Nicholas J. Kolokithas | With copies to: | |
601 Congress Street Boston, Massachusetts 02110 (Name and Address of Agent for Service) |
Mark P. Goshko, Esq. K&L Gates LLP One Lincoln Street Boston, Massachusetts 02111 |
JOHN HANCOCK MUTUAL FUNDS [January 19, 2011] |
YTD | 1-Year | 3-Year | 5-Year | |||||||||||||
John Hancock Small Company Fund |
||||||||||||||||
John Hancock Growth Opportunities Fund |
1. | A proposal to approve an Agreement and Plan of Reorganization between the fund and John Hancock Small Company Fund (Small Company). Under this agreement, the fund would transfer all of its assets to Small Company in exchange for shares of Small Company. These shares would be distributed, as described in the accompanying proxy statement and prospectus, proportionately to you and the other shareholders of the fund. Small Company also would assume the funds liabilities. Your funds Board of Trustees recommends that you vote FOR this proposal. | |
2. | Any other business that may properly come before the meeting. |
| Your fund will transfer all of its assets to Small Company. Small Company will assume your funds liabilities. | ||
| Small Company will issue Class A shares to your fund in an amount equal to the value of your funds net assets attributable to its Class A, Class B and Class C shares, as applicable. These shares will be distributed to your funds Class A, Class B and Class C shareholders, as applicable, in proportion to their holdings on the reorganization date. | ||
| Small Company will issue Class I shares to your fund in an amount equal to the value of your funds net assets attributable to its Class I shares. These shares will be distributed to your funds Class I shareholders in proportion to their holdings on the reorganization date. | ||
| No front-end sales charges will be imposed on shares of Small Company received by shareholders of the Acquired Fund. | ||
| Your fund will be terminated and shareholders of your fund will become shareholders of Small Company. | ||
| For federal income tax purposes, the reorganization is not intended to result in income, gain or loss being recognized by your fund, Small Company, or the shareholders of your fund. |
The Small Company Class A
shares prospectus dated July 1,
2010[, as supplemented through
[___________ ___, 201__], and/or The Small Company Class I
shares prospectus dated July 1,
2010[, as supplemented through
[_________ ___, 201__] |
In the same envelope as this proxy statement and prospectus. This document is incorporated by reference into (and therefore legally part of) this proxy statement and prospectus. | ||||
The statement of additional
information (SAI) dated [January
19, 2011], which relates to this
proxy statement and prospectus and
the reorganization, and contains
additional information about the
Acquired Fund and the Acquiring Fund
The Small Company annual
shareholder report dated March 31,
2010
The Small Company semiannual
shareholder report dated September
30, 2010
The Small Company Class A,
Class I, Class ADV, and Class NAV
shares SAI dated July 1, 2010[, as
supplemented through [___________
___, 201__]
The Growth Opportunities
Class A, Class B and Class C shares
prospectus dated July 1, 2010, as
supplemented through December 9,
2010
The Growth Opportunities
Class I shares prospectus dated July
1, 2010, as supplemented through
December 9, 2010
The Growth Opportunities SAI
dated July 1, 2010, as supplemented
through [__________ ___, 201__]
The Growth Opportunities
annual shareholder report dated
February 28, 2010
The Growth Opportunities
semiannual shareholder report dated
August 31, 2010
|
These documents and additional information about the Acquired Fund and the Acquiring Fund are on file with the SEC and are available at no charge by writing to us or by calling our toll-free telephone number: 1-800-225-5291. Information in these documents is incorporated by reference into (and therefore legally part of) this proxy statement and prospectus. | ||||
To ask questions about this proxy statement and prospectus, call our toll-free telephone number: 1-800-225-5291. | |||||
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11 | ||||
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25 | ||||
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A-1 | ||||
B-1 |
Acquired Fund Growth Opportunities | Acquiring Fund Small Company | |||||||
Business | Each fund operates as a diversified series of the Trust, an open-end investment management company organized as a Massachusetts business trust. | |||||||
Net assets as of
December 31, 2010
|
$_____ million | $_____ million | ||||||
Investment adviser
|
JHIMS | |||||||
Subadviser
|
GMO | FMA | ||||||
1
Acquired Fund Growth Opportunities | Acquiring Fund Small Company | |||||||
Portfolio managers
|
Dr. Thomas Hancock
Co-director of the Quantitative
Equity Team
Joined Growth Opportunities in
January 2009
Leads the management of
international developed market and
global quantitative equities portfolios
Joined GMO in 1995
Sam Wilderman
Co-director
of the Quantitative
Equity Team
Joined Growth Opportunities at
inception
Leads the management of U.S.
equity portfolios since 2005
Joined GMO in 1996
|
Leo Harmon, CFA
Portfolio manager
Managed Small Company and its
predecessor since 2006
Managing director of FMA
Joined FMA in 2003
Over 16 years of
investment
experience
Kathryn Vorisek
Lead portfolio manager
Managed Small Company and its
predecessor since 1998
Joined FMA in 1996
Chief investment officer of
FMA since 2000
Senior managing director of
FMA
Over 25 years of investment
experience |
||||||
Investment objective
|
The fund seeks long-term capital growth. | The fund seeks maximum long-term total return. | ||||||
Principal
investments
|
Under normal market conditions, the
fund invests at least 80% of its net
assets in small- and mid-cap companies
and seeks to achieve its objective by
outperforming its benchmark, the
Russell 2500 Growth Index. The fund
typically makes equity investments in
U.S. companies whose stocks are
included in the Russell 2500 Index, and
in companies with total market
capitalizations similar to those of
companies with stocks in the index
(small and mid-cap companies). As of
December 31, 2010, the market
capitalizations of companies in the
Russell 2500 Index ranged
from $[___
million to $____ billion].
In addition,
as of December 31, 2010, the average
market capitalization of companies that
issue stocks included in the Russell
2500 Index was
approximately [$___
billion], and the median market
capitalization was approximately
[$___ million]. |
Under normal circumstances, the fund seeks to achieve its investment objective by investing at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks of domestic companies that are smaller or less established in terms of revenues and have market capitalizations that are less than $2.5 billion at the time of initial purchase. At any given time, the fund may own stocks in several industries. | ||||||
Investment
strategies
|
The subadviser uses proprietary research and multiple quantitative models to identify small- and mid-cap company stocks the subadviser believes have improving fundamentals. The subadviser then narrows the selection to small- and mid-cap company | The subadviser employs a relative value philosophy to analyze and select investments that have attractive valuations as well as potential catalysts that are expected to lead to accelerated earnings and cash flow growth. The subadviser | ||||||
2
Acquired Fund Growth Opportunities | Acquiring Fund Small Company | |||||||
stocks it believes have growth characteristics, and/or are undervalued. Generally, these growth stocks are trading at prices below what the manager believes to be their fundamental value. The subadviser also uses proprietary techniques to adjust the fund for factors such as stock selection discipline (criteria used for selecting stocks) and industry and sector weights. The factors considered by the subadviser and the models used may change over time. | evaluates broad themes and market developments that can be exploited through portfolio construction and rigorous fundamental research to identify investments that are best positioned to take advantage of impending catalysts and trends. The subadviser believes that earnings and cash flow growth are the principal drivers of investment performance, particularly when accompanied by visible, quantifiable catalysts that have not been fully recognized by the investment community. The subadviser continuously monitors and evaluates investments held by the fund to discern changes in trends, modify investment outlooks, and adjust valuations accordingly. The subadviser attempts to mitigate excess risk through ownership of a portfolio with broad representation across market industries and sectors. The subadviser will liquidate an investment based on several factors, including asset valuation, changes in prospective attributes and purchases of alternative investments with potentially higher returns. The subadviser generally will not sell a stock merely due to market appreciation outside the funds target capitalization range if it believes the company has growth potential. | |||||||
Exchange-traded
funds (ETFs)
|
The fund does not invest in ETFs as principal investment strategy. | The fund may invest in ETFs to a limited extent. | ||||||
Derivatives
|
In pursuing its investment strategy, the fund may (but is not obligated to) use a wide variety of exchange-traded and over-the- counter derivative instruments, including options and futures contracts to: (i) hedge equity exposure; (ii) replace direct investing (e.g., creating equity exposure through the use of futures contracts or other derivative instruments); and (iii) manage risk by implementing shifts in investment exposure. | The fund does not invest in derivatives as a principal investment strategy. | ||||||
Temporary defensive positions | In abnormal market conditions, each fund may invest up to 100% of its assets in short-term, high-quality debt instruments, such as U.S. government securities, and cash. In these and other cases, the fund might not achieve its investment objective. | |||||||
Active trading | Due to its investment strategy, each fund may buy and sell securities frequently. This may result in high transaction costs and additional capital gains tax liabilities than a fund with a buy and hold strategy. | |||||||
3
Class A sales
charges and Rule
12b-1 fees
|
Class A shares of each fund have the same characteristics and the same fee structures.
Class A shares are offered with front-end sales charges ranging from 5% to 2%
of the funds offering price, depending on the amount invested.
Class A shares of each fund are subject to distribution and service (Rule
12b-1) fees equal to 0.30% of the average daily net assets of Class A shares. |
||||
4
There is no front-end sales charge for investments of $1 million or more, but
there is a contingent deferred sales charge (CDSC) ranging from 0.25% to 1.00% on
Class A shares upon which a commission or finders fee was paid that are sold within
one year of purchase.
An investor can combine multiple purchases of Class A shares of John Hancock
funds to take advantage of breakpoints in the sales charge schedule.
Class A shares may be offered without front-end sales charges or CDSCs to
various individuals and institutions, as described in Small Companys Class A
prospectus and Growth Opportunities Class A, Class B and Class C prospectus. |
|||||
Class B sales
charges and Rule
12b-1 fees
|
Class B shares of Growth Opportunities have the following characteristics and fee structures.
Class B shares
are offered without a front-end sales charge, but are subject to a
CDSC if sold within six years after purchase. The CDSC ranges from 1.00% to 5.00% of the
original purchase cost or the current market value, whichever is less, of the Class B shares
being sold, and depends on how long the shares are held. No CDSC is imposed on shares held
for more than six years.
Class B shares are subject to distribution and service (Rule 12b-1) fees equal to
the annual rate of 1.00% of the average daily net assets of Class B shares.
Class B shares CDSCs may be waived in certain cases, as described in the funds
Class A, Class B and Class C prospectus.
Class B shares automatically convert to Class A shares after eight years. |
||||
Class C sales
charges and Rule
12b-1 fees
|
Class C shares of Growth Opportunities have the following characteristics and fee structures.
Class C shares
are offered without a front-end sales charge, but are subject to a
CDSC of 1.00% of the original purchase cost or the current market value, whichever is less,
of the Class C shares being sold within one year of purchase.
Class C shares are subject to distribution and service fees (Rule 12b-1) equal to
the annual rate of 1.00% of the average daily net assets of Class C shares.
Class C shares CDSCs may be waived in certain cases, as described in the funds
Class A, Class B and Class C prospectus.
No automatic conversion to Class A shares, so distribution and service fees expenses
continue at the Class C level throughout the life of the investment. |
||||
Class I sales
charges and Rule
12b-1 fees
|
Class I shares of each fund have the same characteristics and fee structures.
Class I shares
are offered without a front-end sales charge or CDSC to
certain types of investors if they also meet the minimum initial investment
requirement for purchase of Class I shares, as described in the funds Class I
prospectuses.
