pre14a
As filed with the Securities and Exchange Commission on January 9, 2009.
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
FILE NUMBER 811-01677
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
þ |
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Filed by the Registrant |
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Filed by a Party other than the Registrant |
Check the appropriate box:
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Preliminary Proxy Statement |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
JOHN HANCOCK CAPITAL SERIES
(Name of Registrant as Specified in Its Charter)
JOHN HANCOCK CAPITAL SERIES
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
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$125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6 (i)
(1), or 14a-6 (i) (2) or Item 22(a) (2) or schedule 14A (sent by wire transmission). |
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Fee paid previously with preliminary materials. |
John Hancock Bond Trust
John Hancock California Tax-Free Income Fund
John Hancock Capital Series
John Hancock Current Interest
John Hancock Equity Trust
John Hancock Investment Trust
John Hancock Investment Trust II
John Hancock Investment Trust III
John Hancock Municipal Securities Trust
John Hancock Series Trust
John Hancock Sovereign Bond Fund
John Hancock Strategic Series
John Hancock Tax-Exempt Series Fund
John Hancock World Fund
February 6, 2009
Dear Fellow Shareholder:
I am writing to ask for your assistance with an important matter involving your investment in one
or more of the investment portfolios (the Funds) of the trusts listed above (the Trusts). You
are being asked to vote on several proposed changes affecting the Funds. To consider and vote on
these proposed changes, a Special Joint Meeting of Shareholders of the Trusts will be held at 601
Congress Street, Boston, Massachusetts 02210, on April 16, 2009, at 2:00 p.m., Eastern Time (the
Meeting). We encourage you to read the attached materials in their entirety.
The enclosed proxy statement sets forth six proposals that you are being asked to vote on. The
first proposal, a routine item, concerns the election of trustees. Routine items occur annually
and make no fundamental or material changes to a funds investment objectives, policies or
restrictions, or to the investment management contracts. The other proposals are not considered
routine items. All six are summarized below:
The following is an overview of the proposals on which you are being asked to vote. You will find
a detailed explanation of each proposal in the enclosed proxy materials.
Shareholders of all or most of the Funds are being asked to approve several proposals, including
the following:
(1) Election of Trustees
You are being asked to elect eleven Trustees as members of the Board of Trustees of each Trust (a Board).
(2) New Form of Advisory Agreement
You are being asked to approve a new form of Advisory Agreement between each Trust and John Hancock
Advisers, LLC (JHA or the Adviser). The purpose of this proposal is to streamline the advisory
agreements across the John Hancock Fund Complex, primarily to clarify that the new Agreement covers
only investment advisory services. Consistency in operational procedures across the John Hancock
Fund Complex will speed processes and minimize transaction error. These benefits contribute to a
goal of maintaining, even reducing, operational costs. Restricting the new form of Advisory
Agreement to investment advisory services will facilitate the Advisers ability to manage those
services that are non-investment in nature.
The new form of Advisory Agreement will not result in any change in advisory fee rates or the level
or quality of advisory services provided to the Funds, and is not expected to materially increase
the Funds overall expense ratios. Other details and impacts of this proposal are described in the
accompanying proxy statement.
(3) Revisions to or Elimination of Fundamental Investment Policies and Restrictions
You are being asked to approve various amended and restated fundamental investment policies and
restrictions, as described in the proxy statement. This proposal is intended to conform and
standardize many of the investment restrictions that apply to the Funds and other funds in the John
Hancock Fund Complex. In addition, you are being asked to approve the elimination of fundamental
investment restrictions for the various Funds that had been required under state blue sky
regulations that are no longer in effect.
(4) Proposal to Change Certain Rule 12b-1 Plans
You are being asked to approve an amendment to change Rule 12b-1 Plans for certain classes of the
Funds from reimbursement to compensation Plans.
(5) Proposal adopting a Manager of Managers Structure
You are being asked to approve a manager of managers structure for certain Funds. This structure
would allow JHA, with the approval of the applicable Board, to replace a Funds subadviser or
materially amend the Funds investment subadvisory agreement without obtaining shareholder
approval, subject to certain conditions. This effectively would allow JHA to hire and replace
subadvisers to the Funds, subject to Board approval but without a Fund having to incur the cost and
delay of holding a shareholder meeting to approve a new (or materially amend a current) investment
subadvisory agreement for that Fund. Shareholders would, however, be notified of any changes to a
Funds subadvisers. If shareholders of a Fund approve this proposal, the Fund would be able to
implement a manager of managers structure.
(6) Revision to Merger Approval Requirements
You are being asked to approve an amendment to each Trusts Declaration of Trust, as described in
the proxy statement. This proposal is intended to modernize the Declarations of Trust by amending
them in accordance with changes in Investment Company Act of 1940 Rule 17a-8. This proposal is
intended to permit mergers of affiliated Funds without a shareholder vote in certain circumstances
to reduce the need for affiliated Funds to incur the expense of soliciting proxies when a merger
would not raise significant issues for shareholders.
We Need Your Vote of Approval
After careful consideration, each Board has unanimously approved each of the applicable proposals
and recommends that shareholders vote FOR their approval, but the final approval requires your
vote. The enclosed proxy statement, which I strongly encourage you to read before voting, contains
further explanation and important details of the proposals. Each Board has fixed the close of
business on January 23, 2009, as the record date for the determination of shareholders entitled to
vote at the Meeting and any adjournments.
Your Vote Matters!
You are being asked to approve these proposals. No matter how large or small your Fund holdings,
your vote is extremely important. After you review the proxy materials, please submit your vote
promptly to help us avoid the need for additional mailings. For your convenience, you may vote one
of three ways: via telephone by calling the number listed on your proxy card, via mail by returning
the enclosed voting card or via the Internet by visiting www.jhfunds.com/proxy and selecting the
appropriate Fund. I am confident that the proposed changes will help us better serve all of the
Funds shareholders. If you have questions, please call a John Hancock Funds Customer Service
Representative at 1-800-225-5291 between 8:00 a.m. and 7:00 p.m., Eastern Time. I thank you for
your time and your prompt vote on these matters.
Sincerely,
/s/ Keith F. Hartstein
Keith F. Hartstein
John Hancock Funds, LLC, 601 Congress Street, Boston, MA 02210, Member FINRA, SIPC John Hancock
Advisers, LLC John Hancock Signature Services, Inc.
JOHN HANCOCK BOND TRUST
JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND
JOHN HANCOCK CAPITAL SERIES
JOHN HANCOCK CURRENT INTEREST
JOHN HANCOCK EQUITY TRUST
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK INVESTMENT TRUST II
JOHN HANCOCK INVESTMENT TRUST III
JOHN HANCOCK MUNICIPAL SECURITIES TRUST
JOHN HANCOCK SERIES TRUST
JOHN HANCOCK SOVEREIGN BOND FUND
JOHN HANCOCK STRATEGIC SERIES
JOHN HANCOCK TAX-EXEMPT SERIES FUND
JOHN HANCOCK WORLD FUND
(the Trusts)
601 Congress Street
Boston, Massachusetts 02210
NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS
To the Shareholders of the Trusts:
Notice is hereby given that a Special Joint Meeting of Shareholders of all of the investment
portfolios (the Funds) of the Trusts will be held at 601 Congress Street, Boston, Massachusetts
02210, on April 16, 2009 at 2:00 p.m., Eastern Time (the Meeting). A Proxy Statement, which
provides information about the purposes of the Meeting, is included with this notice. The Funds
involved in the Meeting are listed on the front cover of the Proxy Statement. The Meeting will be
held for the following purposes:
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Proposal 1 |
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Election of eleven Trustees as members of the Board of Trustees of each of the Trusts. |
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All shareholders of each Trust will vote separately on Proposal 1. |
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Proposal 2 |
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Approval of a new form of Advisory Agreement between each Trust and John Hancock Advisers, LLC. |
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Shareholders of each Fund will vote separately on Proposal 2. |
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Proposal 3 |
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Approval of revised fundamental investment restrictions regarding: |
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(a)
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Concentration; |
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(b)
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Diversification; |
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(c)
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Underwriting; |
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(d)
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Real estate; |
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(e)
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Loans; and |
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(f)
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Senior securities. |
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Shareholders of each Fund will vote separately on Proposal 3(a). |
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Shareholders of each Fund (except California Tax-Free Income Fund, Greater China
Opportunities Fund, Health Sciences Fund, High Yield Municipal Bond Fund,
International Classic Value Fund and U.S. Global Leaders Growth Fund) will vote
separately on Proposal 3(b). |
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Shareholders of each Fund will vote separately on each of Proposals 3(c) through
3(f). |
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Approval of elimination of fundamental restrictions previously required under state
blue sky laws: |
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(g)
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Oil, gas and mineral programs; |
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(h)
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Investment to exercise control; |
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(i)
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Trustee and officer ownership; |
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(j)
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Margin investment; short selling; |
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(k)
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Restricted securities; |
1
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(l)
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Pledging assets; |
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(m)
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Unseasoned companies; |
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(n)
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Loans to Trust officers and Trustees; and |
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(o)
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Warrants. |
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Shareholders of Government Income Fund and Money Market Fund will vote separately on
each of Proposals 3(g) and 3(h). |
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Shareholders of Government Income Fund, Investment Grade Bond Fund, Large Cap Equity
Fund and Money Market Fund will vote separately on Proposal 3(i). |
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Shareholders of Government Income Fund, Investment Grade Bond Fund, Large Cap Equity
Fund, Money Market Fund and Regional Bank Fund will vote separately on Proposal
3(j). |
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Shareholders of Government Income Fund and Money Market Fund will vote separately on
Proposal 3(k). |
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Shareholders of Balanced Fund, Bond Fund, Health Sciences Fund, Massachusetts
Tax-Free Income Fund, New York Tax-Free Income Fund and Strategic Income Fund will
vote separately on Proposal 3(l). |
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Shareholders of Large Cap Equity Fund will vote separately on each of Proposals 3(m)
and 3(n). |
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Shareholders of Regional Bank Fund will vote separately on Proposal 3(o). |
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Proposal 4 |
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Approval of amendments changing Rule 12b-1 Plans for certain classes of the Funds from reimbursement to
compensation Plans. |
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Applies to all Funds having Class A, Class B, Class C, Class R, Class R1, Class R2,
Class R3, Class R4 and/or Class R5 shares. Shareholders of each such Fund will vote
separately, and individually by share class, on Proposal 4. |
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Proposal 5 |
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Proposal adopting a manager of managers structure. |
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Shareholders of each Fund (except Classic Value Fund II, International Classic Value
Fund and Small Cap Fund) will vote separately on Proposal 5. |
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Proposal 6 |
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Revision to merger approval requirements. |
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All shareholders of each Trust will vote separately on Proposal 6. |
Any other business that may properly come before the Meeting.
Each Board of Trustees of the Trusts recommends that shareholders vote FOR all the Proposals.
Each shareholder of record at the close of business on January 23, 2009 is entitled to receive
notice of and to vote at the Meeting.
Sincerely,
Thomas M. Kinzler
Secretary
February 6, 2009
Boston, Massachusetts
2
Your vote is important Please vote your shares promptly.
Shareholders are invited to attend the Meeting in person. Any shareholder who does not expect to
attend the Meeting is urged to vote by:
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completing the enclosed proxy card, dating and signing it, and returning it in
the envelope provided, which needs no postage if mailed in the United States; |
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(ii) |
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following the touch-tone telephone voting instructions found below; or |
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following the Internet voting instructions found below. |
In order to avoid unnecessary expense, we ask your cooperation in responding promptly, no matter
how large or small your holdings may be.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of assistance to you and help avoid
the time and expense involved in validating your vote if you fail to execute your proxy card
properly.
Individual Accounts: Your name should be signed exactly as it appears on the proxy card.
Joint Accounts: Either party may sign, but the name of the party signing should conform exactly to
a name shown on the proxy card.
All other accounts should show the capacity of the individual signing. This can be shown either in
the form of the account registration itself or by the individual executing the proxy card.
INSTRUCTIONS FOR VOTING BY TOUCH-TONE TELEPHONE
Read the enclosed Proxy Statement, and have your proxy card handy.
Call the toll-free number indicated on your proxy card.
Enter the control number found on the front of your proxy card. Follow the recorded instructions
to cast your vote.
INSTRUCTIONS FOR VOTING BY INTERNET
Read the enclosed Proxy Statement, and have your proxy card handy.
Go to the Web site on the proxy card.
Enter the control number found on your proxy card.
Follow the instructions on the Web site. Please call the toll-free number indicated on your proxy
card if you have any problems.
JOHN HANCOCK BOND TRUST
JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND
JOHN HANCOCK CAPITAL SERIES
JOHN HANCOCK CURRENT INTEREST
JOHN HANCOCK EQUITY TRUST
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK INVESTMENT TRUST II
JOHN HANCOCK INVESTMENT TRUST III
JOHN HANCOCK MUNICIPAL SECURITIES TRUST
JOHN HANCOCK SERIES TRUST
JOHN HANCOCK SOVEREIGN BOND FUND
JOHN HANCOCK STRATEGIC SERIES
JOHN HANCOCK TAX-EXEMPT SERIES FUND
JOHN HANCOCK WORLD FUND
(the Trusts)
PROXY STATEMENT
SPECIAL JOINT MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 2009
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JOHN HANCOCK BOND TRUST |
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JOHN HANCOCK INVESTMENT TRUST II |
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John Hancock Government Income Fund
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John Hancock Financial Industries Fund |
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John Hancock High Yield Fund
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John Hancock Regional Bank Fund |
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John Hancock Investment Grade Bond Fund
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John Hancock Small Cap Equity Fund |
JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND |
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JOHN HANCOCK INVESTMENT TRUST III |
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John Hancock California Tax-Free Income Fund
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John Hancock Greater China Opportunities Fund |
JOHN HANCOCK CAPITAL SERIES |
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JOHN HANCOCK MUNICIPAL SECURITIES TRUST |
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John Hancock Classic Value Fund
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John Hancock High Yield Municipal Bond Fund |
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John Hancock Classic Value Fund II
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John Hancock Tax-Free Bond Fund |
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John Hancock International Classic Value Fund |
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JOHN HANCOCK SERIES TRUST |
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John Hancock Large Cap Select Fund
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John Hancock Mid Cap Equity Fund |
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John Hancock U.S. Global Leaders Growth Fund
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John Hancock Global Real Estate Fund |
JOHN HANCOCK CURRENT INTEREST |
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JOHN HANCOCK SOVEREIGN BOND FUND |
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John Hancock Money Market Fund
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John Hancock Bond Fund |
JOHN HANCOCK EQUITY TRUST |
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JOHN HANCOCK STRATEGIC SERIES |
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John Hancock Small Cap Fund
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John Hancock Strategic Income Fund |
JOHN HANCOCK INVESTMENT TRUST |
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JOHN HANCOCK TAX-EXEMPT SERIES FUND |
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John Hancock Balanced Fund
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John Hancock Massachusetts Tax-Free Income Fund |
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John Hancock Global Opportunities Fund
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John Hancock New York Tax-Free Income Fund |
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John Hancock Large Cap Equity Fund |
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JOHN HANCOCK WORLD FUND |
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John Hancock Small Cap Intrinsic Value Fund
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John Hancock Health Sciences Fund |
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John Hancock Sovereign Investors Fund |
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The following table summarizes which Funds (and share classes) are being asked to vote on a
particular Proposal.
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Proposal |
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Funds |
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Classes |
1
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All Funds
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All Classes |
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2
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All Funds
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All Classes |
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3(a)
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All Funds
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All Classes |
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3(b)
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Balanced Fund
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All Classes |
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Bond Fund |
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Classic Value Fund |
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Classic Value Fund II |
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Financial Industries Fund |
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Global Opportunities Fund |
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Global Real Estate Fund |
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Government Income Fund |
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High Yield Fund |
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Investment Grade Bond Fund |
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Large Cap Equity Fund |
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Large Cap Select Fund |
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Massachusetts Tax-Free Income Fund |
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Mid Cap Equity Fund |
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Money Market Fund |
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New York Tax-Free Income Fund |
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Regional Bank Fund |
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Small Cap Equity Fund |
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Small Cap Fund |
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Small Cap Intrinsic Value Fund |
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Sovereign Investors Fund |
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Strategic Income Fund |
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Tax-Free Bond Fund |
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3(c) to 3(f)
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All Funds
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All Classes |
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3(g) and 3(h)
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Government Income Fund
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All Classes |
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Money Market Fund |
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3(i)
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Government Income Fund
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All Classes |
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Investment Grade Bond Fund |
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Large Cap Equity Fund |
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Money Market Fund |
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3(j)
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Government Income Fund
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All Classes |
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Investment Grade Bond Fund |
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Large Cap Equity Fund |
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Money Market Fund |
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Regional Bank Fund |
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3(k)
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Government Income Fund
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All Classes |
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Money Market Fund |
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3(l)
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Balanced Fund
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All Classes |
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Bond Fund |
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Health Sciences Fund |
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Massachusetts Tax-Free Income Fund |
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New York Tax-Free Income Fund |
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Strategic Income Fund |
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3(m) and 3(n)
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Large Cap Equity Fund
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All Classes |
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3(o)
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Regional Bank Fund
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All Classes |
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4
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All Funds
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A, B, and C |
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Balanced Fund
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R1 |
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Bond Fund |
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Classic Value Fund |
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Proposal |
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Funds |
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Classes |
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Classic Value Fund II |
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Large Cap Select Fund |
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Small Cap Equity Fund |
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Sovereign Investors Fund |
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Strategic Income Fund |
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U.S. Global Leaders Growth Fund |
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Balanced Fund
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R, R2, R3, and R4 |
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5
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Balanced Fund
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All Classes |
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Bond Fund |
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California Tax-Free Income Fund |
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Classic Value Fund |
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Financial Industries Fund |
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Global Opportunities Fund |
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Global Real Estate Fund |
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Government Income Fund |
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Greater China Opportunities Fund |
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Health Sciences Fund |
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High Yield Fund |
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High Yield Municipal Bond Fund |
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Investment Grade Bond Fund |
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Large Cap Equity Fund |
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Large Cap Select Fund |
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Massachusetts Tax-Free Income Fund |
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Mid Cap Equity Fund |
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Money Market Fund |
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New York Tax-Free Income Fund |
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Regional Bank Fund |
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Small Cap Equity Fund |
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Small Cap Intrinsic Value Fund |
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Sovereign Investors Fund |
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Strategic Income Fund |
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Tax-Free Bond Fund |
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U.S. Global Leaders Growth Fund |
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6
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All Funds
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All Classes |
TABLE OF CONTENTS
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1 |
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2 |
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15 |
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21 |
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22 |
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25 |
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28 |
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29 |
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31 |
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32 |
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35 |
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35 |
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36 |
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36 |
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38 |
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39 |
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39 |
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40 |
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40 |
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41 |
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48 |
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50 |
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51 |
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54 |
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57 |
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58 |
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JOHN HANCOCK BOND TRUST
JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND
JOHN HANCOCK CAPITAL SERIES
JOHN HANCOCK CURRENT INTEREST
JOHN HANCOCK EQUITY TRUST
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK INVESTMENT TRUST II
JOHN HANCOCK INVESTMENT TRUST III
JOHN HANCOCK MUNICIPAL SECURITIES TRUST
JOHN HANCOCK SERIES TRUST
JOHN HANCOCK SOVEREIGN BOND FUND
JOHN HANCOCK STRATEGIC SERIES
JOHN HANCOCK TAX-EXEMPT SERIES FUND
JOHN HANCOCK WORLD FUND
(the Trusts)
601 Congress Street
Boston, Massachusetts 02210
PROXY STATEMENT
SPECIAL JOINT MEETING OF SHAREHOLDERS
TO BE HELD APRIL 16, 2009
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by each Board of Trustees
(the Board or Trustees) of each Trust of proxies to be used at a Special Joint Meeting of
shareholders of the Trusts to be held at 601 Congress Street, Boston, Massachusetts 02210, on April
16, 2009 at 2:00 p.m., Eastern Time (the Meeting). Pursuant to the Agreement and Declaration of
Trust of each Trust (the Declaration of Trust), each Board has designated January 23, 2009 as the
record date for determining shareholders eligible to vote at the Meeting (the Record Date). All
shareholders of record at the close of business on the Record Date are entitled to one vote for
each share (and fractional votes for fractional shares) of beneficial interest of Trusts held.
This Proxy Statement is first being sent to shareholders on or about February 6, 2009.
Each of the Trusts is an open-end management investment company, commonly known as a mutual fund,
registered under the Investment Company Act of 1940, as amended (the 1940 Act). The shares of
each of the 14 Trusts being offered as of the Record Date were divided into series corresponding to
a combined total of 29 portfolios (each a Fund). The Funds are named on the cover of this Proxy
Statement.
Investment Management. John Hancock Advisers, LLC (JHA or the Adviser) serves as investment
adviser for each Trust and each of the Funds. Pursuant to an investment advisory agreement with
each Trust, the Adviser is responsible for, among other things, administering the business and
affairs of the Funds and selecting, contracting with, compensating and monitoring the performance
of the investment subadvisers that manage the investment and reinvestment of the assets of the
Funds pursuant to subadvisory agreements with the Adviser. JHA is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the Advisers Act). Each of the
subadvisers to the Funds is also registered as an investment adviser under the Advisers Act or is
exempt from such registration.
The Distributor. John Hancock Funds, LLC (the Distributor) serves as each Funds distributor.
The offices of JHA and the Distributor are located at 601 Congress Street, Boston, Massachusetts
02210, and their ultimate parent entity is Manulife Financial Corporation (MFC), a publicly
traded company based in Toronto, Canada. MFC and its subsidiaries operate as Manulife Financial
in Canada and Asia and primarily as John Hancock in the United States.
1
PROPOSAL 1 ELECTION OF ELEVEN TRUSTEES AS MEMBERS OF THE BOARD OF TRUSTEES OF EACH TRUST
(All Funds)
Shareholders are being asked to elect each of the individuals listed below (the Nominees) as a
member of each Board of Trustees of the Trusts. Nine of the Nominees currently are Trustees of
each Trust and have served in that capacity continuously since originally elected or appointed.
Two of the Nominees, Gregory A. Russo and John G. Vrysen, have not served as Trustees of any Trust,
although Mr. Russo currently serves a Trustee of other funds managed by JHA or its affiliates.
Because no Trust holds regular annual shareholder meetings, each Nominee, if elected, will hold
office until his or her successor is elected and qualified or until he or she dies, retires,
resigns, is removed or becomes disqualified.
The persons named as proxies intend, in the absence of contrary instructions, to vote all proxies
for the election of the Nominees. If, prior to the Meeting, any Nominee becomes unable to serve
for any reason, the persons named as proxies reserve the right to substitute another person or
persons of their choice as nominee or nominees. All of the Nominees have consented to being named
in this Proxy Statement and to serve if elected. The Trusts know of no reason why any Nominee
would be unable or unwilling to serve if elected.
The business and affairs of the Trusts, including of all the Funds, are managed under the direction
of the Boards of the Trusts. The following table presents certain information regarding the
current Trustees, as well as Nominees who are not currently serving as Trustees, including their
principal occupations which, unless specific dates are shown, are of at least five years duration.
In addition, the table includes information concerning other directorships held by each Nominee in
other registered investment companies or publicly traded companies. Information is listed
separately for each Nominee who is an interested person (as defined in the 1940 Act) of a Trust
(the Interested Trustee) and the Nominees who are not interested persons of a Trust (the
Independent Trustees). As stated above, the 14 Trusts have a combined total of 29 separate
Funds, and each Trustee oversees all Funds. In addition to the Funds, some Trustees also oversee
other funds advised by JHA or JHAs affiliates (collectively with the Funds, the John Hancock Fund
Complex). As of December 31, 2008, the John Hancock Fund Complex consisted of 271 funds
(including separate series of series mutual funds): John Hancock Trust (JHT) (112 funds); John
Hancock Funds II (JHF II) (95 Funds); John Hancock Funds III (JHF III) (12 funds); and 52 other
John Hancock funds (including the 29 Funds included in this proxy). Each Nominees business
address is 601 Congress Street, Boston, Massachusetts 02210.
Interested Trustees
|
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|
|
|
Number of Funds in |
Name |
|
Position |
|
|
|
John Hancock Fund |
(Birth |
|
with the |
|
Principal Occupation(s) and Other Directorships |
|
Complex Overseen by |
Year) |
|
Trusts |
|
During the Past 5 Years |
|
Trustee/Nominee |
|
James R. Boyle(1)
(1959)
|
|
Trustee(2)
|
|
Executive Vice President, MFC (since 1999);
Director and President, John Hancock Variable
Life Insurance Company (since 2007); Director
and Executive Vice President, John Hancock
Life Insurance Company (JHLICO) (since
2004); Chairman and Director, JHA, The
Berkeley Financial Group, LLC (The Berkeley
Group) (holding company) and the Distributor
(since 2005); Chairman and Director, John
Hancock Investment Management Services, LLC
(JHIMS) (since 2006); Senior Vice President,
The Manufacturers Life Insurance Company
(U.S.A) (until 2004).(3)
|
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267 |
|
2
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|
Number of Funds in |
Name |
|
Position |
|
|
|
John Hancock Fund |
(Birth |
|
with the |
|
Principal Occupation(s) and Other Directorships |
|
Complex Overseen by |
Year) |
|
Trusts |
|
During the Past 5 Years |
|
Trustee/Nominee |
|
John G.
Vrysen(1)
(1955)
|
|
Nominee for Trustee
Chief Operating
Officer
(since 2005)
|
|
Senior Vice President, MFC (since 2006);
Director, Executive Vice President and Chief
Operating Officer, the Adviser, The Berkeley
Group, JHIMS, and John Hancock Funds, LLC
(since 2007); Chief Operating Officer, JHF,
JHF II, JHF III and JHT (since 2007),
Director, John Hancock Signature Services,
Inc. (since 2005); Chief Financial Officer,
the Adviser, The Berkeley Group, MFC Global
Investment Management (US), JHIMS, John
Hancock Funds, LLC, JHF, JHF II, JHF III and
JHT (2005-2007); Vice President, MFC (until
2006).
|
|
|
N/A |
|
|
|
|
(1) |
|
The Trustee is an Interested Trustee due to his position with the Adviser and
certain of its affiliates. |
|
(2) |
|
Mr. Boyle began service as a Trustee of the various Trusts in different years, as
detailed in the table following the biographical information about the Trustees and Nominees. |
|
(3) |
|
Prior to January 1, 2005, JHLICO (U.S.A.) was named The Manufacturers Life Insurance
Company (U.S.A.). |
Independent Trustees/Nominees
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Number of Funds in |
|
|
Position(s) |
|
|
|
John Hancock Fund |
Name |
|
with the |
|
Principal Occupation(s) and Other Directorships |
|
Complex Overseen by |
(Birth Year) |
|
Trusts |
|
During the Past 5 Years |
|
Trustee/Nominee |
|
James F. Carlin
(1940)
|
|
Trustee*
|
|
Director and Treasurer, Alpha Analytical
Laboratories (chemical analysis) (since 1985);
Part Owner and Treasurer, Lawrence Carlin
Insurance Agency, Inc. (since 1995); Part
Owner and Vice President, Mone Lawrence Carlin
Insurance Agency, Inc. (until 2005); Chairman
and CEO, Carlin Consolidated, Inc.
(management/investments) (since 1987);
Trustee, Massachusetts Health and Education
Tax Exempt Trust (1993-2003).
|
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|
50 |
|
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|
William H.
