<PAGE>
SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
[X] Preliminary information statement [ ] Confidential, for use of the
Commission only (as permitted
by Rule 14c-5(d)(2))
[ ] Definitive information statement
NEW ENGLAND FUNDS TRUST I
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its (Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
NEW ENGLAND STAR SMALL CAP FUND
INFORMATION STATEMENT
This information statement is being furnished by the Board of Trustees
of New England Funds Trust I (the "Trust"), to the shareholders of New England
Star Small Cap Fund (the "Fund"), a series of the Trust. This information
statement is being mailed on or about May 27, 1999 to all the Fund's
shareholders of record as of May [__], 1999. A copy of the Fund's Annual Report
for the year ended December 31, 1998 may be obtained without charge by writing
New England Funds, L.P. ("NEF") at 399 Boylston Street, Boston, Massachusetts
02116, or by calling (800) 225-5478.
NO SHAREHOLDER VOTE WILL BE TAKEN WITH RESPECT TO THE MATTERS
DESCRIBED IN THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU
FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
INTRODUCTION
The Fund is a multi-manager fund. New England Funds Management, L.P.
("NEFM") acts as adviser to the Fund. The portfolio of the Fund is divided into
four segments, each of which is managed by a different money management firm as
sub-adviser to NEFM. RS Investment Management, L.P. ("RS Investment Management")
(formerly, Robertson, Stephens & Company Investment Management, L.P.) has
managed one of the segments of the Fund (the "Segment") since the Fund's
inception. Prior to February 26, 1999, RS Investment Management managed the
Segment pursuant to a sub-advisory agreement dated October 1, 1997 (the
"Previous Sub-Advisory Agreement") between RS Investment Management and NEFM. RS
Investment Management has continued to manage the Segment pursuant to a new
sub-advisory agreement between NEFM and RS Investment Management dated February
26, 1999 (the "New Sub-Advisory Agreement"), following the acquisition of
Robertson Stephens Investment Management Co. Inc. ("Old RSIM") and its
subsidiary, RS Investment Management, by Robertson Stephens Investment
Management Co. LLC ("New RSIM") from BankAmerica Corporation ("BAC") on February
26, 1999, as described more fully below (the "Acquisition").
As required by the Investment Company Act of 1940 (the "1940 Act"), the
Previous Sub-Advisory Agreement between NEFM and RS Investment Management
provided for its automatic termination in the event of its "assignment". Because
the Acquisition represented an ownership and control change of RS Investment
Management, it constituted an "assignment" under the 1940 Act and thus
terminated the Previous Sub-Advisory Agreement.
The 1940 Act generally provides that an investment adviser or
subadviser to a mutual fund may act as such only pursuant to a written contract
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
contract or interested persons of any party to such contract. The Trust and
NEFM, however, have received from the Securities and Exchange Commission 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 portfolio of the Fund or a segment thereof,
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 shareholder approval of such new or amended sub-advisory agreement.
Such agreement must nevertheless be approved by the Trust's Board of 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 an
information statement to its shareholders 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 such an agreement. In
accordance with the SEC Exemption, the Trust is furnishing this information
statement to the Fund's shareholders in order to provide information regarding
the Acquisition and the New Sub-Advisory Agreement with RS Investment
Management.
THE ACQUISITION; INFORMATION ABOUT NEW RSIM
On February 26, 1999, New RSIM purchased all the outstanding shares of
common stock of Old RSIM from BAC. Through its ownership of Old RSIM, New RSIM
indirectly owned all of the outstanding beneficial interest in Old RSIM's
subsidiary, Robertson, Stephens & Company Investment Management, L.P., the
predecessor to RS Investment Management.
New RSIM, a newly-created Delaware limited liability company, is
principally owned by four individuals. G. Randall Hecht owns approximately 29%,
Paul H. Stephens owns approximately 22%, James Callinan owns approximately 20%
and Andrew P. Pilara, Jr., owns approximately 15%, respectively, of the
membership interest in New RSIM. The remainder of the membership interests are
owned by other employees of New RSIM or its affiliates. Each of Messrs. Hecht,
Stephens, Callinan and Pilara and Messrs. David Evans and James Foster, is a
member of the Board of Managers of New RSIM. Messrs. Stephens, Callinan and
Pilara are portfolio managers of certain funds within the RS Investment Trust.