Class I shares are not charged a distribution and service fee (Rule
12b-1). |
||||
COMPARISON OF BUYING, SELLING AND EXCHANGING SHARES (both funds have the same policy)
|
|||||
Buying shares
|
Investors may buy shares at their public offering price through a financial representative or the funds transfer agent, John Hancock Signature Services, Inc. (Signature Services). | ||||
Minimum initial investment
|
Class A, Class B and Class C Shares: the
minimum initial investment is $2,500,
except as follows: Coverdell ESAs: $2,000;
there is no minimum initial
investment for certain group retirement
plans using salary deduction or similar
group methods of payment;
group investments: $250; and |
||||
5
there is no minimum initial
investment for fee-based or wrap accounts
of selling firms that have executed a
fee-based or wrap agreement with the
distributor. |
|||||
Class I Shares: $250,000. The minimum initial investment requirement may be waived, in a funds sole discretion, for certain investors, as detailed in each funds Class I prospectus. |
|||||
Exchanging shares
|
Class A, Class B and Class C Shares: Shareholders may exchange their shares of a class of one John Hancock fund for shares of the same class of any other John Hancock fund that is then offering that class, generally without paying any additional sales charges. The registration for both accounts involved must be identical. | ||||
Class I Shares: Shareholders may exchange Class I shares of one John Hancock fund for Class I shares of other John Hancock funds that are available through their plan, or John Hancock Money Market Fund Class A shares, without paying any additional sales charges. The registration for both accounts involved must be identical. |
|||||
Selling shares
|
Shareholders may sell their shares by submitting a proper written or telephone request to Signature Services. | ||||
Net asset value
|
All purchases, exchanges and sales are made at a price based on the next net asset value (NAV) per share of the class of a fund to be calculated after Signature Services receives your request in good order. The NAV per share for each class of shares of each fund is determined at the close of regular trading on the New York Stock Exchange, which is typically 4:00 pm, Eastern Time. | ||||
6
Small Company | ||||||||||||
(Pro Forma) | ||||||||||||
(Assuming | ||||||||||||
Reorganization with | ||||||||||||
Growth | Growth | |||||||||||
Opportunities | Small Company | Opportunities) | ||||||||||
Class A | Class A | Class A | ||||||||||
Shareholder transaction expenses |
||||||||||||
Maximum front-end sales charge
(load) on purchases as a % of
purchase price |
5.00 | % | 5.00 | % | 5.00 | % | ||||||
Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less |
1.00% (on purchases of $1 million or more) |
1.00% (on purchases of $1 million or more) |
1.00% (on purchases of $1 million or more) |
|||||||||
Annual Operating Expenses |
||||||||||||
Management fee |
0.80 | % | 0.90 | % | 0.90 | % | ||||||
Distribution and service (12b-1) fees |
0.30 | % | 0.30 | % | 0.30 | % | ||||||
Other expenses |
0.69 | % | 0.22 | % | 0.20 | % | ||||||
Total fund operating expenses |
1.79 | % | 1.42 | % | 1.40 | % |
Small Company | ||||||||||||
(Pro Forma) | ||||||||||||
(Assuming | ||||||||||||
Reorganization | ||||||||||||
Growth | with Growth | |||||||||||
Opportunities | Small Company | Opportunities) | ||||||||||
Class B | Class A | Class A | ||||||||||
Shareholder transaction expenses |
||||||||||||
Maximum front-end sales charge
(load) on purchases as a % of
purchase price |
None | 5.00 | % | 5.00 | % | |||||||
Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less |
5.00 | % | 1.00% (on purchases of $1 million or more) | 1.00% (on purchases of $1 million or more) | ||||||||
Annual Operating Expenses |
||||||||||||
Management fee |
0.80 | % | 0.90 | % | 0.90 | % | ||||||
Distribution and service (12b-1) fees |
1.00 | % | 0.30 | % | 0.30 | % | ||||||
Other expenses |
0.93 | % | 0.22 | % | 0.20 | % | ||||||
Total fund operating expenses |
2.73 | % | 1.42 | % | 1.40 | % |
7
Small Company | ||||||||||||
(Pro Forma) | ||||||||||||
(Assuming | ||||||||||||
Reorganization with | ||||||||||||
Growth | Growth | |||||||||||
Opportunities | Small Company | Opportunities) | ||||||||||
Class C | Class A | Class A | ||||||||||
Shareholder transaction expenses |
||||||||||||
Maximum front-end sales charge
(load) on purchases as a % of
purchase price |
None | 5.00 | % | 5.00 | % | |||||||
Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less |
1.00 | % | 1.00% (on purchases of $1 million or more) |
1.00% (on purchases of $1 million or more) |
||||||||
Annual Operating Expenses |
||||||||||||
Management fee |
0.80 | % | 0.90 | % | 0.90 | % | ||||||
Distribution and service (12b-1) fees |
1.00 | % | 0.30 | % | 0.30 | % | ||||||
Other expenses |
0.97 | % | 0.22 | % | 0.20 | % | ||||||
Total fund operating expenses |
2.77 | % | 1.42 | % | 1.40 | % |
Small Company | ||||||||||||
(Pro Forma) | ||||||||||||
(Assuming Reorganization | ||||||||||||
Growth | Small | with Growth | ||||||||||
Opportunities | Company | Opportunities) | ||||||||||
Class I | Class I | Class I | ||||||||||
Annual Operating Expenses Management fee |
0.80 | % | 0.90 | % | 0.90 | % | ||||||
Other expenses |
5.75 | % | 0.20 | % | 0.18 | % | ||||||
Total fund operating expenses |
6.55 | % | 1.10 | % | 1.08 | % | ||||||
Contractual expense reimbursement |
(0.00 | )% | (0.00 | )% | (0.04 | )%* | ||||||
Net annual operating expenses |
6.55 | % | 1.10 | % | 1.04 | % |
* | JHIMS has contractually agreed to waive advisory fees or reimburse fund expenses for Class I shares of Small Company to the extent that expenses attributable to those shares exceed 1.04% of the average annual net assets attributable to the class for one year after the date of the Reorganization. This agreement may not take effect, however, if the Reorganization does not receive shareholder approval. |
8
Small Company Class A | ||||||||||||
(Pro Forma) | ||||||||||||
Growth | (Assuming | |||||||||||
Opportunities | Small Company | Reorganization | ||||||||||
Class A | Class A | with Growth Opportunities) | ||||||||||
Year 1 |
$ | 673 | $ | 637 | $ | 635 | ||||||
Year 3 |
$ | 1,035 | $ | 927 | $ | 921 | ||||||
Year 5 |
$ | 1,421 | $ | 1,238 | $ | 1,227 | ||||||
Year 10 |
$ | 2,500 | $ | 2,117 | $ | 2,096 | ||||||
Growth | Small Company Class A | |||||||||||
Opportunities | (Pro Forma) | |||||||||||
Class B assuming | (Assuming | |||||||||||
redemption at end | Small Company | Reorganization | ||||||||||
of period | Class A | with Growth Opportunities) | ||||||||||
Year 1 |
$ | 776 | $ | 637 | $ | 635 | ||||||
Year 3 |
$ | 1,147 | $ | 927 | $ | 921 | ||||||
Year 5 |
$ | 1,645 | $ | 1,238 | $ | 1,227 | ||||||
Year 10 |
$ | 2,835 | (1) | $ | 2,117 | $ | 2,096 | |||||
Small Company Class A | ||||||||||||
Growth | (Pro Forma) | |||||||||||
Opportunities | (Assuming | |||||||||||
Class B assuming | Small Company | Reorganization | ||||||||||
no redemption | Class A | with Growth Opportunities) | ||||||||||
Year 1 |
$ | 276 | $ | 637 | $ | 635 | ||||||
Year 3 |
$ | 847 | $ | 927 | $ | 921 | ||||||
Year 5 |
$ | 1,445 | $ | 1,238 | $ | 1,227 | ||||||
Year 10 |
$ | 2,835 | (1) | $ | 2,117 | $ | 2,096 | |||||
Growth | Small Company Class A | |||||||||||
Opportunities | (Pro Forma) | |||||||||||
Class C assuming | (Assuming | |||||||||||
redemption at end | Small Company | Reorganization | ||||||||||
of period | Class A | with Growth Opportunities) | ||||||||||
Year 1 |
$ | 380 | $ | 637 | $ | 635 | ||||||
Year 3 |
$ | 859 | $ | 927 | $ | 921 | ||||||
Year 5 |
$ | 1,464 | $ | 1,238 | $ | 1,227 | ||||||
Year 10 |
$ | 3,099 | $ | 2,117 | $ | 2,096 |
9
Small Company Class A | ||||||||||||
Growth | (Pro Forma) | |||||||||||
Opportunities | (Assuming | |||||||||||
Class C assuming | Small Company | Reorganization | ||||||||||
no redemption | Class A | with Growth Opportunities) | ||||||||||
Year 1 |
$ | 280 | $ | 637 | $ | 635 | ||||||
Year 3 |
$ | 859 | $ | 927 | $ | 921 | ||||||
Year 5 |
$ | 1,464 | $ | 1,238 | $ | 1,227 | ||||||
Year 10 |
$ | 3,099 | $ | 2,117 | $ | 2,096 | ||||||
Small Company Class I | ||||||||||||
(Pro Forma) | ||||||||||||
Growth | (Assuming | |||||||||||
Opportunities | Small Company | Reorganization | ||||||||||
Class I | Class I | with Growth Opportunities) | ||||||||||
Year 1 |
$ | 650 | $ | 112 | $ | 106 | ||||||
Year 3 |
$ | 1,920 | $ | 350 | $ | 340 | ||||||
Year 5 |
$ | 3,150 | $ | 606 | $ | 592 | ||||||
Year 10 |
$ | 6,064 | $ | 1,340 | $ | 1,314 |
(1) | Reflects conversion of Class B shares to Class A shares after eight years. |
Growth Opportunities | Small Company | ||||
0.80% first $500 million;
|
0.90% first $500 million; | ||||
0.78% next $500 million;
|
0.85% next $500 million; and | ||||
0.77% next $1.5 billion; and
|
0.80% excess over $1 billion of such assets. | ||||
0.76% excess over $2.5 billion of such assets. |
|||||
10
ACQUIRED FUND | ACQUIRING FUND | |||||||
Active Management Risk | Each fund is subject to management risk because it relies on the subadvisers ability to pursue the funds goal. The subadviser will apply investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that these will produce the desired results. Neither fund generally attempts to time the market and instead generally stays fully invested in the relevant asset class, such as domestic equities or foreign equities. Notwithstanding its benchmark, each fund may buy securities not included in its benchmark or hold securities in very different proportions than its benchmark. To the extent a fund invests in those securities, its performance depends on the ability of the subadviser to choose securities that perform better than securities that are included in the benchmark. | |||||||
Credit and
Counterparty Risk
|
The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract or a borrower of a funds securities, may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise to honor its obligations. | The fund does not invest in derivatives as a principal investment strategy. | ||||||
Equity Securities Risk | Common and preferred stocks represent equity
ownership in a company. Stock markets are
volatile. The price of equity securities will
fluctuate, and can decline and reduce the value
of a fund investing in equities. The price of
equity securities fluctuates based on changes in
a companys financial condition, and overall
market and economic conditions. The value of
equity securities purchased by a fund could
decline if the financial condition of the
companies in which the fund is invested declines,
or if overall market and economic conditions
deteriorate. Even a fund that invests in
high-quality or blue chip equity securities, or
securities of established companies with large
market capitalizations (which generally have
strong financial characteristics), can be
negatively impacted by poor overall market and
economic conditions. Companies with large market
capitalizations also may have less growth
potential than smaller companies and may be less
able to react quickly to changes in the
marketplace. Each fund may maintain substantial exposure to equities and generally does not attempt to time the market. Because of this exposure, the possibility that stock market prices in general will decline over short or extended periods subjects each fund to unpredictable declines in the value of its investments, as well as periods of poor performance. |
|||||||
11
ACQUIRED FUND | ACQUIRING FUND | |||||||
Growth investing risk. Certain equity securities (generally referred to as growth securities) are purchased primarily because the subadviser believes that these securities will experience relatively rapid earnings growth. Growth securities typically trade at higher multiples of current earnings than other securities. Growth securities are often more sensitive to market fluctuations than other securities because their market prices are highly sensitive to future earnings expectations. At times when it appears that these expectations may not be met, growth stock prices typically fall. | Value investing risk. Certain equity securities (generally referred to as value securities) are purchased primarily because they are selling at prices below what a subadviser believes to be their fundamental value and not necessarily because the issuing companies are expected to experience significant earnings growth. The fund bears the risk that the companies that issued these securities may not overcome the adverse business developments or other factors causing their securities to be perceived by the subadvisers to be underpriced or that the market may never come to recognize their fundamental value. A value stock may not increase in price, as anticipated by the subadviser investing in such securities, if other investors fail to recognize the companys value and bid up the price or invest in markets favoring faster growing companies. The funds strategy of investing in value stocks also carries the risk that in certain markets value stocks will underperform growth stocks. | |||||||
ETF Risk
|
The fund does not invest in ETFs as a principal investment strategy. | These are a type of investment company bought and sold on a securities exchange. An ETF represents a fixed portfolio of securities designed to track a particular market index. The fund could purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although lack of liquidity in an ETF could result in it being more volatile and ETFs have management fees which increase their costs. | ||||||
12
ACQUIRED FUND | ACQUIRING FUND | |||||||
Hedging, Derivatives
and Other Strategic
Transaction Risk
|
Hedging and other strategic transactions may increase the volatility of a fund and, if the transaction is not successful, could result in a significant loss to a fund. The use of derivative instruments could produce disproportionate gains or losses, more than the principal amount invested. Investing in derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and, in a down market, could become harder to value or sell at a fair price. The following discusses the risks of the particular derivatives in which the fund may invest. | The fund does not engage in hedging or derivative transactions as a principal strategy. | ||||||
Futures
contracts
Counterparty risk,
liquidity risk (i.e.,
the inability to
enter into closing
transactions) and
risk of
disproportionate loss
are the principal
risks of engaging in
transactions
involving futures
contracts. |
||||||||
Exchange-traded
options Liquidity
risk (i.e., the
inability to enter
into closing
transactions) and
risk of
disproportionate loss
are the principal
risks of engaging in
transactions
involving
exchange-traded
options. |
||||||||
Over-the-counter
options Counterparty
risk, liquidity risk
(i.e., the inability
to enter into closing
transactions) and
risk of
disproportionate loss
are the principal
risks of engaging in
transactions
involving
over-the-counter
options. |
||||||||
High Portfolio Turnover Risk |
A high fund portfolio turnover rate (over 100%) generally involves correspondingly greater brokerage commission expenses, which must be borne directly by a fund. The portfolio turnover rate of a fund may vary from year to year, as well as within a year. | |||||||
Issuer Risk | An issuer of a security may perform poorly and, therefore, the value of its stocks and bonds may decline. An issuer of securities held by the fund could default or have its credit rating downgraded. | |||||||
Liquidity Risk | Exposure exists when trading volume, lack of a market maker, or legal restrictions impair the ability to sell particular securities or close derivative positions at an advantageous price. | |||||||
13
ACQUIRED FUND | ACQUIRING FUND | |||||||
Medium Company Risk
|