Cunningham
(1944)
|
|
Trustee*
|
|
Professor, University of Texas, Austin, Texas
(since 1971); former Chancellor, University of
Texas System and former President of the
University of Texas, Austin, Texas; Chairman
and CEO, IBT Technologies (until 2001);
Director of the following: Hicks Acquisition
Company 1, Inc. (since 2007); Hire.com (until
2004), STC Broadcasting, Inc. and Sunrise
Television Corp. (until 2001), Symtx,
Inc.(electronic manufacturing) (since 2001),
Adorno/Rogers Technology, Inc. (until 2004),
Pinnacle Foods Corporation (until 2003),
rateGenius (until 2003), Lincoln National
Corporation (insurance) (since 2006),
Jefferson-Pilot Corporation (diversified life
insurance company) (until 2006), New Century
Equity Holdings (formerly Billing Concepts)
(until 2001), eCertain (until 2001),
ClassMap.com (until 2001), Agile Ventures
(until 2001), AskRed.com (until 2001),
Southwest Airlines (since 2000), Introgen
(manufacturer of biopharmaceuticals) (since
2000) and Viasystems Group, Inc. (electronic
manufacturer) (until 2003); Advisory Director,
Interactive Bridge, Inc.
|
|
|
50 |
|
3
Independent Trustees/Nominees
|
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|
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|
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|
|
|
|
|
Number of Funds in |
|
|
Position(s) |
|
|
|
John Hancock Fund |
Name |
|
with the |
|
Principal Occupation(s) and Other Directorships |
|
Complex Overseen by |
(Birth Year) |
|
Trusts |
|
During the Past 5 Years |
|
Trustee/Nominee |
|
|
|
|
|
(college fundraising)
(until 2001); Advisory Director, Q Investments
(until 2003); Advisory Director, JP Morgan
Chase Bank (formerly Texas Commerce Bank
Austin), LIN Television (until 2008), WilTel
Communications (until 2003) and Hayes Lemmerz
International, Inc. (diversified automotive
parts supply company) (since 2003). |
|
|
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|
|
|
|
|
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|
|
Deborah Jackson
(1952)
|
|
Trustee
(since 2008)
|
|
Chief Executive Officer, American Red Cross of
Massachusetts Bay (since 2002); Board of
Directors of Eastern Bank Corporation (since
2001); Board of Directors of Eastern Bank
Charitable Foundation (since 2001); Board of
Directors of American Student Association
Corp. (since 1996); Board of Directors of
Boston Stock Exchange (2002-2008); Board of
Directors of Harvard Pilgrim Healthcare (since
2007).
|
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50 |
|
|
|
|
|
|
|
|
|
|
Charles L. Ladner
(1938)
|
|
Trustee*
|
|
Chairman and Trustee, Dunwoody Village, Inc.
(retirement services) (since 2008); Senior
Vice President and Chief Financial Officer,
UGI Corporation (public utility holding
company) (retired 1998); Vice President and
Director for AmeriGas, Inc. (retired 1998);
Director of AmeriGas Partners, L.P.(gas
distribution) (until 1997); Director,
EnergyNorth, Inc. (until 1995); Director,
Parks and History Association (until 2005).
|
|
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50 |
|
|
|
|
|
|
|
|
|
|
Stanley Martin
(1947)
|
|
Trustee (since 2008)
|
|
Senior Vice President/Audit Executive, Federal
Home Loan Mortgage Corporation (2004-2006);
Executive Vice President/Consultant, HSBC Bank
USA (2000-2003); Chief Financial
Officer/Executive Vice President, Republic New
York Corporation & Republic National Bank of
New York (1998-2000); Partner, KPMG LLP
(1971-1998).
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
Patti McGill
Peterson
(1943)
|
|
Trustee* and
Chairperson (since
2008)
|
|
Principal, PMP Globalinc (consulting) (since
2007); Senior Associate, Institute for Higher
Education Policy (since 2007); Executive
Director, CIES (international education
agency) (until 2007); Vice President,
Institute of International Education (until
2007); Senior Fellow, Cornell University
Institute of Public Affairs, Cornell
University (1997-1998); Former President Wells
College, St. Lawrence University and the
Association of Colleges and Universities of
the State of New York. Director of the
following: Niagara Mohawk Power Corporation
(until 2003); Security Mutual Life (insurance)
(until 1997); ONBANK (until 1993).
|
|
|
50 |
|
4
Independent Trustees/Nominees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Funds in |
|
|
Position(s) |
|
|
|
John Hancock Fund |
Name |
|
with the |
|
Principal Occupation(s) and Other Directorships |
|
Complex Overseen by |
(Birth Year) |
|
Trusts |
|
During the Past 5 Years |
|
Trustee/Nominee |
|
|
|
|
|
Trustee of
the following: Board of Visitors, The
University of Wisconsin, Madison (since 2007);
Ford Foundation, International Fellowships
Program (until 2007); UNCF, International
Development Partnerships (until 2005); Roth
Endowment (since 2002); Council for
International Educational Exchange (since
2003). |
|
|
|
|
|
|
|
|
|
|
|
|
|
John A. Moore
(1939)
|
|
Trustee*
|
|
President and Chief Executive Officer,
Institute for Evaluating Health Risks,
(nonprofit institution) (until 2001); Senior
Scientist, Sciences International (health
research) (until 2003); Former Assistant
Administrator & Deputy Administrator,
Environmental Protection Agency; Principal,
Hollyhouse (consulting)(since 2000); Director,
CIIT Center for Health Science Research
(nonprofit research) (until 2007).
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
Steven R. Pruchansky
(1944)
|
|
Trustee* and Vice
Chairman
|
|
Chairman and Chief Executive Officer,
Greenscapes of Southwest Florida, Inc. (since
2000); Director and President, Greenscapes of
Southwest Florida, Inc. (until 2000); Member,
Board of Advisors, First American Bank (since
2008); Managing Director, Jon James, LLC (real
estate) (since 2000); Director, First
Signature Bank & Trust Company (until 1991);
Director, Mast Realty Trust (until 1994);
President, Maxwell Building Corp. (until
1991).
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
Gregory A. Russo
(1949)
|
|
Nominee for Trustee
|
|
Vice Chairman, Risk & Regulatory Matters,
KPMG, LLC (KPMG) (2002-2006); Vice Chairman,
Industrial Markets, KPMG (1998-2002).
|
|
|
21 |
|
|
|
|
* |
|
Except for Ms. Jackson and Mr. Martin, each of whom was appointed as a Trustee of all of the
Trusts in 2008, the current Trustees began service as Trustees of the various Trusts in
different years, as detailed in the table following the biographical information about the
Trustees and Nominees. |
Year Each Current Trustee Began Service as a Trustee
(Other than Ms. Jackson and Mr. Martin)
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boyle |
|
Carlin |
|
Cunningham |
|
Ladner |
|
McGill Peterson |
|
Moore |
|
Pruchansky |
Bond Trust |
|
|
2005 |
|
|
|
1994 |
|
|
|
1987 |
|
|
|
1994 |
|
|
|
2001 |
|
|
|
2001 |
|
|
|
1994 |
|
California Tax-Free
Income Fund |
|
|
2005 |
|
|
|
1994 |
|
|
|
1989 |
|
|
|
1994 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
1994 |
|
Capital Series |
|
|
2005 |
|
|
|
1992 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
1996 |
|
|
|
1996 |
|
|
|
2005 |
|
Current Interest |
|
|
2005 |
|
|
|
1994 |
|
|
|
1987 |
|
|
|
1994 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
1994 |
|
Equity Trust |
|
|
2005 |
|
|
|
2004 |
|
|
|
2004 |
|
|
|
2004 |
|
|
|
2000 |
|
|
|
2000 |
|
|
|
2004 |
|
Investment Trust |
|
|
2005 |
|
|
|
1992 |
|
|
|
1986 |
|
|
|
1979 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
1992 |
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boyle |
|
Carlin |
|
Cunningham |
|
Ladner |
|
McGill Peterson |
|
Moore |
|
Pruchansky |
Investment Trust II |
|
|
2005 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
1993 |
|
|
|
1991 |
|
|
|
2005 |
|
Investment Trust III |
|
|
2005 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
1994 |
|
|
|
1994 |
|
|
|
2005 |
|
Municipal Securities Trust |
|
|
2005 |
|
|
|
1994 |
|
|
|
1987 |
|
|
|
1994 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
1994 |
|
Series Trust |
|
|
2005 |
|
|
|
1992 |
|
|
|
1994 |
|
|
|
1991 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
1991 |
|
Sovereign Bond |
|
|
2005 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
2001 |
|
|
|
2001 |
|
|
|
2005 |
|
Strategic Series |
|
|
2005 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
2001 |
|
|
|
2001 |
|
|
|
2005 |
|
Tax-Exempt Series Fund |
|
|
2005 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
1996 |
|
|
|
1996 |
|
|
|
2005 |
|
World Fund |
|
|
2005 |
|
|
|
2005 |
|
|
|
2005 |
|
|
|
2004 |
|
|
|
1993 |
|
|
|
1991 |
|
|
|
2005 |
|
Correspondence intended for any of the Nominees may be sent to the attention of the individual
Nominee or to a Board at 601 Congress Street, Boston, Massachusetts 02210. All communications
addressed to a Board or individual Nominee will be logged and sent to the Board or individual
Nominee.
Principal Officers Who Are Not Trustees or Nominees
The following table presents information regarding the current principal officers of the Trusts who
are neither current Trustees nor Nominees, including their principal occupations which, unless
specific dates are shown, are of at least five years duration. Each of the officers is an
affiliated person of the Adviser. Each such officers business address is 601 Congress Street,
Boston, Massachusetts 02210-2805.
|
|
|
|
|
Name |
|
|
|
|
(Birth |
|
Position(s) with |
|
|
Year) |
|
each Trust |
|
Principal Occupation(s) During Past 5 Years |
|
Keith F. Hartstein
(1956)
|
|
President and Chief
Executive Officer
(since 2005)
|
|
Senior Vice President, Manulife Financial
Corporation (since 2004); Director,
President and Chief Executive Officer,
JHA, The Berkeley Group, the Distributor
(since 2005); Director, MFC Global
Investment Management (U.S.), LLC (MFC
Global (U.S.)) (since 2005); Chairman and
Director, John Hancock Signature Services,
Inc. (since 2005); President and Chief
Executive Officer, John Hancock Investment
Management Services, LLC (JHIMS) (since
2006); President and Chief Executive
Officer, JHF II, JHF III and JHT;
Director, Chairman and President, NM
Capital Management, Inc. (since 2005);
Chairman, Investment Company Institute
Sales Force Marketing Committee (since
2003); Director, President and Chief
Executive Officer, MFC Global (U.S.)
(2005-2006); Executive Vice President, the
Distributor (until 2005). |
|
|
|
|
|
Francis V. Knox, Jr.
(1947)
|
|
Chief Compliance
Officer
(since 2005)
|
|
Vice President and Chief Compliance
Officer, JHIMS, JHA and MFC Global (U.S.)
(since 2005); Vice President and Chief
Compliance Officer, JHF, JHF II, JHF III
and JHT (since 2005); Vice President and
Assistant Treasurer, Fidelity Group of
Funds (until 2004); Vice President and
Ethics & Compliance Officer, Fidelity
Investments (until 2001). |
|
|
|
|
|
Gordon M. Shone
(1956)
|
|
Treasurer
(since 2006)
|
|
Senior Vice President, JHLICO (U.S.A.)
(since 2001); Treasurer for JHF (since
2006); JHF II, JHF III and JHT (since
2005); Vice President and Chief Financial
Officer, JHT (2003-2005); Vice President,
JHIMS, JHA (since 2006). |
6
|
|
|
|
|
Name |
|
|
|
|
(Birth |
|
Position(s) with |
|
|
Year) |
|
each Trust |
|
Principal Occupation(s) During Past 5 Years |
|
Charles A. Rizzo
(1959)
|
|
Chief Financial
Officer
(since 2007)
|
|
Chief Financial Officer, JHF, JHF II, JHF
III and JHT (since 2007); Assistant
Treasurer, Goldman Sachs Mutual Fund
Complex (registered investment companies)
(2005-2007); Vice President, Goldman Sachs
(2005-2007); Managing Director and
Treasurer of Scudder Funds, Deutsche Asset
Management (2003-2005). |
|
|
|
|
|
Thomas M. Kinzler
(1955)
|
|
Secretary and Chief
Legal Officer
(since 2006)
|
|
Vice President and Counsel, JHLICO
(U.S.A.) (since 2006); Secretary and Chief
Legal Officer, the Distributor, JHF II,
JHF III and JHT (since 2006); Vice
President and Associate General Counsel,
Massachusetts Mutual Life Insurance
Company (1999-2006); Secretary and Chief
Legal Counsel, MML Series Investment Fund
(2000-2006); Secretary and Chief Legal
Counsel, MassMutual Institutional Funds
(2000-2004); Secretary and Chief Legal
Counsel, MassMutual Select Funds and
MassMutual Premier Funds (2004-2006). |
Duties of Trustees; Board Meetings and Board Committees
Each Trust is organized as a Massachusetts business trust. Under each Trusts Declaration of
Trust, the Trustees are responsible for managing the affairs of that Trust, including the
appointment of advisers and subadvisers. The Trustees may appoint officers who assist in managing
its day-to-day affairs. In 2008, each Fund of John Hancock Capital Series (Capital Series),
except for the Large Cap Select Fund, and John Hancock Investment Trust (Investment Trust)
changed its fiscal year end from December 31 to October 31. Accordingly, information in this Proxy
Statement relating to the most recent fiscal year for these two Trusts (except as information
relates to the Large Cap Select Fund) will be shown through or as of the end of each such Trusts
most recently completed fiscal period (October 31, 2008), as well as for the previous full 12-month
fiscal year ended December 31, 2007.
The Board of each Trust met five times during each Trusts last respective 12-month fiscal year.
The Board of each of Capital Series and Investment Trust met ___(___) times during each such
Trusts respective fiscal period ended October 31, 2008.
During each Trusts most recent 12-month fiscal year and, in the case of Capital Series and
Investment Trust, the fiscal period ended October 31, 2008, the Board had four (4) standing
committees: the Audit and Compliance Committee, the Contracts/Operations Committee, the Governance
Committee and the Investment Performance Committee. Each Committee was comprised entirely of
Independent Trustees. In January 2009, each Boards committee structure was changed to consist of
six (6) standing committees. The following discussion relates to the committee structure that was
in place through December 2008. The new committee structure is described below under Revised
Committee Structure.
Audit and Compliance Committee. All of the members of this Committee are independent, and each
member is financially literate with at least one having accounting or financial management
expertise. Each Board has adopted a written charter for the Committee. This Committee recommends
to the full Board independent registered public accounting firms for a Fund, oversees the work of
the independent registered public accounting firm in connection with each Funds audit,
communicates with the independent registered public accounting firm on a regular basis and provides
a forum for the independent registered public accounting firm to report and discuss any matters it
deems appropriate at any time.
The Audit and Compliance Committee of John Hancock Bond Trust, John Hancock California Tax-Free
Income Fund, John Hancock Current Interest, John Hancock Municipal Securities Trust, John Hancock
Sovereign Bond Fund, John Hancock Strategic Series and John Hancock Tax-Exempt Series Fund held
four (4) meetings during each such Trusts last respective fiscal year.
7
The Audit and Compliance Committee of John Hancock Capital Series, John Hancock Equity Trust, John
Hancock Investment Trust, John Hancock Investment Trust II, John Hancock Investment Trust III, John
Hancock Series Trust and John Hancock World Fund held five (5) meetings during each such Trusts
last respective 12-month fiscal year. The Audit and Compliance Committee of each of Capital Series
and Investment Trust met ___(___) times during each such Trusts respective fiscal period ended
October 31, 2008.
Governance Committee. This Committee is comprised of all of the Independent Trustees. This
Committee reviews the activities of the other standing committees and makes the final selection and
nomination of candidates to serve as Independent Trustees. The Trustees who are not Independent
Trustees and the officers of the fund are nominated and selected by the Board.
In reviewing a potential nominee and in evaluating the renomination of current Independent
Trustees, this Committee will generally apply the following criteria: (i) the nominees reputation
for integrity, honesty and adherence to high ethical standards; (ii) the nominees business acumen,
experience and ability to exercise sound judgments; (iii) a commitment to understand the Funds and
the responsibilities of a trustee of an investment company; (iv) a commitment to regularly attend
and participate in meetings of a Board and its committees; (v) the ability to understand potential
conflicts of interest involving management of the Funds and to act in the interests of all
shareholders; and (vi) the absence of a real or apparent conflict of interest that would impair the
nominees ability to represent the interests of all the shareholders and to fulfill the
responsibilities of an Independent Trustee. This
Committee does not necessarily place the same emphasis on each criteria and each nominee may not
have each of these qualities.
It is the intent of each Governance Committee that at least one Independent Trustee be an audit
committee financial expert as defined by the Securities and Exchange Commission.
As long as an existing Independent Trustee continues, in the opinion of the relevant Governance
Committee, to satisfy these criteria, each Trust anticipates that the Committee would favor the
renomination of an existing Trustee rather than a new candidate. Consequently, while each such
Committee will consider nominees recommended by shareholders to serve as trustees, this Committee
may only act upon such recommendations if there is a vacancy on a Board or a committee determines
that the selection of a new or additional Independent Trustee is in the best interests of a Fund.
In the event that a vacancy arises or a change in Board membership is determined to be advisable,
this Committee will, in addition to any shareholder recommendations, consider candidates identified
by other means, including candidates proposed by members of this Committee. This Committee may
retain a consultant to assist it in a search for a qualified candidate, and has done so recently.
Each such Committee has adopted Procedures for the Selection of Independent Trustees, a form of
which is attached as Appendix A to this Proxy Statement.
Any shareholder recommendation must be submitted in compliance with all of the pertinent provisions
of Rule 14a-8 under the Securities Exchange Act of 1934, as amended, to be considered by a
Governance Committee. In evaluating a nominee recommended by a shareholder, this Committee, in
addition to the criteria discussed above, may consider the objectives of the shareholder in
submitting that nomination and whether such objectives are consistent with the interests of all
shareholders. If a Board determines to include a shareholders candidate among the slate of
nominees, the candidates name will be placed on the Funds proxy card. If this Committee or a
Board determines not to include such candidate among a Boards designated nominees and the
shareholder has satisfied the requirements of Rule 14a-8, the shareholders candidate will be
treated as a nominee of the shareholder who originally nominated the candidate. In that case, the
candidate will not be named on the proxy card distributed with a Funds Proxy Statement.
Shareholders may communicate with the members of a Board as a group or individually. Any such
communication should be sent to a Board or an individual Trustee c/o The Secretary of the relevant
Trust at the following address: 601 Congress Street, Boston, Massachusetts 02210-2805. The
Secretary may determine not to forward any letter to the members of a Board that does not relate to
the business of a Fund.
The Governance Committee of John Hancock Bond Trust, John Hancock California Tax-Free Income Fund,
John Hancock Current Interest, John Hancock Municipal Securities Trust, John Hancock Sovereign Bond
Fund, John Hancock Strategic Series and John Hancock Tax-Exempt Series Fund held four (4) meetings
during each such Trusts last respective fiscal year.
8
The Governance Committee of John Hancock Capital Series, John Hancock Equity Trust, John Hancock
Investment Trust, John Hancock Investment Trust II, John Hancock Investment Trust III, John Hancock
Series Trust and John Hancock World Fund held one meeting (1)during its last respective 12-month
fiscal year. The Governance Committee of each of Capital Series and Investment Trust met ___(___)
times during each such Trusts respective fiscal period ended October 31, 2008.
Contracts/Operations Committee. Each such Committee oversees the initiation, operation, and
renewal of the various contracts between a Fund and other entities. These contracts include
advisory and subadvisory agreements, custodial and transfer agency agreements and arrangements with
other service providers. Each such Committee held four (4) meetings during each Trusts last
respective 12-month fiscal year, except for such Committee of John Hancock Current Interest, which
held five (5) meetings during that Trusts last fiscal year. The Contracts/Operations Committee of
each of Capital Series and Investment Trust met ___(___) times during each such Trusts respective
fiscal period ended October 31, 2008.
Investment Performance Committee. Each such Committee monitors and analyzes the performance of a
Fund generally, consults with the Adviser as necessary if a Fund requires special attention, and
reviews peer groups and other comparative standards as necessary. Each such Committee held four
(4) meetings during each Trusts last
respective fiscal year. The Investment Performance Committee of each of Capital Series and
Investment Trust met ___(___) times during each such Trusts respective fiscal period ended October
31, 2008.
Revised Committee Structure. Beginning January 2009, each Trusts committee structure was revised
to consist of six (6) committees: the Audit Committee; the Compliance Committee; the Nominating,
Governance and Administration Committee (which corresponds to the former Governance Committee); the
Equity Investment Performance Committee and the Fixed-Income and Closed-End Fund Investment
Performance Committee (which together correspond to the former Investment Performance Committee);
and the Contracts/Operations Committee (which corresponds to the former committee of the same
name). In terms of function, other than the separate Audit and Compliance Committees, the current
committees operate in the same manner as their predecessor committees.
Audit Committee. The accounting oversight function of this Committee is described above in the
discussion of the former Audit and Compliance Committee.
Compliance Committee. The primary role of each such Committee is to oversee the activities of the
Trusts Chief Compliance Officer; the implementation and enforcement of the Trusts compliance
policies and procedures; and compliance with the Trusts and the Independent Trustees Codes of
Ethics.
The current membership of each committee is set forth below. As Chairperson of the Board, Ms.
McGill Peterson is considered an ex oficio member of each committee and, therefore, is able to
attend and participate in any committee meeting, as appropriate. Prior to January 2009, Ms.
Jackson and Messrs. Martin and Russo were not members of any committee.
|
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|
Nominating, |
|
|
|
Fixed-Income |
|
|
|
|
|
|
Governance |
|
Equity |
|
and Closed-End |
|
|
|
|
|
|
and |
|
Investment |
|
Fund Investment |
|
|
Audit |
|
Compliance |
|
Administrative |
|
Performance |
|
Performance |
|
Contracts/Operations |
|
Mr. Cunningham
|
|
Mr. Carlin
|
|
All Independent
|
|
Mr. Carlin
|
|
Ms. Jackson
|
|
Mr. Ladner |
Ms. Jackson
|
|
Mr. Russo
|
|
Trustees
|
|
Mr. Cunningham
|
|
Mr. Ladner
|
|
Dr. Moore |
Mr. Martin
|
|
|
|
|
|
Mr. Moore
|
|
Mr. Martin
|
|
Mr. Pruchansky |
|
|
|
|
|
|
Mr. Russo
|
|
Mr. Pruchansky |
|
|
Compensation of Trustees
Each Trust pays fees only to its Independent Trustees. Trustees are reimbursed for travel and
other out-of-pocket expenses. The following tables show the compensation paid to each Independent
Trustee for his or her service as a Trustee for the most recent fiscal years or periods indicated.
In each of these tables, the amount shown for each of
9
Ms. Jackson and Mr. Martin is None since
each of these individuals was appointed to the Board of each Trust after the periods to which the
tables relate.
Compensation for Fiscal Year Ended October 31, 2008
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hancock |
Independent |
|
Equity |
|
Investment |
|
Investment |
|
Series |
|
World |
|
Fund |
Trustee |
|
Trust |
|
Trust II |
|
Trust III |
|
Trust |
|
Fund |
|
Complex* |
Carlin |
|
$ |
2,060 |
|
|
$ |
21,249 |
|
|
$ |
2,453 |
|
|
$ |
2,205 |
|
|
$ |
1,558 |
|
|
$ |
260,834 |
|
Cunningham |
|
$ |
1,229 |
|
|
$ |
12,274 |
|
|
$ |
1,579 |
|
|
$ |
1,286 |
|
|
$ |
941 |
|
|
$ |
157,500 |
|
Jackson |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
|
|
|
Ladner |
|
$ |
1,229 |
|
|
$ |
12,274 |
|
|
$ |
1,579 |
|
|
$ |
1,286 |
|
|
$ |
941 |
|
|
$ |
162,500 |
|
Martin |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
None |
|
McGill Peterson |
|
$ |
1,229 |
|
|
$ |
12,275 |
|
|
$ |
1,579 |
|
|
$ |
1,286 |
|
|
$ |
941 |
|
|
$ |
157,500 |
|
Moore |
|
$ |
1,539 |
|
|
$ |
15,531 |
|
|
$ |
1,941 |
|
|
$ |
1,624 |
|
|
$ |
1,178 |
|
|
$ |
212,000 |
|
Pruchansky |
|
$ |
1,579 |
|
|
$ |
19,924 |
|
|
$ |
1,988 |
|
|
$ |
1,672 |
|
|
$ |
1,213 |
|
|
$ |
203,500 |
|
Compensation for Fiscal Year Ended December 31, 2007 and Fiscal Period ended October 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Hancock Fund |
|
|
Capital Series |
|
Investment Trust |
|
Complex* |
|
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
Independent Trustee |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
Carlin |
|
$ |
52,172 |
|
|
$ |
64,455 |
|
|
$ |
8,446 |
|
|
$ |
37,201 |
|
|
$ |
145,250 |
|
|
$ |
255,834 |
|
Cunningham |
|
$ |
52,181 |
|
|
$ |
36,282 |
|
|
$ |
8,448 |
|
|
$ |
20,289 |
|
|
$ |
145,250 |
|
|
$ |
152,500 |
|
Jackson |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
$ |
34,750 |
|
Ladner |
|
$ |
52,172 |
|
|
$ |
36,282 |
|
|
$ |
8,446 |
|
|
$ |
20,289 |
|
|
$ |
146,000 |
|
|
$ |
157,500 |
|
Martin |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
$ |
51,960 |
|
McGill Peterson |
|
$ |
52,177 |
|
|
$ |
36,281 |
|
|
$ |
8,447 |
|
|
$ |
20,289 |
|
|
$ |
151,000 |
|
|
$ |
152,500 |
|
Moore |
|
$ |
64,625 |
|
|
$ |
43,069 |
|
|
$ |
11,083 |
|
|
$ |
25,405 |
|
|
$ |
181,000 |
|
|
$ |
197,000 |
|
Pruchansky |
|
$ |
64,625 |
|
|
$ |
44,295 |
|
|
$ |
11,083 |
|
|
$ |
26,229 |
|
|
$ |
180,250 |
|
|
$ |
188,500 |
|
Compensation for Fiscal Year Ended March 31, 2008
|
|
|
|
|
|
|
|
|
Independent Trustee |
|
Current Interest |
|
John Hancock Fund Complex* |
Carlin |
|
$ |
2,139 |
|
|
$ |
145,250 |
|
Cunningham |
|
$ |
1,821 |
|
|
$ |
145,250 |
|
Jackson |
|
None |
|
|
None |
|
|
|
|
* |
|
This column reflects the aggregate compensation for each
fiscal year end paid to each Trustee from the relevant Trust and from each Fund
in the John Hancock Fund Complex that such Trustee serves. The aggregate
compensation may include overlapping amounts reflected in the compensation
tables for other fiscal year ends. For example, the Compensation for Fiscal
Year Ended May 31, 2008 will reflect aggregate compensation for each month
from June 2007 through May 2008. The Compensation for Fiscal Year Ended
August 31, 2008 will reflect aggregate compensation for each month from
September 2007 through August 2008. Accordingly, the aggregate compensation
paid to each Trustee by the John Hancock Fund Complex from September 2007
through May 2008 will be reflected in both compensation table totals. |
10
|
|
|
|
|
|
|
|
|
Independent Trustee |
|
Current Interest |
|
John Hancock Fund Complex* |
Ladner |
|
$ |
1,820 |
|
|
$ |
146,000 |
|
Martin |
|
None |
|
|
None |
|
McGill Peterson |
|
$ |
1,820 |
|
|
$ |
151,000 |
|
Moore |
|
$ |
2,247 |
|
|
$ |
181,000 |
|
Pruchansky |
|
$ |
2,247 |
|
|
$ |
180,250 |
|
Compensation for Fiscal Year Ended May 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Hancock Fund |
Independent Trustee |
|
Bond Trust |
|
Sovereign Bond |
|
Strategic Series |
|
Complex* |
Carlin |
|
$ |
12,255 |
|
|
$ |
6,463 |
|
|
$ |
8,049 |
|
|
$ |
145,250 |
|
Cunningham |
|
$ |
9,924 |
|
|
$ |
5,335 |
|
|
$ |
6,595 |
|
|
$ |
145,250 |
|
Jackson |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
Ladner |
|
$ |
9,923 |
|
|
$ |
5,334 |
|
|
$ |
6,594 |
|
|
$ |
146,000 |
|
Martin |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
McGill Peterson |
|
$ |
9,924 |
|
|
$ |
5,334 |
|
|
$ |
6,594 |
|
|
$ |
151,000 |
|
Moore |
|
$ |
12,370 |
|
|
$ |
6,588 |
|
|
$ |
8,188 |
|
|
$ |
181,000 |
|
Pruchansky |
|
$ |
12,370 |
|
|
$ |
6,588 |
|
|
$ |
8,188 |
|
|
$ |
180,250 |
|
Compensation for Fiscal Year Ended August 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California Tax- |
|
Municipal Securities |
|
Tax-Exempt |
|
John Hancock Fund |
Independent Trustee |
|
Free Income Fund |
|
Trust |
|
Series Fund |
|
Complex* |
Carlin |
|
$ |
2,268 |
|
|
$ |
3,751 |
|
|
$ |
1,102 |
|
|
$ |
213,834 |
|
Cunningham |
|
$ |
1,652 |
|
|
$ |
2,721 |
|
|
$ |
797 |
|
|
$ |
155,500 |
|
Jackson |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
Ladner |
|
$ |
1,652 |
|
|
$ |
2,721 |
|
|
$ |
797 |
|
|
$ |
161,000 |
|
Martin |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
McGill Peterson |
|
$ |
1,652 |
|
|
$ |
1,129 |
|
|
$ |
797 |
|
|
$ |
156,000 |
|
Moore |
|
$ |
2,097 |
|
|
$ |
3,463 |
|
|
$ |
1,016 |
|
|
$ |
210,000 |
|
Pruchansky |
|
$ |
2,173 |
|
|
$ |
3,596 |
|
|
$ |
1,057 |
|
|
$ |
201,500 |
|
No Trust has a pension or retirement plan for any of its Trustees or officers. Each Trust
participates in the John Hancock Deferred Compensation Plan for Independent Trustees (the Plan).
