adviser,
delegating the day-to-day portfolio management to a sub-adviser. Under such a
structure, the Fund's sub-adviser acts in a capacity similar to that of the
portfolio manager in a more traditional structure that does not involve a
sub-adviser. Specifically, the Fund's sub-adviser, like a portfolio manager in a
more traditional mutual fund advisory structure, manages the Fund under the
oversight and supervision of the Fund's adviser. If the Fund were
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to change sub-advisers, NEFM would continue in its role as adviser and would
continue to exercise oversight and supervision of the Fund's investment affairs
as conducted by the new sub-adviser. Changing the Fund's sub-adviser is,
therefore, analogous to replacing the portfolio manager of a single-manager
managed fund, which does not require shareholder approval under the 1940 Act.
In addition, given the Fund's management structure, the shareholder
approval requirement under the 1940 Act may cause the Fund's shareholders to
incur unnecessary expenses and could hinder the prompt implementation of
sub-advisory changes that are in the best interest of the shareholders, such as
prompt removal of a sub-adviser if circumstances warrant such removal. The
Trustees believe that without the ability to employ promptly a new sub-adviser
or re-employ promptly the current sub-adviser upon a change of control, as the
case may be, investors' expectations may be frustrated and the Fund and its
shareholders could be seriously disadvantaged under the following circumstances:
(a) where a sub-adviser has been terminated because its performance was
unsatisfactory or its retention was otherwise deemed inadvisable, (b) where a
sub-adviser has resigned and (c) where there has been an "assignment" causing
the termination of a sub-advisory agreement (i.e., a change in the actual
control or management of a sub-adviser).
In the absence of an exemption, to obtain the shareholder approval required
by the 1940 Act for a sub-advisory agreement, the Fund must convene a
shareholder's meeting, which invariably involves considerable delay and expense.
Where NEFM, as adviser, has recommended replacement of a sub-adviser, and the
Trustees have determined that such replacement is necessary, the Fund could
receive less than satisfactory sub-advisory services prior to the time that an
agreement with a new sub-adviser is approved by shareholders. Also, in that
situation or where there has been an unexpected resignation or change in control
of a sub-adviser (events which, in many cases, are beyond the control of the
Fund), the Fund may be forced to operate with a less than satisfactory
sub-adviser for some period of time. In such circumstances, without the ability
to engage a new sub-adviser promptly, NEFM, as the adviser, might have to
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assume direct responsibility on a temporary basis for management of the assets
previously assigned to a sub-adviser.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS VOTE TO APPROVE
THE PROPOSED GRANT OF AUTHORITY TO PERMIT NEFM TO ENTER INTO NEW AND AMENDED
AGREEMENTS WITH SUB-ADVISERS WITH RESPECT TO THE FUND WITHOUT OBTAINING
SHAREHOLDER APPROVAL OF SUCH AGREEMENTS, AND TO PERMIT SUCH SUB-ADVISERS TO
MANAGE THE ASSETS OF THE FUND PURSUANT TO SUCH SUB-ADVISORY AGREEMENTS.
The required vote for approval of the grant of authority to permit NEFM to
enter into new and amended sub-advisory agreements without prior shareholder
approval is the lesser of (1) 67% of the shares of the Fund represented at the
Meeting, if more than 50% of the shares of the Fund are represented at the
Meeting, or (2) more than 50% of the outstanding shares of the Fund. If the
shareholders of the Fund do not approve this Proposal 2, the Trustees of the
Trust will consider such alternative actions as may be in the best interests of
the Fund.
IV. OTHER INFORMATION
INFORMATION ABOUT NEFM
NEFM is a limited partnership. Its sole general partner, NEF Corporation,
is a wholly-owned subsidiary of NEIC Holdings, Inc. ("NEIC Holdings"), which is
a wholly-owned subsidiary of NEIC Operating Partnership, L.P. ("NEICOP").
NEICOP's advising general partner is New England Investment Companies, L.P.
("NEIC"), a publicly traded company whose interests are listed on the New York
Stock Exchange. NEICOP's managing general partner, and NEIC's general partner,
is New England Investment Companies, Inc. ("NEIC Inc."). NEF Corporation is also
the sole general partner of NEF, which is the principal underwriter for the
Fund. NEICOP owns the entire limited partnership interest in each of NEF and
NEFM. NEIC Inc. is a wholly-owned subsidiary of MetLife New England Holdings,
Inc., which is a wholly-owned subsidiary of MetLife, a mutual insurance company.
MetLife owns, directly and indirectly, approximately 47% of the outstanding
limited partnership interests in NEICOP.