Stocks of medium companies tend to be more volatile than those of large companies, and may under-perform stocks of large-size companies over any given period of time. Equity securities risk and liquidity risk may be greater for securities of medium companies as compared to large-cap companies. Medium-cap companies may have limited product lines or markets, less access to financial resources or less operating experience, or may depend on a few key employees. Stocks of mediumcap companies may not be widely known to investors and may be thinly traded or may trade only in certain markets, making it difficult to buy or sell them in large volume. | The fund does not invest in medium-size companies as a principal investment strategy. | ||||||
Small Company Risk | Stocks of small companies tend to be more volatile than those of large- or medium-size companies, and may under-perform stocks of either large- or medium-size companies over any given period of time. Equity securities risk and liquidity risk may be greater for securities of small companies as compared to mid-cap or large-cap companies. Small-cap companies may have limited product lines or markets, less access to financial resources or less operating experience, or may depend on a few key employees. Stocks of small-cap companies may not be widely known to investors and may be thinly traded or may trade only in certain markets, making it difficult to buy or sell them in large volume. The market capitalization of a company is based on its capitalization at the time the fund purchases the companys securities. Market capitalizations of companies change over time. The fund is not obligated to sell a companys security simply because, subsequent to its purchase, the companys market capitalization has changed to be outside the capitalization range for the fund. | |||||||
| The Reorganization is scheduled to occur at 5:00 pm, Eastern Time, on April 8, 2011, but may occur on any later date on or before April 8, 2012. The Acquired Fund will transfer all of its assets to the Acquiring Fund, and the Acquiring Fund will assume substantially all of the Acquired Funds liabilities. This will result in the addition of the Acquired Funds assets to the Acquiring Funds portfolio. The NAV of both funds will be computed as of 4:00 pm, Eastern Time, on the closing date of the Reorganization (the Closing Date). | ||
| Small Company, the Acquiring Fund, will issue Class A shares to Growth Opportunities, the Acquired Fund, in an amount equal to the aggregate net assets attributable to the Acquired Funds Class A, Class B and Class C shares. As part of the liquidation of the Acquired Fund, these shares will immediately be distributed to Class A, Class B and Class C shareholders of record of the Acquired Fund in proportion to |
14
their holdings on the Closing Date. As a result, Class A, Class B and Class C shareholders of the Acquired Fund will become Class A shareholders of the Acquiring Fund. | |||
| The Acquiring Fund will issue Class I shares to the Acquired Fund in an amount equal to the net assets attributable to the Acquired Funds Class I shares. As part of the liquidation of the Acquired Fund, these shares will immediately be distributed to Class I shareholders of record of the Acquired Fund in proportion to their holdings on the Closing Date. As a result, Class I shareholders of the Acquired Fund will become Class I shareholders of the Acquiring Fund. | ||
| After the shares are issued, the existence of the Acquired Fund will be terminated. |
15
Since | ||||||||||||
1-Year | 5-Year | Inception(1) | ||||||||||
Class A before tax |
[___] | % | [___] | % | [___] | % | ||||||
Class A after tax on distributions(2) |
[___] | % | [___] | % | [___] | % | ||||||
Class A after tax on distributions, with sale(2) |
[___] | % | [___] | % | [___] | % | ||||||
Class B before tax |
[___] | % | [___] | % | [___] | % | ||||||
Class C before tax |
[___] | % | [___] | % | [___] | % | ||||||
Class I before tax |
[___] | % | [___] | % | [___] | % | ||||||
Russell 2500 Growth Index |
[___] | % | [___] | % | [___] | % |
(1) | September 16, 2005. |
16
(2) | After-tax returns are shown for Class A shares only and would be different for the other classes. After-tax returns calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on your situation and may differ from those shown. Furthermore, the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or IRAs. |
1-Year | 5-Years | 10 Year | ||||||||||
Class A before tax |
[___] | % | [___] | % | [___] | % | ||||||
Class A after tax on distributions(1) |
[___] | % | [___] | % | [___] | % | ||||||
Class A after tax on distributions, with sale(1) |
[___] | % | [___] | % | [___] | % | ||||||
Class I before tax |
[___] | % | [___] | % | [___] | % | ||||||
Russell 2000 Index |
[___] | % | [___] | % | [___] | % | ||||||
(1) | After-tax returns are shown for Class A shares only and would be different for the other classes. After-tax returns calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on your situation and may differ from those shown. Furthermore, the after-tax returns shown are not relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or IRAs. |
17
| No gain or loss will be recognized by the Acquired Fund upon: (1) the transfer of all of its assets to the Acquiring Fund as described above; or (2) the distribution by the Acquired Fund of the Acquiring Fund shares to the Acquired Funds shareholders; | ||
| No gain or loss will be recognized by the Acquiring Fund upon the receipt of the Acquired Funds assets solely in exchange for the issuance of the Acquiring Fund shares to the Acquired Fund and the assumption of the Acquired Funds liabilities by the Acquiring Fund; | ||
| The tax basis of the assets of the Acquired Fund acquired by the Acquiring Fund will be the same as the tax basis of those assets in the hands of the Acquired Fund immediately before the transfer; | ||
| The tax holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the Acquired Funds tax holding period for those assets; | ||
| You will not recognize gain or loss upon the exchange of your shares of the Acquired Fund solely for the Acquiring Fund shares as part of the Reorganization; | ||
| The aggregate tax basis of the Acquiring Fund shares received by you in the Reorganization will be the same as the aggregate tax basis of your shares of the Acquired Fund surrendered in exchange; and | ||
| The tax holding period of the Acquiring Fund shares you receive will include the tax holding period of the shares of the Acquired Fund that you surrender in the exchange, provided that the shares of the Acquired Fund were held by you as capital assets on the date of the exchange. |
18
19
Shares | ||||||||||||||
Funds | Net Assets | Share Class | NAV | Outstanding | ||||||||||
Growth Opportunities (Acquired Fund) |
$ | 49,835,932 | Class A | $ | 18.93 | 2,646,639 | ||||||||
$ | 4,265,324 | Class B | $ | 18.29 | 233,181 | |||||||||
$ | 2,281,261 | Class C | $ | 18.29 | 124,743 | |||||||||
$ | 68,719 | Class I | $ | 19.18 | 3,582 | |||||||||
Small Company (Acquiring Fund) |
$ | 77,551,787 | Class A | $ | 17.59 | 4,407,967 | ||||||||
$ | 47,684,011 | Class I | $ | 17.63 | 2,704,728 | |||||||||
Decrease in net assets to reflect the estimated
expenses of the Reorganization and increase in
outstanding shares relative to net asset value upon the
Reorganization. |
$ | (63,210 | ) | Class A | $ | (0.02 | ) | 196,745 | ||||||
$ | (5,410 | ) | Class B | $ | (0.02 | ) | NA | |||||||
$ | (2,893 | ) | Class C | $ | (0.03 | ) | NA | |||||||
$ | (87 | ) | Class I | $ | (0.02 | ) | 311 | |||||||
Small Company (Acquiring Fund) (pro forma
assuming Reorganization with Growth Opportunities) |
$ | 133,862,791 | Class A | $ | 17.59 | 7,609,275 | ||||||||
$ | 47,752,643 | Class I | $ | 17.63 | 2,708,621 |
# | JHIMS will bear any costs incurred by the Acquired Fund in connection with the Reorganization that would cause the Acquired Fund to exceed its expense limitation arrangements. |
Headings in Each Prospectus | ||||
Type of Information | Growth Opportunities | Small Company | ||
Investment objective and policies | Fund summary Investment objective, Principal investment strategies, Principal risks Fund details Investment strategies, Risks of investing |
|||
Portfolio management | Whos who Investment adviser, Subadviser | |||
Expenses | Fund summary Fees and expenses | |||
Custodian | Whos who Custodian | |||
Shares of
beneficial interest
|
Your account Choosing a share class (Class A, Class B and Class C prospectus) |
Your account Investing in Class A
shares (Class A prospectus) |
||
Your account Who can buy shares (Class I prospectus) |
Your account Who can buy shares (Class I prospectus) |
20
Headings in Each Prospectus | ||||
Type of Information | Growth Opportunities | Small Company | ||
Purchase of shares
|
Your account Choosing a share class,
How sales charges are calculated, Sales
charge reductions and waivers (Class A
prospectus) Your account Who can buy shares (Class I prospectus) Your account Opening an account, Buying shares, Transaction policies, Additional investor services (all share classes) |
Your account Investing in Class A
shares, How sales charges are calculated,
Sales charge reductions and waivers (Class
A prospectus) Your account Who can buy shares (Class I prospectus) Your account Opening an account, Buying shares, Transaction policies, Additional investor services (all share classes) |
||
Redemption of sale
of shares
|
Your account Choosing a share class,
How sales charges are calculated (Class A
prospectus) Your account Who can buy shares (Class I prospectus) Your account Selling shares, Transaction policies, Additional investor services (all share classes) |
Your account Investing in Class A
shares, How sales charges are calculated
(Class A prospectus) Your account Who can buy shares (Class I prospectus) Your account Selling shares, Transaction policies, Additional investor services (all share classes) |
||
Dividends, distributions and taxes | Your account Dividends and account policies |
21
(1) | 67% or more of the voting securities present at such meeting, if more than 50% of the outstanding voting securities of the Acquired Fund are present or represented by proxy; or | ||
(2) | more than 50% of the outstanding voting securities of the Acquired Fund. |
Shares | Quorum | Voting | ||||||
In General
|
All shares present in person or by proxy are counted towards a quorum. | Shares present at the meeting will be voted in person at the meeting. Shares present by proxy will be voted in accordance with instructions. | ||||||
Proxy with no Voting Instruction (other than Broker Non-Vote) | Considered present at the meeting. | Voted for a proposal. | ||||||
Broker Non-Vote
|
Considered present at the meeting. | Not voted. Same effect as a vote against. | ||||||
Abstain
|
Considered present at the meeting. | Not voted. Same effect as a vote against. | ||||||
| By filing a written notice of revocation with the Acquired Funds transfer agent, John Hancock Signature Services, Inc., One John Hancock Way, Suite 1000, Boston, Massachusetts 02217-1000; |
22
| By returning a duly executed proxy with a later date before the time of the meeting; or | ||
| If a shareholder has executed a proxy but is present at the meeting and wishes to vote in person, by notifying the secretary of your fund (without complying with any formalities) at any time before it is voted. |
Shares Outstanding | ||||
Class A |
[ ] | |||
Class B |
[ ] | |||
Class C |
[ ] | |||
Class I |
[ ] | |||
Total |
[ ] |
| A shareholder will be called on a recorded line at the telephone number in the funds account records and will be asked to provide the shareholders Social Security number or other identifying information. | ||
| The shareholder will then be given an opportunity to authorize proxies to vote his or her shares at the meeting in accordance with the shareholders instructions. |
23
| To ensure that the shareholders instructions have been recorded correctly, the shareholder will also receive a confirmation of the voting instructions by mail. | ||
| A toll-free number will be available in case the voting information contained in the confirmation is incorrect. | ||
| If the shareholder decides after voting by telephone to attend the meeting, the shareholder can revoke the proxy at that time and vote the shares at the meeting. |
| Read the proxy statement and prospectus and have your proxy card(s) at hand. | ||
| Go to the Web site on the proxy card(s). | ||
| Enter the control number found on your proxy card(s). | ||
| Follow the instructions on the Web site. Please call us at 1-800-225-5291 if you have any problems. | ||
| To ensure that your instructions have been recorded correctly, you will receive a confirmation of your voting instructions immediately after your submission and also by e-mail, if chosen. |
Names and Addresses | Percentage | Class | Record or Beneficial | |||||||||
24
Names and Addresses | Percentage | Class | Record or Beneficial | |||||||||
Names and Addresses | Percentage | Class | Record or Beneficial | |||||||||
25
(a) | The Acquiring Fund is a series of shares of the Trust, a Massachusetts business trust duly organized and validly existing under, and in conformity with, the laws of the Commonwealth of Massachusetts, and has the power to own all of its assets and to carry out its obligations under this Agreement. The Trust is qualified as a foreign association in every jurisdiction where required, except to the extent that failure to so qualify would not have a material adverse effect on the Trust. Each of the Trust and the Acquiring Fund has all necessary federal, state and local authorizations to carry on its business as it is now being conducted and to carry out this Agreement. | ||
(b) | The Trust is duly registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and such registration has not been revoked or rescinded and is in full force and effect, and the Acquiring Fund is a separate diversified series thereof duly designated in accordance with the applicable provisions of the Trusts Second Amended and Restated Agreement and Declaration of Trust dated August 12, 2005, as may be amended (the Declaration), and the 1940 Act. | ||
(c) | The Acquiring Fund has elected to be, and has met the requirements of subchapter M of Code for treatment as, a regulated investment company (RIC) within the meaning of Section 851 of the Code at all times since its inception, and will continue to meet such requirements at all times through the Closing Date (as defined in Section 7 herein) and thereafter. The Acquiring Fund has not at any time since its inception been liable for, or is not now liable for, any material income or excise tax pursuant to Sections 852 or 4982 of the Code. | ||
(d) | The Acquired Fund has been furnished with: (i) the annual report of the Acquiring Fund for the fiscal year ended March 31, 2010, and the audited financial statements appearing therein, having been audited by PricewaterhouseCoopers LLP, independent registered public accounting firm (PwC); and (ii) the unaudited semiannual report of the Acquiring Fund for the six months ended September 30, 2010; which, in each case, fairly presents the financial condition and result of operations of the Acquiring Fund as of March 31, 2010 or September 30, 2010, as the case may be, in conformity with generally accepted accounting principles in the United States applied on a consistent basis. | ||
(e) | The Acquiring Fund has no known liabilities of a material nature, contingent or otherwise, other than those that will be shown as belonging to it on the statement of assets and liabilities of the Acquiring Fund as of September |
A-1
30, 2010, and those incurred in the ordinary course of business as an investment company since such date. As of the Valuation Time (as defined in Section 3(e)), the Acquiring Fund will advise the Acquired Fund in writing of all known liabilities, contingent or otherwise, whether or not incurred in the ordinary course of business, existing or accrued as of such time. | |||
(f) | The Trust, on behalf of the Acquiring Fund, has full power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action of the Board of Trustees of the Trust (the Board), and this Agreement constitutes a valid and binding contract enforceable in accordance with its terms subject to approval by the Acquired Funds shareholders and subject to the effects of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors rights generally and court decisions with respect thereto. | ||