Under the Plan, an Independent Trustee may elect to have his deferred fees invested in shares of
one or more funds in the John Hancock Fund Complex and the amount paid to the Independent Trustees
under the Plan will be determined based upon the performance of such investments. Deferral of
Trustees fees does not obligate a Trust to retain the services of any Trustee or obligate the
Trust to pay any particular level of compensation to the Trustee. Under these circumstances, the
Trustee is not the legal owner of the underlying shares, but does participate in any positive or
negative return on those shares to the same extent as all other shareholders. As of November 30,
2008, the value of the aggregate accrued deferred compensation amount from all funds in the John
Hancock Fund Complex for Mr. Cunningham was $155,441; Mr. Ladner was $71,250; Ms. McGill Peterson
was $112,504; Dr. Moore was $209,776; and Mr. Pruchansky was $255,930 under the Plan.
11
Nominee Ownership of Shares of the Funds
The table below sets forth the dollar range of the value of the shares of each Fund, and the dollar
range of the aggregate value of the shares of all funds in the John Hancock Fund Complex overseen
or to be overseen by a Nominee, owned beneficially by each Nominee as of December 31, 2008. The
table lists only those Funds in which one or more of the Nominees own shares. The current value of
the Funds that the participating Independent Trustees have selected under the Plan is included in
this table. For purposes of this table, beneficial ownership is defined to mean a direct or
indirect pecuniary interest. Exact dollar amounts of securities held are not listed in the table.
Rather, the ranges are identified according to the following key:
A-$0
B -$1 up to and including $10,000
C -$10,001 up to and including $50,000
D -$50,001 up to and including $100,000
E -$100,001 or more
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|
McGill |
|
|
|
|
|
|
|
|
Fund/Trustee |
|
Boyle |
|
Carlin |
|
Cunningham |
|
Jackson |
|
Ladner |
|
Martin |
|
Peterson |
|
Moore |
|
Pruchansky |
|
Russo |
|
Vrysen |
Balanced |
|
|
|
|
|
|
B |
|
|
|
|
|
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|
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|
|
|
|
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|
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|
A |
|
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C |
|
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|
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|
Bond |
|
|
|
|
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|
B |
|
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|
|
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|
|
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|
C |
|
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|
C |
|
|
|
|
|
|
|
|
|
|
|
|
|
CA Tax Free Income |
|
|
|
|
|
|
A |
|
|
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|
|
|
|
|
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|
|
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|
|
|
|
|
|
A |
|
|
|
C |
|
|
|
|
|
|
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|
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|
|
|
|
Classic Value |
|
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|
|
|
|
B |
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A |
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C |
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|
Classic Value II |
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B |
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A |
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B |
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Financial Industries |
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B |
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B |
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B |
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Global Oppty |
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A |
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B |
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B |
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Global Real Estate |
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B |
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B |
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B |
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Govt Income |
|
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B |
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B |
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B |
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Greater China Oppty |
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B |
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B |
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B |
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Health Sciences |
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B |
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C |
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B |
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High Yield |
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B |
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B |
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C |
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High Yield Muni Bond |
|
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B |
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B |
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C |
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Intl Classic Value |
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B |
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A |
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B |
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Investment Grade Bond |
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B |
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B |
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A |
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Large Cap Equity |
|
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B |
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B |
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C |
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Large Cap Select |
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B |
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B |
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B |
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MA Tax Free Income |
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B |
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A |
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A |
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Mid Cap Equity |
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B |
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B |
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A |
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Money Market |
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B |
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A |
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B |
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B |
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12
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McGill |
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|
Fund/Trustee |
|
Boyle |
|
Carlin |
|
Cunningham |
|
Jackson |
|
Ladner |
|
Martin |
|
Peterson |
|
Moore |
|
Pruchansky |
|
Russo |
|
Vrysen |
NY Tax Free Income |
|
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|
A |
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B |
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A |
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Regional Bank |
|
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B |
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B |
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B |
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|
Small Cap |
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B |
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B |
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B |
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|
Small Cap Equity |
|
|
|
|
|
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B |
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B |
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A |
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|
Small Cap Intrinsic Value |
|
|
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|
|
B |
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|
B |
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B |
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|
Sovereign Investors |
|
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C |
|
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B |
|
|
|
B |
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|
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|
Strategic Income |
|
|
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|
|
B |
|
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C |
|
|
|
B |
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|
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|
|
|
|
|
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|
|
Tax-Free Bond |
|
|
|
|
|
|
B |
|
|
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|
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C |
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|
C |
|
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|
|
US Global Leaders |
|
|
|
|
|
|
B |
|
|
|
B |
|
|
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|
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|
|
B |
|
|
|
B |
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|
John Hancock Fund Complex |
|
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|
|
Material Relationships of the Independent Trustees
As of December 31, 2008, none of the Independent Trustees, nor any immediate family member, owned
shares of the Adviser or a principal underwriter of the Funds, nor does any such person own shares
of a company controlling, controlled by or under common control with the Adviser or a principal
underwriter of the Funds.
There have been no transactions by the Funds since the beginning of the Funds last two fiscal
years, nor are there any transactions currently proposed in which the amount exceeds $120,000, and
in which any Trustee of the Funds or any immediate family members has or will have a direct or
indirect material interest, nor have any of the foregoing persons been indebted to the Funds in an
amount in excess of $120,000 at any time since that date.
No Independent Trustee, nor any immediate family member, has had in the past five years, any direct
or indirect interest, the value of which exceeds $120,000, in the Adviser, a principal underwriter
of the Funds or in a person (other than a registered investment company) directly or indirectly
controlling, controlled by or under common
control with the Adviser or principal underwriter of the Funds. Moreover, no Independent Trustee
or his or her immediate family member has, or has had in the last two fiscal years of the Funds,
any direct or indirect relationships or material interest in any transaction or in any currently
proposed transaction, in which the amount involved exceeds $120,000, in which the following persons
were or are a party: the Funds, an officer of a Trust, any investment company sharing the same
investment adviser or principal underwriter as the Funds or any officer of such a company, any
investment adviser or principal underwriter of the Funds or any officer of such a party, any person
directly or indirectly controlling, controlled by or under common control with the investment
adviser or principal underwriter of the Funds, or any officer of such a person.
Within the last two completed fiscal years of the Funds, no officer of any investment adviser or
principal underwriter of the Funds or of any person directly or indirectly controlling, controlled
by or under common control with, the investment adviser or principal underwriter of the Funds, has
served as a director on a board of a company where any of the Independent Trustees or Nominees, or
immediate family members of such persons, has served as an officer.
13
Legal Proceedings
There are no material pending legal proceedings to which any Trustee or affiliated person is a
party adverse to the funds or any of its affiliated persons or has a material interest adverse to
the Funds or any of their affiliated persons. In addition, there have been no legal proceedings
that are material to an evaluation of the ability or integrity of any Trustee or executive officer
of the Funds within the past five years.
Required Vote
Trustees are elected by a plurality of the votes cast by holders of shares of each Trust present in
person or represented by proxy at the Meeting.
Each Board, including all the Independent Trustees each Trust, recommends that shareholders of each
Trust vote FOR all of the Nominees.
14
PROPOSAL 2 APPROVAL OF A NEW FORM OF ADVISORY AGREEMENT
(All Funds)
Shareholders of the Funds are being asked to approve a new form of Advisory Agreement for the
Funds. Approval of the new form of Advisory Agreement will not change the annual advisory fee
rates payable by any Fund.
Introduction
At its meeting on December 8-9, 2008, the Board, including all the Independent Trustees, approved
the new form of Advisory Agreement between the Trusts and the Adviser (Proposal 2). A copy of the
proposed new form of Advisory Agreement is included at Appendix B to this Proxy Statement.
The purpose of this proposal is to streamline the advisory agreements across the John Hancock Fund
Complex. The new form of Advisory Agreement will:
|
|
Eliminate coverage of all Non-Advisory Services from the Advisory Agreement. In this Proxy
Statement, the term Non-Advisory Services means services that include, but are not limited
to, legal, tax, accounting, valuation, financial reporting and performance, compliance,
service provider oversight, portfolio and cash management, SEC filings, graphic design, and
other services that are not investment advisory in nature. |
|
|
For certain Funds, change the frequency with which advisory fees are paid from monthly or
quarterly payment to daily payment to provide consistency across the John Hancock Fund
Complex. |
|
|
Eliminate a provision requiring certain Funds to not exceed certain expense limitations
that had been required by state securities regulators (which are no longer in effect). |
|
|
Contain clearer, more detailed provisions with respect to certain matters, as summarized
below. |
The 1940 Act requires that any change in an advisory contract be approved by shareholders of a
Fund.
Additional Information. For additional information about the Adviser, including: Management and
Control of the Adviser, the amounts of advisory fees paid to the Adviser during each Funds fiscal
year, and Payments by the Funds to Affiliates of the Adviser, see Appendix C hereto (Additional
Information About the Adviser and the Advisory Agreements). The advisory fee schedule for each
Fund and information regarding comparable funds managed by the Adviser are set forth in Appendix D
hereto (Advisory Fee Schedules and Comparable Funds Managed by the Adviser).
Clarification Regarding Non-Advisory Services
The current Advisory Agreement describes the investment advisory functions to be performed by the
Adviser (or a subadviser, under the Advisers supervision), including the formulation and
implementation of a continuous investment program for each Fund consistent with the Funds
investment objectives and related investment policies (Advisory Services). In addition, each
Funds current Advisory Agreement provides that the Adviser will provide certain limited
Non-Advisory Services. A substantial number of other Non-Advisory Services, which the Funds pay
for, are already provided to the Funds under a separate Accounting and Legal Services Agreement.
In order to provide clarity and to consolidate like services in a single agreement, it is proposed
that all references to Non-Advisory Services in the Advisory Agreements be eliminated. Management
has proposed to the Board that each Fund adopt a new, separate Service Agreement (replacing the
existing Accounting and Legal Services Agreement) that will clearly cover all Non-Advisory
Services, including those eliminated from the Advisory Agreement, if Proposal 2 is approved.
15
Management believes that this consolidation of Non-Advisory Services under a single contract will
eliminate confusion and facilitate more effective tracking of Non-Advisory Services and costs. The
elimination of Non-Advisory Services provisions from the Advisory Agreements and consolidation of
Non-Advisory Services in a separate Service Agreement will not materially increase the amount of
expenses incurred by the Funds for Non-Advisory Services, and is not expected to materially
increase the Funds overall expense ratios. Consistency in operational procedures across the John
Hancock Fund Complex will speed processes and minimize transaction error. These benefits
contribute to a goal of maintaining, even reducing, operational costs. Restricting the new form of
Advisory Agreement to investment advisory services will facilitate the Advisers ability to manage
those services that are non-investment in nature. The Board expects to consider managements
Service Agreement proposal, which does not require shareholder approval, at a future Board meeting.
The proposed new form of Advisory Agreement will not result in any increase in the advisory fee
that each Fund pays the Adviser under the current Advisory Agreement or in any change in the nature
and level of advisory services provided by the Adviser to the Funds.
Frequency of Payment
The new form of Advisory Agreement will restructure the advisory fees paid by certain Funds so that
fees will be accrued and paid on a daily basis. As compensation for its services under the
Advisory Agreement, the Adviser receives a fee from the Trust computed separately for each Fund,
determined by applying the annual fee rate to the net assets of the Fund.
Currently, the Sovereign Investors Fund pays the Adviser on a quarterly basis and the other Funds
(except for the Classic Value Fund, Classic Value Fund II, International Classic Value Fund, Large
Cap Select Fund, Small Cap Fund, Global Opportunities Fund, Small Cap Intrinsic Value Fund, and
Greater China Opportunities Fund) pay the Adviser on a monthly basis. This amendment is intended
to bring all advisory fee payment mechanics for the John Hancock funds into conformity and will
result in greater administrative efficiencies for the Funds.
Proposal 2 would amend the frequency of payments for all of the Funds so that JHA will be paid
advisory fees on a daily basis. The amendment will not change the annual advisory fee rates
payable by any of the Funds. This amendment would promote uniformity of advisory fee distributions
across the John Hancock Fund Complex. The Board believes that this will lead to greater
administrative efficiencies for the Funds.
Because each relevant Funds advisory fees have historically been accrued on a daily basis, there
is no difference between the amounts that a Fund would have paid if daily payment of advisory fees
were in effect in prior periods instead of monthly or quarterly payment. Nevertheless, the Adviser
may benefit from the time value of advisory fee payments received on a daily, rather than a monthly
or quarterly basis.
Elimination of Blue Sky Expense Limitation
The proposed new form of Advisory Agreement no longer includes a provision limiting the advisory
fee in accordance with state blue sky requirements. Such limitations no longer exist, as federal
law supersedes state investment limitations.
Provision of Trust Officers
The current form of Advisory Agreement provides that the Adviser pays for all officers (or
Trustees) of the Trust that are also adviser personnel. Under the proposed new form of Advisory
Agreement, the Adviser expressly agrees only to permit its employees to serve as President (or
Trustees) without remuneration from the Trust. The Adviser will continue to provide such other
officers as the Trusts may require at the Trusts expense.
16
Key Differences
The following table lists the key differences between the proposed new form of Advisory Agreement
and the current Advisory Agreements. These provisions would be changed to those in the proposed
form if the form is approved by shareholders of a Fund.
Key Differences between the New and Current Advisory Agreements
|
|
|
|
|
Term |
|
New Form of Advisory Agreement |
|
Current Advisory Agreements |
Advisory and
Non-Advisory
Services
|
|
Agreement deletes all
Non-Advisory Services.
|
|
Agreement includes certain limited
Non-Advisory Services, such as the
preparation of certain valuation reports. |
|
|
|
|
|
Frequency of Payment
|
|
The advisory fees for each
Fund will be accrued and paid
daily.
|
|
The advisory fees for certain Funds are
paid monthly or quarterly. |
|
|
|
|
|
Trustees and
Officers
|
|
Adviser agrees to permit its
employees to serve as
interested Trustees and
President without
remuneration from the Trust.
Other Adviser personnel may
be furnished at Trusts
expense.
|
|
Adviser agrees to pay for all officers and
employees of Trust that are also adviser
personnel. Trust pays for outside
Trustees, a portion of CCO compensation
and any outside contractors or employees. |
|
|
|
|
|
Expenses Assumed by
the Trust
|
|
More detailed list than
current form of Advisory
Agreement as well as some
general provisions.
|
|
Less detailed enumeration of such expenses. |
|
|
|
|
|
Conflicts of
Interest
|
|
Potential conflicts on behalf
of Adviser do not affect
validity of relationship or
transactions made.
|
|
Agreement is silent. |
|
|
|
|
|
Duration and
Termination
|
|
60 days written notice is
required. Following
shareholder approval of the
new form of Advisory
Agreement, if the Agreement
terminates with respect to a
Fund because the Funds
shareholders fail to provide
any required approval of the
Agreement, then the Adviser
will act as adviser until the
Agreement is approved or
another agreement is enacted,
and Adviser will be paid at
cost or the amount under this
Agreement, whichever is less.
This is consistent with 1940
Act provision permitting
certain types of interim
advisory contracts.
|
|
60 days written notice is required. No
interim adviser clause is included.
However, if necessary, a Fund likely could
still avail itself of the interim advisory
contract provisions of the 1940 Act. |
|
|
|
|
|
Provision of
Certain Information
by Adviser
|
|
Adviser will notify Trust in
writing when:
Advisers
registration on state or
federal level ceases; and
Adviser receives
notice of an action involving
the affairs of the Trust, or
the CEO or Managing Member of
the Adviser, or a Funds
portfolio manager changes.
|
|
No explicit provision is provided, but
these may be presumed from the Advisers
general fiduciary duties. |
|
|
|
|
|
Indemnification of
Adviser
|
|
Provided (when not a result
of willful malfeasance, bad
faith, gross negligence or
reckless disregard) to the
fullest extent permitted by
law, the Trust indemnifies
the Adviser, its affiliates
and the officers,
|
|
No similar clause. |
17
|
|
|
|
|
Term |
|
New Form of Advisory Agreement |
|
Current Advisory Agreements |
|
|
directors
and employees of the Adviser
and its affiliates.
Advancement is also provided
for. |
|
|
|
|
|
|
|
Limitation of
Liability under the
Declaration of
Trust
|
|
Agreement notes that
Declaration of Trust limits
the personal liability of
shareholder, officer,
employee or agent of the
Trust.
|
|
Agreement is silent. The Declaration of
Trust and Massachusetts law provides for
such limitation of liability but ideally
this should be stated in all fund
contracts. |
DESCRIPTION OF CURRENT AND NEW FORM OF ADVISORY AGREEMENTS
The following is a summary of the terms of the current Advisory Agreements and the new form of
Agreement that are substantially similar.
Duties. The Adviser oversees the investment operations of each Fund, and retains and compensates
subadvisers that manage the investment and reinvestment of the Funds assets pursuant to
subadvisory agreements with the Adviser.
Compensation. The annual percentage rates for the advisory fees for the Funds are set forth in
Appendix D to this Proxy Statement. The new form of Advisory Agreement does not change the annual
advisory fee rates for the Funds.
Expenses. Each Fund is responsible for the payment of all expenses of its organization, operations
and business, except those that the Adviser has agreed to pay. Each Fund pays the expenses of:
|
|
custody, auditing, transfer agency, bookkeeping and dividend disbursement; |
|
|
legal fees and expenses, including litigation and share registration; and |
|
|
printing and mailing shareholder reports, prospectuses and proxy statements. |
Liability. The Advisory Agreement provides that the Adviser will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to
which the Advisory Agreement relates, except a loss resulting from willful misfeasance, bad faith,
or gross negligence on the part of the Adviser in the performance of its duties or from reckless
disregard by the Adviser of its obligations and duties under the Advisory Agreement.
Term. With respect to each Fund, each of the current and the amended Advisory Agreements has an
initial two-year term, and continuance must be specifically approved at least annually either by:
(a) the Board; or (b) a Majority of the Funds Outstanding Voting Securities (as defined below).
Any such continuance also requires the approval of a majority of the Independent Trustees.
In this Proxy Statement, the term Majority of the Outstanding Voting Securities means the
affirmative vote of the lesser of:
(1) 67% or more of the voting securities of a Trust or a Fund, as applicable, present at the
Meeting, if the holders of more than 50% of the outstanding voting securities of a Trust or a Fund,
as applicable, are present in person or by proxy; or
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(2) more than 50% of the outstanding voting securities of a Trust or a Fund, as applicable.
Any required shareholder approval of any continuance of the current or amended Advisory Agreements
shall be effective with respect to a Fund if a Majority of the Outstanding Voting Securities of
that Fund votes to approve such continuance even if such continuance may not have been approved by
a Majority of the Outstanding Voting Securities of: (a) any other Fund affected by the Agreement;
or (b) all of the other Funds of each Trust.
Failure of Shareholders to Approve Continuance. If the outstanding voting securities of a Fund
fail to approve any continuance of the Advisory Agreement, the Adviser may continue to act as
investment adviser with respect to the Fund pending the required approval of the continuance of
such agreement, a new agreement with the Adviser or a different adviser, or other definitive
action. The compensation received by the Adviser during such period will be no more than: (a) its
actual costs incurred in furnishing Advisory Services; or (b) the amount it would have received
under the Agreement, whichever is less.
Termination. The Advisory Agreement may be terminated with respect to a Fund at any time without
the payment of any penalty on 60 days written notice to the other parties. The Agreement with
respect to a Fund may be terminated by:
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a Majority of the Outstanding Voting Securities of the Fund; or |
An Advisory Agreement will automatically terminate in the event of its assignment.
Amendments. The Advisory Agreement may be amended, provided the amendment is approved by the vote
of a Majority of the Outstanding Voting Securities of each affected Fund and by the vote of a
majority of the Trustees, including a majority of the Independent Trustees.
Any required shareholder approval of any amendment shall be effective with respect to a Fund if a
Majority of the Outstanding Voting Securities of that Fund votes to approve the amendment, even if
the amendment may not have been approved by a Majority of the Outstanding Voting Securities of
another Fund.
EVALUATION BY EACH BOARD OF NEW FORM OF ADVISORY AGREEMENT UNDER PROPOSAL 2
At its meeting on December 8-9, 2008, each Board, including all the Independent Trustees, approved
the proposed new form of Advisory Agreement for the Funds under Proposal 2.
Each Board, including the Independent Trustees, is responsible for selecting a Funds investment
adviser, approving the Advisers selection of Fund subadvisers and approving that Funds advisory
and subadvisory agreements, their periodic continuation and any amendments.
Consistent with SEC rules, a Board regularly evaluates a Funds advisory and subadvisory
arrangements, including consideration of the factors listed below. A Board may also consider other
factors (including conditions and trends prevailing generally in the economy, the securities
markets and the industry) and does not treat any single factor as determinative, and each Trustee
may attribute different weights to different factors. Each Board is furnished with an analysis of
its fiduciary obligations in connection with its evaluation and, throughout the evaluation process,
a Board is assisted by counsel for a Trust and the Independent Trustees are also separately
assisted by independent legal counsel. The factors considered by a Board are:
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the nature, extent and quality of the services to be provided by the Adviser to the Funds; |
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the investment performance of the Funds; |
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the extent to which economies of scale would be realized as a Fund grows and whether fee
levels reflect these economies of scale for the benefit of shareholders of the Fund; |
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the costs of the services to be provided and the profits to be realized by the Adviser
(including any subadvisers affiliated with the Adviser) and its affiliates from the Advisers
relationship with a Fund; and |
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comparative services rendered and comparative advisory fee rates. |
Each Board believes that information relating to all these factors is relevant to its evaluation of
a Funds advisory agreements.
At its meeting on June 10, 2008, the Board approved the annual continuation of the Advisory
Agreements and considered each of the factors listed above. With respect to each Fund, a
discussion of the basis of the Boards approval of the Advisory Agreements and its consideration of
such factors at that meeting is available in the shareholder report for the fiscal six month period
during which the approval took place. Each such report was mailed to shareholders of the relevant
Fund on or about two months after the relevant six month period. A copy of the report may be
obtained by calling 1-800-225-5291 (TDD 1-800-554-6713) or by writing to the Trust at 601
Congress Street, Boston, Massachusetts 02210, Attn.: Gordon M. Shone.
In approving the proposed new form of Advisory Agreement at the December 8-9, 2008 meeting, each
Board determined that it was appropriate to rely upon its recent consideration at its June 10, 2008
meeting of such factors as: fund performance; the realization of economies of scale; profitability
of the Advisory Agreement to the Adviser; and comparative advisory fee rates (as well as its
conclusions with respect to those factors). Each Board noted that it had, at the June 10, 2008
meeting, concluded that these factors, taken as a whole, supported the continuation of the Advisory
Agreement. Each Board, at the December 8-9, 2008 meeting, revisited particular factors to the
extent relevant to the proposed new form of Agreement. In particular, each Board noted the skill
and competency of the Adviser in its past management of each Funds affairs and subadvisory
relationships, the qualifications of the Advisers personnel who perform services for each Trust
and the Funds, including those who served as officers of each Trust, and the high level and quality
of services that the Adviser may reasonably be expected to continue to provide the Funds and
concluded that the Adviser may reasonably be expected to perform its services ably under the
proposed new form of Advisory Agreement. Each Board also took into consideration the extensive
analysis and effort undertaken by a working group comprised of a subset of the Boards Independent
Trustees, which met several times, both with management representatives and separately, to evaluate
the proposals described here, prior to the Boards December 8-9, 2008 meeting. Each Board
considered with respect to Proposal 2 the differences between the current and proposed new form of
Advisory Agreement, as described above and agreed that the new Advisory Agreement structure would
more clearly delineate the Advisers duties under each agreement by separating the Advisers
administrative functions from its advisory functions. The enhanced delineation is expected to
facilitate oversight of the Advisers advisory and administrative activities without leading to any
material increase in the Funds overall expense ratios.
Required Vote
Shareholders of each Fund voting on the proposed new form of Advisory Agreement will vote
separately with respect to that proposal. For each Fund, approval of Proposal 2 will require the
affirmative vote of a Majority of the Outstanding Voting Securities of the Fund. If shareholders
of a Fund do not approve Proposal 2, the new form of Advisory Agreement will not take effect, and
the terms of the current Advisory Agreement will continue in effect as to that Fund.
If Proposal 2 is approved by the shareholders of a Fund, the new form of Advisory Agreement is
expected to become effective as to that Fund promptly after such approval and upon disclosure in
that Funds statement of additional information (SAI).
Each applicable Board, including all the Independent Trustees, recommends that shareholders of each
Fund vote FOR Proposal 2.
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PROPOSAL 3 APPROVAL OF REVISION OR ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
Introduction
Each Fund has adopted investment policies. Investment policies that can only be changed by a vote
of shareholders are considered fundamental. The 1940 Act requires that certain policies,
including those dealing with industry concentration, diversification, borrowing money, underwriting
securities of other issuers, purchasing or selling real estate or commodities, making loans and the
issuance of senior securities be fundamental. Each Board may elect to designate other policies as
fundamental. The fundamental policies described in Proposals 3(a) through 3(o) are referred to as
investment restrictions. Proposal 3 does not apply to the Funds current fundamental policies
with respect to borrowing money and investing in commodities; these policies will remain unchanged.
In addition, prior to the passage of the National Securities Market Improvement Act of 1996
(NSMIA), investment companies were required to submit their offering documents to state blue
sky securities authorities for review. Many state authorities, as a condition of qualifying a
funds shares for sale in those states, required the fund to adopt certain fundamental investment
restrictions. Since NSMIA was enacted, although funds are no longer required to qualify their
shares with state authorities (funds must still register their shares with states in which the
shares are sold), funds are required to obtain shareholder approval to eliminate the blue sky
fundamental restrictions previously required by state authorities. Although these blue sky
restrictions have been eliminated for many Funds, Proposals 3(g) through 3(o) seek shareholder
approval to eliminate blue sky restrictions that continue to apply to certain Funds.
Proposals 3(a) to 3(f)
Shareholders of each Fund are being asked to approve amendments and restatements of the fundamental
investment restrictions that apply to that Fund. The amendment to each investment restriction is
set forth in a separate proposal below (Proposals 3(a) to 3(h)), and the Funds that will vote on
each proposal are identified under the caption for that proposal (Proposal 3(b), however, does not
apply to certain Funds, as indicated in the discussion of the Proposal). For each proposal, the
term Funds refers to the Funds voting on the particular proposal. The Adviser has reviewed each
of the current investment restrictions and has recommended to a Board that they be amended and
restated. The primary purpose of the proposed amendments is to conform and standardize many of the
investment restrictions that apply to the Funds and to other funds in the John Hancock Fund
Complex. Standardizing the investment restrictions across the John Hancock Fund Complex is
expected to facilitate more effective management of the funds by the Adviser and the subadvisers,
enhance monitoring compliance with applicable restrictions and eliminate conflicts among comparable
restrictions resulting from minor variations in their terms. In addition, to reflect changes over
time in industry practices and regulatory requirements, the proposed amendments are intended to
update those fundamental restrictions that are more restrictive than are required under the federal
securities laws or that are no longer required. The proposed amendments are also intended to
simplify each Funds fundamental restrictions and to incorporate maximum flexibility that will
permit the investment restrictions to accommodate future regulatory changes without the need for
further shareholder action. The proposed amendments are not expected to have any material effect
on the manner in which any Fund is managed or on its current investment objective.
Each Board has concluded that the proposed amendments to the investment restrictions are
appropriate and will benefit the Funds and their shareholders. Each Board unanimously recommends
that shareholders of each Fund approve the proposed amendments applicable to that Fund.
If approved by shareholders of a Fund, each amended investment restriction will become effective as
to that Fund when that Funds SAI is revised or supplemented to reflect the amendment. If a
proposed amendment is not approved by shareholders of a Fund, the current investment restriction
will remain in effect as to that Fund.