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The principal executive officer of NEF and NEFM is Henry L.P. Schmelzer,
who is the President and a Trustee of the Trust and whose principal occupation
is his positions with NEF and NEFM. The address of NEF, NEFM, NEF Corporation,
NEIC Holdings, NEICOP, NEIC, NEIC Inc. and Mr. Schmelzer is 399 Boylston Street,
Boston, Massachusetts 02116. The address of MetLife New England Holdings, Inc.
and MetLife is One Madison Avenue, New York, New York 10010.
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. NEICOP owns the entire limited partnership interest in Westpeak.
The principal executive officer of Westpeak is Gerald H. Scriver, whose
principal occupation is his position with Westpeak. The address of Westpeak,
Westpeak Inc. and Mr. Scriver is 1011 Walnut Street, Boulder, Colorado 80302.
Westpeak acts as sub-adviser to the following other mutual funds that have
similar investment objectives and policies to the Fund. The approximate size and
sub-advisory fee rates for these funds are set forth in the table below.
[Westpeak has not reduced or otherwise agreed to reduce its compensation for
these funds.]
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS
AS OF
ANNUAL SUB-ADVISORY FEE 12/31/97
FUND RATE (AS A % OF NET ASSETS) -----------
- ---------------------- ---------------------------------- ($ MILLION)
<S> <C> <C>
Westpeak Growth and
Income Series of New
England Zenith
Fund................ .50% of the first $25 million $ []
.40% of the next $75 million
.35% of the next $100 million
.30% of amounts over $200 million
New England Growth
Opportunities
Fund................ .50% of the first $25 million $ []
.40% of the next $75 million
.35% of the next $100 million
.30% of amounts over $200 million
</TABLE>
[OTHERS?]
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PORTFOLIO TRANSACTIONS AND BROKERAGE
Westpeak selects only brokers or dealers which it believes are financially
responsible and will provide efficient and effective services in executing,
clearing and settling an order. 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. Transactions in
unlisted securities are carried out through broker-dealers who make the primary
market for such securities unless, in the judgment of Westpeak, a more favorable
price can be obtained by carrying out such transactions through other brokers or
dealers.
Receipt of research services from brokers may sometimes be a factor in
selecting a broker which Westpeak believes will provide best execution for a
transaction. These research services include not only a wide variety of reports
on such matters as economic and political developments, industries, companies,
securities, portfolio strategy, account performance, daily prices of securities,
stock and bond market conditions and projections, asset allocation and portfolio
structure, but also meetings with management representatives of issuers and with
other analysts and specialists. Although it is not possible to assign an exact
dollar value to these services, they may, to the extent used, tend to reduce
Westpeak's expenses. Such services may be used by Westpeak in servicing other
client accounts and in some cases may not be used with respect to the Fund.
Receipt of services or products other than research from brokers is not a factor
in the selection of brokers. Consistent with the Conduct Rules of the National
Association of Securities Dealers, Inc., Westpeak may, however, consider
purchases of shares of the Fund and other funds managed by Westpeak by customers
of broker-dealers as a factor in the selection of broker-dealers to execute the
Fund's securities transactions.
15
<PAGE> 17
In placing orders for the purchase and sale of securities for the Fund,
Westpeak may cause the Fund to pay a broker-dealer that provides the brokerage
and research services to Westpeak an amount of commission for effecting a
securities transaction for the Fund 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 Trust and its other clients. Westpeak's
authority to cause the Fund to pay such greater commissions is also subject to
such policies as the Trustees of the Trust may adopt from time to time.
CERTAIN PAYMENTS TO AFFILIATES
In addition to advisory fees payable to NEFM, the Fund compensates NEF and
New England Funds Service Corporation ("NEFSCO"), a wholly-owned subsidiary of
NEF Corporation, for providing various services to the Fund and its
shareholders. In 1997, these payments to NEF amounted to $[ ] for transfer
agency services, $[ ] for service and distribution (Rule 12b-1) fees for
Class A shares, $[ ] for service and distribution (Rule 12b-1) fees for
Class B shares, $[ ] for service and distribution (Rule 12b-1) fees for
Class C shares and $[ ] for the provision of certain legal and accounting
services. In addition, in 1997 NEF received from the Fund's shareholders
$[ ] in sales charges (including contingent deferred sales charges on
Class A and B shares). No payments were made in 1997 to NEFSCO, which commenced
operations on January 1, 1998. These arrangements are not affected in any way by
the New Sub-Advisory Agreement.