(g) | Except as has been disclosed in writing to the Acquired Fund, there are no material legal, administrative or other proceedings pending or, to the knowledge of the Trust or the Acquiring Fund, threatened against the Trust or the Acquiring Fund which assert liability on the part of the Trust or the Acquiring Fund or which materially affect the financial condition of the Trust or the Acquiring Fund or the Trusts or the Acquiring Funds ability to consummate the Reorganization. Neither the Trust nor the Acquiring Fund is charged with or, to the best of its knowledge, threatened with any violation or investigation of any possible violation of any provisions of any federal, state or local law or regulation or administrative ruling relating to any aspect of its business. | ||
(h) | Neither the Trust nor the Acquiring Fund is obligated under any provision of the Declaration or the Trusts By-laws dated March 8, 2005, as may be amended (the By-laws), and neither is a party to any contract or other commitment or obligation, nor is subject to any order or decree, which would be violated by its execution of or performance under this Agreement, except insofar as the Acquiring Fund and the Acquired Fund may mutually agree that the Acquiring Fund may take such necessary action to amend such contract or other commitment or obligation to cure any potential violation as a condition precedent to the Reorganization. | ||
(i) | There are no material contracts outstanding to which the Acquiring Fund is a party that have not been disclosed in the N-14 Registration Statement (as defined in sub-section (k) below) or that will not otherwise be disclosed to the Acquired Fund prior to the Valuation Time. | ||
(j) | No consent, approval, authorization or order of any court or government authority is required for the consummation by the Acquiring Fund of the Reorganization, except such as may be required under the Securities Act of 1933, as amended (the 1933 Act), the Securities Exchange Act of 1934, as amended (the 1934 Act), and the 1940 Act or state securities laws (which term as used herein shall include the laws of the District of Columbia and Puerto Rico). | ||
(k) | The registration statement on Form N-14 filed with the Securities and Exchange Commission (the Commission) by the Trust on behalf of the Acquiring Fund and relating to the Merger Shares issuable hereunder, and the proxy statement of the Acquired Fund relating to the meeting of the Acquired Funds shareholders referred to in Section 6(b) herein (together with the documents incorporated therein by reference, the Proxy Statement/Prospectus), and any supplement or amendment thereto or to the documents therein (as amended or supplemented, the N-14 Registration Statement), on the effective date of the N-14 Registration Statement, at the time of the shareholders meeting referred to in Section 6(b) of this Agreement and at the Closing Date, insofar as it relates to the Acquiring Fund, |
(i) | did and will comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder; and | ||
(ii) | does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Proxy Statement/Prospectus included therein did not or will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that none of the representations and warranties in this sub-section shall apply to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by the Acquired Fund for use in the N-14 Registration Statement. |
A-2
(l) | The Acquiring Funds investment operations from inception to the date hereof have been in compliance in all material respects with the investment policies and investment restrictions set forth in the N-14 Registration Statement. | ||
(m) | All issued and outstanding shares of the Acquiring Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and nonassessable by the Acquiring Fund. In regard to the statement that the outstanding shares will be nonassessable, it is noted that the Trust is a Massachusetts business trust and under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Acquiring Fund. The Acquiring Fund does not have outstanding any security convertible into any of the Acquiring Fund shares. | ||
(n) | The Merger Shares to be issued to the Acquired Fund pursuant to this Agreement have been duly authorized and, when issued and delivered pursuant to this Agreement, will be legally and validly issued Class A and Class I shares of beneficial interest in the Acquiring Fund and will be fully paid and nonassessable by the Acquiring Fund, and no shareholder of the Acquiring Fund will have any preemptive right of subscription or purchase in respect thereof. In regard to the statement above that the Merger Shares will be nonassessable, it is noted that Trust is a Massachusetts business trust and under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of Trust. | ||
(o) | At or prior to the Closing Date, the Merger Shares to be transferred to the Acquired Fund for distribution to the shareholders of the Acquired Fund on the Closing Date will be duly qualified for offering to the public in all states of the United States in which the sale of shares of the Acquired Fund presently are qualified, and there will be a sufficient number of such shares registered under the 1933 Act and, as may be necessary, with each pertinent state securities commission to permit the transfers contemplated by this Agreement to be consummated. | ||
(p) | At or prior to the Closing Date, the Acquiring Fund will have obtained any and all regulatory, trustee and shareholder approvals necessary to issue the Merger Shares to the Acquired Fund. | ||
(q) | The Acquiring Fund has filed, or intends to file, or has obtained extensions to file, all federal, state and local tax returns which are required to be filed by it, and has paid or has obtained extensions to pay, all federal, state and local taxes shown on said returns to be due and owing and all assessments received by it, up to and including the taxable year in which the Closing Date occurs. All tax liabilities of the Acquiring Fund have been adequately provided for on its books, and no tax deficiency or liability of the Acquiring Fund has been asserted and no question with respect thereto has been raised by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid, up to and including the taxable year in which the Closing Date occurs. |
(a) | The Acquired Fund is a series of shares of the Trust, a Massachusetts business trust duly organized and validly existing under, and in good standing in conformity with, the laws of the Commonwealth of Massachusetts, and has the power to own all of its assets and to carry out its obligations under this Agreement. The Trust is qualified as a foreign association in every jurisdiction where required, except to the extent that failure to so qualify would not have a material adverse effect on the Trust. Each of the Trust and the Acquired Fund has all necessary federal, state and local authorizations to carry on its business as it is now being conducted and to carry out this Agreement. | ||
(b) | The Trust is a duly registered under the 1940 Act as an open-end management investment company and such registration has not been revoked or rescinded and is in full force and effect, and the Acquired Fund is a separate diversified series thereof duly designated in accordance with the applicable provisions of the Declaration), and the 1940 Act. | ||
(c) | The Acquired Fund has elected to be, and has met the requirements of subchapter M of the Code for treatment as a RIC within the meaning of Section 851 of the Code at all times since its inception, and will continue to meet such requirements at all times through the Closing Date with respect to its taxable year ending on the Closing Date. The Acquired Fund has not at any time since its inception been liable for, and is not now liable for, |
A-3
and will not be liable for on the Closing Date, any material income or excise tax pursuant to Sections 852 or 4982 of the Code. | |||
(d) | The Trust, on behalf of the Acquired Fund, has full power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action of the Board, and this Agreement constitutes a valid and binding contract enforceable in accordance with its terms subject to approval by the Acquired Funds shareholders and subject to the effects of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors rights generally and court decisions with respect thereto. | ||
(e) | The Acquiring Fund has been furnished with: (i) the annual report of the Acquired Fund for the fiscal year ended February 28, 2010, and the audited financial statements appearing therein, having been audited by PwC; and (ii) the unaudited semiannual report of the Acquired Fund for the six months ended August 31, 2010, and the financial statements appearing therein; which, in ease case, fairly presents the financial condition and result of operations of the Acquired Fund as of February 28, 2010 or August 31, 2010, as the case may be, in conformity with accounting principles generally accepted in the United States applied on a consistent basis. | ||
(f) | The Acquired Fund has no known liabilities of a material nature, contingent or otherwise, other than those that will be shown as belonging to it on its statement of assets and liabilities as of August 31, 2010, and those incurred in the ordinary course of business as an investment company since such date. As of the Valuation Time, the Acquired Fund will advise the Acquiring Fund in writing of all known liabilities, contingent or otherwise, whether or not incurred in the ordinary course of business, existing or accrued as of such time. | ||
(g) | Except as has been disclosed in writing to the Acquiring Fund, there are no material legal, administrative or other proceedings pending or, to the knowledge of the Trust or the Acquired Fund, threatened against the Trust or the Acquired Fund which assert liability on the part of the Trust or the Acquired Fund or which materially affect the financial condition of the Trust or the Acquired Fund or the Trusts or the Acquired Funds ability to consummate the Reorganization. Neither the Trust nor the Acquired Fund is charged with or, to the best of its knowledge, threatened with any violation or investigation of any possible violation of any provisions of any federal, state or local law or regulation or administrative ruling relating to any aspect of its business. | ||
(h) | There are no material contracts outstanding to which the Acquired Fund is a party that have not been disclosed in the N-14 Registration Statement or that will not otherwise be disclosed to the Acquiring Fund prior to the Valuation Time. | ||
(i) | Neither the Trust nor the Acquired Fund is obligated under any provision of the By-laws, and neither is a party to any contract or other commitment or obligation, nor is subject to any order or decree, which would be violated by its execution of or performance under this Agreement, except insofar as the Acquired Fund and the Acquiring Fund may mutually agree that the Acquired Fund may take such necessary action to amend such contract or other commitment or obligation to cure any potential violation as a condition precedent to the Reorganization. | ||
(j) | The Acquired Fund has filed, or intends to file, or has obtained extensions to file, all federal, state and local tax returns which are required to be filed by it, and has paid or has obtained extensions to pay, all federal, state and local taxes shown on said returns to be due and owing and all assessments received by it, up to and including the taxable year in which the Closing Date occurs. All tax liabilities of the Acquired Fund have been adequately provided for on its books, and no tax deficiency or liability of the Acquired Fund has been asserted and no question with respect thereto has been raised by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid, up to and including the taxable year in which the Closing Date occurs. | ||
(k) | As used in this Agreement, the term Acquired Fund Investments shall mean: (i) the investments of the Acquired Fund shown on its schedule of investments as of the Valuation Time furnished to the Acquiring Fund; and (ii) all other assets owned by the Acquired Fund or liabilities incurred as of the Valuation Time. At the Valuation Time and the Closing Date, the Acquired Fund will have full right, power and authority to sell, assign, transfer and deliver the Acquired Fund Investments. At the Closing Date, subject only to the obligation to deliver the Acquired Fund Investments as contemplated by this Agreement, the Acquired Fund will have good and marketable title to all of the Acquired Fund Investments, and the Acquiring Fund will acquire all of the Acquired Fund Investments free and clear of any encumbrances, liens or security interests and without any restrictions upon the transfer thereof |
A-4
(except those imposed by the federal or state securities laws and those imperfections of title or encumbrances as do not materially detract from the value or use of the Acquired Fund Investments or materially affect title thereto). | |||
(l) | No consent, approval, authorization or order of any court or governmental authority is required for the consummation by the Acquired Fund of the Reorganization, except such as may be required under the 1933 Act, the 1934 Act, the 1940 Act or state securities laws. | ||
(m) | The N-14 Registration Statement, on the effective date of the N-14 Registration Statement, at the time of the shareholders meeting referred to in Section 6(b) of this Agreement and at the Closing Date, insofar as it relates to the Acquired Fund, |
(i) | did and will comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder; and | ||
(ii) | does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Proxy Statement/Prospectus included therein did not or will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that none of the representations and warranties in this sub-section shall apply to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by the Acquiring Fund for use in the N-14 Registration Statement. |
(n) | All issued and outstanding shares of the Acquired Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and nonassessable by the Acquired Fund (Acquired Fund Shares). In regard to the statement above that the Acquired Fund Shares will be nonassessable, it is noted that the Trust is a Massachusetts business trust and under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Acquired Fund. The Acquired Fund does not have outstanding any security convertible into any of the Acquired Fund Shares, except that Class B shares of the Acquired Fund are convertible into Class A shares of the Acquired Fund in the manner and on the terms described in the N-14 Registration Statement. | ||
(o) | All of the issued and outstanding shares of the Acquired Fund were offered for sale and sold in conformity with all applicable federal and state securities laws. | ||
(p) | The books and records of the Acquired Fund made available to the Acquiring Fund and/or its counsel are substantially true and correct and contain no material misstatements or omissions with respect to the operations of the Acquired Fund. | ||
(q) | The Acquired Fund will not sell or otherwise dispose of any of the Merger Shares to be received in the Reorganization, except in distribution to the shareholders of the Acquired Fund, as provided in Section 3 of this Agreement. |