Messrs. Evans and Foster are employees of New RSIM. Mr. Hecht's principal
occupation is Chairman and Chief Executive Officer of New RSIM and his principal
business address is 388 Market Street, Suite 200, San Francisco, California
94111.
The Acquisition did not change the management or operations of RS
Investment Management, nor any of the personnel managing the Segment or the
other services or business activities relating to the Segment. The Trustees of
the Trust do not believe that the Acquisition will cause any reduction in the
quality of services now provided to the Fund, nor do the Trustees believe the
Acquisition will have any adverse effect on RS Investment Management's ability
to fulfill its obligations relating to the Fund.
ADVISORY AGREEMENT
NEFM has acted as the Fund's adviser since the Fund's inception
pursuant to an advisory agreement dated December 31, 1996 (the "Advisory
Agreement"). The Advisory Agreement was approved by the Trustees of the Trust at
a meeting held on October 25, 1996, and received shareholder approval upon the
Fund's inception on December 28, 1996. The purpose of the submission of the
Advisory Agreement for shareholder approval at such time was for its initial
approval upon the Fund's inception.
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 third 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
of the Trust) 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 1.05% of the
Fund's average daily net assets.
PREVIOUS SUB-ADVISORY AGREEMENT
NEFM has delegated its responsibility under the Advisory Agreement to
provide portfolio management services to the Fund to four sub-advisers, each
sub-adviser managing a different segment of the Fund's portfolio. Pursuant to
the Previous Sub-Advisory Agreement between NEFM and RS Investment Management,
NEFM delegated responsibility for managing the assets of the Segment to RS
Investment Management. The Previous Sub-Advisory Agreement required RS
Investment Management to manage the investment and reinvestment of the assets of
the Segment, subject to the supervision of NEFM. Under the terms of the Previous
Sub-Advisory Agreement, RS Investment Management was authorized to effect
portfolio transactions for the Segment, using its own discretion and without
prior consultation with NEFM. RS Investment Management was also required to
report periodically to NEFM and the Trustees of the Trust.
Under the Previous Sub-Advisory Agreement, RS Investment Management was
entitled to receive from NEFM (and not from the Fund) a sub-advisory fee at the
annual rate of 0.55% of the first $50 million of the average daily net assets of
the Segment and 0.50% of such assets in excess of $50 million. During the fiscal
year ended December 31, 1998, NEFM paid RS Investment Management $185,912 for
sub-advisory services.
The Previous Sub-Advisory Agreement was approved by the Trustees of the
Trust at a meeting held on July 22, 1997. The Previous Sub-Advisory Agreement
was not submitted for shareholder approval because such approval was not
necessary pursuant to the SEC Exemption.
The Previous Sub-Advisory Agreement was approved by the Trustees
because of the termination of the sub-advisory agreement between NEFM and RS
Investment Management dated December 31, 1996 which was approved by (i) the
Trustees at a meeting held October 25, 1996 and (ii) by the shareholders upon
the Fund's inception on December 28, 1996 (the "Initial Sub-Advisory
Agreement"). As required by the 1940 Act, the Initial Sub-Advisory Agreement
provided for its automatic termination in the event of its "assignment." When
BAC acquired the Old RSIM group in October 1997 there occurred an ownership and
control change of RS Investment Management which constituted an "assignment"
under the 1940 Act and thus terminated the Initial Sub-Advisory Agreement. The
Trustees of the Trust approved the Previous Sub-Advisory Agreement in part
because its terms were nearly identical to the terms of the Initial Sub-Advisory
Agreement.
NEW SUB-ADVISORY AGREEMENT
Like the Previous Sub-Advisory Agreement, the New Sub-Advisory
Agreement requires RS Investment Management to manage the investment and
reinvestment of the assets of the Segment, subject to the supervision of NEFM.
Under the terms of the New Sub-Advisory Agreement, RS Investment Management is
authorized to effect portfolio transactions for the Segment, using its own
discretion and without prior consultation with NEFM. RS Investment Management is
also required to report periodically to NEFM and the Trustees of the Trust.
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 1940 Act, of the Trust, NEFM or RS Investment
Management, 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 RS Investment Management, and, if required by law, by vote of a
majority of the outstanding voting securities of the Fund and by vote of a
majority of Trustees of the Trust 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 was approved by the Trustees of the Trust at a meeting
held on February 12, 1999.