Proposals 3(g) to 3(o)
Each of the relevant Boards has concluded that the proposed elimination of the blue sky investment
restrictions with respect to the Funds is appropriate and will benefit each Fund and its
shareholders. The proposed amendments are
21
not expected to have any material effect on the manner in which any Fund is managed or on its
current investment objective. Each relevant Board unanimously recommends that shareholders of the
applicable Funds approve the proposed elimination of these blue sky restrictions.
If approved by shareholders of the applicable Funds, the elimination of each such blue sky
restriction will become effective when the Funds SAI is revised or supplemented to reflect the
elimination. If a proposed elimination is not approved by a Funds shareholders, the current
investment restriction will remain in effect as to the Fund.
Required Vote
Shareholders of each Fund will vote separately on each proposed amendment that applies to that
Fund. As to any Fund, approval of each of Proposals 3(a) to 3(o) will require the affirmative vote
of a Majority of the Outstanding Voting Securities of that Fund.
PROPOSAL 3(A) AMENDED FUNDAMENTAL RESTRICTION RELATING TO CONCENTRATION
(All Funds)
Under the 1940 Act, a funds policy regarding concentration of investments in the securities of
companies in any particular industry must be fundamental. While the 1940 Act does not define what
constitutes concentration in an industry, the staff of the SEC takes the position that any fund
that invests more than 25% of its total assets in a particular industry (excluding the U.S.
government, its agencies or instrumentalities) is deemed to be concentrated in that industry.
The following are the statements of each Funds current investment restriction relating to
concentration.
Balanced Fund, Classic Value Fund, Classic Value Fund II, Global Opportunities Fund, Government
Income Fund, Greater China Opportunities Fund, High Yield Fund, International Classic Value Fund,
Large Cap Select Fund, Mid Cap Equity Fund, Small Cap Fund, Small Cap Intrinsic Value Fund,
Sovereign Investors Fund and U.S. Global Leaders Growth Fund
The Fund may not purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value of its
investments in such industry would exceed 25% of its total assets taken at market
value at the time of such investment. This limitation does not apply to investments
in obligations of the U.S. Government or any of its agencies, instrumentalities or
authorities.
Bond Fund, Small Cap Equity Fund and Strategic Income Fund
The Fund may not purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after such purchase, the
value of its investments in such industry would exceed 25% of its total assets taken
at market value at the time of each investment. This limitation does not apply to
investments in obligations of the U.S. Government or any of its agencies or
instrumentalities.
California Tax-Free Income Fund, High Yield Municipal Bond Fund and Tax-Free Bond Fund
The Fund may not invest 25% or more of the value of its assets in any one industry,
provided that this limitation does not apply to: (i) tax-exempt municipal securities
other than those tax-exempt municipal securities backed only by assets and revenues
of non-governmental issuers and (ii) obligations of the U.S. Government or any of
its agencies, instrumentalities or authorities.
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Financial Industries Fund
The Fund may not purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value of its
investments in such industry would exceed 25% of its total assets taken at market
value at the time of such investment; except that the Fund will ordinarily invest
more than 25% of its assets in the financial services sector. This limitation does
not apply to investments in obligations of the U.S. government or any of its
agencies, instrumentalities or authorities.
Global Real Estate Fund
The Fund may not purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value of its
investments in such industry would equal or exceed 25% of its total assets taken at
market value at the time of such investment; except that the Fund intends to invest
more than 25% of its total assets in real estate companies as defined in the
prospectus. This limitation does not apply to investments in obligations of the
U.S. Government or any of its agencies or instrumentalities.
Health Sciences Fund
The Fund may not purchase securities, other than obligations of the U.S. Government
or any of its agencies or instrumentalities, if such purchase would cause 25% or
more of the value of the Funds total assets to be invested in securities of issuers
conducting their principal business activities in the same industry, except that the
Fund shall invest at least 25% of the value of its total assets in securities of
issuers in the health care group of industries.
Investment Grade Bond Fund
The Fund may not invest more than 25% of its total assets in the securities of
issuers whose principal business activities are in the same industry (excluding
obligations of the U.S. Government, its agencies and instrumentalities and
repurchase agreements) except that the Fund may invest all or substantially all of
its assets in another registered investment company having substantially the same
objectives as the Fund.
Large Cap Equity Fund
The Fund may not purchase any securities, other than obligations of domestic banks
or of the U.S. Government, or its agencies or instrumentalities, if as a result of
such purchase more than 25% of the value of the Funds total assets would be
invested in the securities of issuers in any one industry.
Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
The Fund may not purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after such purchase, the
value of its investments in such industry would exceed 25% of its total assets taken
at market value at the time of each investment. (Tax-Exempt Bonds and securities
issued or guaranteed by the United States Government and its agencies and
instrumentalities are not subject to this limitation.)
Money Market Fund
The Fund may not purchase the securities of issuers conducting their principal
activity in the same industry if, immediately after such purchase, the value of its
investments in such industry would equal or exceed 25% of its total assets taken at
market value at the time of such investment. This
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limitation does not apply to investments in obligations of the U.S. Government or
any of its agencies, instrumentalities or authorities.
The Fund may not invest more than 25% of its total assets in obligations issued by
(i) foreign banks or (ii) foreign branches of U.S. banks where the Adviser has
determined that the U.S. bank is not unconditionally responsible for the payment
obligations of the foreign branch. Also, the Fund may not purchase securities of
any issuer (other than securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities) if such purchase, at the time thereof, would cause
the Fund to hold more than 10% of any class of securities of such issuer. For this
purpose, all indebtedness of an issuer maturing in less than one year shall be
deemed a single class and all preferred stock of an issuer shall be deemed a single
class.
Regional Bank Fund
The Fund may not purchase any securities which would cause more than 25% of the
market value of the Funds total assets at the time of such purchase to be invested
in the securities of one or more issuers having their principal business activities
in the same industry, provided that there is no limitation with respect to
investments in obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities; provided that, notwithstanding the foregoing, the Fund will
invest more than 25% of its total assets in issuers in the banking industry; as more
fully set forth in the Funds prospectus.
Proposed Revision
Under the proposed amendment, the restriction with respect to concentration for all Funds, except
Money Market Fund, will provide as follows:
Each Fund may not concentrate its investments in a particular industry, as that term
is used in the 1940 Act, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time.
Under the proposed amendment, the restriction with respect to concentration for Money Market Fund
will provide as follows:
The Fund may not concentrate its investments in a particular industry, as that term
is used in the 1940 Act, as amended, and as interpreted or modified by regulatory
authority having jurisdiction, from time to time. For the elimination of doubt,
this limitation does not apply to investments in obligations of the U.S. Government
or any of its agencies, instrumentalities or authorities and instruments issued by
U.S. banks, including foreign braches of U.S. banks if the Adviser has determined
that the U.S. bank unconditionally responsible for the payment obligations of the
foreign branch.
In addition, certain Funds will have fundamental policies to concentrate in particular industries
or market sectors, as follows:
California Tax-Free Income Fund, High Yield Municipal Bond Fund,
Massachusetts Tax-Free Income Fund, New York Tax-Free Income Fund, and
Tax-Free Bond Fund:
With respect to the Fund, the fundamental restriction on
concentration does not apply to investments in tax-exempt
municipal securities other than those tax-exempt municipal
securities backed only by assets and revenues of
non-governmental issuers.
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The Financial Industries Fund will normally invest more than 25% of its
assets in the financial services sector.
The Global Real Estate Fund will normally invest more than 25% of its total
assets in real estate companies as defined in the Funds prospectus.
The Health Sciences Fund will normally invest at least 25% of the value of
its total assets in securities of issuers in the health care group of
industries.
The Regional Bank Fund will normally invest more than 25% of assets in the
banking industry as defined in the Funds prospectus.
Discussion of Proposal. The proposed amendment permits investment in an industry up to the most
recently prescribed limits under the 1940 Act and related regulatory interpretations. In addition,
the proposed amendment is expected to reduce administrative and compliance burdens by simplifying
and making uniform the fundamental investment restriction with respect to concentration. As noted,
the 1940 Act does not define what constitutes concentration in an industry, but the SEC has taken
the position that investment of 25% or more of a Funds total assets in one or more issuers
conducting their principal business activities in the same industry (excluding the U.S. Government,
its agencies or instrumentalities) constitutes concentration. The Funds proposed fundamental
restriction is consistent with this interpretation.
Each applicable Board, including all the Independent Trustees, recommends that shareholders of each
Fund vote FOR Proposal 3(a).
PROPOSAL 3(B) AMENDED FUNDAMENTAL RESTRICTION RELATING TO DIVERSIFICATION
(All Funds, except California Tax-Free Income Fund, Greater China Opportunities Fund, Health
Sciences Fund, High Yield Municipal Bond Fund, International Classic Value Fund and U.S. Global
Leaders Growth Fund)
Section 5(b)(1) of the 1940 Act sets forth the requirements that must be met for an investment
company to be diversified. Section 13(a)(1) of the 1940 Act provides that an investment company
may not change its classification from diversified to non-diversified unless authorized by the vote
of a majority of its outstanding voting securities.
A diversified fund is limited as to the amount it may invest in any single issuer. Specifically,
with respect to 75% of its total assets, a diversified fund currently may not invest in a security
if, as a result of such investment, more than 5% of its total assets (calculated at the time of
purchase) would be invested in securities of any one issuer. In addition, with respect to 75% of
its total assets, a diversified fund may not hold more than 10% of the outstanding voting
securities of any one issuer. Under the 1940 Act, these restrictions do not apply to U.S.
government securities, securities of other investment companies, cash and cash items.
The following are the statements of each Funds current investment restriction relating to
diversification.
Balanced Fund, Classic Value Fund, Classic Value Fund II, Global Opportunities Fund, Global Real
Estate Fund, High Yield Fund, Investment Grade Bond Fund, Large Cap Select Fund, Mid Cap Equity
Fund, Small Cap Fund, Small Cap Intrinsic Value Fund and Sovereign Investors Fund
The Fund may not with respect to 75% of the Funds total assets, invest more than 5%
of the Funds total assets in the securities of any single issuer or own more than
10% of the outstanding voting securities of any one issuer, in each case other than
(i) securities issued or guaranteed by
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the U.S. Government, its agencies or its instrumentalities or (ii) securities of
other investment companies.
Bond Fund
The Fund may not purchase securities of an issuer, (other than the U.S. Government,
its agencies or instrumentalities) if (a) such purchase would cause more than 5% of
the Funds total assets taken at market value to be invested in the securities of
such issuer, or (b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.
Financial Industries Fund, Regional Bank Fund and Small Cap Equity Fund
The Fund may not with respect to 75% of total assets purchase, securities of an
issuer (other than the U.S. Government, its agencies, instrumentalities or
authorities), if (a) such purchase would cause more than 5% of the Funds total
assets taken at market value to be invested in the securities of such issuer, or (b)
such purchase would at the time result in more than 10% of the outstanding voting
securities of such issuer being held by the Fund.
Government Income Fund and Money Market Fund
The Fund may not purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of its total assets (taken at market value) to be
invested in the securities of such issuer, other than securities issued or
guaranteed by the United States or any state or political subdivision thereof, or
any political subdivision of any such state, or any agency or instrumentality of the
United States, any state or political subdivision thereof, or any political
subdivision of any such state. In applying these limitations, a guarantee of a
security will not be considered a security of the guarantor, provided that the value
of all securities issued or guaranteed by that guarantor, and owned by the Fund,
does not exceed 10% of the Funds total assets. In determining the issuer of a
security, each state and each political subdivision, agency, and instrumentality of
each state and each multi state agency of which such state is a member is a separate
issuer. Where securities are backed only by assets and revenues of a particular
instrumentality, facility or subdivision, such entity is considered the issuer.
Large Cap Equity Fund
The Fund may not purchase securities which will result in the Funds holdings of the
issuer thereof to be more than 5% of the value of the Funds total assets (exclusive
of U.S. Government securities) and may not purchase more than 10% of the voting
securities of any class of securities of any one issuer.
Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
Each Fund may not purchase securities of an issuer (other than the U.S. Government,
its agencies or instrumentalities), if such purchase would cause more than 10% of
the outstanding voting securities of such issuer to be held by the Fund.
Strategic Income Fund
The Fund may not purchase securities of an issuer (other than the U.S. Government,
its agencies or instrumentalities), if (i) more than 5% of the Funds total assets
taken at market value would be invested in the securities of such issuer, except
that up to 25% of the Funds total assets may be invested in securities issued or
guaranteed by any foreign government or its agencies or instrumentalities, or, (ii)
such purchase would at the time result in more than 10% of the outstanding voting
securities of such issuer being held by the Fund.
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Tax-Free Bond Fund
The Fund may not with respect to 75% of its total assets, purchase securities (other
than obligations issued or guaranteed by the United States government, its agencies
of instrumentalities and shares of other investment companies) of any issuer if the
purchase would cause immediately thereafter more than 5% of the value of the Funds
total assets to be invested in the securities of such issuer or the Fund would own
more than 10% of the outstanding voting securities of such issuer.
Proposed Revision
Under the proposed amendment, the restriction with respect to diversification will provide as
follows:
Each Fund has elected to be treated as a diversified investment company, as that
term is used in the 1940 Act, as amended, and as interpreted or modified by
regulatory authority having jurisdiction, from time to time.
The proposed restriction with respect to diversification will apply to all Funds, except California
Tax-Free Income Fund, Greater China Opportunities Fund, Health Sciences Fund, High Yield Municipal
Bond Fund, International Classic Value Fund and U.S. Global Leaders Growth Fund.
Discussion of Proposal. The proposed amendment modifies each relevant Funds fundamental
investment restriction regarding the Funds classification as a diversified fund under the 1940
Act to rely on the definition of the term diversified in the 1940 Act rather than stating the
relevant limitations expressed under current law. By relying on the definition of the term
diversified, the proposed amendment also clarifies that securities issued by other investment
companies are not subject to the fundamental restriction regarding portfolio diversification. In
addition, the proposed amendment is expected to reduce administrative burdens by simplifying and
making uniform the fundamental investment restriction with respect to diversification.
If the shareholders of the Government Income Fund and Money Market Fund approve this proposal, each
relevant Board will adopt the following non-fundamental policy for each of these Funds:
The Fund, in implementing its fundamental policy on diversification, will not
consider a guarantee of a security to be a security of the guarantor, provided that
the value of all securities issued or guaranteed by that guarantor, and owned by the
Fund, does not exceed 10% of the Funds total assets. In determining the issuer of
a security, each state and each political subdivision, agency, and instrumentality
of each state and each multi state agency of which such state is a member is a
separate issuer. Where securities are backed only by assets and revenues of a
particular instrumentality, facility or subdivision, such entity is considered the
issuer.
In addition, if the shareholders of the Government Income Fund approve this proposal, the relevant
Board will adopt the following non-fundamental policy for this Fund:
The Fund may not purchase securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities) if such
purchase, at the time thereof, would cause the Fund to hold more than 10% of any
class of securities of such issuer. For this purpose, all indebtedness of an issuer
shall be deemed a single class and all preferred stock of an issuer shall be deemed
a single class.
Each applicable Board, including all the Independent Trustees, recommends that shareholders of each
applicable Fund vote FOR Proposal 3(b).
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PROPOSAL 3(C) AMENDED FUNDAMENTAL RESTRICTION RELATING TO UNDERWRITING
(All Funds)
Sections 8(b)(1)(D) and 13(a)(2) of the 1940 Act together require that each Fund have an investment
restriction addressing the underwriting of securities. Section 12(c) of the 1940 Act prohibits
those Funds that are diversified investment companies from making any underwriting commitments in
excess of limits set forth in that Section. None of the Funds intends to enter into formal
underwriting commitments. Certain Funds may acquire restricted securities (i.e., securities that
may be sold only if registered under the Securities Act of 1933, as amended, or pursuant to an
exemption from registration such as that provided by Rule 144A). These acquisitions, however, are
not deemed to be underwriting commitments within the meaning of Section 12(c).
The following are the statements of each Funds current investment restriction relating to
underwriting.
Balanced Fund, Bond Fund, Classic Value Fund, Classic Value Fund II, Financial Industries Fund,
Global Opportunities Fund, Global Real Estate Fund, Government Income Fund, Greater China
Opportunities Fund, Health Sciences Fund, High Yield Fund, International Classic Value Fund, Large
Cap Equity Fund, Large Cap Select Fund, Mid Cap Equity Fund, Regional Bank Fund, Small Cap Fund,
Small Cap Equity Fund, Small Cap Intrinsic Value Fund, Sovereign Investors Fund, Strategic Income
Fund, and U.S. Global Leaders Growth Fund
The Fund may not act as an underwriter, except to the extent that in connection with
the disposition of portfolio securities, the Fund may be deemed to be an underwriter
for purposes of the Securities Act of 1933.
California Tax-Free Income Fund, High Yield Municipal Bond Fund and Tax-Free Bond Fund
The Fund may not underwrite the securities of other issuers, except insofar as the
Fund may be deemed an underwriter under the Securities Act of 1933 in disposing of a
portfolio security.
Investment Grade Bond Fund
The Fund may not underwrite securities issued by other persons, except insofar as
the Fund may technically be deemed an underwriter under the Securities Act of 1933
in selling a security, and except that the Fund may invest all or substantially all
of its assets in another registered investment company having substantially the same
investment objectives as the Fund.
Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
Each Fund may not act as an underwriter, except to the extent that in connection
with the disposition of Fund securities, the Fund may be deemed to be an underwriter
for purposes of the Securities Act of 1933. The Fund may also participate as part
of a group in bidding for the purchase of Tax-Exempt Bonds directly from an issuer
in order to take advantage of the lower purchase price available to members of such
groups.
Money Market Fund
The Fund may not underwrite securities issued by other persons except insofar as the
Fund may technically be deemed an underwriter under the Securities Act of 1933 in
selling a portfolio security.
28
Proposed Revision
Under the proposed amendment, the restriction with respect to underwriting will provide as follows:
Each Fund may not engage in the business of underwriting securities issued by
others, except to the extent that a Fund may be deemed to be an underwriter in
connection with the disposition of portfolio securities.
In addition, certain tax-exempt Funds will have a fundamental policy with respect to acquiring
tax-exempt securities, as follows:
California Tax-Free Income Fund, High Yield Municipal Bond Fund,
Massachusetts Tax-Free Income Fund, New York Tax-Free Income Fund and
Tax-Free Bond Fund:
The Fund may participate as part of a group in bidding for the
purchase of tax-exempt debt securities directly from an issuer in
order to take advantage of the lower purchase price available to
members of such groups.
Discussion of Proposal. The amendment revises the current investment restriction without making
any material change and will conform the Funds restriction relating to underwriting to a format
has become standard for the John Hancock Fund Complex.
Each applicable Board, including all the Independent Trustees, recommends that shareholders of each
Fund vote FOR Proposal 3(c).
PROPOSAL 3(D) AMENDED FUNDAMENTAL RESTRICTION RELATING TO REAL ESTATE
(All Funds)
Sections 8(b)(1)(F) and 13(a)(2) of the 1940 Act together require each Fund to have an investment
restriction governing the purchase or sale of real estate. The 1940 Act does not prohibit an
investment company from investing in real estate, either directly or indirectly.
The following are the statements of each Funds current investment restriction relating to real
estate. (The Global Real Estate Fund currently has no investment restriction relating to investing
in real estate.)
Balanced Fund and Sovereign Investors Fund
The Fund may not purchase or sell real estate, or any interest therein, including
real estate mortgage loans, except that the Fund may: (i) hold and sell real estate
acquired as the result of its ownership of securities, or (ii) invest in securities
of corporate or governmental entities secured by real estate or marketable interests
therein or securities issued by companies (other that real estate limited
partnerships) that invest in real estate or interests therein.
Bond Fund, Health Sciences Fund and Strategic Income Fund
The Fund may not purchase or sell real estate or any interest therein, except that
the Fund may invest in securities of corporate or governmental entities secured by
real estate or marketable interests therein or securities issued by companies that
invest in real estate or interests therein.
29
California Tax-Free Income Fund, High Yield Municipal Bond Fund and Tax-Free Bond Fund
The Fund may not purchase or sell real estate, real estate investment trust
securities. This limitation shall not prevent the Fund from investing in municipal
securities secured by real estate or interests in real estate or holding real estate
acquired as a result of owning such municipal securities.
Classic Value Fund, Classic Value Fund II, Financial Industries Fund, Global Opportunities Fund,
Greater China Opportunities Fund, High Yield Fund, International Classic Value Fund, Large Cap
Select Fund, Mid Cap Equity Fund, Small Cap Fund, Small Cap Equity Fund, Small Cap Intrinsic Value
Fund, and U.S. Global Leaders Growth Fund
The Fund may not purchase, sell or invest in real estate, but subject to its other
investment policies and restrictions may invest in securities of companies that deal
in real estate or are engaged in the real estate business. These companies include
real estate investment trusts and securities secured by real estate or interests in
real estate. The Fund may hold and sell real estate acquired through default,
liquidation or other distributions of an interest in real estate as a result of the
Funds ownership of securities.
Government Income Fund and Money Market Fund
The Fund may not purchase or retain real estate (including limited partnership
interests but excluding securities of companies, such as real estate investment
trusts, which deal in real estate or interests therein and securities secured by
real estate), or mineral leases, commodities or commodity contracts (except
contracts for the future delivery of fixed income securities, stock index and
currency futures and options on such futures) in the ordinary course of its
business. The Fund reserves the freedom of action to hold and to sell real estate
or mineral leases, commodities or commodity contracts acquired as a result of the
ownership of securities.
Investment Grade Bond
The Fund may not purchase or sell real estate (including limited partnership
interests) other than securities secured by real estate or interests therein
including mortgage-related securities or interests in oil, gas or mineral leases in
the ordinary course of business (the Fund reserves the freedom of action to hold and
to sell real estate acquired as a result of the ownership of securities).
Large Cap Equity Fund
The Fund may not invest in real estate (including interests in real estate
investment trusts).
Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
Each Fund may not purchase or sell real estate or any interest therein, but this
restriction shall not prevent the Fund from investing in Tax-Exempt Bonds secured by
real estate or interests therein.
Regional Bank Fund
The Fund may not purchase or sell real estate although the Fund may purchase and
sell securities which are secured by real estate, mortgages or interests therein, or
issued by companies which invest in real estate or interests therein; provided,
however, that the Fund will not purchase real estate limited partnership interests.
30
Proposed Revision
Under the proposed amendment, the restriction with respect to real estate will provide as follows:
Each Fund may not purchase or sell real estate, which term does not include
securities of companies which deal in real estate or mortgages or investments
secured by real estate or interests therein, except that each Fund reserves freedom
of action to hold and to sell real estate acquired as a result of the Funds
ownership of securities.
Discussion of Proposal. The proposed restriction permits Funds to invest directly in securities
issued by companies investing in real estate and interests in real estate as well as in mortgages
and mortgage-backed securities. The proposal also permits each Fund to hold and to sell real
estate acquired as a result of the Funds ownership of securities. The amendment will conform each
Funds investment restriction with respect to real estate to a format that has become standard for
the John Hancock Fund Complex.
Each applicable Board, including all the Independent Trustees, recommends that shareholders of each
Fund vote FOR Proposal 3(d).
PROPOSAL 3(E) AMENDED FUNDAMENTAL RESTRICTION RELATING TO LOANS
(All Funds)
Sections 8(b)(1)(G) and 13(a)(2) of the 1940 Act together require that each Fund have an investment
restriction governing the making of loans to other persons. In addition to a loan of cash, a loan
may include certain transactions and investment-related practices under certain circumstances
(e.g., lending portfolio securities, purchasing certain debt instruments and entering into
repurchase agreements).
The following are the statements of each Funds current investment restriction relating to loans.
Balanced Fund, Bond Fund, Classic Value Fund, Classic Value Fund II, Global Opportunities Fund,
Global Real Estate Fund, Greater China Opportunities Fund, Health Sciences Fund, High Yield Fund,
International Classic Value Fund, Investment Grade Bond Fund, Large Cap Equity Fund, Large Cap
Select Fund, Mid Cap Equity Fund, Small Cap Fund, Small Cap Intrinsic Value Fund, Sovereign
Investors Fund, Strategic Income Fund, and U.S. Global Leaders Growth Fund
The Fund may not make loans, except that the Fund may (i) lend portfolio securities
in accordance with the Funds investment policies up to 33 1/3% of the Funds total
assets taken at market value, (ii) enter into repurchase agreements, and (iii)
purchase all or a portion of an issue of publicly distributed debt securities, bank
loan participation interests, bank certificates of deposit, bankers acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities.
California Tax-Free Income Fund, High Yield Municipal Bond Fund and Tax-Free Bond Fund
The Fund may not make loans, except that the Fund may (i) lend portfolio securities
in accordance with the Funds investment policies up to 33 1/3% of the Funds total
assets taken at market value, (ii) enter into repurchase agreements, and (iii)
purchase all or a portion of an issue of publicly distributed debt securities,
interests in bank loans, including without limitation, participation interests, bank
certificates of deposit, bankers acceptances, debentures or other securities,
whether or not the purchase is made upon the original issuance of the securities.
Financial Industries Fund and Small Cap Equity Fund
The Fund may not make loans, except that the Fund may lend portfolio securities in
accordance with the Funds investment policies. The Fund does not, for this
purpose, consider repurchase
31
agreements, the purchase of all or a portion of an issue of publicly distributed
bonds, bank loan participation agreements, bank certificates of deposit, bankers
acceptances, debentures or other securities, whether or not the purchase is made
upon the original issuance of the securities, to be the making of a loan.
Government Income Fund and Money Market Fund
The Fund may not make loans to other persons except by the purchase of obligations
in which the Fund is authorized to invest and by entering into repurchase
agreements; provided that the Fund may lend its portfolio securities not in excess
of 30% of its total assets (taken at market value). Not more than 10% of the Funds
total assets (taken at market value) will be subject to repurchase agreements
maturing in more than seven days. For these purposes the purchase of all or a
portion of an issue of debt securities shall not be considered the making of a loan.
Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
The Fund may not make loans, except that the Fund (1) may lend portfolio securities
in accordance with the Funds investment policies in an amount up to 33 1/3% of the
Funds total assets taken at market value, (2) enter into repurchase agreements, and
(3) purchase all or a portion of an issue of debt securities, bank loan
participation interests, bank certificates of deposit, bankers acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities.
Regional Bank Fund
The Fund may not make loans, except that the Fund may purchase or hold debt
instruments and may enter into repurchase agreements in accordance with its
investment objective and policies.
Proposed Revision
Under the proposed amendment, the restriction with respect to loans will provide as follows:
Each Fund may not make loans except as permitted under the 1940 Act, as amended, and
as interpreted or modified by regulatory authority having jurisdiction, from time to
time.
Discussion of Proposal. The proposed amendment would allow each Fund to lend money and other
assets thus becoming a creditor to the full extent permitted under the 1940 Act. Thus, the
Funds would continue to be able to engage in the types of transactions presently permitted by the
current restrictions, such as securities loans and repurchase agreements, as well as to engage in
other activities that could be deemed to be lending, such as the acquisition of loans, loan
participations and other forms of debt instruments. Loans and debt instruments involve the risk
that the party responsible for repaying a loan or paying the principal and interest on a debt
instrument will not meet its obligation. The proposed amendment is also intended to conform each
Funds fundamental restriction with respect to loans to a format that has become standard for the
John Hancock Fund Complex.
Each Board, including all the Independent Trustees, recommends that shareholders of each Fund vote
FOR Proposal 3(e).
PROPOSAL 3(F) AMENDED FUNDAMENTAL RESTRICTION RELATING TO SENIOR SECURITIES
(All Funds)
Under Section 18(f)(1) of the 1940 Act, a fund may not issue senior securities, a term that is
defined, generally, to refer to obligations that have a priority over shares of the fund with
respect to the distribution of its assets or the payment of dividends. Sections 8(b) (1) (C) and
13(a) (2) of the 1940 Act together require that each Fund have a
32
fundamental restriction addressing senior securities. SEC staff interpretations permit a fund,
under certain conditions, to engage in a number of types of transactions that might otherwise be
considered to create senior securities, including short sales, certain options and futures
transactions, reverse repurchase agreements and securities transactions that obligate the fund to
pay money at a future date (such as when-issued, forward commitment or delayed delivery
transactions).
The following are the statements of each Funds current investment restriction relating to senior
securities.
Balanced Fund, Financial Industries Fund, Global Opportunities Fund, Global Real Estate Fund, Mid
Cap Equity Fund, Small Cap Equity Fund, Small Cap Intrinsic Value Fund, and Sovereign Investors
Fund
The Fund may not issue senior securities, except as permitted by [the Funds
fundamental investment restrictions on] borrowing, commodities and loans and as
otherwise permitted under the 1940 Act. For purposes of this restriction, the
issuance of shares of beneficial interest in multiple classes or series, the
deferral of trustees fees, the purchase or sale of options, futures contracts and
options on futures contracts, forward commitments, forward foreign exchange
contracts and repurchase agreements entered into in accordance with the Funds
investment policies are not deemed to be senior securities.