(a) | Subject to the requisite approval of the shareholders of the Acquired Fund, and to the other terms and conditions contained herein, the Acquired Fund agrees to sell, convey, transfer and deliver to the Acquiring Fund, and the Acquiring Fund agrees to acquire from the Acquired Fund, on the Closing Date, all of the Acquired Fund Investments (including interest accrued as of the Valuation Time on debt instruments) and to assume substantially all of the liabilities of the Acquired Fund, in exchange for that number of Merger Shares provided for in Section 4. Pursuant to this Agreement, as soon as practicable after the Closing Date, the Acquired Fund will distribute all Merger Shares received by it to its shareholders in exchange for their Acquired Fund Shares. Such distributions shall be accomplished by the opening of shareholder accounts on the share ledger records of the Acquiring Fund in the amounts due the shareholders of the Acquired Fund based on their respective holdings in the Acquired Fund as of the Valuation Time. | ||
(b) | If it is determined that the portfolios of the Acquired Fund and the Acquiring Fund, when aggregated, would contain investments exceeding certain percentage limitations imposed upon the Acquiring Fund with respect to such investments, the Acquired Fund, if requested by the Acquiring Fund, will dispose of a sufficient amount of |
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such investments as may be necessary to avoid violating such limitations as of the Closing Date. Notwithstanding the foregoing, |
(i) | nothing herein will require the Acquired Fund to dispose of any portfolio securities or other investments, if, in the reasonable judgment of the Board or the Acquired Funds investment adviser, such disposition would adversely affect the tax-free nature of the Reorganization for federal income tax purposes or would otherwise not be in the best interests of the Acquired Fund, and | ||
(ii) | nothing will permit the Acquired Fund to dispose of any portfolio securities or other investments if, in the reasonable judgment of the Board or the Acquiring Funds investment adviser, such disposition would adversely affect the tax-free nature of the Reorganization for federal income tax purposes or would otherwise not be in the best interests of the Acquiring Fund. |
(c) | Prior to the Closing Date, the Acquired Fund shall declare a dividend or dividends which, together with all such previous dividends, shall have the effect of distributing to its shareholders all of its net investment company taxable income to and including the Closing Date, if any (computed without regard to any deduction for dividends paid), and all of its net capital gain realized to and including the Closing Date, if any. | ||
(d) | The Acquired Fund will pay or cause to be paid to the Acquiring Fund any interest the Acquired Fund receives on or after the Closing Date with respect to any of the Acquired Fund Investments transferred to the Acquiring Fund hereunder. | ||
(e) | The Valuation Time shall be 4:00 pm, Eastern Time, on the Closing Date, or such earlier or later day and time as may be mutually agreed upon in writing (the Valuation Time). | ||
(f) | Recourse for liabilities assumed from the Acquired Fund by the Acquiring Fund in the Reorganization will be limited to the assets acquired by the Acquiring Fund. The known liabilities of the Acquired Fund, as of the Valuation Time, shall be confirmed to the Acquiring Fund pursuant to Section 2(k) of this Agreement. | ||
(g) | The Acquired Fund will be terminated following the Closing Date by terminating its registration under the 1940 Act and its organization under Massachusetts law and, where it is required to do so, will withdraw its authority to do business in any state. | ||
(h) | The Acquiring Fund will file with the Secretary of the Commonwealth of Massachusetts any necessary amendment to the Declaration and By-laws to consummate the Reorganization. |
(a) | On the Closing Date, the Acquiring Fund will deliver to the Acquired Fund a number of full and fractional Merger Shares having an aggregate net asset value equal: (a) in the case of Class A shares of the Acquiring Fund, to the aggregate value of the assets of the Acquired Fund attributable to Class A, Class B and Class C shares of the Acquired Fund on such date less the value of the liabilities attributable to Class A, Class B and Class C shares of the Acquired Fund assumed by the Acquiring Fund on that date; and (b) in the case of Class I shares of the Acquiring Fund, to the value of the assets of the Acquired Fund attributable to Class I shares of the Acquired Fund on such date less the value of the liabilities attributable to Class I shares of the Acquired Fund assumed by the Acquiring Fund on that date; in each case determined as hereinafter provided in this Section 4. | ||
(b) | The net asset value of the Merger Shares to be delivered to the Acquired Fund, the value of the assets attributable to the Acquired Fund Shares, and the value of the liabilities of the Acquired Fund to be assumed by the Acquiring Fund, shall in each case be determined as of the Valuation Time. | ||
(c) | The net asset value of the Merger Shares shall be computed in the manner set forth in the then-current prospectus or statement of additional information of the Acquiring Fund Prospectus. The value of the assets and liabilities of the Acquired Fund shall be determined by the Acquiring Fund, in cooperation with the Acquired Fund, pursuant to procedures which the Acquiring Fund would use in determining the fair market value of the Acquiring Funds assets and liabilities. | ||
(d) | No adjustment shall be made in the net asset value of either the Acquired Fund or the Acquiring Fund to take into account differences in realized and unrealized gains and losses. |
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(e) | The Acquiring Fund shall issue the Merger Shares to the Acquired Fund. The Acquired Fund shall promptly distribute the Merger Shares to the shareholders of the Acquired Fund by establishing open accounts for each Acquired Fund shareholder on the share ledger records of the Acquiring Fund. Certificates representing Merger Shares will not be issued to Acquired Fund shareholders. | ||
(f) | The Acquiring Fund shall assume substantially all of the liabilities of the Acquired Fund, whether accrued or contingent, in connection with the acquisition of assets and subsequent liquidation and dissolution of the Acquired Fund or otherwise, except for the Acquired Funds liabilities, if any, arising pursuant to this Agreement. |
(a) | Except as otherwise provided in this Section 5, each of John Hancock Investment Management, LLC, each Funds investment adviser (JHIMS), and the Acquired Fund will bear 50% of any and all costs and expenses of the Reorganization incurred by the Acquiring Fund and the Acquired Fund; provided, however, that the Acquiring Fund and the Acquired Fund will each pay any brokerage commissions, dealer mark-ups and similar expenses (Portfolio Expenses) that it may incur in connection with the purchases or sale of portfolio securities; and provided, further, that, the Acquiring Fund will pay all governmental fees required in connection with the registration or qualification of the Merger Shares under applicable state and federal laws. | ||
(b) | In the event that the Reorganization contemplated by this Agreement is not consummated, then JHIMS will bear all the costs and expenses incurred in connection with such Reorganization. | ||
(c) | Notwithstanding any other provisions of this Agreement, if for any reason the Reorganization contemplated by this Agreement is not consummated, neither the Acquiring Fund nor the Acquired Fund shall be liable to the other for any damages resulting therefrom, including, without limitation, consequential damages, except as specifically set forth above. | ||
(d) | Notwithstanding any of the foregoing, costs and expenses will in any event be paid by the party directly incurring them if and to the extent that the payment by another party of such costs and expenses would result in the disqualification of such party as a regulated investment company within the meaning of subchapter M of the Code. |
(a) | Each of the Acquired Fund and the Acquiring Fund will operate its business as presently conducted in the ordinary course of business between the date hereof and the Closing Date, it being understood that such ordinary course of business will include regular and customary periodic dividends and distributions. | ||
(b) | The Trust, on behalf of the Acquired Fund, will call a meeting of its shareholders to be held prior to the Closing Date to consider and act upon this Agreement and take all other reasonable action necessary to obtain the required shareholder approval of the Reorganization contemplated hereby. | ||
(c) | In connection with the Acquired Fund shareholders meeting referred to in sub-section (b) above, the Acquiring Fund will prepare the Prospectus/Proxy Statement for such meeting, to be included in the N-14 Registration Statement, which the Trust, on behalf of the Acquiring Fund, will prepare and file for registration under the 1933 Act of the Merger Shares to be distributed to the Acquired Funds shareholders pursuant hereto, all in compliance with the applicable requirements of the 1933 Act, the 1934 Act, and the 1940 Act. The Acquiring Fund will use its best efforts to provide for the N-14 Registration Statement to become effective as promptly as practicable. The Acquired Fund and the Acquiring Fund will cooperate fully with each other, and each will furnish to the other the information relating to itself to be set forth in the N-14 Registration Statement, as required by the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations thereunder and the state securities laws. | ||
(d) | The information to be furnished by the Acquired Fund and the Acquiring Fund for use in the N-14 Registration Statement shall be accurate and complete in all material respects and shall comply with federal securities and other laws and regulations thereunder applicable hereto. |
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(e) | The Trust shall: |
(i) | following the consummation of the Reorganization, terminate the Acquired Fund in accordance with the laws of the Commonwealth of Massachusetts, the Declaration and By-laws, the 1940 Act and any other applicable law; | ||
(ii) | not make any distributions of any Merger Shares other than to the respective Acquired Fund shareholders and without first paying or adequately providing for the payment of all of its respective liabilities not assumed by the Acquiring Fund, if any; and | ||
(iii) | on and after the Closing Date not conduct any business on behalf of the Acquired Fund except in connection with the termination of the Acquired Fund. |
(f) | Each of the Acquired Fund and the Acquiring Fund agrees that by the Closing Date all of its federal and other tax returns and reports required to be filed on or before such date shall have been filed and all taxes shown as due on said returns either have been paid or adequate liability reserves have been provided for the payment of such taxes. | ||
(g) | Neither the Acquiring Fund nor the Acquired Fund shall take any action or cause any action to be taken (including, without limitation, the filing of any tax return) that results in the failure of the Reorganization to qualify as a reorganization within the meaning of Section 368(a) of the Code or is inconsistent with the treatment of the Reorganization as a reorganization within the meaning of such Code section. At or prior to the Closing Date, the Trust, the Acquiring Fund, the Trust and the Acquired Fund will take such action, or cause such action to be taken, as is reasonably necessary to enable K&L Gates LLP, counsel to the Acquired Fund and the Acquiring Fund, to render the tax opinion required herein (including, without limitation, each partys execution of representations reasonably requested by and addressed to K&L Gates). | ||
(h) | In connection with the covenant in subsection (g) above, each of the Acquired Fund and Acquiring Fund will cooperate with each other in filing any tax return, amended return or claim for refund, determining a liability for taxes or a right to a refund of taxes or participating in or conducting any audit or other proceeding in respect of taxes. The Acquiring Fund will retain for a period of ten (10) years following the Closing Date all returns, schedules and work papers and all material records or other documents relating to tax matters of the Acquired Fund for such Acquired Funds taxable period first ending after the Closing Date and for all prior taxable periods. | ||
(i) | After the Closing Date, the Acquired Fund shall prepare, or cause its agents to prepare, any federal, state or local tax returns required to be filed by the Acquired Fund with respect to its final taxable year ending with its complete liquidation and for any prior periods or taxable years and further shall cause such tax returns to be duly filed with the appropriate taxing authorities. Notwithstanding the aforementioned provisions of this subsection, any expenses incurred by the Acquired Fund (other than for payment of taxes) in connection with the preparation and filing of said tax returns after the Closing Date shall be borne by such Acquired Fund to the extent such expenses have been accrued by such Acquired Fund in the ordinary course without regard to the Reorganization; any excess expenses shall be borne by the investment adviser or an affiliate thereof. | ||
(j) | Following the consummation of the Reorganization, the Acquiring Fund will continue its business as a diversified series of the Trust, an open-end management investment company registered under the 1940 Act. |
(a) | Delivery of the assets of the Acquired Fund to be transferred, together with any other Acquired Fund Investments, assumption of the liabilities of the Acquired Fund to be assumed, and delivery of the Merger Shares to be issued as provided in this Agreement shall be made at such place and time as the Acquired Fund and Acquiring Fund shall mutually agree, as of the close of business on April 8, 2011, or at such other time and date agreed to by the Acquired Fund and the Acquiring Fund, the date and time upon which such delivery is to take place being referred to herein as the Closing Date. | ||
(b) | To the extent that any Acquired Fund Investments, for any reason, are not transferable on the Closing Date, the Acquired Fund shall cause such Acquired Fund Investments to be transferred to the Acquiring Funds account with its custodian at the earliest practicable date thereafter. |
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(c) | The Acquired Fund will deliver to the Acquiring Fund on the Closing Date confirmation or other adequate evidence as to the tax basis of the Acquired Fund Investments delivered to the Acquiring Fund hereunder. | ||
(d) | As soon as practicable after the close of business on the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list of the names and addresses of all of the shareholders of record of the Acquired Fund on the Closing Date and the number of Acquired Fund Shares owned by each such shareholder, certified to the best of its knowledge and belief by the transfer agent for the Acquired Fund or by its President. |
(a) | That the Board has determined that participation in the Reorganization is in the best interests of the Acquiring Fund and that the interests of the existing shareholders thereof will not be diluted as a result of the Reorganization, that this Agreement shall have been adopted, and the Reorganization shall have been approved, by the Board, and that the Acquiring Fund shall have delivered to the Acquired Fund a copy of the resolution approving this Agreement adopted by the Board certified by its Secretary. | ||
(b) | That the Acquired Fund shall have received from the Acquiring Fund a statement of assets, liabilities and capital, with values determined as provided in Section 4 of this Agreement, together with a schedule of the Acquiring Funds investments, all as of the Valuation Time, certified on the Acquiring Funds behalf by its President (or any Vice President) or its Treasurer, and a certificate signed by the Acquiring Funds President (or any Vice President) and its Treasurer, dated as of the Closing Date, certifying that as of the Valuation Time and as of the Closing Date there has been no material adverse change in the financial position of the Acquiring Fund since the date of the Acquiring Funds most recent annual report or semiannual report, as applicable, other than changes in its portfolio securities since that date or changes in the market value of its portfolio securities. | ||