The New Sub-Advisory Agreement may be terminated without penalty by
vote of the Board of Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Fund, upon 60 days' written notice, or by
RS Investment Management or NEFM upon 60 days' written notice, and will
terminate automatically in the event of its "assignment," as that term is
defined in the 1940 Act. The New Sub-Advisory Agreement will automatically
terminate if the Advisory Agreement for the Fund is terminated. Like the
Previous Sub-Advisory Agreement, the New Sub-Advisory Agreement provides that
RS Investment Management will not be subject to any liability 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, in connection with, or arising out of any
service to be rendered under the New Sub-Advisory Agreement, except by reason of
RS Investment Management's willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of reckless disregard by RS
Investment Management of its obligations and duties.
As compensation for its services under the New Sub-Advisory Agreement,
RS Investment Management is entitled to receive from NEFM sub-advisory fees
calculated at the same rates as those charged under the Previous Sub-Advisory
Agreement described above.
The Previous Sub-Advisory Agreement by its terms terminated upon the
Acquisition, since the Acquisition constituted a change of control of RS
Investment Management for purposes of the 1940 Act. Because of this, the
Trustees of the Trust approved the New Sub-Advisory Agreement, which became
effective on February 26, 1999 upon the consummation of the Acquisition. The New
Sub-Advisory Agreement is substantially identical, except for its date and the
legal name of the sub-adviser, to the Previous Sub-Advisory Agreement.
The Trustees of the Trust believe that the terms of the New
Sub-Advisory Agreement are fair to, and in the best interest of, the Fund and
its shareholders.
In evaluating the New Sub-Advisory Agreement, the Trustees of the Trust
considered the fact that the Previous Sub-Advisory Agreement and the New
Sub-Advisory Agreement are substantially identical to each other, including the
terms relating to the services to be provided and the fees to be paid by NEFM to
RS Investment Management thereunder. The Trustees considered the performance of
RS Investment Management to date in providing services to the Segment, and the
skills and capabilities of the personnel of RS Investment Management.
The Trustees of the Trust reviewed material furnished by RS Investment
Management and New RSIM. Those materials include information regarding RS
Investment Management, New RSIM, their respective affiliates and their
personnel, operations and financial condition and the terms of the Acquisition
and the possible effects of the Acquisition on the Fund and the shareholders of
the Fund. It was represented to the Trustees that RS Investment Management and
New RSIM believe that the operations of the Fund and the capability of RS
Investment Management to provide services to the Segment would not be adversely
affected by the Acquisition.
In approving the New Sub-Advisory Agreement, the Trustees of the Trust
evaluated the experience of RS Investment Management's key personnel in
portfolio management, the arrangements made to secure the continued service of
the key personnel in portfolio management and the high quality of services RS
Investment Management is expected to continue to provide to the Segment, and
gave careful consideration to all factors deemed to be relevant to the Fund,
including, but not limited to: (1) the performance of the Segment since the
Fund's commencement of operations; (2) the research-intensive nature and quality
of the services expected to be rendered to the Segment; (3) the importance of
such research and services to the fulfillment of the particular investment
objective of the Fund and the investment policies of the Segment; (4) that the
compensation payable to RS Investment Management by NEFM under the New
Sub-Advisory Agreement is at the same rates as the compensation payable by NEFM
to RS Investment Management under the Previous Sub-Advisory Agreement; (5) that
the material terms of the New Sub-Advisory Agreement are unchanged from the
Previous Sub-Advisory Agreement; (6) the reputation, qualification and
background of RS Investment Management and New RSIM and their respective
financial conditions; (7) the commitment of RS Investment Management or its
affiliates to pay or reimburse the Fund for the expenses incurred in connection
with the Acquisition so that shareholders of the Fund would not bear those
expenses; (8) RS Investment Management's current brokerage policies and
practices, as described below, and RS Investment Management's intentions to
continue such policies and practices; and (9) other factors they deemed
relevant.
RS Investment Management has advised the Trustees of the Trust that it
expects that there will be no diminution in the scope and quality of
sub-advisory services provided to the Segment as a result of the Acquisition.
Accordingly, the Trustees of the Trust believe that the Segment should continue
to receive services under the new Sub-Advisory Agreement comparable to those it
received under the Previous Sub-Advisory Agreement.