Bond Fund
The Fund may not issue senior securities, except as permitted by [the Funds
fundamental investment restrictions on borrowing, commodities and loans]. For
purposes of this restriction, the issuance of shares of beneficial interest in
multiple classes or series, the purchase or sale of options, futures contracts and
options on futures contracts, forward commitments, forward foreign exchange
contracts and repurchase agreements entered into in accordance with the Funds
investment policy, and the pledge, mortgage or hypothecation of the Funds assets
within the meaning of [the Funds fundamental investment policy with respect to
pledging assets] are not deemed to be senior securities.
California Tax-Free Income Fund and Tax-Free Bond Fund
The Fund may not issue any senior securities, except insofar as the Fund may be
deemed to have issued a senior security by: entering into a repurchase agreement;
purchasing securities on a when-issued or delayed delivery basis; purchasing or
selling any options or financial futures contract; borrowing money or lending
securities in accordance with applicable investment restrictions.
Classic Value Fund, Classic Value Fund II, Greater China Opportunities Fund, International Classic
Value Fund, Large Cap Select Fund, Small Cap Fund and U.S. Global Leaders Growth Fund
The Fund may not issue senior securities, except as permitted by the Funds
fundamental investment restrictions on borrowing, lending and investing in
commodities and as otherwise permitted under the 1940 Act. For purposes of this
restriction, the issuance of shares of beneficial interest in multiple classes or
series, the deferral of trustees fees, the purchase or sale of options, futures
contracts and options on futures contracts, forward commitments, forward foreign
exchange contracts and repurchase agreements entered into in accordance with the
Funds investment policies are not deemed to be senior securities.
Government Income Fund, High Yield Fund and Investment Grade Bond Fund
The Fund may not issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder.
33
Health Sciences Fund
The Fund may not issue senior securities, except as permitted by [the Funds
fundamental investment restrictions on] borrowing and commodities. For purposes of
this restriction the issuance of shares of beneficial interest in multiple classes
or series, the purchase or sale of options, futures contracts and options on futures
contracts, forward contracts, forward commitments and repurchase agreements entered
into in accordance with the Funds investment policies, and the pledge, mortgage or
hypothecation of the Funds assets within the meaning of [the Funds fundamental
investment policy with respect to pledging assets], are not deemed to be senior
securities.
Large Cap Equity Fund
The Fund may not issue senior securities as defined in the 1940 Act and the rules
thereunder; except insofar as the Fund may be deemed to have issued a senior
security by reason of entering into a repurchase agreement or engaging in permitted
borrowings.
Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
The Fund may not issue senior securities, except as permitted by [the Funds
fundamental investment restrictions on] borrowing and commodities. For purposes of
this restriction, the issuance of shares of beneficial interest in multiple classes
or series, the purchase or sale of options, futures contracts and options on futures
contracts, forward commitments, and repurchase agreements entered into in accordance
with the Funds investment policies, and the pledge, mortgage or hypothecation of
the Funds assets within the meaning of [the Funds fundamental investment policy
with respect to pledging assets] are not deemed to be senior securities.
High Yield Municipal Bond Fund and Money Market Fund
The Fund may not issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder. For the purpose of this restriction, collateral
arrangements with respect to options, futures contracts and options on futures
contracts and collateral arrangements with respect to initial and variation margins
are not deemed to be the issuance of a senior security.
Regional Bank Fund
The Fund may not issue senior securities except as appropriate to evidence
indebtedness which the Fund is permitted to incur, provided that, to the extent
applicable, (i) the purchase and sale of futures contracts or related options, (ii)
collateral arrangements with respect to futures contracts, related options, forward
foreign currency exchange contracts or other permitted investments of the Fund as
described in the Prospectus, including deposits of initial and variation margin, and
(iii) the establishment of separate classes of shares of the Fund for providing
alternative distribution methods are not considered to be the issuance of senior
securities for purposes of this restriction.
Strategic Income Fund
The Fund may not issue senior securities, except as permitted by [the Funds other
stated investment policies]. For purposes of this restriction, the issuance of
shares of beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward foreign
currency exchange contracts, forward commitments and repurchase agreements entered
into in accordance with the Funds investment policies, and the pledge, mortgage or
hypothecation of the Funds assets within the meaning of [the Funds fundamental
investment policy with respect to pledging assets], are not deemed to be senior
securities.
34
Proposed Revision
Under the proposed amendment, the restriction with respect to senior securities will provide as
follows:
Each Fund may not issue senior securities, except as permitted under the 1940 Act,
as amended, and as interpreted or modified by regulatory authority having
jurisdiction, from time to time.
Discussion of Proposal. The proposed amendment permits the Funds to issue senior securities in
accordance with the most recent regulatory requirements, or, provided certain conditions are met,
to engage in the types of transactions that have been interpreted by the SEC staff as not
constituting the issuance of senior securities. Such transactions include covered reverse
repurchase transactions, futures, permitted borrowings, short sales, swaps and other strategies.
The proposed amendment is also intended to conform each Funds fundamental restriction with respect
to senior securities to a format that has become standard for the John Hancock Fund Complex.
Each Board, including all the Independent Trustees, recommends that shareholders of each Fund vote
FOR Proposal 3(f).
PROPOSAL 3(G) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO OIL, GAS AND MINERAL PROGRAMS
(Government Income Fund and Money Market Fund)
The following is the statement of these Funds current investment restriction relating to oil and
gas programs.
The Fund may not invest in direct participation interests in oil, gas or other
mineral exploration or development programs.
Discussion of Proposed Amendment. This restriction, which was previously required by state blue
sky laws, is no longer required. Eliminating this restriction promotes uniformity among the John
Hancock Fund Complex. The elimination of this fundamental restriction will not result in a
material change to the investment operation of these Funds. In addition, the concepts underlying
the current restriction are included in each such Funds fundamental restrictions on commodities.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Government Income Fund and Money Market Fund vote FOR Proposal 3(g).
PROPOSAL 3(H) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO INVESTMENT TO EXERCISE CONTROL
(Government Income Fund and Money Market Fund)
The following is the statement of these Funds current investment restriction relating to
investment to exercise control.
The Fund may not invest in companies for the purpose of exercising control or
management.
Discussion of Proposal. The 1940 Act does not require a fund to have a policy on investing for
control or management unless the fund intends to invest for the purpose of exercising control or
management of another company. As a non-fundamental restriction, the relevant Board could in the
future amend the restriction if, for example, the 1940 Act requirements change, without either of
these Funds incurring the costs of shareholder approval. In addition, reclassifying the
restriction as non-fundamental would promote uniformity among the John Hancock Fund Complex.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Government Income Fund and Money Market Fund vote FOR Proposal 3(h).
35
PROPOSAL 3(I) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO TRUSTEE AND OFFICER OWNERSHIP
(Government Income Fund, Investment Grade Bond Fund, Large Cap Equity Fund and Money Market Fund)
The following are the statements of the current investment restrictions relating to Trustee and
officer ownership for these Funds.
Government Income Fund and Money Market Fund
The Fund may not purchase or retain in its portfolio any securities issued by an
issuer any of whose officers, directors, trustees or security holders is an officer
or Trustee of the Fund, or is a member, partner, officer or Director of the Funds
investment adviser, if after the purchase of the securities of such issuer by the
Fund one or more of such persons owns beneficially more than 1/2 of 1% of the shares
or securities, or both, all taken at market value, of such issuer, and such persons
owning more than 1/2 of 1% of such shares or securities together own beneficially
more than 5% of such shares or securities, or both, all taken at market value.
Investment Grade Bond Fund
The Fund may not invest in securities of any company if, to the knowledge of the
Trust, any officer or director of the Trust or its Adviser owns more than 1/2 of 1%
of the outstanding securities of such company, and all such officers and directors
own in the aggregate more than 5% of the outstanding securities of such company.
Large Cap Equity Fund
The Fund may not purchase securities of a company in which any officer or trustee of
the Trust or the Funds investment adviser owns beneficially more than of 1% of the
securities of such company and all such officers and trustees own beneficially in
the aggregate more than 5% of the securities of such company.
Discussion of Proposal. This restriction, which was previously required by state blue sky laws, is
no longer required. Eliminating this restriction promotes uniformity among the John Hancock Fund
Complex. Potential conflicts of interest of this nature are addressed in the John Hancock Funds
Code of Ethics.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Government Income Fund, Investment Grade Bond Fund, Large Cap Equity Fund and Money Market Fund
vote FOR Proposal 3(i).
PROPOSAL 3(J) ELIMINATION OF FUNDAMENTAL RESTRICTIONS RELATING TO MARGIN INVESTMENT; SHORT
SELLING
Margin Investment
(Government Income Fund and Money Market Fund)
The following are the statements of these Funds current investment restriction relating to margin
investment.
Government Income Fund
The Fund may not purchase any securities or evidences of interest therein on margin,
except that the Fund may obtain such short term credit as may be necessary for the
clearance of purchases and
36
sales of securities and the Fund may make deposits on margin in connection with
futures contracts and related options.
Money Market Fund
The Fund may not purchase any securities or evidences of interest therein on margin,
except that the Fund may obtain such short term credit as may be necessary for the
clearance of purchases and sales of securities.
Short Selling
(Government Income Fund and Money Market Fund)
The following is the statement of these Funds current investment restriction relating to short
selling.
Government Income Fund and Money Market Fund
The Fund may not sell any security which the Fund does not own unless by virtue of
its ownership of other securities it has at the time of sale a right to obtain
securities without payment of further consideration equivalent in kind and amount to
the securities sold and provided that if such right is conditional the sale is made
upon equivalent conditions.
Margin Investment and Short Selling
(Investment Grade Bond Fund, Large Cap Equity Fund and Regional Bank Fund)
The following are the statements of the Funds current investment restrictions relating to margin
investment and short selling.
Investment Grade Bond Fund
The Fund may not make short sales of securities or purchase any security on margin,
except that the Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of securities (this restriction does not apply to
securities purchased on a when-issued basis).
Large Cap Equity Fund
The Fund may not buy securities on margin or sell short.
Regional Bank Fund
The Fund may not purchase securities on margin or sell short, except that the Fund
may obtain such short term credits as are necessary for the clearance of securities
transactions. The deposit or payment by the Fund of initial or maintenance margin
in connection with futures contracts or related options transactions is not
considered the purchase of a security on margin.
Discussion of Proposal. These restrictions, which were previously required by state blue sky laws,
are no longer required. Eliminating these restrictions promotes uniformity among the John Hancock
Fund Complex. The elimination of these fundamental restrictions will not result in a material
change to the investment operation of any of the Government Income Fund, Investment Grade Bond
Fund, Large Cap Equity Fund, Money Market Fund or Regional Bank Fund. In addition, the concepts
underlying the current restrictions are included in the Funds fundamental restrictions on
borrowing, which is proposed to be amended as described in Proposal 3(c) above, and issuing senior
securities, which is proposed to be amended as described in Proposal 3(h) above.
37
Although the SEC staffs current position restricts mutual funds from purchasing securities on
margin, as a non-fundamental policy the relevant Board could in the future amend the policy if the
regulatory restrictions change without causing the applicable Fund to incur the costs of
shareholder approval. In addition, the restriction on short sales would be eliminated to improve
uniformity and flexibility, although there is no current intention for any of these Funds to engage
in short sales.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Government Income Fund, Investment Grade Bond Fund, Large Cap Equity Fund, Money Market Fund and
Regional Bank Fund vote FOR Proposal 3(j).
PROPOSAL 3(K) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO RESTRICTED SECURITIES
(Government Income Fund and Money Market Fund)
The following are the statements of these Funds current investment restriction relating to
restricted securities.
Government Income Fund
The Fund may not knowingly invest in securities which are subject to legal or
contractual restrictions on resale or for which there is no readily available market
(e.g., trading in the security is suspended or market makers do not exist or will
not entertain bids or offers), except for repurchase agreements, if, as a result
thereof more than 10% of the Funds total assets (taken at market value) would be so
invested.
Money Market Fund
The Fund may not knowingly invest in securities which are subject to legal or
contractual restrictions on resale or for which there is no readily available market
(e.g., trading in the security is suspended or market makers do not exist or will
not entertain bids or offers), except for repurchase agreements, if, as a result
thereof more than 10% of the Funds total assets (taken at market value) would be so
invested. (The Staff of the SEC has taken the position that a money market fund may
not invest more than 10% of its net assets in illiquid securities. The Fund has
undertaken with the Staff to require, that as a matter of operating policy, it will
not invest in illiquid securities in an amount exceeding 10% of its net assets.)
Discussion of Proposal. The 1940 Act does not require that this restriction be a fundamental
investment policy of these Funds, although the SEC staff has taken the position that an open-end
investment company may not invest more than 15% of its net assets in illiquid securities (10% in
the case of money market funds, such as the Money Market Fund). Each of these Funds has, and will
continue to have, a non-fundamental policy to invest no more than 10% of its net assets in illiquid
securities.
Eliminating this restriction promotes uniformity among the John Hancock Fund Complex. As a
non-fundamental policy, the relevant Board could in the future amend the policy if, for example,
the 1940 Act requirements or the SEC staff views change, without either of these Funds incurring
the costs of shareholder approval.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Government Income Fund and Money Market Fund vote FOR Proposal 3(k).
38
PROPOSAL 3(L) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO PLEDGING ASSETS
(Balanced Fund, Bond Fund, Health Sciences Fund, Massachusetts Tax-Free Income Fund, New York
Tax-Free Income Fund and Strategic Income Fund)
The following are the statements of these Funds current investment restriction relating to
pledging or hypothecating assets.
Balanced Fund and Bond Fund
The Fund may not pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by [its fundamental restriction on] borrowing and then only
if the assets subject to such pledging, mortgaging or hypothecation do not exceed
33% of the Funds total assets taken at market value.
Health Sciences Fund, Massachusetts Tax-Free Income Fund and New York Tax-Free Income Fund
The Fund may not pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by [its fundamental restriction on] borrowing and then only
if such pledging, mortgaging or hypothecating does not exceed 10% of the Funds
total assets taken at market value.
Strategic Income Fund
The Fund may not pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by [the Funds investment policy with respect to borrowing]
and then only if such pledging, mortgaging or hypothecating does not exceed 33 1/3%
of the funds total assets taken at market value.
Discussion of Proposal. This restriction, which was previously required by state blue sky laws, is
no longer required. Eliminating this restriction promotes uniformity among the John Hancock Fund
Complex. The elimination of this fundamental restriction will not result in a material change to
the investment operation of these Funds. In addition, the concepts underlying the current
restriction are included in each such Funds fundamental restriction on borrowing and the
fundamental restriction on issuing senior securities, which is proposed to be amended as described
in Proposal 3(f) above.
The relevant Board, including all the Independent Trustees, recommends that shareholders of each of
the Balanced Fund, Bond Fund, Health Sciences Fund, Massachusetts Tax-Free Income Fund, New York
Tax-Free Income Fund and Strategic Income Fund, as applicable, vote FOR Proposal 3(l).
PROPOSAL 3(M) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO UNSEASONED COMPANIES
(Large Cap Equity Fund only)
The following is the statement of this Funds current investment restriction relating to investing
in unseasoned companies.
Large Cap Equity Fund
The Fund may not invest in a company having a record of less than three years
continuous operation, which may include the operations of any predecessor company or
enterprise to which the company has succeeded by merger, consolidation,
reorganization or purchase of assets.
39
Discussion of Proposal. This restriction, which was previously required by state blue sky laws, is
no longer required. Eliminating this restriction promotes uniformity among the John Hancock Fund
Complex. The elimination of this fundamental restriction will not result in a material change to
the investment operation of this Fund.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Large Cap Equity Fund vote FOR Proposal 3(m).
PROPOSAL 3(N) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO LOANS TO TRUST OFFICERS AND
TRUSTEES
(Large Cap Equity Fund only)
The following is the statement of this Funds current investment restriction relating to loans.
Large Cap Equity Fund
The Fund may not make loans to any of its officers or trustees, or to any firms,
corporations or syndicates in which officers or trustees of the Trust have an
aggregate interest of 10% or more. It is the intention of the Trust not to make
loans of any nature, except the Fund may enter into repurchase agreements and lend
its portfolio securities (as permitted by the 1940 Act) as referred to in its
registration statement. In addition, the purchase of a portion of an issue of a
publicly issued corporate debt security is not considered to be the making of a
loan.
Discussion of Proposal. This restriction, which was previously required by state blue sky laws, is
no longer required. Eliminating this restriction promotes uniformity among the John Hancock Fund
Complex. The elimination of this fundamental restriction will not result in a material change to
the investment operation of this Fund. We note that transactions between the Funds and their
affiliated persons, including Trustees and officers (and their affiliated persons) are regulated by
Section 17(a) of the 1940 Act and the rules thereunder. In addition, the concepts underlying the
current restrictions are included in the Funds fundamental restrictions on loans, which is
proposed to be amended as described in Proposal 3(e) above.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Large Cap Equity Fund vote FOR Proposal 3(n).
PROPOSAL 3(O) ELIMINATION OF FUNDAMENTAL RESTRICTION RELATING TO WARRANTS
(Regional Bank Fund only)
The following is the statement of this Funds current investment restriction relating to warrants.
Regional Bank Fund
The Fund may not invest more than 5% of the value of the Funds net assets in
marketable warrants to purchase common stock. Warrants acquired in units or
attached to securities are not included in this restriction.
Discussion of Proposal. This restriction, which was previously required by state blue sky laws, is
no longer required. Eliminating this restriction promotes uniformity among the John Hancock Fund
Complex. The elimination of this fundamental restriction will not result in a material change to
the investment operation of this Fund.
The relevant Board, including all the Independent Trustees, recommends that shareholders of the
Regional Bank Fund vote FOR Proposal 3(o).
40
PROPOSAL 4 APPROVAL OF AMENDMENTS CHANGING CERTAIN RULE 12B-1 PLANS FROM REIMBURSEMENT TO
COMPENSATION PLANS
(Applies as follows:
Class A, Class B and Class C shares All Funds
Class R1 shares Classic Value Fund, Classic Value Fund II, Large Cap Select Fund, U.S. Global
Leaders Growth Fund, Balanced Fund, Sovereign Investors Fund, Small Cap Equity Fund, Bond Fund and
Strategic Income Fund
Class R, Class R2, Class R3, Class R4 and Class R5 shares Balanced Fund
Shareholders of each Fund will vote separately, and individually by class of share, on Proposal 4.)
At its meeting on December 8-9, 2008, each Board, including all the Independent Trustees, approved
an amendment to the distribution plan pursuant to Rule 12b-1 under the 1940 Act (each, a 12b-1
Plan) for the Class A, Class B, Class C, Class R, Class R1, Class R2, Class R3, Class R4 and Class
R5 shares of each of the Funds (as applicable) named above. The holders of Class A, Class B, Class
C, Class R, Class R1, Class R2, Class R3, Class R4 and Class R5 shares of each of the Funds, as
applicable, are being asked to approve the amended 12b-1 Plan (the Amended 12b-1 Plan) for their
respective share classes.
The proposed amendments will change each of the current 12b-1 Plans (the Current 12b-1 Plans)
from a reimbursement to a compensation plan. The amendments will not change the maximum amount
that may be paid under the 12b-1 Plans to the Distributor, each Funds distributor in connection
with the distribution of shares of the Funds, but the Distributor will no longer be obligated to
reimburse each Fund to the extent such payments exceed distribution-related expenses incurred by
the Distributor with respect to the Fund for a particular fiscal year.
The amendments are being proposed to increase flexibility and ease of administration and accounting
and to assist in integrating the operations of the Funds. Each of the above listed classes of
shares has a 12b-1 Plan; under its Amended 12b-1 Plan, each such share class provides for Rule
12b-1 fees at the same maximum rates as the Current 12b-1 Plan, but the fees are paid under a
compensation rather than reimbursement basis.
If the shareholders of a class of shares of a Fund vote to approve the Amended 12b-1 Plan for that
class, the Amended 12b-1 Plan will become effective immediately. If the shareholders of a class of
shares of a Fund do not vote to approve the Amended 12b-1 Plan for that class, the Current 12b-1
Plan will continue to be applicable to that class.
Payments under the 12b-1 Plans
Under the Current 12b-1 Plans each of the Funds pays, and under the Amended 12b-1 Plans each of the
Funds will pay, the Distributor a fee after the end of each month at an annual rate as a percentage
of the average daily net assets attributable to Class A, Class B, Class C, Class R, Class R1, Class
R2, Class R3, Class R4 and Class R5 shares as follows:
41
|
|
|
|
|
|
|
Maximum |
|
|
Annualized |
Share Class |
|
12b-1 Fee |
|
Class A shares |
|
|
0.15 |
% |
(California Tax-Free Income Fund) |
|
|
|
|
Class A shares |
|
|
0.25 |
% |
(Classic Value Fund, Classic Value Fund II, Government Income
Fund, High Yield Fund, High Yield Municipal Bond Fund,
Investment Grade Bond Fund, Large Cap Equity Fund, Large Cap
Select Fund, Money Market Fund, Tax-Free Bond Fund and U.S.
Global Leaders Growth Fund) |
|
|
|
|
Class A shares |
|
|
0.30 |
% |
(Bond Fund, Balanced Fund, Financial Industries Fund, Global
Real Estate Fund, Global Opportunities Fund, Greater China
Opportunities Fund, Health Sciences Fund, International Classic
Value Fund, Massachusetts Tax-Free Income Fund, Mid Cap Equity
Fund, New York Tax-Free Income Fund, Regional Bank Fund, Small
Cap Fund, Small Cap Equity Fund, Small Cap Intrinsic Value
Fund, Sovereign Investors Fund, and Strategic Income Fund) |
|
|
|
|
Class B and Class C shares |
|
|
1.00 |
% |
Class R shares |
|
|
0.75 |
% |
Class R1 and R3 shares |
|
|
0.50 |
% |
Class R2 and R4 shares |
|
|
0.25 |
% |
Class R5 shares |
|
|
0.00 |
% |
Under each of the Current 12b-1 Plans, which are reimbursement plans, the Distributor retains such
amounts of the payments it receives under the plan as are appropriate to reimburse the Distributor
for actual expenses incurred in distributing and promoting the sale of a Funds shares to the
public. If the aggregate payments received by the Distributor under the Current 12b-1 Plan for a
Fund in any fiscal year exceed the expenditures made by the Distributor in that year pursuant to
that plan, the Distributor reimburses the Fund for the amount of the excess. If, however, the
expenditures made by the Distributor on a Funds behalf during any fiscal year exceed the payments
received under the Current 12b-1 Plans, the Distributor may carry over such unreimbursed expenses
to be paid in subsequent fiscal years from available 12b-1 amounts.
Under the Amended 12b-1 Plans, which are compensation plans, the Distributor will retain the entire
amount of the payments made to it, even if such amount exceeds the Distributors actual
distribution-related expenses for the applicable fiscal year. As indicated in the table below, the
share classes of most Funds already pay fees under the Current 12b-1 Plans at the maximum rate.
Under these circumstances, the Distributor recommended and each Board approved the proposed shift
from reimbursement to compensation arrangements in order to simplify the administration of each
Funds affairs.
In the event that a Fund is not fully reimbursed for payments or expenses it incurs under the Class
A Plan, these expenses will not be carried beyond twelve months from the date they were incurred.
Unreimbursed expenses under the Class B and Class C Plans will be carried forward together with
interest on the balance of these unreimbursed expenses. Unreimbursed expenses under the Class R1
Plan will be carried forward to subsequent fiscal years. A Fund does not treat unreimbursed
expenses under the Class B, Class C and Class R1 Plans as a liability of a Fund because the Funds
Trustees may terminate Class B, Class C and/or Class R1 Plans at any time.
Under a reimbursement plan, it is possible that a Funds maximum annual 12b-1 fee would exceed
reimbursable expenses for the year. As a result, in a reimbursement plan, a Fund may pay less than
its maximum 12b-1 fee to the Distributor in any given year. By contrast, under a compensation
plan, a Fund will always pay the maximum 12b-1 fee to the Distributor, which means that a Fund
could conceivably pay more in 12b-1 fees under a compensation plan. In fact, however, as a general
matter, the Funds have historically paid the entire 12b-1 fee under the reimbursement plan. The
following table illustrates the differences between the amounts payable under the two plans for the
Funds latest fiscal year.
42
The table below sets forth for the Class A, Class B, Class C, Class R, Class R1, Class R2, Class
R3, Class R4 and Class R5 shares (as applicable) of the Funds: (i) the aggregate 12b-1 fees paid
under each Current 12b-1 Plan for the Funds last respective 12-month fiscal year (and, in the case
of the Funds of Capital Series and Investment Trust, for the fiscal period ended October 31, 2008)
and such fees as a percentage of the Funds average daily net assets for that fiscal year or
period; and (ii) the pro forma aggregate 12b-1 fees that would have been paid if the Amended 12b-1
Plans had been in effect for the Funds last respective fiscal year or period, and such fees as a
percentage of the Funds average daily net assets for that fiscal year or period.