(c) | That the Acquiring Fund shall have furnished to the Acquired Fund a certificate signed by the Acquiring Funds President (or any Vice President), its Chief Financial Officer or its Treasurer, dated as of the Closing Date, certifying that, as of the Valuation Time and as of the Closing Date, all representations and warranties of the Acquiring Fund made in this Agreement are true and correct in all material respects with the same effect as if made at and as of such dates, and that the Acquiring Fund has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to each of such dates. | ||
(d) | That there shall not be any material litigation pending with respect to the matters contemplated by this Agreement. | ||
(e) | That the Acquired Fund shall have received the opinion(s) of K&L Gates, counsel for the Acquiring Fund, dated as of the Closing Date, addressed to the Acquired Fund substantially in the form and to the effect that: |
(i) | the Acquiring Fund is a separate series of the Trust, both the Acquiring Fund and the Trust are duly formed and validly existing under the laws of the Commonwealth of Massachusetts; | ||
(ii) | the Acquiring Fund is a separate series of the Trust, an open-end, management investment company registered under the 1940 Act; | ||
(iii) | this Agreement and the Reorganization provided for herein and the execution of this Agreement have been duly authorized and approved by all requisite action of the Board, and this Agreement has been duly executed and delivered by the Trust on behalf of the Acquiring Fund and (assuming this Agreement is a valid and binding obligation of the other party hereto) is a valid and binding obligation of the Acquiring Fund; | ||
(iv) | neither the execution or delivery by the Trust on behalf of the Acquiring Fund of this Agreement nor the consummation by the Acquiring Fund of the Reorganization contemplated hereby violates any provision of any statute or any published regulation or any judgment or order disclosed to counsel by the Acquiring Fund as being applicable to the Acquiring Fund; | ||
(v) | the Merger Shares have each been duly authorized and, upon issuance thereof in accordance with this Agreement, will be validly issued, fully paid and nonassessable, except to the extent shareholders could under |
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certain circumstances, in accordance with Massachusetts law, be held personally liable for the obligations of the Acquiring Fund; and |
(vi) | to their knowledge and subject to the qualifications set forth below, the execution and delivery by the Trust on behalf of the Acquiring Fund of this Agreement and the consummation of the Reorganization herein contemplated do not require, under the laws of the Commonwealth of Massachusetts or any state in which the Acquiring Fund is qualified to do business or the federal laws of the United States, the consent, approval, authorization, registration, qualification or order of, or filing with, any court or governmental agency or body (except such as have been obtained under the 1933 Act, 1934 Act, the 1940 Act or the rules and regulations thereunder). Counsel need express no opinion, however, as to any such consent, approval, authorization, registration, qualification, order or filing which may be required as a result of the involvement of other parties to this Agreement in the transactions herein contemplated because of their legal or regulatory status or because of any other facts specifically pertaining to them. |
(f) | That the Acquired Fund shall have obtained an opinion from K&L Gates dated as of the Closing Date, addressed to the Acquired Fund, and based upon such representations of the parties as K&L Gates may reasonably request, that the consummation of the Reorganization set forth in this Agreement complies with the requirements of a reorganization as described in Section 368(a) of the Code. | ||
(g) | That all proceedings taken by the Acquiring Fund and its counsel in connection with the Reorganization and all documents incidental thereto shall be satisfactory in form and substance to the others. | ||
(h) | That the N-14 Registration Statement shall have become effective under the 1933 Act, and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Trust or the Acquiring Fund, be contemplated by the Commission. |
9. | CONDITIONS OF THE ACQUIRING FUNDS OBLIGATIONS. | |
The obligations of the Acquiring Fund hereunder shall be subject to the following conditions: |
(a) | That the Board has determined that participation in the Reorganization is in the best interests of the Acquired Fund and that the interests of the existing shareholders thereof will not be diluted as a result of the Reorganization, that this Agreement shall have been adopted, and the Reorganization shall have been approved, by the Board of the Acquired Fund and by the affirmative vote of the holders of a majority of the outstanding Acquired Fund Shares (as defined in the Declaration); and the Acquired Fund shall have delivered to the Acquiring Fund a copy of the resolutions approving this Agreement adopted by the Board, and a certificate setting forth the vote of the holders of the Acquired Fund Shares obtained, each certified by its Secretary. | ||
(b) | That the Acquired Fund shall have furnished to the Acquiring Fund a statement of its assets, liabilities and capital, with values determined as provided in Section 4 of this Agreement, together with a schedule of investments with their respective dates of acquisition and tax costs, all as of the Valuation Time, certified on the Acquired Funds behalf by its President (or any Vice President) or its Treasurer, and a certificate signed by the Acquired Funds President (or any Vice President) or its Treasurer, dated as of the Closing Date, certifying that as of the Valuation Time and as of the Closing Date there has been no material adverse change in the financial position of the Acquired Fund since the date of the Acquired Funds most recent annual report or semiannual report, as applicable, other than changes in the Acquired Fund Investments since that date or changes in the market value of the Acquired Fund Investments. | ||
(c) | That the Acquired Fund shall have furnished to the Acquiring Fund a certificate signed by the Acquired Funds President (or any Vice President), its Chief Financial Officer or its Treasurer, dated as of the Closing Date, certifying that as of the Valuation Time and as of the Closing Date, all representations and warranties of the Acquired Fund made in this Agreement are true and correct in all material respects with the same effect as if made at and as of such dates and the Acquired Fund has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to such dates. | ||
(d) | That there shall not be any material litigation pending with respect to the matters contemplated by this Agreement. |
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(e) | That the Acquiring Fund shall have received the opinion(s) of K&L Gates, counsel for the Acquired Fund, dated as of the Closing Date, addressed to the Acquiring Fund, substantially in the form and to the effect that: |
(i) | the Acquired Fund is a separate series of the Trust, both the Acquired Fund and the Trust are duly formed and validly existing under the laws of the Commonwealth of Massachusetts; | ||
(ii) | the Acquired Fund is a separate series of the Trust, an open-end, management investment company registered under the 1940 Act; | ||
(iii) | this Agreement and the Reorganization provided for herein and the execution of this Agreement have been duly authorized and approved by all requisite action of the Board, and this Agreement has been duly executed and delivered by the Trust on behalf of the Acquired Fund and (assuming this Agreement is a valid and binding obligation of the other party hereto) is a valid and binding obligation of the Acquired Fund; | ||
(iv) | neither the execution or delivery by the Trust on behalf of the Acquired Fund of this Agreement nor the consummation by the Acquired Fund of the Reorganization contemplated hereby violates any provision of any statute, or any published regulation or any judgment or order disclosed to counsel by the Acquired Fund as being applicable to the Acquired Fund; and | ||
(v) | to their knowledge and subject to the qualifications set forth below, the execution and delivery by the Trust on behalf of the Acquired Fund of the Agreement and the consummation of the Reorganization herein contemplated do not require, under the laws of the Commonwealth of Massachusetts or any state in which the Acquired Fund is qualified to do business, or the federal laws of the United States, the consent, approval, authorization, registration, qualification or order of, or filing with, any court or governmental agency or body (except such as have been obtained under the 1933 Act, 1934 Act, the 1940 Act or the rules and regulations thereunder). Counsel need express no opinion, however, as to any such consent, approval, authorization, registration, qualification, order or filing which may be required as a result of the involvement of other parties to this Agreement in the transactions herein contemplated because of their legal or regulatory status or because of any other facts specifically pertaining to them. |
(f) | That the Acquiring Fund shall have obtained an opinion from K&L Gates, counsel for the Acquired Fund, dated as of the Closing Date, addressed to the Acquiring Fund, and based upon such representations of the parties as K&L Gates may reasonably request, that the consummation of the Reorganization set forth in this Agreement complies with the requirements of a reorganization as described in Section 368(a) of the Code. | ||
(g) | That the N-14 Registration Statement shall have become effective under the 1933 Act and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Acquired Fund, be contemplated by the Commission. | ||
(h) | That the Acquired Funds custodian shall have delivered to the Acquiring Fund a certificate identifying all assets of the Acquired Fund held or maintained by such custodian as of the Valuation Time. | ||
(i) | That all proceedings taken by the Acquired Fund and its counsel in connection with the Reorganization and all documents incidental thereto shall be satisfactory in form and substance to the Acquiring Fund. | ||
(j) | That prior to the Closing Date the Acquired Fund shall have declared a dividend or dividends which, together with all such previous dividends, shall have the effect of distributing to its shareholders all of its net investment company taxable income for the period to and including the Closing Date, if any (computed without regard to any deduction for dividends paid), and all of its net capital gain, if any, realized up to and including the Closing Date. |
10. | TERMINATION, POSTPONEMENT AND WAIVERS. |
(a) | Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated and the Reorganization abandoned at any time (whether before or after adoption thereof by the shareholders of the Acquired Fund) prior to the Closing Date, or the Closing Date may be postponed, |
(i) | by consent of the Board; |
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(ii) | by the Board, if any condition of the Acquired Funds obligations set forth in Section 8 of this Agreement has not been fulfilled or waived by the Board; or | ||
(iii) | by the Board, if any condition of the Acquiring Funds obligations set forth in Section 9 of this Agreement has not been fulfilled or waived by the Board. |
(b) | If the Reorganization contemplated by this Agreement has not been consummated by April 8, 2012, this Agreement automatically shall terminate on that date, unless a later date is agreed to by the Board. | ||
(c) | In the event of termination of this Agreement pursuant to the provisions hereof, the same shall become void and have no further effect, and there shall not be any liability on the part of the Acquired Fund, the Acquiring Fund or persons who are their directors, trustees, officers, agents or shareholders in respect of this Agreement. | ||
(d) | At any time prior to the Closing Date, any of the terms or conditions of this Agreement may be waived by the Board, if, in the judgment of the Board after consultation with its counsel, such action or waiver will not have a material adverse effect on the benefits intended under this Agreement to the shareholders of the Fund on behalf of which such action is taken. | ||
(e) | The respective representations and warranties contained in Sections 1 and 2 of this Agreement shall expire with, and be terminated by, the consummation of the Reorganization, and the Acquired Fund and the Acquiring Fund and the officers, trustees, agents or shareholders of such Funds shall not have any liability with respect to such representations or warranties after the Closing Date. This provision shall not protect any officer, trustee, agent or shareholder of either the Acquired Fund or the Acquiring Fund against any liability to the entity for which that officer, trustee, agent or shareholder so acts or to its shareholders, to which that officer, trustee, agent or shareholder otherwise would be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties in the conduct of such office. | ||
(f) | If any order or orders of the Commission with respect to this Agreement shall be issued prior to the Closing Date and shall impose any terms or conditions which are determined by action of the Board to be acceptable, such terms and conditions shall be binding as if a part of this Agreement without further vote or approval of the shareholders of the Acquired Fund unless such terms and conditions shall result in a change in the method of computing the number of Merger Shares to be issued to the Acquired Fund, in which event, unless such terms and conditions shall have been included in the proxy solicitation materials furnished to the shareholders of the Acquired Fund prior to the meeting at which the Reorganization shall have been approved, this Agreement shall not be consummated and shall terminate unless the Acquired Fund promptly shall call a special meeting of shareholders at which such conditions so imposed shall be submitted for approval. |
11. | INDEMNIFICATION. |
(a) | Each party (an Indemnitor) shall indemnify and hold the other and its officers, trustees, agents and persons controlled by or controlling any of them (each an Indemnified Party) harmless from and against any and all losses, damages, liabilities, claims, demands, judgments, settlements, deficiencies, taxes, assessments, charges, costs and expenses of any nature whatsoever (including reasonable attorneys fees) including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred by such Indemnified Party in connection with the defense or disposition of any claim, action, suit or other proceeding, whether civil or criminal, before any court or administrative or investigative body in which such Indemnified Party may be or may have been involved as a party or otherwise or with which such Indemnified Party may be or may have been threatened (collectively, the Losses) arising out of or related to any claim of a breach of any representation, warranty or covenant made herein by the Indemnitor; provided, however, that no Indemnified Party shall be indemnified hereunder against any Losses arising directly from such Indemnified Partys: (i) willful misfeasance; (ii) bad faith; (iii) gross negligence; or (iv) reckless disregard of the duties involved in the conduct of such Indemnified Partys position. | ||