BROKERAGE POLICIES
It is the policy of RS Investment Management, in effecting transactions
in portfolio securities, to seek the best execution of orders. The determination
of what may constitute best execution in a securities transaction involves a
number of judgmental considerations, including, without limitation, the overall
direct net economic result to the Segment (involving both price paid or received
and any commissions and other costs), the efficiency with which the transaction
is effected, the ability to effect the transaction at all when a large block is
involved, the availability of the broker to stand ready to execute possibly
difficult transactions for the Segment in the future, and the financial strength
and stability of the broker.
Subject to the policy of seeking best execution of orders at the most
favorable prices, RS Investment Management may execute transactions with
brokerage firms which provide research services and products to RS Investment
Management. The phrase "research services and products" includes advice as to
the value of securities, the advisability of investing in, purchasing or selling
securities, the availability of securities or purchasers or sellers of
securities, the furnishing of analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and the
performance of accounts and the obtainment of products such as third party
publications, computer and electronic access equipment, software programs and
other information and accessories that may assist RS Investment Management in
furtherance of its investment advisory responsibilities to its advisory clients.
Such services and products permit RS Investment Management to supplement its own
research and analysis activities, and provide it with information from
individuals and research staffs of many securities firms. Generally, it is not
possible to place a dollar value on the benefits derived from specific research
services and products. RS Investment Management may receive a benefit from these
research services and products which is not passed on, in the form of a direct
monetary benefit, to the Segment. If RS Investment Management determines that
any research product or service has a mixed use, such that it also serves
functions that do not assist in the investment decision-making process, RS
Investment Management may allocate the cost of such service or product
accordingly. The portion of the product or service that RS Investment Management
determines will assist it in the investment decision-making process may be paid
for in brokerage commission dollars. Any such allocation may create a conflict
of interest for RS Investment Management. Subject to the standards outlined in
this and the preceding paragraph, RS Investment Management may arrange to
execute a specified dollar amount of transactions through a broker that has
provided research products or services. Such arrangements do not constitute
commitments by RS Investment Management to allocate portfolio brokerage upon any
prescribed basis, other than upon the basis of seeking best execution of orders.
Research services and products obtained by RS Investment Management
from brokers who execute portfolio transactions for the Fund may be useful to RS
Investment Management in providing investment advice to any of the funds or
clients it advises. Likewise, information made available to RS Investment
Management from brokers effecting securities transactions for such other funds
and clients may be utilized on behalf of the Fund. Thus, there may be no
correlation between the amount of brokerage commissions generated by a
particular fund or client and the indirect benefits received by that fund or
client.
Subject to the policy of seeking the best execution of orders and to
such policies as the Board of Trustees of the Trust may establish from time to
time, sales of shares of the Fund may also be considered as a factor in the
selection of brokerage firms to execute portfolio transactions for the Segment.
Because selection of executing brokers is not based solely on net
commissions, the Segment may pay an executing broker a commission higher than
that which might have been charged by another broker for that transaction. RS
Investment Management will not knowingly pay higher mark-ups on principal
transactions to brokerage firms as consideration for receipt of research
services or products. While it is not practicable for RS Investment Management
to solicit competitive bids for commissions on each portfolio transaction,
consideration is given regularly to available information concerning the level
of commissions charged in comparable transactions by various brokers.
Transactions in over-the-counter securities are normally placed with principal
market makers, except in circumstances when, in the opinion of RS Investment
Management, better prices and execution are available elsewhere.
Subject to the overriding objective of obtaining the best possible
execution of orders, RS Investment Management may allocate brokerage
transactions to affiliated brokers. In order for the affiliated broker to effect
portfolio transactions for the Segment, the commissions, fees or other
remuneration received by the affiliated broker must be reasonable and fair
compared to the commissions, fees and other remuneration paid to other brokers
in connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period.
Furthermore, the Trustees of the Trust, including a majority of those Trustees
who are not "interested persons" of the Trust as defined in the 1940 Act, have
adopted procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to an affiliated broker are
consistent with the foregoing standard.
INFORMATION ABOUT THE TRUST
The Trust is a diversified, open-end management investment company
organized in 1985 as a business trust under the laws of Massachusetts. The Trust
is a series type company with twelve investment portfolios. The Fund is one of
those portfolios. The address of the Trust is 399 Boylston Street, Boston,
Massachusetts 02116.