Rule 12b-1 Fee Comparisons for Funds that Did Not Change Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current 12b-1 Plans |
|
Amended 12b-1 Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of |
|
|
12-Month |
|
Aggregate 12b- |
|
% of |
|
Aggregate 12b-1 |
|
Average Net |
|
|
Fiscal Year |
|
1 Fee for last |
|
Average |
|
Fee for last FYE |
|
Assets (Pro |
Fund |
|
Ended |
|
FYE |
|
Net Assets |
|
(Pro Forma) |
|
Forma) |
Bond |
|
|
5-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
2,555,782 |
|
|
|
0.30 |
% |
|
$ |
2,555,782 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
498,096 |
|
|
|
1.00 |
% |
|
$ |
498,096 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
278,484 |
|
|
|
1.00 |
% |
|
$ |
278,484 |
|
|
|
1.00 |
% |
Class R1 |
|
|
|
|
|
$ |
7,007 |
|
|
|
0.50 |
% |
|
$ |
7,007 |
|
|
|
0.50 |
% |
California Tax-Free Income |
|
|
8-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
451,009 |
|
|
|
0.15 |
% |
|
$ |
451,009 |
|
|
|
0.15 |
% |
Class B |
|
|
|
|
|
$ |
123,691 |
|
|
|
1.00 |
% |
|
$ |
123,691 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
125,027 |
|
|
|
1.00 |
% |
|
$ |
125,027 |
|
|
|
1.00 |
% |
Financial Industries |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
2,089,798 |
|
|
|
0.30 |
% |
|
$ |
2,089,798 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
1,308,793 |
|
|
|
1.00 |
% |
|
$ |
1,308,793 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
211,309 |
|
|
|
1.00 |
% |
|
$ |
211,309 |
|
|
|
1.00 |
% |
Global Real Estate |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
143,546 |
|
|
|
0.30 |
% |
|
$ |
143,546 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
230,971 |
|
|
|
1.00 |
% |
|
$ |
230,971 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
145,150 |
|
|
|
1.00 |
% |
|
$ |
145,150 |
|
|
|
1.00 |
% |
Government Income |
|
|
5-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
817,995 |
|
|
|
0.25 |
% |
|
$ |
817,995 |
|
|
|
0.25 |
% |
Class B |
|
|
|
|
|
$ |
178,511 |
|
|
|
1.00 |
% |
|
$ |
178,511 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
82,022 |
|
|
|
1.00 |
% |
|
$ |
82,022 |
|
|
|
1.00 |
% |
Greater China Opportunities |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
475,252 |
|
|
|
0.30 |
% |
|
$ |
475,252 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
312,886 |
|
|
|
1.00 |
% |
|
$ |
312,886 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
308,840 |
|
|
|
1.00 |
% |
|
$ |
308,840 |
|
|
|
1.00 |
% |
Health Sciences |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
440,793 |
|
|
|
0.30 |
% |
|
$ |
440,793 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
617,071 |
|
|
|
1.00 |
% |
|
$ |
617,071 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
123,389 |
|
|
|
1.00 |
% |
|
$ |
123,389 |
|
|
|
1.00 |
% |
High Yield |
|
|
5-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
2,218,888 |
|
|
|
0.25 |
% |
|
$ |
2,218,888 |
|
|
|
0.25 |
% |
Class B |
|
|
|
|
|
$ |
2,097,975 |
|
|
|
1.00 |
% |
|
$ |
2,097,975 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
2,669,007 |
|
|
|
1.00 |
% |
|
$ |
2,669,007 |
|
|
|
1.00 |
% |
High Yield Municipal Bond |
|
|
8-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
186,759 |
|
|
|
0.25 |
% |
|
$ |
186,759 |
|
|
|
0.25 |
% |
Class B |
|
|
|
|
|
$ |
92,376 |
|
|
|
1.00 |
% |
|
$ |
92,376 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
148,895 |
|
|
|
1.00 |
% |
|
$ |
148,895 |
|
|
|
1.00 |
% |
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current 12b-1 Plans |
|
Amended 12b-1 Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of |
|
|
12-Month |
|
Aggregate 12b- |
|
% of |
|
Aggregate 12b-1 |
|
Average Net |
|
|
Fiscal Year |
|
1 Fee for last |
|
Average |
|
Fee for last FYE |
|
Assets (Pro |
Fund |
|
Ended |
|
FYE |
|
Net Assets |
|
(Pro Forma) |
|
Forma) |
Investment Grade Bond |
|
|
5-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
262,134 |
|
|
|
0.25 |
% |
|
$ |
262,134 |
|
|
|
0.25 |
% |
Class B |
|
|
|
|
|
$ |
77,826 |
|
|
|
1.00 |
% |
|
$ |
77,826 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
71,000 |
|
|
|
1.00 |
% |
|
$ |
71,000 |
|
|
|
1.00 |
% |
Large Cap Select |
|
|
12-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class C |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class R1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massachusetts Tax-Free
Income |
|
|
8-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
263,015 |
|
|
|
0.30 |
% |
|
$ |
263,015 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
109,475 |
|
|
|
1.00 |
% |
|
$ |
109,475 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
109,770 |
|
|
|
1.00 |
% |
|
$ |
109,770 |
|
|
|
1.00 |
% |
Mid Cap Equity |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
23,386 |
|
|
|
0.30 |
% |
|
$ |
23,386 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
28,432 |
|
|
|
1.00 |
% |
|
$ |
28,432 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
13,417 |
|
|
|
1.00 |
% |
|
$ |
13,417 |
|
|
|
1.00 |
% |
Money Market |
|
|
3-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
608,142 |
|
|
|
0.15 |
% |
|
$ |
608,142 |
|
|
|
0.15 |
% |
Class B |
|
|
|
|
|
$ |
303,876 |
|
|
|
1.00 |
% |
|
$ |
303,876 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
159,946 |
|
|
|
1.00 |
% |
|
$ |
159,946 |
|
|
|
1.00 |
% |
New York Tax-Free
Income |
|
|
8-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
125,309 |
|
|
|
0.30 |
% |
|
$ |
125,309 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
91,666 |
|
|
|
1.00 |
% |
|
$ |
91,666 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
31,307 |
|
|
|
1.00 |
% |
|
$ |
31,307 |
|
|
|
1.00 |
% |
Regional Bank |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
4,458,156 |
|
|
|
0.28 |
% |
|
$ |
4,831,311 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
1,863,169 |
|
|
|
1.00 |
% |
|
$ |
1,863,169 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
406,957 |
|
|
|
1.00 |
% |
|
$ |
406,957 |
|
|
|
1.00 |
% |
Small Cap |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
474,888 |
|
|
|
0.30 |
% |
|
$ |
474,888 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
102,088 |
|
|
|
1.00 |
% |
|
$ |
102,088 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
426,369 |
|
|
|
1.00 |
% |
|
$ |
426,369 |
|
|
|
1.00 |
% |
Small Cap Equity |
|
|
10-31-07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
1,736,088 |
|
|
|
0.30 |
% |
|
$ |
1,736,088 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
1,670,557 |
|
|
|
1.00 |
% |
|
$ |
1,670,557 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
477,043 |
|
|
|
1.00 |
% |
|
$ |
477,043 |
|
|
|
1.00 |
% |
Class R1 |
|
|
|
|
|
$ |
13,303 |
|
|
|
0.50 |
% |
|
$ |
13,303 |
|
|
|
0.50 |
% |
Strategic Income |
|
|
5-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
2,285,925 |
|
|
|
0.30 |
% |
|
$ |
2,285,925 |
|
|
|
0.30 |
% |
Class B |
|
|
|
|
|
$ |
2,073,690 |
|
|
|
1.00 |
% |
|
$ |
2,073,690 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
2,008,481 |
|
|
|
1.00 |
% |
|
$ |
2,008,481 |
|
|
|
1.00 |
% |
Class R1 |
|
|
|
|
|
$ |
39,699 |
|
|
|
0.50 |
% |
|
$ |
39,699 |
|
|
|
0.50 |
% |
Tax-Free Bond |
|
|
8-31-08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
|
|
|
$ |
1,060,645 |
|
|
|
0.25 |
% |
|
$ |
1,060,645 |
|
|
|
0.25 |
% |
Class B |
|
|
|
|
|
$ |
143,337 |
|
|
|
1.00 |
% |
|
$ |
143,337 |
|
|
|
1.00 |
% |
Class C |
|
|
|
|
|
$ |
89,954 |
|
|
|
1.00 |
% |
|
$ |
89,954 |
|
|
|
1.00 |
% |
44
Rule 12b-1 Fee Comparisons for Funds that Change Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current 12b-1 Plans |
|
Amended 12b-1 Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Average |
|
|
|
|
|
|
|
|
|
|
% of Average |
|
Aggregate 12b-1 Fee (Pro |
|
Net Assets (Pro |
|
|
Aggregate 12b-1 Fee |
|
Net Assets |
|
Forma) |
|
Forma) |
|
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
Balanced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
428,204 |
|
|
$ |
1,067,846 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
|
$ |
428,204 |
|
|
$ |
1,067,846 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
Class B |
|
$ |
281,524 |
|
|
$ |
398,539 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
281,524 |
|
|
$ |
398,539 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
177,036 |
|
|
$ |
1,059,892 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
177,036 |
|
|
$ |
1,059,892 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class R* |
|
|
|
|
|
$ |
32 |
|
|
|
|
|
|
|
0.75 |
% |
|
|
|
|
|
$ |
32 |
|
|
|
|
|
|
|
0.75 |
% |
Class R1* |
|
|
|
|
|
$ |
24 |
|
|
|
|
|
|
|
0.50 |
% |
|
|
|
|
|
$ |
24 |
|
|
|
|
|
|
|
0.50 |
% |
Class R2* |
|
|
|
|
|
$ |
16 |
|
|
|
|
|
|
|
0.25 |
% |
|
|
|
|
|
$ |
16 |
|
|
|
|
|
|
|
0.25 |
% |
Class R3* |
|
|
|
|
|
$ |
21 |
|
|
|
|
|
|
|
0.50 |
% |
|
|
|
|
|
$ |
21 |
|
|
|
|
|
|
|
0.50 |
% |
Class R4* |
|
|
|
|
|
$ |
11 |
|
|
|
|
|
|
|
0.25 |
% |
|
|
|
|
|
$ |
11 |
|
|
|
|
|
|
|
0.25 |
% |
Classic Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
14,837,961 |
|
|
$ |
6,076,361 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
|
$ |
14,837,961 |
|
|
$ |
6,076,361 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
Class B |
|
$ |
3,002,807 |
|
|
$ |
1,193,042 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
3,002,807 |
|
|
$ |
1,193,042 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
10,131,774 |
|
|
$ |
3,264,760 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
10,131,774 |
|
|
$ |
3,264,760 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class R1 |
|
$ |
138,378 |
|
|
$ |
89,711 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
|
$ |
138,378 |
|
|
$ |
89,711 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
Classic Value II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
188,642 |
|
|
$ |
91,454 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
|
$ |
188,642 |
|
|
$ |
91,454 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
Class B |
|
$ |
94,056 |
|
|
$ |
49,323 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
94,056 |
|
|
$ |
49,323 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
317,157 |
|
|
$ |
173,749 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
317,157 |
|
|
$ |
173,749 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class R1 |
|
$ |
3,684 |
|
|
$ |
774 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
|
$ |
3,684 |
|
|
$ |
774 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
Global Opportunities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
24,633 |
|
|
$ |
166,401 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
|
$ |
24,633 |
|
|
$ |
166,401 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
Class B |
|
$ |
5,379 |
|
|
$ |
35,097 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
5,379 |
|
|
$ |
35,097 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
6,239 |
|
|
$ |
94,556 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
6,239 |
|
|
$ |
94,556 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
International
Classic Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
56,702 |
|
|
$ |
26,650 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
|
$ |
56,702 |
|
|
$ |
26,650 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
Class B |
|
$ |
14,623 |
|
|
$ |
7,926 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
14,623 |
|
|
$ |
7,926 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
44,182 |
|
|
$ |
19,886 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
44,182 |
|
|
$ |
19,886 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Large Cap Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
1,791,186 |
|
|
$ |
3,688,926 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
|
$ |
1,791,186 |
|
|
$ |
3,688,926 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
Class B |
|
$ |
1,279,001 |
|
|
$ |
1,356,227 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
1,279,001 |
|
|
$ |
1,356,227 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
795,628 |
|
|
$ |
2,525,997 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
795,628 |
|
|
$ |
2,525,997 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Small Cap Intrinsic
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
360,972 |
|
|
$ |
485,769 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
|
$ |
360,972 |
|
|
$ |
485,769 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
Class B |
|
$ |
68,351 |
|
|
$ |
57,701 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
68,351 |
|
|
$ |
57,701 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
291,307 |
|
|
$ |
340,417 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
291,307 |
|
|
$ |
340,417 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Sovereign Investors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
2,391,212 |
|
|
$ |
1,631,361 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
|
$ |
2,391,212 |
|
|
$ |
1,631,361 |
|
|
|
0.30 |
% |
|
|
0.30 |
% |
Class B |
|
$ |
943,267 |
|
|
$ |
515,426 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
943,267 |
|
|
$ |
515,426 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
148,139 |
|
|
$ |
105,702 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
148,139 |
|
|
$ |
105,702 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class R1 |
|
$ |
478 |
|
|
$ |
632 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
|
$ |
478 |
|
|
$ |
632 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current 12b-1 Plans |
|
Amended 12b-1 Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Average |
|
|
|
|
|
|
|
|
|
|
% of Average |
|
Aggregate 12b-1 Fee (Pro |
|
Net Assets (Pro |
|
|
Aggregate 12b-1 Fee |
|
Net Assets |
|
Forma) |
|
Forma) |
|
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
U.S. Global Leaders
Growth |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
$ |
2,790,831 |
|
|
$ |
1,704,370 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
|
$ |
2,790,831 |
|
|
$ |
1,704,370 |
|
|
|
0.25 |
% |
|
|
0.25 |
% |
Class B |
|
$ |
1,267,698 |
|
|
$ |
706,529 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
1,267,698 |
|
|
$ |
706,529 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class C |
|
$ |
1,462,116 |
|
|
$ |
740,474 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
|
$ |
1,462,116 |
|
|
$ |
740,474 |
|
|
|
1.00 |
% |
|
|
1.00 |
% |
Class R1 |
|
$ |
22,259 |
|
|
$ |
16,590 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
|
$ |
22,259 |
|
|
$ |
16,590 |
|
|
|
0.50 |
% |
|
|
0.50 |
% |
|
|
|
* |
|
Classes R, R1, R2, R3, R4 and R5 of Balanced Fund were not offered until August 12, 2008. |
Description of Current and Amended Rule 12b-1 Plans
Rule 12b-1 under the 1940 Act permits a Fund to pay expenses associated with the distribution of
its shares in accordance with a written plan adopted by each Board and approved by its
shareholders. Pursuant to such rule, each Board and initial shareholders of the Class A, Class B,
Class C, Class R, Class R1, Class R2, Class R3, Class R4 and Class R5 shares of the Funds approved
the Current 12b-1 Plans.
Except with respect to the change from reimbursement to compensation plans, the terms of the
Current 12b-1 Plans and the proposed Amended 12b-1 Plans are the same. A copy of the form of
Amended 12b-1 Plan for each class of shares is included as Appendix E to this Proxy Statement. For
purposes of the following description, the Current and Amended 12b-1 Plans are referred to as the
12b-1 Plans. In addition, payments made under the 12b-1 Plans for each Funds respective latest
12-month fiscal year (and, in the case of the Funds of Capital Series and Investment Trust, for
each such Funds respective fiscal period ended October 31, 2008) are included in Appendix C,
Additional Information About the Adviser and the Advisory Agreements, under Payments by the
Funds to Affiliates of the Adviser Distribution Fees.
Under the 12b-1 Plans, each Fund makes payments to the Distributor from assets attributable to its
Class A, Class B, Class C, Class R, Class R1, Class R2, Class R3, Class R4 and Class R5 shares to
compensate the Distributor and other selling dealers, various banks, broker-dealers and other
financial intermediaries, for providing certain services to the to the holders of these classes of
shares of the Fund. Such services may include the following:
|
|
formulation and implementation of marketing and promotional activities; |
|
|
preparation, printing and distribution of sales literature; |
|
|
preparation, printing and distribution of prospectuses and Fund reports to other than
existing shareholders; |
|
|
obtaining such information with respect to marketing and promotional activities as the
Distributor deems advisable; |
|
|
making payments to dealers and others engaged in the sale of shares or who engage in
shareholder support services; and |
|
|
providing training, marketing and support with respect to the sale of shares. |
The Distributor may remit on a continuous basis all of the payments it receives to its registered
representatives and other financial intermediaries as a trail fee in recognition of their services
and assistance.
46
Currently, the Distributor makes payments to dealers on accounts for which such dealer is
designated dealer of record. Payments are based on the average net asset value of the accounts. At
least quarterly, the Distributor provides to each Board, and the Board reviews, a written report of
the amounts expended pursuant to the Plans and the purposes for which such expenditures were made.
Under the Amended Rule 12b-1 Plans, the Board will continue to review quarterly written reports of
the amounts expended pursuant to the Plans, although such reports will be more streamlined as they
will consist entirely of payments made to the Distributor and not of detailed reimbursable
expenditures.
Continuance of the 12b-1 Plans must be approved by each Board, including a majority of the
Independent Trustees, annually. The 12b-1 Plans may be amended by a vote of each Board, including
a majority of the Independent Trustees, except that the plans may not be amended to materially
increase the amount spent for distribution without approval of the shareholders of the affected
class. The 12b-1 Plans terminate automatically in the event of an assignment and may be terminated
upon a vote of a majority of the Independent Trustees or by vote of a Majority of the Outstanding
Voting Securities of the affected class.
Evaluation by each Board
Each Board considered the Amended 12b-1 Plans at its meeting on December 8-9, 2008. In approving
the Amended 12b-1 Plans, each Board, including all the Independent Trustees, determined that there
was a reasonable likelihood that the Amended 12b-1 Plans would benefit each of the Funds and the
Class A, Class B, Class C, Class R, Class R1, Class R2, Class R3, Class R4 and Class R5
shareholders of the Funds.
In making its determination to approve the Amended 12b-1 Plans, each Board took into consideration
the fact that, as a general matter, the Funds have historically paid the entire 12b-1 fee under the
reimbursement plan and the Distributors representation that it intended to spend greater amounts
on distribution activities. As a result, each Board considered the fact that the Distributor
expected on a going forward basis for there to be little, if any, difference in the amounts paid
regardless of whether the 12b-1 Plans were reimbursement plans or compensation plans.
Each Board concluded that the change from reimbursement to compensation plans could be expected to
result in greater flexibility and ease of administration and accounting with respect to
distribution-related payments and expenses.
Required Vote
Each class of shares of each Fund will vote separately on the Proposal with respect to that share
class. The vote required to approve the Proposal for each share class is a Majority of the
Outstanding Voting Securities of the class.
If Proposal 4 is approved by shareholders of a class of shares of a Fund, the Amended 12b-1 Plan
for that class will become effective as to that class immediately upon such approval.
If the Proposal is not approved by the shareholders of a class, the Amended 12b-1 Plan for that
class will not become effective and the Current 12b-1 Plan will remain in effect. Each Board, in
consultation with JHA, will determine the appropriate course of action to take, which may include
submitting an alternative proposal to shareholders of the class at a future shareholders meeting.
Each relevant Board, including all the Independent Trustees, recommends that shareholders of each
relevant class of each relevant Fund vote FOR Proposal 4.
47
PROPOSAL 5 APPROVAL OF THE ADOPTION OF A MANAGER OF MANAGERS STRUCTURE
Introduction
(All Funds, except Classic Value Fund II, International Classic Value Fund and Small Cap Fund)
The Funds each have JHA as their investment manager, subject to the supervision of the applicable
Board, pursuant to an Advisory Agreement between JHA and the Trust, on behalf of each Fund. JHA is
permitted under the Advisory Agreement, at its own expense, to select and contract with one or more
investment subadviser to perform some or all of the investment advisory services for which JHA is
responsible under the Advisory Agreement.
If JHA delegates portfolio management duties to a subadviser with respect to a Fund, the 1940 Act
requires that the subadvisory agreement must be approved by the shareholders of that Fund.
Specifically, Section 15 of the 1940 Act makes it unlawful for any person to act as an investment
manager (including as a subadviser) to a mutual fund, except pursuant to a written contract that
has been approved by shareholders. Therefore, to comply with Section 15 of the 1940 Act, each Fund
must obtain shareholder approval of a subadvisory agreement in order to employ a subadviser,
replace an existing subadviser with a new subadviser, materially change the terms of a subadvisory
agreement or continue the employment of an existing subadviser whose subadvisory agreement
terminates because of an assignment (as such term is defined under the 1940 Act).
Because of the expense and delay associated with obtaining shareholder approval of subadvisers and
related subadvisory agreements, many mutual fund investment managers have requested and obtained
orders from the SEC exempting them and the mutual funds they manage from certain requirements of
Section 15 of the 1940 Act and the rules thereunder. Subject to the conditions delineated therein,
these orders permit the covered mutual funds and their respective managers to employ a manager of
managers structure with respect to the funds, whereby the investment managers may retain
unaffiliated subadvisers for the funds and change the terms of a subadvisory agreement without
obtaining shareholder approval.
On January 27, 2000, the SEC issued an exemptive order pursuant to Section 6(c) of 1940 Act that
allows the Adviser to enter in and materially amend subadvisory agreements without shareholder
approval. This order does not extend to a subadviser that is an affiliated person, as defined in
Section 2(a)(3) of the 1940 Act, of a Trust or the Adviser, other than by reason of serving as
subadviser to one or more of the Funds.
The proposed manager of managers structure would permit JHA, as each Funds investment manager, to
make changes to a Funds subadvisers and materially amend the subadvisory agreement without
shareholder approval. This would allow JHA, subject to a Boards approval, to select new or
additional subadvisers for a Fund and terminate and replace existing subadvisers to a Fund. The
manager of managers structure is intended to enable each Fund to operate with greater efficiency
and help each Fund enhance performance by allowing the Board and JHA to employ subadvisers best
suited to the needs of the Fund without incurring the expense and delay associated with obtaining
shareholder approval of a new subadviser and its subadvisory agreement. Each Board believes that
it is in the best interests of each Fund and its shareholders to adopt a manager of managers
structure. A discussion of the factors considered by each Board is set forth in the section below
entitled Board Approval of Manager of Managers Structure.
The process of seeking shareholder approval can be administratively expensive to any Fund and may
cause delays in executing changes that a Board and JHA have determined are necessary or desirable.
These costs are often borne by the Funds (and therefore indirectly by the Funds shareholders).
Further, if a subadviser of a Fund is involved in a corporate transaction that could be deemed to
result in an assignment of its subadvisory agreement, the Fund currently must seek shareholder
approval of a new subadvisory agreement, even where there will be no change in the persons managing
the Fund or the subadvisory fee paid to the subadviser. If a Funds shareholders approve the
policy authorizing a manager of managers structure for the Fund, a Board would be able to act more
quickly, and with less expense to the Fund, to appoint an unaffiliated subadviser, in instances in
which a Board and JHA believe that the appointment would be in the best interests of the Fund and
its shareholders.
48
Each Board, including the Independent Trustees, would continue to oversee the subadviser selection
process under the manager of managers structure to help ensure that the interests of shareholders
are protected whenever JHA would seek to select a subadviser or modify a subadvisory agreement.
Specifically, a Board, including the Independent Trustees, would evaluate and approve each
subadvisory agreement as well as any modification to an existing subadvisory agreement. A Board,
including a majority of the Independent Trustees, will continue to be required to review and
consider the continuance of each subadvisory agreement at least annually, after the expiration of
the initial term. In reviewing new or existing subadvisory agreements or modifications to existing
subadvisory agreements, a Board will analyze all factors that it considers to be relevant to its
determination, including the subadvisory fees, the nature, quality and scope of services to be
provided by the subadviser, the investment performance of the assets managed by the subadviser in
the particular style for which a subadviser is sought, as well as the subadvisers compliance with
federal securities laws and regulations. JHA and each subadviser will continue to have a legal
duty to provide a Board with information on all factors pertinent to that Boards decision
regarding the subadvisory arrangement.
Furthermore, operation of a Fund under the proposed manager of managers structure would not: (1)
permit investment management fees paid by a Fund to JHA to be increased without shareholder
approval, or (2) diminish JHAs responsibilities to a Fund, including JHAs overall responsibility
for the portfolio management services furnished by a subadviser. Under the structure, JHA would
continue to supervise and oversee the activities of the subadviser(s) to each Fund, monitor each
subadvisers performance and make recommendations to a Board about whether its subadvisory
agreement should be continued, modified or terminated. JHA will only enter into new or materially
amended subadvisory agreements with shareholder approval, to the extent required by applicable law.
Under the manager of managers structure, a Funds shareholders would receive notice of, and
information pertaining to, any new subadvisory agreement or any material change to an existing
subadvisory agreement for the Fund. In particular, shareholders would receive the same information
about a new subadvisory agreement and a new subadviser that they would have received in a proxy
statement related to their approval of a new subadvisory agreement in the absence of a manager of
managers structure.
Board Approval of Manager of Managers Structure
At a meeting held on December 8-9, 2008, each Board, including the Independent Trustees,
unanimously approved the use of the manager of managers structure and determined: (1) that it would
be in the best interests of each Fund and its shareholders; and (2) to obtain shareholder approval
of the structure. In evaluating this structure, each Board, including the Independent Trustees,
considered various factors and other information, including the following:
|
1. |
|
A manager of managers structure will enable a Board to act more quickly, with
less expense to a Fund, in appointing new subadvisers when a Board and JHA believe that
such appointment would be in the best interests of the Fund and its shareholders; |
|
|
2. |
|
JHA would continue to be directly responsible for monitoring a subadvisers
compliance with a Funds investment objective(s) and investment strategies and
analyzing the performance of the subadviser; |
|
|
3. |
|
The management fees paid by the Funds to JHA would remain the same and any
increase would require shareholder approval; and |
|
|
4. |
|
No subadviser could be appointed, removed or replaced without a Boards
approval and involvement. |
REQUIRED VOTE
Shareholders of each Fund (except Classic Value Fund II, International Classic Value Fund and Small
Cap Fund) will vote separately with respect to Proposal 5. For each such Fund, approval of
Proposal 5 will require the affirmative vote of a Majority of the Outstanding Voting Securities of
that Fund.
49
If shareholders of a Fund approve the adoption of a manager of managers structure, this structure
is expected to become effective immediately upon approval and upon disclosure of the structure in
the Funds prospectus.
If shareholders of a Fund do not approve the proposed manager of managers structure, the structure
will not take effect.
Each applicable Board, including all the Independent Trustees, recommends that shareholders of each
such Fund vote FOR Proposal 5.
PROPOSAL 6 REVISION TO MERGER APPROVAL REQUIREMENTS
Introduction
(All Funds)
Shareholders are being asked to approve the amendment to each Trusts Declaration of Trust.
Section 17 of the 1940 Act prohibits or limits certain transactions between affiliated funds. On
July 26, 2002, the SEC amended Rule 17a-8 under the 1940 Act to permit mergers of affiliated funds
without shareholder approval in certain circumstances to reduce the need for affiliated funds to
incur the expense of soliciting proxies when a combination does not raise significant issues for
shareholders. For example, Rule 17a-8, as amended, would permit the combination of two small Funds
having the same portfolio managers, the same investment objectives and the same fee structure in
order to achieve economies of scale and thereby reduce fund expenses borne by shareholders. The
rule still requires a fund board (including a majority of the independent trustees) to determine
that any combination is in the best interests of the combining funds and will not dilute the
interest of existing shareholders. Shareholders of an acquired affiliated fund will still be
required to approve a combination that would result in a change in a fundamental investment policy,
a material change to the terms of an advisory agreement, the institution of or an increase in Rule
12b-1 fees or when the board of the surviving fund does not have a majority of independent trustees
who were elected by its shareholders.
Under Massachusetts law, shareholder approval is not required for fund mergers, consolidation or
sales of assets. Shareholder approval nevertheless will be obtained for combinations of affiliated
funds when required by Rule 17a-8. Shareholder approval will also be obtained for combinations with
unaffiliated funds when deemed appropriate by the Trustees. The proposed amendment to the
Declaration of Trust, consistent with the amended affiliated fund merger rule, authorizes the
Trustees to approve a merger, consolidation or sale of assets of a Fund without a shareholder
action or approval only if permitted by the 1940 Act, Massachusetts law and other applicable laws
and regulations. The amendment will provide the Trustees with increased flexibility to react more
quickly to new developments and changes in competitive and regulatory conditions and, as a
consequence, may result in Funds that operate more efficiently and economically. If the amendment
is approved, the Trustees will, as stated above, continue to exercise their fiduciary obligations
in approving any combination transaction. The Trustees will evaluate any and all information
reasonably necessary to make their determination and consider and give appropriate weight to all
pertinent factors in fulfilling the overall duty of care owed to shareholders.
Article VIII, Section 8.4 of each Declaration of Trust addresses Merger, Consolidation and Sale of
Assets. If the proposed amendment is approved by shareholders, Section 8.4 as so amended will
provide as follows (new language is in bold):
Section 8.4 Merger, Consolidation and Sale of Assets. The Trust or
any Series may merge or consolidate into any other corporation,
association, trust or other organization or may sell, lease or
exchange all or substantially all of the Trust Property or Trust
Property allocated or belonging to such Series, including its good
will, upon such terms and conditions and for such consideration: (a)
when and as authorized at any meeting of Shareholders called for the
purpose by the affirmative vote of the holders of two-thirds of the
Shares of the Trust or such Series outstanding and entitled to vote
and present in person or by proxy at a meeting of Shareholders, or
by an instrument or instruments in writing without a
50
meeting,
consented to by the holders of two-thirds of the Shares of the Trust
or such Series; provided, however, that, if such merger,
consolidation, sale, lease or exchange is recommended by the
Trustees, the vote or written consent of the holders of a majority
of the Outstanding Shares of the Trust or such Series entitled to
vote shall be sufficient authorization; or (b) if deemed appropriate
by a majority of the Trustees, including a majority of the
independent Trustees, without action or approval of the
Shareholders, to the extent consistent with applicable laws and
regulations; and any such merger, consolidation, sale, lease or
exchange shall be deemed for all purposes to have been accomplished
under and pursuant to Massachusetts law.
REQUIRED VOTE
Approval of the amendment to each Declaration of Trust will require the affirmative vote of a
Majority of the Outstanding Voting Securities of each Trust. If the Proposal is approved, the
amendment will become effective upon the later to occur of: (1) approval of shareholders of the
Trust; or (2) the execution of an amendment to the Declaration of Trust signed by a majority of the
Trustees. If the Proposal is not approved, this amendment will not be made to the Declaration of
Trust.
Each Board, including all the Independent Trustees each Trust, recommends that shareholders of each
Trust vote FOR Proposal 6.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The firm of PricewaterhouseCoopers LLP (PwC), 125 High Street, Boston, Massachusetts 02110, has
been selected as the independent registered public accounting firm for each Fund for its fiscal
year and served as such for the prior fiscal period. PwC examines annual financial statements for
each Fund, reviews regulatory filings that include those financial statements and provides other
audit-related, non-audit, and tax-related services to each Fund. Representatives of PwC are not
expected to be present at the Meeting but have been given the opportunity to make a statement, if
they so desire, and will be available should any matter arise requiring their participation.
Audit Fees. These fees represent aggregate fees billed to a Fund for the last two 12-month fiscal
years (and, in the case of the Funds of Capital Series and Investment Trust, for each such Funds
respective fiscal period ended October 31, 2008) (the Reporting Periods) for professional
services rendered by PwC for the audit of the Funds annual financial statements or services that
are normally provided by the accountant in connection with statutory and regulatory filings or
engagements for such period.
Audit-Related Fees. These fees represent the aggregate fees billed for the Reporting Periods for
assurance and related services by PwC that are reasonably related to the performance of the audit
of each Funds financial statements and are not reported under Audit Fees, below. Such fees
relate to professional services rendered by PwC for separate audit reports in connection with Rule
17f-2 (under the 1940 Act) security counts and fund merger audit services.