(b) | The Indemnified Party shall use its best efforts to minimize any liabilities, damages, deficiencies, claims, judgments, assessments, costs and expenses in respect of which indemnity may be sought hereunder. The Indemnified Party shall give written notice to Indemnitor within the earlier of ten (10) days of receipt of written notice to Indemnified Party or thirty (30) days from discovery by Indemnified Party of any matters which may give rise to a claim for indemnification or reimbursement under this Agreement. The failure to give such notice shall not |
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affect the right of Indemnified Party to indemnity hereunder unless such failure has materially and adversely affected the rights of the Indemnitor. At any time after ten (10) days from the giving of such notice, Indemnified Party may, at its option, resist, settle or otherwise compromise, or pay such claim unless it shall have received notice from Indemnitor that Indemnitor intends, at Indemnitors sole cost and expense, to assume the defense of any such matter, in which case Indemnified Party shall have the right, at no cost or expense to Indemnitor, to participate in such defense. If Indemnitor does not assume the defense of such matter, and in any event until Indemnitor states in writing that it will assume the defense, Indemnitor shall pay all costs of Indemnified Party arising out of the defense until the defense is assumed; provided, however, that Indemnified Party shall consult with Indemnitor and obtain Indemnitors prior written consent to any payment or settlement of any such claim. Indemnitor shall keep Indemnified Party fully apprised at all times as to the status of the defense. If Indemnitor does not assume the defense, Indemnified Party shall keep Indemnitor apprised at all times as to the status of the defense. Following indemnification as provided for hereunder, Indemnitor shall be subrogated to all rights of Indemnified Party with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. |
12. | OTHER MATTERS. |
(a) | All covenants, agreements, representations and warranties made under this Agreement and any certificates delivered pursuant to this Agreement shall be deemed to have been material and relied upon by each of the parties, notwithstanding any investigation made by them or on their behalf. | ||
(b) | All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally or sent by registered mail or certified mail, postage prepaid. Notice to the Acquired Fund shall be addressed to the John Hancock Growth Opportunities Fund, c/o John Hancock, 601 Congress Street, Boston, Massachusetts 02210, Attention: General Counsel, or at such other address as the Acquired Fund may designate by written notice to the Acquiring Fund. Notice to the Acquiring Fund shall be addressed to John Hancock Small Company Fund, c/o John Hancock, 601 Congress Street, Boston, Massachusetts 02210, Attention: General Counsel, or at such other address and to the attention of such other person as the Acquiring Fund may designate by written notice to the Acquired Fund. Any notice shall be deemed to have been served or given as of the date such notice is delivered personally or mailed. | ||
(c) | This Agreement supersedes all previous correspondence and oral communications between the parties regarding the Reorganization, constitutes the only understanding with respect to the Reorganization, may not be changed except by a letter of agreement signed by each party and shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to agreements made and to be performed in said state. | ||
(d) | It is expressly agreed that the obligations of the Trust, on behalf of each Fund, hereunder shall not be binding upon any of its trustees, shareholders, nominees, officers, agents, or employees personally, but shall bind only the trust property of the respective Fund, as provided in the Declaration. The execution and delivery of this Agreement has been authorized by the Board on behalf of both Funds and signed by authorized officers of the Trust, acting as such, and neither such authorization by such trustees, nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Trust on behalf of the relevant Fund, as provided in the Declaration. | ||
(e) | This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original but all such counterparts together shall constitute but one instrument. |
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JOHN HANCOCK FUNDS III, | ||||||
on behalf of its series, John Hancock Growth Opportunities Fund | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
Attest: | ||||||
Name: | ||||||
Title: | ||||||
JOHN HANCOCK FUNDS III, | ||||||
on behalf of its series, John Hancock Small Company Fund | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
Attest: | ||||||
Name: | ||||||
Title: | ||||||
Agreed to and accepted as to Section 5 only: | ||||||
JOHN HANCOCK INVESTMENT MANAGEMENT SERVICES, LLC | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
Attest: | ||||||
Name: | ||||||
Title: | ||||||
A-14
Per share operating performance | ||||||||||||||||||||||||
Period Ended | 08/31/20101 | 02/28/2010 | 02/28/2009 | 02/29/2008 | 02/28/20072 | 02/28/20063 | ||||||||||||||||||
Net Asset Value, Beginning of Period |
$ | 16.90 | $ | 11.53 | $ | 20.76 | $ | 24.34 | $ | 23.29 | $ | 21.31 | ||||||||||||
Net investment income (loss)4 |
(0.07 | ) | (0.10 | ) | (0.10 | ) | (0.15 | ) | (0.07 | )5 | 0.04 | |||||||||||||
Net realized and unrealized gain (loss) on investments |
(0.12 | ) | 5.47 | (9.13 | ) | (3.43 | ) | 1.36 | 1.94 | |||||||||||||||
Total from Investment Operations |
(0.19 | ) | 5.37 | (9.23 | ) | (3.58 | ) | 1.29 | 1.98 | |||||||||||||||
Less Distributions |
||||||||||||||||||||||||
From net realized gain |
| | | | 6 | (0.24 | ) | | ||||||||||||||||
Net Asset Value, End of Period |
$ | 16.71 | $ | 16.90 | $ | 11.53 | $ | 20.76 | $ | 24.34 | $ | 23.29 | ||||||||||||
Total Return (%)7,8,9 |
(1.12 | )10 | 46.57 | (44.46 | ) | (14.69 | ) | 5.57 | 9.29 | 10 | ||||||||||||||
Ratios and Supplemental Data |
||||||||||||||||||||||||
Net assets, end of period (in millions) |
$ | 45 | $ | 47 | $ | 36 | $ | 72 | $ | 5 | $ | 2 | ||||||||||||
Ratios (as a percentage of average net assets): |
||||||||||||||||||||||||
Expenses before reductions |
1.77 | 11 | 2.12 | 12 | 2.01 | 1.81 | 5.59 | 5.45 | 11 | |||||||||||||||
Expenses net of fee waivers |
1.50 | 11 | 1.64 | 12 | 1.81 | 1.55 | 1.32 | 0.48 | 11 | |||||||||||||||
Expenses net of fee waivers and credits |
1.50 | 11 | 1.51 | 12 | 1.54 | 1.54 | 1.32 | 0.48 | 11 | |||||||||||||||
Net investment income (loss) |
(0.74 | )11 | (0.68 | ) | (0.52 | ) | (0.64 | ) | (0.34 | )5 | 0.41 | 11 | ||||||||||||
Portfolio turnover (%) |
59 | 125 | 140 | 262 | 13 | 96 | 43 |
1 | Semiannual period from 3-1-10 to 8-31-10. Unaudited. | |
2 | Effective 6-12-06, shareholders of the former GMO Small/Mid Cap Growth Fund (the predecessor fund) became owners of an equal number of full and fractional Class A shares of John Hancock Growth Opportunities Fund. Additionally, the accounting and performance history of the former GMO Small/Mid Cap Growth Fund was redesignated as that of John Hancock Growth Opportunities Fund Class A. | |
3 | The inception date for Class A shares is 9-16-05. | |
4 | Based on the average daily shares outstanding. | |
5 | Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund, which amounted to $0.03 per share and 0.14% of average net assets. | |
6 | Less than ($0.005) per share. | |
7 | Assumes dividend reinvestment (if applicable). | |
8 | Total returns would have been lower had certain expenses not been reduced during the periods shown. | |
9 | Does not reflect the effect of sales charges, if any. | |
10 | Not annualized. | |
11 | Annualized. | |
12 | Includes the impact of proxy expenses, which amounted to 0.03% of average net assets. | |
13 | Excludes merger activity. |
B-1
Per share operating performance | ||||||||||||||||||||
Period Ended | 08/31/20101 | 02/28/2010 | 02/28/2009 | 02/29/2008 | 02/28/20072 | |||||||||||||||
Net Asset Value, Beginning of Period |
$ | 16.49 | $ | 11.33 | $ | 20.52 | $ | 24.23 | $ | 22.17 | ||||||||||
Net investment loss3 |
(0.13 | ) | (0.20 | ) | (0.23 | ) | (0.31 | ) | (0.20 | )4 | ||||||||||
Net realized and unrealized gain (loss) on investments |
(0.12 | ) | 5.36 | (8.96 | ) | (3.40 | ) | 2.50 | ||||||||||||
Total from Investment Operations |
(0.25 | ) | 5.16 | (9.19 | ) | (3.71 | ) | 2.30 | ||||||||||||
Less Distributions |
||||||||||||||||||||
From net realized gain |
| | | | 5 | (0.24 | ) | |||||||||||||
Net Asset Value, End of Period |
$ | 16.24 | $ | 16.49 | $ | 11.33 | $ | 20.52 | $ | 24.23 | ||||||||||
Total Return (%)6,7,8 |
(1.52 | )9 | 45.54 | (44.79 | ) | (15.29 | ) | 10.40 | 9 | |||||||||||
Ratios and Supplemental Data |
||||||||||||||||||||
Net assets, end of period (in millions) |
$ | 4 | $ | 5 | $ | 5 | $ | 13 | $ | | 10 | |||||||||
Ratios (as a percentage of average net assets): |
||||||||||||||||||||
Expenses before reductions |
2.74 | 11 | 3.19 | 12 | 3.07 | 2.61 | 14.62 | 11 | ||||||||||||
Expenses net of fee waivers |
2.20 | 11 | 2.24 | 12 | 2.72 | 2.25 | 2.22 | 11 | ||||||||||||
Expenses net of fee waivers and credits |
2.20 | 11 | 2.21 | 12 | 2.24 | 2.24 | 2.22 | 11 | ||||||||||||
Net investment loss |
(1.44 | )11 | (1.38 | ) | (1.24 | ) | (1.34 | ) | (1.21 | )4,11 | ||||||||||
Portfolio turnover (%) |
59 | 125 | 140 | 262 | 13 | 96 |
1 | Semiannual period from 3-1-10 to 8-31-10. Unaudited. | |
2 | The inception date for Class B shares is 6-12-06. | |
3 | Based on the average daily shares outstanding. | |
4 | Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund, which amounted to $0.02 per share and 0.11% of average net assets. | |
5 | Less than ($0.005) per share. | |
6 | Assumes dividend reinvestment (if applicable). | |
7 | Total returns would have been lower had certain expenses not been reduced during the periods shown. | |
8 | Does not reflect the effect of sales charges, if any. | |
9 | Not annualized. | |
10 | Less than $500,000. | |
11 | Annualized. | |
12 | Includes the impact of proxy expenses, which amounted to 0.04% of average net assets. | |
13 | Excludes merger activity. |
B-2
Per share operating performance | ||||||||||||||||||||
Period Ended | 08/31/20101 | 02/28/2010 | 02/28/2009 | 02/29/2008 | 02/28/20072 | |||||||||||||||
Net Asset Value, Beginning of Period |
$ | 16.49 | $ | 11.32 | $ | 20.53 | $ | 24.23 | $ | 22.17 | ||||||||||
Net investment loss3 |
(0.13 | ) | (0.20 | ) | (0.21 | ) | (0.32 | ) | (0.19 | )4 | ||||||||||
Net realized and unrealized gain (loss) on investments |
(0.12 | ) | 5.37 | (9.00 | ) | (3.38 | ) | 2.49 | ||||||||||||
Total from Investment Operations |
(0.25 | ) | 5.17 | (9.21 | ) | (3.70 | ) | 2.30 | ||||||||||||
Less Distributions |
||||||||||||||||||||
From net realized gain |
| | | | 5 | (0.24 | ) | |||||||||||||
Net Asset Value, End of Period |
$ | 16.24 | $ | 16.49 | $ | 11.32 | $ | 20.53 | $ | 24.23 | ||||||||||
Total Return (%)6,7,8 |
(1.52 | )9 | 45.67 | (44.86 | ) | (15.25 | ) | 10.40 | 9 | |||||||||||
Ratios and Supplemental Data |
||||||||||||||||||||
Net assets, end of period (in millions) |
$ | 2 | $ | 2 | $ | 2 | $ | 3 | $ | 1 | ||||||||||
Ratios (as a percentage of average net assets): |
||||||||||||||||||||
Expenses before reductions |
2.76 | 10 | 3.27 | 11 | 3.45 | 3.14 | 10.43 | 10 | ||||||||||||
Expenses net of fee waivers |
2.20 | 10 | 2.28 | 11 | 2.55 | 2.25 | 2.22 | 10 | ||||||||||||
Expenses net of fee waivers and credits |
2.20 | 10 | 2.21 | 11 | 2.24 | 2.24 | 2.22 | 10 | ||||||||||||
Net investment loss |
(1.45 | )10 | (1.39 | ) | (1.21 | ) | (1.35 | ) | (1.15 | )4,10 | ||||||||||
Portfolio turnover (%) |
59 | 125 | 140 | 262 | 12 | 96 |
1 | Semiannual period from 3-1-10 to 8-31-10. Unaudited. | |
2 | The inception date for Class C shares is 6-12-06. | |
3 | Based on the average daily shares outstanding. | |
4 | Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund, which amounted to $0.03 per share and 0.11% of average net assets. | |
5 | Less than ($0.005) per share. | |
6 | Assumes dividend reinvestment (if applicable). | |
7 | Total returns would have been lower had certain expenses not been reduced during the periods shown. | |
8 | Does not reflect the effect of sales charges, if any. | |
9 | Not annualized. | |
10 | Annualized. | |
11 | Includes the impact of proxy expenses, which amounted to 0.04% of average net assets. | |
12 | Excludes merger activity. |
B-3
Per share operating performance | ||||||||||||||||||||
Period Ended | 08/31/20101 | 02/28/2010 | 02/28/2009 | 02/29/2008 | 02/28/20072 | |||||||||||||||
Net Asset Value, Beginning of Period |
$ | 17.18 | $ | 11.66 | $ | 20.90 | $ | 24.41 | $ | 22.17 | ||||||||||
Net investment loss3 |
(0.01 | ) | (0.04 | ) | (0.01 | ) | (0.07 | ) | (0.02 | )4 | ||||||||||
Net realized and unrealized gain (loss) on investments |
(0.15 | ) | 5.56 | (9.23 | ) | (3.44 | ) | 2.50 | ||||||||||||
Total from Investment Operations |
(0.16 | ) | 5.52 | (9.24 | ) | (3.51 | ) | 2.48 | ||||||||||||
Less Distributions |
||||||||||||||||||||
From net realized gain |
| | | | 5 | (0.24 | ) | |||||||||||||
Net Asset Value, End of Period |
$ | 17.02 | $ | 17.18 | $ | 11.66 | $ | 20.90 | $ | 24.41 | ||||||||||
Total Return (%)6,7 |
(0.93 | )8 | 47.34 | (44.21 | ) | (14.36 | ) | 11.22 | 8 | |||||||||||
Ratios and Supplemental Data |
||||||||||||||||||||
Net assets, end of period (in millions) |
$ | 1 | $ | | 9 | $ | | 9 | $ | | 9 | $ | | 9 | ||||||
Ratios (as a percentage of average net assets): |
||||||||||||||||||||
Expenses before reductions |
6.68 | 10 | 26.99 | 11 | 121.96 | 12.17 | 16.26 | 10 | ||||||||||||
Expenses net of fee waivers |
1.04 | 10 | 1.07 | 11 | 1.09 | 1.04 | 1.13 | 10 | ||||||||||||
Expenses net of fee waivers and credits |
1.04 | 10 | 1.07 | 11 | 1.09 | 1.04 | 1.13 | 10 | ||||||||||||
Net investment loss |
(0.09 | )10 | (0.27 | ) | (0.04 | ) | (0.30 | ) | (0.10 | )4,10 | ||||||||||
Portfolio turnover (%) |
59 | 125 | 140 | 262 | 12 | 96 |
1 | Semiannual period from 3-1-10 to 8-31-10. Unaudited. | |
2 | The inception date for Class I shares is 6-12-06. | |
3 | Based on the average daily shares outstanding. | |
4 | Net investment loss per share and ratio of net investment loss to average net assets reflects a special dividend received by the Fund, which amounted to $0.03 per share and 0.11% of average net assets. | |
5 | Less than ($0.005) per share. | |
6 | Assumes dividend reinvestment (if applicable). | |
7 | Total returns would have been lower had certain expenses not been reduced during the periods shown. | |
8 | Not annualized. | |
9 | Less than $500,000. | |
10 | Annualized. | |
11 | Includes proxy fees. The impact of this expense to the gross and net expense ratios was 0.01%. | |
12 | Excludes merger activity. |
B-4
Per share operating performance | ||||||||||||||||||||||||||||
Period Ended | 9-30-101 | 3-31-102,3 | 10-31-09 | 10-31-084 | 10-31-07 | 10-31-06 | 10-31-05 | |||||||||||||||||||||
Net Asset Value, Beginning of Period |
$ | 17.82 | $ | 14.68 | $ | 13.83 | $ | 22.55 | $ | 23.04 | $ | 22.40 | $ | 23.77 | ||||||||||||||
Net investment income (loss)5 |
(0.02 | ) | (0.02 | ) | | 6 | 0.05 | (0.04 | ) | (0.05 | ) | 0.03 | ||||||||||||||||
Net realized and unrealized gain (loss) on investments |
(0.21 | ) | 3.18 | 0.87 | (6.01 | ) | 2.06 | 4.24 | 2.47 | |||||||||||||||||||
Total from Investment Operations |
(0.23 | ) | 3.16 | 0.87 | (5.96 | ) | 2.02 | 4.19 | 2.50 | |||||||||||||||||||
From net investment income |
| (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | | (0.01 | ) | ||||||||||||||||
From net realized gain |
| | | (2.75 | ) | (2.50 | ) | (3.55 | ) | (3.86 | ) | |||||||||||||||||
Total Distributions |
| (0.02 | ) | (0.02 | ) | (2.76 | ) | (2.51 | ) | (3.55 | ) | (3.87 | ) | |||||||||||||||
Net Asset Value, End of Period |
$ | 17.59 | $ | 17.82 | $ | 14.68 | $ | 13.83 | $ | 22.55 | $ | 23.04 | $ | 22.40 | ||||||||||||||
Total Return (%)7,8 |
(1.29 | )9 | 21.51 | 9 | 6.34 | (29.67 | ) | 9.43 | 21.07 | 11.07 | ||||||||||||||||||
Ratios and Supplemental Data |
||||||||||||||||||||||||||||
Net assets, end of period (in millions) |
$ | 78 | $ | 92 | $ | 87 | $ | 104 | $ | 209 | $ | 212 | $ | 163 | ||||||||||||||