CERTAIN TRUSTEES AND OFFICERS OF THE TRUST
The following persons are both (1) Trustees or officers of the Trust and
(2) officers or employees of NEFM (or officers or directors of that firm's
corporate general partner): Henry L.P. Schmelzer, Bruce Speca, Frank Nesvet and
John Pelletier. In addition, Peter S.
16
<PAGE> 18
Voss, President and Chief Executive Officer of NEIC and NEICOP, is a Trustee and
an officer of the Trust.
SHAREHOLDERS AS OF THE RECORD DATE
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 each class of shares of the Fund, representing the
indicated percentage of the outstanding shares of such class:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
CLASS SHAREHOLDER SHARES CLASS
- ------ ------------------------------- --------- ----------
<S> <C> <C> <C>
</TABLE>
As of the Record Date, the officers and Trustees of the Trust as a group
owned [less than 1% of the outstanding shares of the Fund.]
OTHER MATTERS
Forty percent of the shares of the Fund outstanding on the Record Date,
present in person or represented by proxy, constitutes a quorum for the
transaction of business at the Meeting, although at least 50% of the outstanding
shares of the Fund must be present or represented at the Meeting in order for
Proposal 1 or Proposal 2 to be approved. Votes cast by proxy or in person at the
Meeting will be counted by persons appointed by the Trust as tellers for the
Meeting. The tellers will count the total number of votes cast "for" approval of
Proposals 1 and 2 for purposes of determining whether sufficient affirmative
votes have been cast. The tellers will count all shares represented by proxies
that reflect abstentions and "broker non-votes" (i.e., shares held by brokers or
nominees as to which instructions have not been received from the beneficial
owners or the persons entitled to vote) for purposes of determining the presence
of a quorum. With respect to Proposals 1 and 2, assuming the presence of
17
<PAGE> 19
a quorum, abstentions and broker non-votes have the effect of a negative vote on
the proposal.
In the event that a quorum is not present, or if sufficient votes in favor
of Proposals 1 and 2 are not received by April 17, 1998, the persons named as
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of 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 and 2 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 are Proposals 1 and 2 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 AT FUTURE MEETINGS
The Trust does not hold annual or other regular meetings of shareholders.
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.
February 27, 1998
18
<PAGE> 20
APPENDIX A
NEW ENGLAND CAPITAL GROWTH FUND
SUB-ADVISORY AGREEMENT
(WESTPEAK INVESTMENT ADVISORS, L.P.)
This Sub-Advisory Agreement (this "Agreement") is entered into as of April
, 1998 by and between New England Funds Management, L.P., a Delaware limited
partnership (the "Manager"), and Westpeak Investment Advisors, L.P., a Delaware
limited partnership (the "Sub-Adviser").
WHEREAS, the Manager has entered into an Advisory Agreement dated August
30, 1996 (the "Advisory Agreement") with New England Funds Trust I (the
"Trust"), pursuant to which the Manager provides portfolio management and
administrative services to New England Capital Growth Fund, a 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 and the trustees of the Trust desire 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 of
any administrator appointed by the Manager (the "Administrator"), manage the
investment and reinvestment of the assets of the Series, and have the authority
on behalf of the Series to vote all proxies and exercise all other rights of the
Series as a security holder of companies in which the Series from time to time
invests. The Sub-Adviser shall manage the Series in conformity with (1) the
A-1
<PAGE> 21
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), 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.
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 it. 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
with such other information and reports as may reasonably be requested by the
Manager from time to time, including without limitation all material requested
by or required to be delivered to the Trustees of the Trust.
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 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.
A-2
<PAGE> 22
2. Obligations of the Manager.
a. The Manager shall provide (or cause the Series' Custodian (as defined in
Section 3 hereof) to provide) timely information to the Sub-Adviser regarding
such matters as the composition of assets of 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 the Sub-Adviser with 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 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.
4. Proprietary Rights. The Manager agrees and acknowledges that the
Sub-Adviser is the sole owner of the name "Westpeak
A-3
<PAGE> 23
Investment Advisors, L.P." and that all use of any designation consisting in
whole or part of "Westpeak Investment Advisors, L.P." under this Agreement shall
inure to the benefit of the Sub-Adviser. The Manager on its own behalf and on
behalf of the Series agrees not to use any such designation in any advertisement
or sales literature or other materials promoting the Series, except with the
prior written consent of the Sub-Adviser. Without the prior written consent of
the Sub-Adviser, the Manager shall not, and the Manager shall use its best
efforts to cause the Series not to, make representations regarding the
Sub-Adviser in any disclosure document, advertisement or sales literature or
other materials relating to the Series. Upon termination of this Agreement for
any reason, the Manager shall cease, and the Manager shall use its best efforts
to cause the Series to cease, all use of any such designation as soon as
reasonably practicable.