Tax Fees. These fees represent aggregate fees billed for the Reporting Periods for professional
services rendered by PwC for tax compliance, tax advice and tax planning. The tax services
provided by PwC related to the review of each Funds federal and state income tax returns, excise
tax calculations and returns and a review of each Funds calculations of capital gain and income
distributions.
All Other Fees. These fees relate to products and services provided by PwC other than those
reported above under Audit Fees, Audit-Related Fees and Tax Fees above.
51
Fees Paid to PwC for the Last Two Fiscal Years by Funds that Did Not Change Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund (12- |
|
Audit Fees |
|
Audit Related Fees |
|
Tax Fees |
|
All Other Fees |
Month Fiscal |
|
Last |
|
Prior |
|
Last |
|
Prior |
|
Last |
|
Prior |
|
Last |
|
Prior |
Year End) |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
Bond
(5-31) |
|
$ |
33,050 |
|
|
$ |
33,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
4,450 |
|
|
$ |
4,450 |
|
|
$ |
0 |
|
|
$ |
0 |
|
California Tax-Free
Income
(8-31) |
|
$ |
26,850 |
|
|
$ |
26,850 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,400 |
|
|
$ |
3,400 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Financial Industries
(10-31) |
|
$ |
32,719 |
|
|
$ |
22,350 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,000 |
|
|
$ |
3,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Global Real Estate
(10-31) |
|
$ |
34,905 |
|
|
$ |
12,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,600 |
|
|
$ |
1,600 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Government Income
(5-31) |
|
$ |
28,700 |
|
|
$ |
28,700 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,600 |
|
|
$ |
3,600 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Greater China
Opportunities
(10-31) |
|
$ |
31,833 |
|
|
$ |
19,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,500 |
|
|
$ |
3,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Health Sciences
(10-31) |
|
$ |
36,670 |
|
|
$ |
26,300 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,000 |
|
|
$ |
3,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
High Yield (5-31) |
|
$ |
31,350 |
|
|
$ |
31,350 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,950 |
|
|
$ |
3,950 |
|
|
$ |
0 |
|
|
$ |
0 |
|
High Yield
Municipal Bond
(8-31) |
|
$ |
25,450 |
|
|
$ |
25,450 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,200 |
|
|
$ |
3,200 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Investment Grade
Bond
(5-31) |
|
$ |
25,350 |
|
|
$ |
25,350 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,200 |
|
|
$ |
3,200 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Massachusetts
Tax-Free Income
(8-31) |
|
$ |
17,800 |
|
|
$ |
17,800 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,500 |
|
|
$ |
2,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Large Cap Select
(12-31) |
|
$ |
19,050 |
|
|
$ |
19,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,250 |
|
|
$ |
2,250 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Mid Cap Equity
(10-31) |
|
$ |
25,519 |
|
|
$ |
10,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,050 |
|
|
$ |
1,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Money Market
(3-31) |
|
$ |
28,900 |
|
|
$ |
23,900 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,000 |
|
|
$ |
3,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund (12- |
|
Audit Fees |
|
Audit Related Fees |
|
Tax Fees |
|
All Other Fees |
Month Fiscal |
|
Last |
|
Prior |
|
Last |
|
Prior |
|
Last |
|
Prior |
|
Last |
|
Prior |
Year End) |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
|
FYE |
New York Tax-Free
Income
(8-31) |
|
$ |
17,800 |
|
|
$ |
17,800 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,500 |
|
|
$ |
2,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Regional Bank
(10-31) |
|
$ |
41,421 |
|
|
$ |
31,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,500 |
|
|
$ |
3,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Small Cap
(10-31) |
|
$ |
26,183 |
|
|
$ |
15,850 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,000 |
|
|
$ |
2,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Small Cap Equity
(10-31) |
|
$ |
38,271 |
|
|
$ |
27,900 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,950 |
|
|
$ |
3,950 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Strategic Income
(5-31) |
|
$ |
36,200 |
|
|
$ |
36,200 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
5,750 |
|
|
$ |
5,750 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Tax-Free Bond
(8-31) |
|
$ |
27,600 |
|
|
$ |
27,600 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,500 |
|
|
$ |
3,500 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Fees Paid to PwC for the Last Two Fiscal Years Ended December 31, 2007
and the Fiscal Period Ended October 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees |
|
Audit Related Fees |
|
Tax Fees |
|
All Other Fees |
Fund |
|
2006 |
|
2007 |
|
2008 |
|
2006 |
|
2007 |
|
2008 |
|
2006 |
|
2007 |
|
2008 |
|
2006 |
|
2007 |
|
2008 |
Balanced |
|
$ |
26,250 |
|
|
$ |
26,250 |
|
|
$ |
36,556 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,300 |
|
|
$ |
3,300 |
|
|
$ |
3,300 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Classic Value |
|
$ |
18,700 |
|
|
$ |
18,700 |
|
|
$ |
27,566 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,600 |
|
|
$ |
2,600 |
|
|
$ |
2,600 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Classic Value II |
|
$ |
18,800 |
|
|
$ |
18,800 |
|
|
$ |
26,523 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,500 |
|
|
$ |
2,500 |
|
|
$ |
1,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Global Opportunities |
|
$ |
8,700 |
|
|
$ |
8,700 |
|
|
$ |
25,263 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,350 |
|
|
$ |
2,350 |
|
|
$ |
1,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
International
Classic Value |
|
$ |
18,800 |
|
|
$ |
18,800 |
|
|
$ |
35,024 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,500 |
|
|
$ |
2,500 |
|
|
$ |
2,600 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Large Cap Equity |
|
$ |
30,500 |
|
|
$ |
30,500 |
|
|
$ |
37,607 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,900 |
|
|
$ |
3,900 |
|
|
$ |
3,900 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Small Cap Intrinsic
Value |
|
$ |
8,700 |
|
|
$ |
8,700 |
|
|
$ |
24,763 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,350 |
|
|
$ |
2,350 |
|
|
$ |
1,050 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Sovereign Investors |
|
$ |
31,300 |
|
|
$ |
31,300 |
|
|
$ |
44,232 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
4,000 |
|
|
$ |
4,000 |
|
|
$ |
4,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
U.S. Global Leaders
Growth |
|
$ |
19,300 |
|
|
$ |
19,300 |
|
|
$ |
28,667 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
3,000 |
|
|
$ |
3,000 |
|
|
$ |
3,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
The SECs auditor independence rules require each Trusts Audit Committee to pre-approve: (a) all
audit and permissible non-audit services provided by PwC directly to the Fund; and (b) those
permissible non-audit services provided by PwC to the Adviser (not including any subadviser whose
role is primarily portfolio management and is sub-contracted with or overseen by another investment
adviser) and any entity controlling, controlled by or under
53
common control with the Adviser that
provides ongoing services to the Fund (the Affiliated Service Providers), if the services relate
directly to the operations and financial reporting of the Fund. Each Audit Committee has adopted
policies and procedures regarding the pre-approval of audit and non-audit services by PwC). The
procedures are designed to assure that these services do not impair PwCs independence. The
procedures also require each Audit Committee to pre-approve non-audit services provided by PwC to
MFC (or any subsidiary thereof) where such services provided have a direct impact on the operations
or financial reporting of the Fund, as further assurance that such services do not impair PwCs
independence. The procedures follow two different approaches to pre-approving services: (1)
proposed services may be pre-approved (general pre-approval); or (2) proposed services require
specific pre-approval (specific pre-approval). Unless a type of service provided by PwC has
received general pre-approval, it will require specific pre-approval by the relevant Audit
Committee. The procedures describe the audit, audit-related, tax and all other services that have
been pre-approved by an Audit Committee. Each Audit Committee annually reviews these services and
the amount of fees for each such service that have been pre-approved. Each Audit Committee may
delegate pre-approval authority to its chairperson or any other member or members. The procedures
identify as prohibited services those services which, if performed by PwC, would result in PwC
losing its independence.
The following tables show the aggregate non-audit fees billed by PwC for non-audit services
rendered to the Funds, the Adviser and the Affiliated Service Providers for the indicated fiscal
year and period ends.
Non-Audit Fees for Funds that Did Not Change Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
Fiscal Year End |
|
2007 |
|
2008 |
March 31 |
|
$ |
875,192 |
|
|
$ |
1,354,936 |
|
May 31 |
|
$ |
3,285,809 |
|
|
$ |
1,367,498 |
|
August 31 |
|
$ |
1,699,335 |
|
|
$ |
877,545 |
|
October 31 |
|
$ |
1,424,769 |
|
|
$ |
4,609,372 |
|
Non-Audit Fees for Funds that Changed Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
FYE 12-31-06 |
|
FYE 12-31-07 |
|
FPE 10-31-08 |
$900,942 |
|
$ |
1,579,573 |
|
|
$ |
4,610,322 |
|
During the Reporting Periods, PwC billed no fees that an Audit Committee was required to
pre-approve pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Each Audit Committee has considered whether the provision of non-audit services that were rendered
to Affiliated Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining PwCs independence. For the Reporting
Periods, there were no non-audit fees billed by PwC for services rendered to the Affiliated Service
Providers.
SHAREHOLDERS AND VOTING INFORMATION
Shares of the Funds are offered to the public, including various institutional investors. Only
shares of a particular Fund are entitled to vote on matters that affect only the interests of that
Fund.
As of the Record Date, the Class NAV shares of the Funds, as applicable, were held principally by
the Lifestyle Portfolios, the Lifecycle Portfolios and the Absolute Return Portfolio, which are
portfolios of JHF II, a separate series investment company in the John Hancock Fund Complex
(collectively, the Funds of Funds), each of which operates as a fund of funds and invests in
shares of other registered investment companies, including the Funds. No JHF II Fund exercises any
discretion in voting the shares of the Funds held by the Funds of Funds.
54
For purposes of the 1940 Act, any person who owns beneficially more than 25% of any class of the
outstanding shares of a Fund is presumed to control that class of shares of the Fund. Shares are
generally deemed to be beneficially owned by a person who has the power to vote or dispose of the
shares. Consequently, an entity that is deemed to have the power to vote or dispose of more than
25% of the shares of any class of shares of a Fund will be presumed to control that class of shares
of a Fund. As currently operated, the Funds of Funds have no power to exercise any discretion in
voting the shares of underlying Funds, and the power to dispose of the shares resides not with the
Fund of Funds or with the Funds but rather with the subadviser to the Fund of Funds as a result of
its advisory arrangements. Under these circumstances, the Funds do not view a Fund of Funds as
being the beneficial owner of shares of underlying Funds for purposes of the 1940 Act presumption
of control.
Information as to the number of shares outstanding for each Fund, and share ownership of each Fund,
as of the Record Date or such other recent date as may be indicated, is set forth in Appendix F
(Outstanding Shares and Share Ownership) to this Proxy Statement.
Each Fund will furnish, without charge, a copy of its most recent annual report and semi-annual
report to any shareholder upon request. To obtain a report, please contact the relevant Fund
calling 1-800-225-5291 (TDD 1-800-554-6713) or by writing to the Fund at 601 Congress Street,
Boston, Massachusetts 02210, Attn.: Gordon Shone.
Voting Procedures
Proxies may be revoked at any time prior to the voting of the shares represented thereby by:
submitting to the Trusts a written notice of revocation or a subsequently executed proxy; by
calling the toll-free telephone number; or attending the Meeting and voting in person. All valid
proxies will be voted in accordance with specifications thereon, or in the absence of
specifications, for approval of all applicable proposals.
Quorum. Shareholders of record at the close of business on the Record Date will be entitled to
vote at the Meeting or any adjournment of the Meeting. The holders of a majority of the
outstanding shares of a Trust at the close of
business on that date present in person or by proxy will constitute a quorum for the Meeting. A
Majority of the Outstanding Voting Securities of a Trust or a Fund, as applicable, is required to
approve a proposal, except as otherwise stated herein.
Shareholders are entitled to one vote for each share held and fractional votes for fractional
shares held. No shares have cumulative voting rights.
In the event the necessary quorum to transact business or the vote required to approve a proposal
is not obtained at the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting with respect to one or more proposals in accordance with applicable law to permit
further solicitation of proxies. Any adjournment of the Meeting will require the affirmative vote
of the holders of a majority of a Trusts shares cast at the Meeting, and any adjournment with
respect to a proposal will require the affirmative vote of the holders of a majority of the shares
entitled to vote on the proposal cast at the Meeting. The persons named as proxies will vote for or
against any adjournment in their discretion.
Abstentions and Broker Non-Votes. If a proxy is marked with an abstention or represents a broker
non-vote (that is, a proxy from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote Fund shares on a particular
matter with respect to which the broker or nominee does not have a discretionary power), the Fund
shares represented thereby will be considered to be present at the Meeting for purposes of
determining the existence of a quorum but will not be counted as votes cast with respect to a
proposal. Therefore, with respect to a proposal that requires for its approval a Majority of the
Outstanding Voting Securities (Proposals 2 through 6), abstentions and broker non-votes may have
the same effect as a vote against the proposal.
In this Proxy Statement, the term Majority of the Outstanding Voting Securities means the
affirmative vote of the lesser of:
55
(1) 67% or more of the voting securities of a Trust or a Fund, as applicable, present at the
Meeting, if the holders of more than 50% of the outstanding voting securities of a Trust or a Fund,
as applicable, are present in person or by proxy; or
(2) more than 50% of the outstanding voting securities of a Trust or a Fund, as applicable.
Cost of Preparation and Distribution of Proxy Materials. The costs of the preparation of these
proxy materials and their distribution will be borne by the Funds, allocated among them on the
basis of their relative net assets.
Solicitation of Proxies. In addition to the mailing of these proxy materials, proxies may be
solicited by telephone, by fax or in person by the Trustees, officers and employees of a Trust; by
personnel of a Funds investment adviser, JHA, and its transfer agent, Signature Services; or by
broker-dealer firms. Signature Services, together with D.F. King & Co., Inc., a third party
solicitation firm, has agreed to provide proxy solicitation services to the Funds at a cost of
approximately $[ ]. The Funds will pay the costs of preparing, mailing and soliciting
proxies, including payments to unaffiliated solicitation firms.
Fund Voting. Shares of all Funds of each Trust will vote in the aggregate and not separately by
Fund or class of shares with respect to the election of Trustees (Proposal 1) and the revision of
the Trusts merger approval procedures (Proposal 6). Shares of the applicable Fund or Funds will
vote separately, and in the aggregate and not by class of shares, on the proposals with respect to
amendments to the Advisory Agreement (Proposal 2), to the fundamental investment policies and
restrictions of the Funds (Proposal 3) and to the adoption of a Manager of Managers Structure
(Proposal 5). Shares of the Funds will vote separately, and individually by class of shares on the
proposal with respect to the Amendment of the 12b-1 Plans (Proposal 4).
Telephone Voting
In addition to soliciting proxies by mail, by fax or in person, the Trusts may also arrange to have
votes recorded by telephone by officers and employees of the Trusts or by the personnel of the
Adviser, the transfer agent or Signature
Services. The telephone voting procedure is designed to verify a shareholders identity, to allow
a shareholder to authorize the voting of shares in accordance with the shareholders instructions
and to confirm that the voting instructions have been properly recorded.
A shareholder will be called on a recorded line at the telephone number in a Trusts 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.
Alternatively, a shareholder may call a Trusts Voice Response Unit to vote by taking the following
steps:
|
|
|
Read the Proxy Statement and have your proxy card at hand. |
|
|
|
|
Call the toll-free-number located on your proxy card. |
|
|
|
|
Follow recorded instructions. |
With both methods of telephone voting, to ensure that the shareholders instructions have been
recorded correctly, the shareholder will also receive a confirmation of the voting instructions. 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.
56
Internet Voting
You will also have the opportunity to submit your voting instructions via the Internet by utilizing
a program provided through a vendor. Voting via the Internet will not affect your right to vote in
person if you decide to attend the meeting. Do not mail the proxy card if you are voting via the
Internet. To vote via the Internet, you will need the control number that appears on your proxy
card. These Internet voting procedures are designed to authenticate shareholder identities, to
allow shareholders to give their voting instructions and to confirm that shareholders instructions
have been recorded properly. If you are voting via the Internet, you should understand that there
may be costs associated with electronic access, such as usage charges from Internet access
providers and telephone companies, which costs you must bear.
To vote via the Internet:
|
■ |
|
Read the Proxy Statement and have your proxy card(s) at hand. |
|
|
■ |
|
Go to the Web site on the proxy card. |
|
|
■ |
|
Enter the control number found on your proxy card. |
|
|
■ |
|
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. |
OTHER MATTERS
No Board knows of any matters to be presented at the Meeting other than those described in this
Proxy Statement. If any other matters properly come before the Meeting, the shares represented by
proxies will be voted in accordance with the best judgment of the person or persons voting the
proxies.
No Trust is required to hold annual meetings of shareholders and, therefore, it cannot be
determined when the next meeting of shareholders will be held. Shareholder proposals to be
presented at any future meeting of shareholders of that Trust must be received by a Trust a
reasonable time before that Trusts solicitation of proxies for that meeting in order for such
proposals to be considered for inclusion in the proxy materials related to that meeting.
BY ORDER OF THE BOARDS OF TRUSTEES
February 6, 2009, Boston, Massachusetts
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS WHO DO NOT EXPECT TO
ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD(S) IN THE
ENCLOSED ENVELOPE OR, ALTERNATIVELY, TO VOTE BY TOUCH-TONE TELEPHONE.
57
APPENDICES
PROXY STATEMENT OF
JOHN HANCOCK BOND TRUST
JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND
JOHN HANCOCK CAPITAL SERIES
JOHN HANCOCK CURRENT INTEREST
JOHN HANCOCK EQUITY TRUST
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK INVESTMENT TRUST II
JOHN HANCOCK INVESTMENT TRUST III
JOHN HANCOCK MUNICIPAL SECURITIES TRUST
JOHN HANCOCK SERIES TRUST
JOHN HANCOCK SOVEREIGN BOND FUND
JOHN HANCOCK STRATEGIC SERIES
JOHN HANCOCK TAX-EXEMPT SERIES FUND
JOHN HANCOCK WORLD FUND
SPECIAL JOINT MEETING OF SHAREHOLDERS TO BE HELD APRIL 16, 2009
|
|
|
Appendix A
|
|
Procedures for the Selection of Independent Trustees |
|
|
|
Appendix B
|
|
Proposed New Form of Advisory Agreement |
|
|
|
Appendix C
|
|
Additional Information about the Adviser and the Advisory Agreements |
|
|
|
Appendix D
|
|
Advisory Fee Schedules and Comparable Funds Managed by the Adviser |
|
|
|
Appendix E
|
|
Form of Amended 12b-1 Plan |
|
|
|
Appendix F
|
|
Outstanding Shares and Share Ownership |
John Hancock Funds, LLC
MEMBER FINRA / SIPC
601 Congress Street
Boston, MA 02210-2805
1-800-225-5291
1-800-554-6713 TDD
1-800-338-8080 EASI-Line
www.jhfunds.com
|
|
Private Managed Accounts |
58
APPENDIX A
JOHN
HANCOCK FUNDS
PROCEDURES FOR THE SELECTION OF INDEPENDENT TRUSTEES
1. Nominees should have a reputation for integrity, honesty and adherence to high ethical
standards.
2. Nominees should have demonstrated business acumen, experience and ability to exercise sound
judgments in matters that relate to the current and long-term objectives of the funds and should be
willing and able to contribute positively to the decision-making process of the funds.
3. Nominees should have a commitment to understand the funds, and the responsibilities of a
trustee/director of an investment company and to regularly attend and participate in meetings of
the Board and its committees.
4. Nominees should have the ability to understand the sometimes conflicting interests of the
various constituencies of the funds, including shareholders and the management company, and to act
in the interests of all shareholders.
5. Nominees should not have, nor appear to have, a conflict of interest that would impair their
ability to represent the interests of all the shareholders and to fulfill the responsibilities of a
director/trustee.
Application of Criteria to Existing Trustees
The renomination of existing Trustees should not be viewed as automatic, but should be based on
continuing qualification under the criteria set forth above. In addition, the Nominating,
Governance and Administration Committee (the Committee) shall consider the existing Trustees
performance on the Board and any committee.
Review of Shareholder Nominations
Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of
Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Committee.
In evaluating a nominee recommended by a shareholder, the Committee, in addition to the criteria
discussed above, may consider the objectives of the shareholder in submitting that nomination and
whether such objectives are consistent with the interests of all shareholders. If the Board
determines to include a shareholders candidate among the slate of its designated nominees, the
candidates name will be placed on the funds proxy card. If the Board determines not to include
such candidate among its designated nominees, and the shareholder has satisfied the requirements of
Rule 14a-8, the shareholders candidate will be treated as a nominee of the shareholder who
originally nominated the candidate. In that case, the candidate will not be named on the proxy
card distributed with the funds proxy statement.
As long as an existing Independent Trustee continues, in the opinion of the Committee, to satisfy
the criteria listed above, the Committee generally would favor the re-nomination of an existing
Trustee rather than a new candidate. Consequently, while the Committee will consider nominees
recommended by shareholders to serve as trustees, the Committee may only act upon such
recommendations if there is a vacancy on the Board, or the Committee determines that the selection
of a new or additional Trustee is in the best interests of the fund. In the event that a vacancy
arises or a change in Board membership is determined to be advisable, the Committee will, in
addition to any shareholder recommendations, consider candidates identified by other means,
including candidates proposed by members of the Committee. The Committee may retain a consultant
to assist the Committee in a search for a qualified candidate.
A-1
APPENDIX B
JOHN HANCOCK RETAIL FUNDS
FORM OF ADVISORY AGREEMENT
Advisory Agreement dated , 2009, between
John Hancock , a
Massachusetts business trust (the Trust), and John Hancock Advisers, LLC, a Delaware limited
liability company (JHA or the Adviser). In consideration of the mutual covenants contained
herein, the parties agree as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints JHA, subject to the supervision of the Trustees of the Trust and
the terms of this Agreement, as the investment adviser for each of the funds of the Trust
specified in Appendix A to this Agreement as it shall be amended by the Adviser and the Trust from
time to time (the Funds). The Adviser accepts such appointment and agrees to render the
services and to assume the obligations set forth in this Agreement commencing on its effective
date. The Adviser will be an independent contractor and will have no authority to act for or
represent the Trust in any way or otherwise be deemed an agent unless expressly authorized in this
Agreement or another writing by the Trust and the Adviser.
2. DUTIES OF THE ADVISER
a. |
|
Subject to the general supervision of the Trustees of the Trust and the terms of this
Agreement, the Adviser will at its own expense, except as noted below, select and contract
with investment subadvisers (Subadvisers) to manage the investments and determine the
composition of the assets of the Funds; provided, that any contract with a Subadviser (a
Subadvisory Agreement) shall be in compliance with and approved as required by the
Investment Company Act of 1940, as amended (the 1940 Act), except for such exemptions
therefrom as may be granted to the Trust or the Adviser. Subject always to the direction and
control of the Trustees of the Trust, the Adviser will monitor each Subadvisers management
of the Funds investment operations in accordance with the investment objectives and related
investment policies, as set forth in the Trusts registration statement with the Securities
and Exchange Commission, of any Fund or Funds under the management of such Subadviser, and
review and report to the Trustees of the Trust on the performance of such Subadviser. |
|
|
|
b. |
|
The Adviser shall furnish to the Trust the following: |
|
i. |
|
Office and Other Facilities. The Adviser shall furnish to the Trust
office space in the offices of the Adviser or in such other place as may be agreed
upon by the parties hereto from time to time, and all necessary office facilities and
equipment; |
|
|
ii. |
|
Trustees and Officers. The Adviser agrees to permit individuals who
are directors, officers or employees of the Adviser to serve (if duly elected or
appointed) as Trustees or President of the Trust without remuneration from or other
cost to the Trust. |
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iii. |
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Investment Personnel. The Adviser shall furnish to the Trust, at the
Trusts expense, any other personnel necessary for the oversight and/or conduct of the
investment operations of the Trust. For the elimination of doubt, however, the
Adviser shall not be obligated to furnish to the Trust pursuant to this Agreement
personnel for the performance of functions: (a) related to and to be performed under
any other separate contract from time-to-time in effect between the Trust and the
Adviser or another party for legal, accounting, administrative and other any other
non-investment related services; (b) related to and to be performed under the Trust
contract for custodial, bookkeeping, transfer and dividend disbursing agency services
by the bank or other financial institution selected to perform such services; or (c)
related to the
investment subadvisory services to be provided by any Subadviser pursuant to a
Subadvisory Agreement. |
B-1
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iv. |
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Reports to Trust. The Adviser shall furnish to, or place at the
disposal of, the Trust such information, reports, valuations, analyses and opinions as
the Trust may, at any time or from time to time, reasonably request or as the Adviser
may deem helpful to the Trust, provided that the expenses associated with any such
materials furnished by the Adviser at the request of the Trust shall be borne by the
Trust. |
c. |
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In addition to negotiating and contracting with Subadvisers as set forth in section (2)(a) of
this Agreement and providing facilities, personnel and services as set forth in section
(2)(b), the Adviser will pay the compensation of the President and Trustees of the Trust who
are also directors, officers or employees of the Adviser or its affiliates. |
d. |
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With respect to any one or more of the Funds named in Appendix A, the Adviser may elect to
manage the investments and determine the composition of the assets of the Funds, subject to
the approval of the Trustees of the Trust. In the event of such election, the Adviser,
subject always to the direction and control of the Trustees of the Trust, will manage the
investments and determine the composition of the assets of the Funds in accordance with the
Trusts registration statement, as amended. In fulfilling its obligations to manage the
investments and reinvestments of the assets of the Funds, the Adviser: |
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i. |
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will obtain and evaluate pertinent economic, statistical, financial and other
information affecting the economy generally and individual companies or industries the
securities of which are included in the Funds or are under consideration for inclusion
in the Funds; |
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ii. |
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will formulate and implement a continuous investment program for each Fund
consistent with the investment objectives and related investment policies for each such
Fund as described in the Trusts registration statement, as amended; |
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iii. |
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will take whatever steps are necessary to implement these investment programs by
the purchase and sale of securities including the placing of orders for such purchases
and sales; |
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iv. |
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will regularly report to the Trustees of the Trust with respect to the
implementation of these investment programs; |
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v. |
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will provide assistance to the Trusts Custodian regarding the fair value of
securities held by the Funds for which market quotations are not readily available; |
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vi. |
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will furnish, at its expense: (i) all necessary investment and management
facilities, including salaries of personnel required for it to execute its duties
faithfully; and (ii) administrative facilities, including bookkeeping, clerical
personnel and equipment necessary for the efficient conduct of the investment affairs
of the Funds (excluding any such services that are the subject of a separate agreement
as may from time to time be in effect between the Trust and the Adviser or another
party); |
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vii. |
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will select brokers and dealers to effect all transactions subject to the
following conditions: the Adviser will place all necessary orders with brokers,
dealers, or issuers, and will negotiate brokerage commissions if applicable; the
Adviser is directed at all times to seek to execute brokerage transactions for the
Funds in accordance with such policies or practices as may be established by the
Trustees and described in the Trusts registration statement as amended; the Adviser
may pay a broker-dealer which provides research and brokerage services a higher spread
or commission for a particular transaction than otherwise might have been charged by
another broker-dealer, if the Adviser determines that the higher spread or commission
is reasonable in relation to the value of the brokerage and research services that such
broker-dealer provides, viewed in terms of either the particular transaction or the
Advisers overall responsibilities with respect to accounts managed by the Adviser; and
the Adviser may use for the benefit of its other
clients, or make available to companies affiliated with the Adviser for the benefit of
such companies or their clients, any such brokerage and research services that the
Adviser obtains from brokers or dealers; |
B-2
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viii. |
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to the extent permitted by applicable laws and regulations, may, but shall be
under no obligation to, on occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of the
Adviser, aggregate the securities to be purchased or sold to attempt to obtain a more
favorable price or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Adviser in the manner the Adviser considers to be
the most equitable and consistent with its fiduciary obligations to the Fund and to its
other clients; |
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ix. |
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will maintain all accounts, books and records with respect to the Funds as are
required of an investment adviser of a registered investment company pursuant to the
1940 Act and the Investment Advisers Act of 1940, as amended (the Advisers Act) and
the rules thereunder; and |
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x. |
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will vote all proxies received in connection with securities held by the Funds. |
3. EXPENSES ASSUMED BY THE TRUST
The Trust will pay all expenses of its organization, operations and business not specifically
assumed or agreed to be paid by the Adviser, as provided in this Agreement, or by a Subadviser, as
provided in a Subadvisory Agreement. Without limiting the generality of the foregoing, in
addition to certain expenses described in section 2 above, the Trust shall pay or arrange for the
payment of the following:
a. |
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Edgarization, Printing and Mailing. Costs of edgarization, printing and mailing
(i) all registration statements (including all amendments thereto) and
prospectuses/statements of additional information (including all supplements thereto), all
annual, semiannual and periodic reports to shareholders of the Trust, regulatory authorities
or others, (ii) all notices and proxy solicitation materials furnished to shareholders of the
Trust or regulatory authorities and (iii) all tax returns; |
b. |
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Compensation of Officers and Trustees. Compensation of the officers and Trustees
of the Trust (other than persons serving as President or Trustee of the Trust who are also
directors, officers or employees of the Adviser or its affiliates); |
c. |
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Registration and Filing Fees. Registration, filing, blue-sky and other fees in
connection with requirements of regulatory authorities, including, without limitation, all
fees and expenses of registering and maintaining the registration of the Trust under the 1940
Act and the registration of the Trusts shares under the Securities Act of 1933, as amended; |
d. |
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Custodial Services. The charges and expenses of the custodian appointed by the
Trust for custodial services; |
e. |
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Accounting Fees. The charges and expenses of the independent accountants retained
by the Trust; |
f. |
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Legal, Accounting and Administrative Services. The charges and expenses of the
Adviser or any other party pursuant to any separate contract with the Trust from time to time
in effect with respect to the provision of legal (including registering and qualifying Fund
shares with regulatory authorities), as well as accounting, administrative and any other
non-investment related services. |
g. |
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Transfer, Bookkeeping and Dividend Disbursing Agents. The charges and expenses of
any transfer, bookkeeping and dividend disbursing agents appointed by the Trust; |
h. |
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Commissions. Brokers commissions and issue and transfer taxes chargeable to the
Trust in connection with securities transactions to which the Trust is a party; |
i. |
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Taxes. Taxes and corporate fees payable by the Trust to federal, state or other
governmental agencies and the expenses incurred in the preparation of all tax returns; |
j. |
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Stock Certificates. The cost of stock certificates, if any, representing shares of
the Trust; |
B-3
k. |
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Membership Dues. Association membership dues, as explicitly approved by the
Trustees; |
l. |
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Insurance Premiums. Insurance premiums for fidelity, errors and omissions,
directors and officers and other coverage; |
m. |
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Shareholders and Trustees Meetings. Expenses of shareholders and Trustees
meetings; |
n. |
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Pricing. Pricing of the Trust Funds and shares, including the cost of any
equipment or services used for obtaining price quotations and valuing Trust portfolio
investments; |
o |
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Interest. Interest on borrowings; |
p. |
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Communication Equipment. All charges for equipment or services used for
communication between the Adviser or the Trust and the custodian, transfer agent or any other
agent selected by the Trust; and |
q. |
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Nonrecurring and Extraordinary Expense. Such nonrecurring expenses as may arise,
including the costs of actions, suits, or proceedings to which the Trust is, or is threatened
to be made, a party and the expenses the Trust may incur as a result of its legal obligation
to provide indemnification to its Trustees, officers, agents and shareholders. |
4. COMPENSATION OF ADVISER
Subject to the provisions of section 2(d) of this Agreement, the Adviser shall be entitled to
a fee, accrued and paid daily, at such annual percentage rates, as specified in Appendix A to this
Agreement, of the average daily net asset value of the Fund.