Ratios (as a percentage of average net assets): |
||||||||||||||||||||||||||||
Expenses before reductions |
1.42 | 10 | 1.66 | 10 | 1.42 | 1.37 | 1.30 | 1.27 | 1.25 | |||||||||||||||||||
Expenses net of fee waivers and credits |
1.34 | 10 | 1.39 | 10 | 1.39 | 1.31 | 1.25 | 1.24 | 1.20 | |||||||||||||||||||
Net investment income (loss) |
(0.25 | )10 | (0.23 | )10 | (0.01 | ) | 0.27 | (0.20 | ) | (0.17 | ) | 0.09 | ||||||||||||||||
Portfolio turnover (%) |
66 | 42 | 11 | 155 | 177 | 132 | 135 | 12 | 169 |
1 | Semiannual period from 4-1-10 to 9-30-10. Unaudited. | |
2 | For the five month period ended 3-31-10. The Fund changed its fiscal year end from October 31 to March 31. | |
3 | After the close of business on 12-11-09, holders of Investor Shares of the former FMA Small Company Portfolio (the predecessor fund) became owners of an equal number of full and fractional Class A shares of John Hancock Small Company Fund. These shares were first offered on 12-14-09. Additionally, the accounting and performance history of the Investor Shares of FMA Small Company Portfolio was redesignated as that of John Hancock Small Company Fund Class A. | |
4 | Prior to 5-1-08, Investor Shares were offered as Institutional Shares. | |
5 | Based on the average daily shares outstanding. | |
6 | Less than ($0.005) per share. | |
7 | Total returns would have been lower had certain expenses not been reduced during the periods shown. | |
8 | Does not reflect the effect of sales charges, if any. | |
9 | Not annualized. | |
10 | Annualized. | |
11 | Portfolio turnover is shown for the period from 11-1-09 to 3-31-10. | |
12 | Includes the effects of in-kind transactions. If the in-kind transactions were not included, the Portfolio Turnover Rate would have been 127%. |
B-5
Per share operating performance | ||||||||||||||||
Period Ended | 9-30-101 | 3-31-102,3 | 10-31-09 | 10-31-084 | ||||||||||||
Net Asset Value, Beginning of Period |
$ | 17.84 | $ | 14.71 | $ | 13.84 | $ | 17.99 | ||||||||
Net investment income5 |
| 6 | | 7 | 0.03 | 0.04 | ||||||||||
Net realized and unrealized gain (loss) on investments |
(0.21 | ) | 3.18 | 0.87 | (4.17 | ) | ||||||||||
Total from Investment Operations |
(0.21 | ) | 3.18 | 0.90 | (4.13 | ) | ||||||||||
Less Distributions |
||||||||||||||||
From net investment income |
| (0.05 | ) | (0.03 | ) | (0.02 | ) | |||||||||
Net Asset Value, End of Period |
$ | 17.63 | $ | 17.84 | $ | 14.71 | $ | 13.84 | ||||||||
Total Return (%) |
(1.18 | )8 | 21.67 | 8,9 | 6.56 | (22.95 | )8,9 | |||||||||
Ratios and Supplemental Data |
||||||||||||||||
Net assets, end of period (in millions) |
$ | 48 | $ | 36 | $ | 23 | $ | 27 | ||||||||
Ratios (as a percentage of average net assets): |
||||||||||||||||
Expenses before reductions |
1.10 | 10 | 1.18 | 10 | 1.17 | 1.18 | 10 | |||||||||
Expenses net of fee waivers and credits |
1.10 | 10 | 1.14 | 10 | 1.14 | 1.08 | 10 | |||||||||
Net investment income (loss) |
(0.01 | )10 | 0.01 | 10 | 0.24 | 0.55 | 10 | |||||||||
Portfolio turnover (%) |
66 | 42 | 11 | 155 | 177 |
1 | Semiannual period from 4-1-10 to 9-30-10. Unaudited. | |
2 | For the five month period ended 3-31-10. The Fund changed its fiscal year end from October 31 to March 31. | |
3 | After the close of business on 12-11-09, holders of Institutional Shares of the former FMA Small Company Portfolio (the predecessor fund) became owners of an equal number of full and fractional Class I shares of John Hancock Small Company Fund. These shares were first offered on 12-14-09. Additionally, the accounting and performance history of the Institutional Shares of FMA Small Company Portfolio was redesignated as that of John Hancock Small Company Fund Class I. | |
4 | Commencement of operations 5-1-08. | |
5 | Based on the average daily shares outstanding. | |
6 | Less than ($0.005) per share. | |
7 | Less than $0.005 per share. | |
8 | Not annualized. | |
9 | Total returns would have been lower had certain expenses not been reduced during the periods shown. | |
10 | Annualized. | |
11 | Portfolio turnover is shown for the period from 11-1-09 to 3-31-10. |
B-6
2 | ||||
2 | ||||
2 | ||||
2 | ||||
2 | ||||
2 | ||||
2 | ||||
3 | ||||
3 | ||||
3 | ||||
3 | ||||
3 | ||||
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3 | ||||
3 |
1. | The SAI dated July 1, 2010 of the Trust (File Nos. 811-21777 and 333-125838) with respect to Class A, Class B, Class C, Class I, and Class NAV shares of the Acquired Fund, and Class A, Class I, Class ADV, and Class NAV shares of the Acquiring Fund, as filed with the Securities and Exchange Commission (the SEC) on June 25, 2010 (Accession No. 0000950123-10-061105 (the Trust SAI)). |
2. | The Annual Report of the Trust (File No. 811-21777) for the fiscal year ended February 28, 2010 with respect to the Acquired Fund, as filed with the SEC on May 7, 2010 (Accession No. 0000928816-10-000547). |
3. | The Semi-Annual Report of the Trust (File No. 811-21777) for the six months ended August 31, 2010 with respect to the Acquired Fund, as filed with the SEC on November 5, 2010 (Accession No. 0000928816-10-001307). |
4. | The Annual Report of the Trust (File No. 811-21777) for the fiscal year ended March 31, 2010 with respect to the Acquiring Fund, as filed with the SEC on June 3, 2010 (Accession No. 0000928816-10-000598). |
5. | The Semi-Annual Report of the Trust (File No. 811-21777) for the six months ended September 30, 2010 with respect to the Acquiring Fund, as filed with the SEC on December 2, 2010 (Accession No. 0000928816-10-001419). |
2
3
Growth Opportunities | Small Company | |
0.80% first $500 million;
|
0.90% first $500 million; | |
0.78% next $500 million;
|
0.85% next $500 million; and | |
0.77% next $1.5 billion; and
|
0.80% excess over $1 billion of such assets. | |
0.76% excess over $2.5 billion of such assets. |
4
Exhibit No. | Exhibit Description | Note | ||||
(1)(a)
|
Second Amended and Restated Agreement and Declaration of Trust dated August 12, 2005. | (1 | ) | |||
(1)(b)
|
Amendment to Declaration of Trust dated September 2, 2009. | (2 | ) | |||
(2)(a)
|
By-Laws dated June 9, 2005. | (3 | ) | |||
(2)(b)
|
Amendment dated June 9, 2009 to the By-laws dated June 9, 2005. | (4 | ) | |||
(2)(c)
|
Amendment dated August 31, 2010 to the By-laws dated June 9, 2005. | (5 | ) | |||
(3)
|
Not applicable. | |||||
(4)
|
Form of Agreement and Plan of Reorganization. | (+ | ) | |||
(5)
|
Instruments Defining Rights of Security Holders, see Exhibits (1) and (2). | |||||
(6)(a)
|
Advisory Agreement dated July 1, 2009 between the Registrant and John Hancock Investment Management Services, LLC (JHIMS). | (6 | ) | |||
(6)(b)
|
Amendment dated December 8, 2009 to Advisory Agreement dated July 1, 2009 relating to John Hancock Small Company Fund. | (7 | ) | |||
(6)(c)
|
Subadvisory Agreement between Registrant between the Registrant and Fiduciary Management Associates, LLC relating to John Hancock Small Company Fund. | (8 | ) | |||
(7)
|
Distribution Agreement between John Hancock Funds, LLC and Registrant. | (1 | ) | |||
(8)
|
Not applicable. | |||||
(9)
|
Master Custodian Agreement dated September 10, 2008 between Registrant and State Street Bank and Trust Company. | (2 | ) | |||
(10)(a)
|
Plan of Distribution pursuant to Rule 12b-1 dated September 2, 2005, as amended December 13, 2006 relating to Class A shares. | (9 | ) | |||
(10)(b)
|
Amended and Restated Multiple Class Plan pursuant to Rule 18f-3. | (10 | ) | |||
(11)
|
Opinion and Consent of Counsel. | (# | ) | |||
(12)
|
Form of Opinion as to Tax Matters and Consent. | (# | ) | |||
(13)(a)
|
Master Transfer Agency and Services Agreement dated June 1, 2007 between Registrant and John Hancock Signature Services, Inc. | (11 | ) | |||
(13)(b)
|
Amended and Restated Expense Limitation Agreement dated July 9, 2010 between Registrant and JHIMS. | (12 | ) | |||
(14)
|
Consent of Independent Registered Public Accounting Firm. | (# | ) | |||
(15)
|
Not applicable. | |||||
(16)
|
Powers of Attorney. | (# | ) |
Exhibit No. | Exhibit Description | Note | ||||
(17)(a)
|
Code of Ethics of Registrant, JHIMS, John Hancock Funds, LLC and John Hancock Distributors, LLC, dated January 1, 2008 revised January 1, 2010. | (8 | ) | |||
(17)(b)
|
Code of Ethics of Fiduciary Management Associates, LLC, revised as of January 21, 2010. | (2 | ) | |||
(17)(c)
|
Form of Proxy Card. | (# | ) |
1 | Incorporated by reference to an exhibit filed with pre-effective amendment no. 2 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on September 2, 2005 (accession no. 0000898432-05-000776). | |
2 | Incorporated by reference to an exhibit filed with post-effective amendment no. 26 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on June 25, 2010 (accession no. 0000950123-10-061105). | |
3 | Incorporated by reference to an exhibit filed with Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on June 15, 2005 (accession no. 0000898432-05-000492). | |
4 | Incorporated by reference to an exhibit filed with post-effective amendment no. 19 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on June 30, 2009 (accession no. 0000950123-09-018788). | |
5 | Incorporated by reference to an exhibit filed with post-effective amendment no. 28 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on November 5, 2010 (accession no. 0000950123-10-101104). | |
+ | Filed herewith as Exhibit A to the Proxy Statement and Prospectus included in Part A of this Registration Statement. | |
6 | Incorporated by reference to an exhibit filed with post-effective amendment no. 20 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on July 31, 2009, (accession no. 0000950123-09-028376). | |
7 | Incorporated by reference to an exhibit filed with post-effective amendment no. 24 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on April 22, 2010, (accession number 0000950123-10-037188). | |
8 | Incorporated by reference to an exhibit filed with post-effective amendment no. 21 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on February 23, 2010, (accession no. 0000950123-10-015685). | |
9 | Incorporated by reference to an exhibit filed with post-effective amendment no. 3 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on December 15, 2006 (Accession No. 0001010521-06-000969). | |
10 | Incorporated by reference to an exhibit filed with post-effective amendment no. 9 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on June 25, 2008 (Accession No. 0000950135-08-004552). | |
11 | Incorporated by reference to an exhibit filed with post-effective amendment no. 19 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on June 30, 2009 (Accession No. 0000950123-09-018788). |
4
12 | Incorporated by reference to an exhibit filed with post-effective amendment no. 27 to Registrants Registration Statement on Form N-1A (File Nos. 333-125838 and 811-21777), as filed with the SEC on October 12, 2010 (accession no. 0000950123-10-092811). | |
# | Filed herewith. |
5
John Hancock Funds III |
||||
By: | /s/ Keith F. Hartstein | |||
Name: | Keith F. Hartstein | |||
Title: | President and Chief Executive Officer | |||
Signature | Title | Date | ||
/s/ Keith F. Hartstein
|
President and Chief Executive Officer | December 20, 2010 | ||
/s/ Charles A. Rizzo
|
Chief Financial Officer (Chief Accounting Officer) | December 20, 2010 | ||
/s/ James F. Carlin*
|
Trustee | December 20, 2010 | ||
/s/ William H. Cunningham*
|
Trustee | December 20, 2010 | ||
/s/ Deborah C. Jackson*
|
Trustee | December 20, 2010 | ||
/s/ Charles L. Ladner*
|
Trustee | December 20, 2010 | ||
/s/ Stanley Martin*
|
Trustee | December 20, 2010 | ||
/s/ Patti McGill Peterson*
|
Trustee | December 20, 2010 | ||
/s/ Hugh McHaffie*
|
Trustee | December 20, 2010 | ||
/s/ John A. Moore*
|
Trustee | December 20, 2010 | ||
/s/ Steven R. Pruchansky*
|
Trustee | December 20, 2010 | ||
/s/ Gregory A. Russo*
|
Trustee | December 20, 2010 | ||
/s/ John G. Vrysen*
|
Trustee | December 20, 2010 |
*By:
|
/s/ Nicholas J. Kolokithas
|
December 20, 2010 | ||||
Attorney-In-Fact, under | ||||||
Power of Attorney filed herewith. |
Exhibit No. | Description | |
(4)
|
Form of Agreement and Plan of Reorganization (filed as Exhibit A to the Proxy Statement and Prospectus included in Part A of this Registration Statement). | |
(11)
|
Opinion and Consent of Counsel. | |
(12)
|
Form of Opinion as to Tax Matters and Consent. | |
(14)
|
Consent of Independent Registered Public Accounting Firm. | |
(16)
|
Powers of Attorney. | |
(17)(c)
|
Form of Proxy Card. |
K&L Gates LLP State Street Financial Center One Lincoln Street Boston, MA 02111-2950 T 617.261.3100 www.klgates.com |
1. | The Merger Shares to be issued pursuant to the Registration Statement have been duly authorized for issuance by the Trust; and | ||
2. | When issued and consideration therefor has been paid in accordance with the Agreement, the Merger Shares to be issued pursuant to the Registration Statement will be validly issued, fully paid, and nonassessable. In this regard, however, we note that the Trust is a Massachusetts business trust and, under certain circumstances, shareholders of a Massachusetts business trust could be held personally liable for the obligations of the Trust. |
Very truly yours, |
||||
/s/ K&L Gates LLP | ||||
Re: | Reorganization to Combine Series of a Massachusetts Business Trust |
1 | Each of the Acquired Fund and Acquiring Fund is sometimes referred to herein as a Fund, and JHF III is sometimes referred to herein as an Investment Company. | |
2 | All section references are to the Internal Revenue Code of 1986, as amended (Code), unless otherwise noted, and all Treas. Reg. § references are to the regulations under the Code (Regulations). |
Name | Signature | Title | Date | |||
Keith F. Hartstein
|
/s/ Keith F. Hartstein
|
President and Chief Executive Officer | December 7, 2010 | |||
Charles A. Rizzo
|
/s/ Charles A. Rizzo
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
December 7, 2010 | |||
James F. Carlin
|
/s/ James F. Carlin | Trustee | December 7, 2010 | |||
William H. Cunningham
|
/s/ William H. Cunningham | Trustee | December 7, 2010 | |||
Deborah C. Jackson
|
/s/ Deborah C. Jackson | Trustee | December 7, 2010 | |||
Charles L. Ladner
|
/s/ Charles L. Ladner | Trustee | December 7, 2010 | |||
Stanley Martin
|
/s/ Stanley Martin | Trustee | December 7, 2010 | |||
Name | Signature | Title | Date | |||
Patti McGill Peterson
|
/s/ Patti McGill Peterson | Chairperson and Trustee | December 13, 2010 | |||
Hugh McHaffie
|
/s/ Hugh McHaffie | Trustee | December 7, 2010 | |||
Dr. John A. Moore
|
/s/ John A. Moore | Trustee | December 7, 2010 | |||
Steven R. Pruchansky
|
/s/ Steven R. Pruchansky | Trustee | December 7, 2010 | |||
Gregory A. Russo
|
/s/ Gregory A. Russo | Trustee | December 7, 2010 | |||
John G. Vrysen
|
/s/ John G. Vrysen | Trustee | December 7, 2010 | |||
2
PROXY | JOHN HANCOCK GROWTH OPPORTUNITIES FUND PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD March 23, 2011 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF JOHN HANCOCK FUNDS III |
PROXY |
999 9999 9999 999 |
||||||||
To approve an Agreement and Plan of Reorganization between Growth Opportunities Fund and John
Hancock Small Company Fund (the Acquiring Fund). Under this Agreement, Growth Opportunities
Fund would transfer all of its assets to the Acquiring Fund in exchange for shares of the
Acquiring Fund. These shares would be distributed, as described in the accompanying Proxy
Statement and Prospectus, proportionately to you and the other shareholders of Growth
Opportunities Fund. The Acquiring Fund also would assume Growth Opportunities Funds known
liabilities.
|
FOR o |
AGAINST o |
ABSTAIN o |
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`
end
John Hancock Financial Services |
Name:
|
Nicholas J. Kolokithas | |
Title:
|
Assistant Vice President and Senior Counsel |
RE: | John Hancock Funds III (the Trust): Form N-14 for the Reorganization of John Hancock Growth Opportunities Fund into John Hancock Small Company Fund |
/s/ Nicholas J. Kolokithas
|
||
Assistant Secretary |
||
John Hancock Funds III |