INFORMATION ABOUT RS INVESTMENT MANAGEMENT
The general partner of RS Investment Management is New RSIM. Mr. G.
Randall Hecht is the President of RS Investment Management. The address of RS
Investment Management, New RSIM and Mr. Hecht is 388 Market Street, Suite 200,
San Francisco, California 94111.
RS Investment Management acts as investment adviser and administrator
to the Diversified Growth Fund, which has a similar objective to that of the
Fund. RS Investment Management has either (i) waived, reimbursed or reduced its
compensation, or (ii) reimbursed expenses to, or borne expenses for, the
Diversified Growth Fund in connection with its management.
ANNUAL ANNUAL
MANAGEMENT ADMINISTRATIVE APPROXIMATE
FEE RATE FEE RATE NET ASSETS
FUND AND YEAR (AS A % OF AS A % OF AS OF
ORGANIZED NET ASSETS) (NET ASSETS) 12/31/98
----------- ------------ -------------- --------
Diversified Growth Fund (1996) 1.00% 0.25% $70,000,000
RS Investment Management also acts as sub-adviser for the fund of
another investment company not affiliated with RS Investment Management. The
approximate size and management fee rates for the Robertson Stephens Diversified
Growth Portfolio are set forth below; it has a similar objective to the Fund. RS
Investment Management has not waived, reduced or otherwise agreed to reduce its
compensation for this fund.
APPROXIMATE NET
ANNUAL MANAGEMENT FEE ASSETS
FUND RATE (AS A % OF NET ASSETS) AS OF 12/31/98
---- --------------------------- --------------
Robertson Stephens .70% of the first $10 million $6,000,000
Diversified Growth .65% of the next $25 million
Portfolio (London .60% of the next $165 million
Pacific Variable .55% of amounts over $200 million
Insurance Series Trust)
INFORMATION ABOUT NEFM
NEFM, formed in 1995, is a limited partnership. Its sole general
partner, NEF Corporation, is a wholly-owned subsidiary of Nvest Holdings, L.P.
("Nvest Holdings"), which in turn is a wholly-owned subsidiary of Nvest
Companies, L.P. ("Nvest Companies"). NEF Corporation is also the sole general
partner of NEF, which is the principal underwriter for the Fund. Nvest Companies
owns the entire limited partnership interest in each of NEFM and NEF. Nvest
Companies' managing general partner, Nvest Corporation, is a wholly-owned
subsidiary of MetLife New England Holdings, Inc., which in turn is a
wholly-owned subsidiary of Metropolitan Life Insurance Company ("MetLife"), a
mutual life insurance company. MetLife owns approximately 46% (and in the
aggregate, directly and indirectly, approximately 47%) of the outstanding
limited partnership interests in Nvest Companies. Nvest Companies' advising
general partner, Nvest, L.P., is a publicly-traded company listed on the New
York Stock Exchange. Nvest Corporation is the sole general partner of Nvest,
L.P. The fourteen principal subsidiary or affiliated asset management firms of
Nvest Companies, collectively, have more than $135 billion of assets under
management or administration as of December 31, 1998.
The principal executive officer of NEFM and NEF is Bruce R. Speca, who
is the President of the Trust and whose principal occupation is his positions
with NEFM and NEF. The address of NEFM, NEF, NEF Corporation, Nvest Holdings,
Nvest Companies, Nvest Corporation and Mr. Speca 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.
OTHER INFORMATION
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): Bruce R. Speca, Thomas P. Cunningham and John E.
Pelletier. In addition, Peter S. Voss, President and Chief Executive Officer of
Nvest Companies, is a Trustee and an officer of the Trust.
In addition to paying management fees to NEFM, the Fund compensates NEF
(an affiliate of NEFM) for providing various services to the Fund and its
shareholders. These arrangements will not be affected in any way by the New
Sub-Advisory Agreement.
The Trustees of the Trust and the principal executive officers and
general partner of NEFM do not have any affiliation with RS Investment
Management.
As of April 1, 1999, to the Trust's knowledge, no persons owned of
record or beneficially more than 5% of the outstanding shares of the indicated
class of the Fund.
As of April 9, 1999, the officers and Trustees of the Trust as a group
owned less than 1% of the outstanding shares of the Fund.