5. 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
organizational, operational or business 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. Any reimbursement of advisory fees required by any expense limitation
provision of any law shall be the sole responsibility of the Manager. The
Manager and the Sub-Adviser shall not be considered as partners or participants
in a joint venture. The Sub-Adviser will pay its own expenses incurred in
furnishing the services to be provided by it pursuant to this Agreement. Neither
the Sub-Adviser nor any affiliated person thereof shall be entitled to any
compensation from the Manager or the Trust with respect to service by any
affiliated person of the Sub-Adviser as an officer or trustee of the Trust
(other than the compensation to the Sub-Adviser payable by the Manager pursuant
to Section 7 hereof).
6. Purchase and Sale of Assets. 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
A-4
<PAGE> 24
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. 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 be used by the Sub-Adviser in
managing the Series.
7. 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 0.40%
of the first $200 million of the average daily net assets of the Series, 0.35%
of the next $300 million of the average daily net assets of the Series, and
0.30% of the average daily net assets of the Series in excess of $500 million
(or such lesser amount as the Sub-Adviser may from time to time agree to
receive). 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.
8. 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
A-5
<PAGE> 25
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 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 Series or the Manager in any way or
otherwise be deemed an agent of the Series or the Manager.
9. 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, partners, 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 hereunder.
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 under this
Agreement.
10. Effective Date and Termination. This Agreement shall become effective
as of the date of its execution, and
A-6
<PAGE> 26
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 by the Manager on ninety
days' written notice to the Sub-Adviser.
Termination of this Agreement pursuant to this Section 10 shall be without
the payment of any penalty.
11. 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.
12. 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,
A-7
<PAGE> 27
to such exemptions as may be granted by the Securities and Exchange Commission
under the 1940 Act.
13. 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
day-to-day 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.
<TABLE>
<S> <C>
NEW ENGLAND FUNDS WESTPEAK INVESTMENT
MANAGEMENT, L.P. ADVISORS, L.P.
By NEF Corporation, By Westpeak Investment
its general partner Advisors, Inc.,
its general partner
By:________________ By:__________________
Name:______________ Name:________________
Title:_____________ Title:_______________
</TABLE>
A-8
<PAGE> 28
PRELIMINARY COPY
YOUR VOTE IS NEEDED
Please vote on the reverse side of this form and sign in the space provided.
Return your completed proxy in the enclosed envelope today.
You may receive additional proxies for other accounts. These are not duplicates;
you should sign and return each proxy card in order for your votes to be
counted. Please return them as soon as possible to avoid additional mailings.
NOTE: Please sign exactly as your name appears on this card. All joint owners
should sign. When signing as executor, administrator, attorney, trustee or
guardian or as custodian for a minor, please give full title as such. If a
corporation, please sign in full corporate name and indicate the signer's
office. If a partnership, please sign in the partnership name.
The undersigned hereby appoints Henry L.P. Schmelzer, Bruce R. Speca, Frank
Nesvet and John Pelletier, and each of them, proxies, with full power of
substitution to each, and hereby authorizes them to represent and to vote, as
designated on the reverse side hereof, at the Special Meeting of Shareholders of
New England Capital Growth Fund (the "Fund") on April 17, 1998, at 2:30 p.m.
Eastern time, and at any adjournments thereof, all of the shares of the Fund
which the undersigned would be entitled to vote if personally present.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
<PAGE> 29
NEW ENGLAND
CAPITAL GROWTH FUND
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting. The Trustees recommend a vote FOR the
proposals listed below:
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
<TABLE>
<S> <C> <C> <C>
1. Proposal to approve new Sub-Advisory For Against Abstain
Agreement relating to the Fund between New [ ] [ ] [ ]
England Funds Management, L.P. and Westpeak
Investment Advisors, L.P.
2. Proposal to approve the grant of authority to For Against Abstain
the Fund to enter into new and amended [ ] [ ] [ ]
sub-advisory agreements with sub-advisers
with respect to the Fund, to the extent
permitted by the Securities and Exchange
Commission by an exemption or exemptions,
without obtaining shareholder approval of
such agreements, and to permit such
sub-advisers to manage the assets of the Fund
pursuant to such sub-advisory agreements.
</TABLE>
Please be sure to sign and date this Proxy.
Shareholder sign here:____________________________
Co-owner sign here:_______________________________
Date:_____________________________________________