5. NON-EXCLUSIVITY
The services of the Adviser to the Trust are not to be deemed to be exclusive, and the
Adviser shall be free to render investment advisory or other services to others (including other
investment companies) and to engage in other activities. It is understood and agreed that the
directors, officers and employees of the Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from serving as partners,
officers, directors, trustees or employees of any other firm or corporation, including other
investment companies.
6. SUPPLEMENTAL ARRANGEMENTS
The Adviser may enter into arrangements with other persons affiliated with the Adviser to
better enable it to fulfill its obligations under this Agreement for the provision of certain
personnel and facilities to the Adviser.
7. CONFLICTS OF INTEREST
It is understood that Trustees, officers, agents and shareholders of the Trust are or may be
interested in the Adviser as directors, officers, stockholders, or otherwise; that directors,
officers, agents and stockholders of the Adviser are or may be interested in the Trust as
Trustees, officers, shareholders or otherwise; that the Adviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity hereof or of any
transactions hereunder except as otherwise provided in the Agreement and Declaration of Trust of
the Trust or the organizational documents of the Adviser or by specific provision of applicable
law.
8. REGULATION
The Adviser shall submit to all regulatory and administrative bodies having jurisdiction over
the services provided pursuant to this Agreement any information, reports or other material which
any such body by reason of this Agreement may request or require pursuant to applicable laws and
regulations.
B-4
9. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective on the later of (i) its execution and (ii) the date of
the meeting of the shareholders of the Trust, at which meeting this Agreement is approved by the
vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the
Funds. The Agreement will continue in effect for a period more than two years from the date of
its execution only so long as such continuance is specifically approved at least annually either
by the Trustees of the Trust or by the vote of a majority of the outstanding voting securities of
the Trust provided that in either event such continuance shall also be approved by the vote of a
majority of the Trustees of the Trust who are not interested persons (as defined in the 1940
Act) of any party to this Agreement cast in person at a meeting called for the purpose of voting
on such approval. The required shareholder approval of the Agreement or of any continuance of the
Agreement shall be effective with respect to any Fund if a majority of the outstanding voting
securities of that Fund votes to approve the Agreement or its continuance, notwithstanding that
the Agreement or its continuance may not have been approved by a majority of the outstanding
voting securities of (a) any other Fund affected by the Agreement or (b) all the Funds of the
Trust.
Following the effectiveness of the Agreement with respect to any Fund, if the Agreement
terminates with respect to such Fund because the shareholders of such Fund fail to provide any
requisite approval under the 1940 Act for the continued effectiveness of the Agreement, the
Adviser will continue to act as investment adviser with respect to such Fund pending the required
approval of the Agreement or its continuance or of a new contract with the Adviser or a different
adviser or other definitive action; provided, that the compensation received by the Adviser in
respect of such Fund during such period will be no more than its actual costs incurred in
furnishing investment advisory and management services to such Fund or the amount it would have
received under the Agreement in respect of such Fund, whichever is less; provided further, for the
elimination of doubt, the failure of shareholders of any Fund to approve a proposed amendment to
the Agreement is not a termination of the Agreement with respect to such Fund and, in such event,
the Agreement shall continue with respect to such Fund as previously in force and effect.
This Agreement may be terminated at any time, without the payment of any penalty, by the
Trustees of the Trust, by the vote of a majority of the outstanding voting securities of the
Trust, or with respect to any Fund by the vote of a majority of the outstanding voting securities
of the Fund, on sixty days written notice to the Adviser, or by the Adviser on sixty days
written notice to the Trust. This Agreement will automatically terminate, without payment of any
penalty, in the event of its assignment (as defined in the 1940 Act).
10. PROVISION OF CERTAIN INFORMATION BY ADVISER.
The Adviser will promptly notify the Trust in writing of the occurrence of any of the
following:
a. |
|
the Adviser fails to be registered as an investment adviser under the Advisers Act or under
the laws of any jurisdiction in which the Adviser is required to be registered as an
investment adviser in order to perform its obligations under this Agreement; |
b. |
|
the Adviser is served or otherwise receives notice of any action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court, public board or body,
involving the affairs of the Trust; and |
c. |
|
the chief executive officer or managing member of the Adviser or the portfolio manager of
any Fund changes. |
11. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is specifically approved
by the vote of a majority of the outstanding voting securities of each of the Funds affected by the
amendment and by the vote of a majority of the Trustees of the Trust who are not interested persons
of any party to this Agreement cast in person at
a meeting called for the purpose of voting on such approval. The required shareholder
approval shall be effective with respect to any Fund if a majority of the outstanding voting
securities of that Fund vote to approve the amendment, notwithstanding that the amendment may not
have been approved by a majority of the outstanding voting securities of (a) any other Fund
affected by the amendment or (b) all the Funds of the Trust.
B-5
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the parties.
13. HEADINGS
The headings in the sections of this Agreement are inserted for convenience of reference only
and shall not constitute a part hereof.
14. NOTICES
All notices required to be given pursuant to this Agreement shall he delivered or mailed to
the last known business address of the Trust or Adviser in person or by registered mail or a
private mail or delivery service providing the sender with notice of receipt. Notice shall be
deemed given on the date delivered or mailed in accordance with this section.
15. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in law or in equity, the
Agreement shall be construed, insofar as is possible, as if such portion had never been
contained herein.
16. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in accordance with the
laws of The Commonwealth of Massachusetts, or any of the applicable provisions of the 1940 Act.
To the extent that the laws of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the 1944 Act, the latter shall control.
17. NAME OF THE TRUST AND FUNDS
The Trust, on behalf of itself and with respect to any Fund, may use the name John Hancock
or any name or names derived from or similar to the names John Hancock Investment Management
Services, LLC, John Hancock Life Insurance Company or John Hancock Financial Services, Inc.
only for so long as this Agreement remains in effect as to the Trust or the particular Fund. At
such time as this Agreement shall no longer be in effect as to the Trust or a particular Fund, the
Trust or the particular Fund, as the case may be, will (to the extent it lawfully can) cease to
use such a name or any other name indicating that the Trust or the particular Fund is advised by
or otherwise connected with the Adviser. The Trust acknowledges that it has adopted the name John
Hancock Funds III through permission of John Hancock Life Insurance Company, a Massachusetts
insurance company, and agrees that John Hancock Life Insurance Company reserves to itself and any
successor to its business the right to grant the non-exclusive right to use the name John
Hancock or any similar name or names to any other corporation or entity, including but not
limited to any investment company of which John Hancock Life Insurance Company or any subsidiary
or affiliate thereof shall be the investment adviser.
18. LIMITATION OF LIABILITY UNDER THE DECLARATION OF TRUST
The Declaration of Trust establishing the Trust, dated
, , a copy of
which, together with all amendments thereto (the Declaration), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that no Trustee, shareholder, officer,
employee or agent of the Trust shall be subject to any personal liability in connection with Trust
property or the affairs of the Trust and that all persons should shall look solely to
the Trust property or to the property of one or more specific Funds for satisfaction of
claims of any nature arising in connection with the affairs of the Trust.
B-6
19. LIABILITY OF THE ADVISER
In the absence of (a) willful misfeasance, bad faith or gross negligence on the part of the
Adviser in performance of its obligations and duties hereunder, (b) reckless disregard by the
Adviser of its obligations and duties hereunder, or (c) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in which case any award
of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940
Act), the Adviser shall not be subject to any liability whatsoever to the Trust, or to any
shareholder for any error of judgment, mistake of law or any other act or omission in the course
of, or connected with, rendering services hereunder including, without limitation, for any losses
that may be sustained in connection with the purchase, holding, redemption or sale of any security
on behalf of a Fund.
20. INDEMNIFICATION
a. |
|
To the fullest extent permitted by applicable law, the Trust shall, on behalf of each Fund,
indemnify the Adviser, its affiliates and the officers, directors, employees and agents of
the Adviser and its affiliates (each an indemnitee) against any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting
from any claim, demand, action or suit relating to the particular Fund and not resulting from
the willful misfeasance, bad faith, gross negligence, or reckless disregard of the indemnitee
in the performance of the obligations and duties of the indenmitees office. The federal and
state securities laws impose liabilities under certain circumstances on persons who act in
good faith, and therefore nothing in this Agreement will waive or limit any rights that the
Trust or a Fund may have under those laws. An indemnitee will not confess any claim or
settle or make any compromise in any instance in which the Trust will be asked to provide
indemnification, except with the Trusts prior written consent. Any amounts payable by the
Trust under this section shall be satisfied only against the assets of the particular Fund(s)
involved in the claim, demand, action or suit and not against the assets of any other Fund(s)
of the Trust. |
b. |
|
Any indemnification or advancement of expenses made in accordance with this section shall
not prevent the recovery from any indemnitee of any amount if the indemnitee subsequently is
determined in a final judicial decision on the merits in any action, suit, investigation or
proceeding involving the liability or expense that gave rise to the indemnification to be
liable to a Fund or its shareholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the indemnitees
office. |
c. |
|
The rights of indemnification provided in this section shall not be exclusive of or affect
any other rights to which any person may be entitled by contract or otherwise under law.
Nothing contained in this section shall affect the power of a Fund to purchase and maintain
liability insurance on behalf of the Adviser or any indemnitee. |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under seal
by their duly authorized officers as of the date first mentioned above.
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JOHN HANCOCK
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By: |
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Name |
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Title |
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JOHN HANCOCK ADVISERS, LLC |
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By: |
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Name
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Title |
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B-7
APPENDIX C
ADDITIONAL INFORMATION ABOUT THE ADVISER
AND THE ADVISORY AGREEMENTS
The information set forth below regarding the Adviser and the Advisory Agreements should be
read in conjunction with the discussion of Proposals 2 and 4 in the proxy statement.
Prior Approvals of the Advisory Agreements
Each Trust has an Advisory Agreement with John Hancock Advisers, LLC (the Adviser) on behalf
of each Fund. These Advisory Agreements were most recently approved by the Boards on June 10, 2008
in connection with their annual continuance. This table states the date that an Advisory Agreement
became effective as to each Fund, and the date of the Agreements most recent approval by
shareholders.
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Date of Most Recent |
Fund |
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Effective Date |
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Shareholder Approval |
Balanced
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December 2, 1996
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December 2, 1996 |
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Bond
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January 1, 1994
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December 8, 1993 |
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California Tax-Free Income
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December 22, 1994
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December 22, 1994 |
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Classic Value
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November 8, 2002
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November 8, 2002 |
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Classic Value II
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July 1, 2006
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June 7, 2006 |
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Financial Industries
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July 1, 1996
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January 14, 1997 |
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Global Opportunities
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February 28, 2005
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February 28, 2005 |
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Global Real Estate
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November 1, 1999
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November 1, 1999 |
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Government Income
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August 30, 1996
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December 22, 1994 |
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Greater China Opportunities
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June 1, 2005
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June 8, 2005 |
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Health Sciences
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June 24, 1991
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March 4, 1994 |
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High Yield
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August 30, 1996
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December 22, 1994 |
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High Yield Municipal Bond
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September 30, 1996
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December 22, 1994 |
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International Classic Value
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February 28, 2006
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February 28, 2006 |
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Investment Grade Bond
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September 22, 1995
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December 22, 1994 |
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Large Cap Equity
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December 22, 1994
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December 22, 1994 |
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Large Cap Select
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August 25, 2003
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August 25, 2003 |
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Massachusetts Tax-Free Income
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July 1, 1996
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October 2, 1996 |
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Mid Cap Equity
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August 4, 2003
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August 4, 2003 |
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Money Market
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December 2, 1996
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September 12, 1995 |
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New York Tax-Free Income
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July 1, 1996
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October 2, 1996 |
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Regional Bank
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July 1, 1996
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January 14, 1997 |
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Small Cap
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December 3, 2004
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December 3, 2004 |
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Small Cap Equity
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October 31, 1998
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October 31, 1998 |
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Small Cap Intrinsic Value
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February 28, 2005
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February 28, 2005 |
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Sovereign Investors
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December 2, 1996
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January 3, 1994 |
C-1
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Date of Most Recent |
Fund |
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Effective Date |
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Shareholder Approval |
Strategic Income
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January 1, 1994
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September 21, 1993 |
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Tax-Free Bond
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December 22, 1994
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December 22, 1994 |
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U.S. Global Leaders Growth
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May 13, 2002
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May 8, 2002 |
Management and Control of the Adviser
JHA is a Delaware limited liability company having its principal offices at 601 Congress
Street, Boston, Massachusetts 02210. JHA is a wholly owned subsidiary of John Hancock Financial
Services, Inc., which in turn is a subsidiary of Manulife Financial Corporation, based in Toronto,
Canada. Manulife Financial Corporation is the holding company of The Manufacturers Life Insurance
Company and its subsidiaries, collectively known as Manulife Financial. The Adviser is registered
as an investment adviser under the Advisers Act. The following table sets forth the principal
executive officers and directors of the Adviser and their principal occupations. The business
address of each such person is 601 Congress Street, Boston, Massachusetts 02210.
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Name |
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Position with JHA |
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Position with each Trust |
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Principal Occupation |
James R. Boyle
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Chairman, Director
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Trustee
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President, JHLICO
(U.S.A.) |
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Keith F. Hartstein
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President, Chief
Executive Officer and
Director
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President and Chief
Executive Officer
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President and Chief
Executive Officer,
JHA |
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John G. Vrysen
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Executive Vice
President, Chief
Operating Officer and
Director
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Chief Operating Officer
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Executive Vice
President and Chief
Operating Officer,
JHA |
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John J. Danello
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Senior Vice President
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Vice President, Law
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Senior Vice
President, JHA |
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Bruce Speca
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Chief Investment Officer
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Senior Vice President,
Investments
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Chief Investment
Officer, JHA |
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Jeffrey H. Long
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Chief Financial Officer
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None
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Chief Financial
Officer, JHA |
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Francis V. Knox
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Chief Compliance Officer
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Chief Compliance
Officer*
|
|
Chief Compliance
Officer, John
Hancock Financial
Services |
|
|
|
|
|
|
|
Thomas M. Kinzler
|
|
Chief Legal Counsel
|
|
Secretary and Chief
Legal Officer
|
|
Chief Legal
Counsel, JHA |
The Adviser pays a subadvisory fee to each Funds subadviser out of the advisory fee that
the Adviser receives from that Fund. Two subadvisers are affiliates of the Adviser: MFC Global
Investment Management (U.S.), LLC; and MFC Global Investment Management (U.S.A.) Limited.
Payments by the Funds to Affiliates of the Adviser
Distribution Fees
John Hancock Funds, LLC (the Distributor), an indirect wholly owned subsidiary of MFC,
is the distributor and principal underwriter for each Fund. It is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended, and is a member of the
Financial Industry Regulatory Authority
|
|
|
* |
|
Mr. Knox has been appointed each Trusts Chief
Compliance Officer by the Trustees, including a majority of the Independent
Trustees. |
C-2
(FINRA). Other than Rule 12b-1 fees, the Distributor does not receive compensation from
a Fund. A portion of the Rule 12b-1 fee may constitute a service fee as defined in FINRA
Rule 2830(d)(5). The amounts that the relevant share classes of each Fund paid to the
Distributor for the Funds most recent 12-month fiscal year (and, in the case of the Funds of
John Hancock Capital Series (Capital Series) and John Hancock Investment Trust (Investment
Trust), for each such Funds respective fiscal period ended October 31, 2008) are detailed in
the proxy statement in the discussion of Proposal 4. The following table shows the date that
each Rule 12b-1 Plan was adopted or most recently amended.
|
|
|
|
|
|
|
|
|
Date Plan Adopted or |
Fund (FYE) |
|
Share Class |
|
Amended |
Balanced (12/31)
|
|
Class A
|
|
December 2, 1996 |
|
|
Class B
|
|
December 2, 1996 |
|
|
Class C
|
|
May 1, 1999 |
|
|
Class R
|
|
August 1, 2008 |
|
|
Class R1
|
|
August 1, 2008 |
|
|
Class R2
|
|
August 1, 2008 |
|
|
Class R3
|
|
August 1, 2008 |
|
|
Class R4
|
|
August 1, 2008 |
|
|
Class R5
|
|
August 1, 2008 |
|
|
|
|
|
Bond (5/31)
|
|
Class A
|
|
May, 1, 1995 |
|
|
Class B
|
|
May 1, 1995 |
|
|
Class C
|
|
October 1, 1998 |
|
|
Class R1
|
|
August 1, 2003 |
|
|
|
|
|
California Tax-Free Income (8/31)
|
|
Class A
|
|
December 22, 1994 |
|
|
Class B
|
|
December 22, 1994 |
|
|
Class C
|
|
April 1, 1999 |
|
|
|
|
|
Classic Value (12/31)
|
|
Class A
|
|
November 8, 2002 |
|
|
Class B
|
|
November 8, 2002 |
|
|
Class C
|
|
November 8, 2002 |
|
|
Class R1
|
|
August 1, 2003 |
|
|
|
|
|
Classic Value II (12/31)
|
|
Class A
|
|
July 1, 2006 |
|
|
Class B
|
|
July 1, 2006 |
|
|
Class C
|
|
July 1, 2006 |
|
|
Class R1
|
|
July 1, 2006 |
|
|
|
|
|
Financial Industries (10/31)
|
|
Class A
|
|
June 3, 1997 |
|
|
Class B
|
|
June 3, 1997 |
|
|
Class C
|
|
March 1, 1999 |
|
|
|
|
|
Global Opportunities (12/31)
|
|
Class A
|
|
February 28, 2005 |
|
|
Class B
|
|
February 28, 2005 |
|
|
Class C
|
|
February 28, 2005 |
|
|
|
|
|
Global Real Estate (10/31)
|
|
Class A
|
|
November 1, 1999 |
|
|
Class B
|
|
November 1, 1999 |
|
|
Class C
|
|
November 1, 1999 |
|
|
|
|
|
Government Income (5/31)
|
|
Class A
|
|
August 30, 1996 |
|
|
Class B
|
|
August 30, 1996 |
|
|
Class C
|
|
April 1, 1999 |
|
|
|
|
|
Greater China Opportunities (10/31)
|
|
Class A
|
|
June 1, 2005 |
|
|
Class B
|
|
June 1, 2005 |
|
|
Class C
|
|
June 1, 2005 |
|
|
|
|
|
Health Sciences (10/31)
|
|
Class A
|
|
January 3, 1994 |
|
|
Class B
|
|
March 4, 1994 |
|
|
Class C
|
|
March 1, 1999 |
|
|
|
|
|
High Yield (5/31)
|
|
Class A
|
|
August 30, 1996 |
|
|
Class B
|
|
August 30, 1996 |
|
|
Class C
|
|
May 1, 1998 |
C-3
|
|
|
|
|
|
|
|
|
Date Plan Adopted or |
Fund (FYE) |
|
Share Class |
|
Amended |
High Yield Municipal Bond (8/31)
|
|
Class A
|
|
December 22, 1994 |
|
|
Class B
|
|
September 30, 1996 |
|
|
Class C
|
|
April 1, 1999 |
|
|
|
|
|
Investment Grade Bond (5/31)
|
|
Class A
|
|
December 22, 1994 |
|
|
Class B
|
|
December 22, 1994 |
|
|
Class C
|
|
April 1, 1999 |
|
|
|
|
|
International Classic Value (12/31)
|
|
Class A
|
|
February 28, 2006 |
|
|
Class B
|
|
February 28, 2006 |
|
|
Class C
|
|
February 28, 2006 |
|
|
|
|
|
Large Cap Equity (12/31)
|
|
Class A
|
|
December 22, 1994 |
|
|
Class B
|
|
December 22, 1994 |
|
|
Class C
|
|
May 1, 1998 |
|
|
|
|
|
Large Cap Select (12/31)
|
|
Class A
|
|
August 25, 2003 |
|
|
Class B
|
|
August 25, 2003 |
|
|
Class C
|
|
August 25, 2003 |
|
|
Class R1
|
|
November 3, 20003 |
|
|
|
|
|
Money Market (3/31)
|
|
Class A
|
|
December 2, 1996 |
|
|
Class B
|
|
December 2, 1996 |
|
|
Class C
|
|
May 1, 1998 |
|
|
|
|
|
Massachusetts Tax-Free Income (8/31)
|
|
Class A
|
|
July 1, 1996 |
|
|
Class B
|
|
July 1, 1996 |
|
|
Class C
|
|
April 1, 1999 |
|
|
|
|
|
Mid Cap Equity (10/31)
|
|
Class A
|
|
August 4, 2003 |
|
|
Class B
|
|
August 4, 2003 |
|
|
Class C
|
|
August 4, 2003 |
|
|
|
|
|
New York Tax-Free Income (8/31)
|
|
Class A
|
|
July 1, 1996 |
|
|
Class B
|
|
July 1, 1996 |
|
|
Class C
|
|
April 1, 1999 |
|
|
|
|
|
Regional Bank (10/31)
|
|
Class A
|
|
June 3, 1997 |
|
|
Class B
|
|
June 3, 1997 |
|
|
Class C
|
|
March 1, 1999 |
|
|
|
|
|
Small Cap (10/31)
|
|
Class A
|
|
December 3, 2004 |
|
|
Class B
|
|
December 3, 2004 |
|
|
Class C
|
|
December 3, 2004 |
|
|
|
|
|
Small Cap Equity (10/31)
|
|
Class A
|
|
October 31, 1998 |
|
|
Class B
|
|
October 31, 1998 |
|
|
Class C
|
|
October 31, 1998 |
|
|
Class R1
|
|
August 1, 2003 |
|
|
|
|
|
Small Cap Intrinsic Value (12/31)
|
|
Class A
|
|
February 28, 2005 |
|
|
Class B
|
|
February 28, 2005 |
|
|
Class C
|
|
February 28, 2005 |
|
|
|
|
|
Sovereign Investors (12/31)
|
|
Class A
|
|
December 2, 1996 |
|
|
Class B
|
|
December 2, 1996 |
|
|
Class C
|
|
May 1, 1998 |
|
|
Class R1
|
|
August 1, 2003 |
|
|
|
|
|
Strategic Income (5/31)
|
|
Class A
|
|
January 3, 1994 |
|
|
Class B
|
|
December 8, 1998 |
|
|
Class C
|
|
May 1, 1998 |
|
|
Class R1
|
|
August 1, 2003 |
|
|
|
|
|
Tax-Free Bond (8/31)
|
|
Class A
|
|
June 26, 1996 |
|
|
Class B
|
|
December 22, 1994 |
|
|
Class C
|
|
April 1, 1999 |
C-4
|
|
|
|
|
|
|
|
|
Date Plan Adopted or |
Fund (FYE) |
|
Share Class |
|
Amended |
U.S. Global Leaders Growth (12/31)
|
|
Class A
|
|
May 13, 2002 |
|
|
Class B
|
|
May 13, 2002 |
|
|
Class C
|
|
May 13, 2002 |
|
|
Class R1
|
|
August 1, 2003 |
Transfer Agency Fees
John Hancock Signature Services, Inc. (Signature Services), an affiliate of JHA, is the
transfer and dividend paying agent for each of the Funds. Each Fund pays Signature Services a
monthly fee that is based on an annual rate, plus certain out-of-pocket expenses. Expenses for a
Fund are aggregated and allocated to each class on the basis of their relative net asset values.
The following tables show the transfer agency fees paid by the Funds to Signature Services for the
last 12-month fiscal year (and, in the case of the Funds of Capital Series and Investment Trust,
for each such Funds respective fiscal period ended October 31, 2008).
Transfer Agency Fee Information for Funds that Did Not Change Fiscal Year Ends in 2008
|
|
|
|
|
Fund (FYE) |
|
Net Transfer Agency Fees |
|
Bond (5-31-08) |
|
$ |
1,725,560 |
|
California Tax-Free Income (8-31-08) |
|
$ |
129,294 |
|
Financial Industries (10-31-08) |
|
$ |
1,129,060 |
|
Global Real Estate (10-31-08) |
|
$ |
173,748 |
|
Government Income (5-31-08) |
|
$ |
570,913 |
|
Greater China Opportunities (10-31-08) |
|
$ |
558,468 |
|
Health Sciences (10-31-08) |
|
$ |
670,393 |
|
High Yield (5-31-08) |
|
$ |
1,457,218 |
|
High Yield Municipal Bond (8-31-08) |
|
$ |
61,596 |
|
Investment Grade Bond (5-31-08) |
|
$ |
186,968 |
|
Large Cap Select (12-31-08) |
|
$ |
120,037 |
|
Massachusetts Tax-Free Income (08-31-08) |
|
$ |
65,784 |
|
Mid Cap Equity (10-31-08) |
|
$ |
35,025 |
|
Money Market (3-31-08) |
|
$ |
501,578 |
|
New York Tax-Free Income (8-31-08) |
|
$ |
39,239 |
|
Regional Bank (10-31-08) |
|
$ |
2,350,974 |
|
Small Cap (10-31-08) |
|
$ |
356,782 |
|
Small Cap Equity (10-31-08) |
|
$ |
2,087,648 |
|
Strategic Income (5-31-08) |
|
$ |
1,654,666 |
|
Tax-Free Bond (8-31-08) |
|
$ |
367,638 |
|
Transfer Agency Fee Information for Funds that Changed Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
|
|
Transfer Agency Fees |
Fund |
|
FYE 12-31-07 |
|
FPE 10-31-08 |
Balanced |
|
$ |
368,155 |
|
|
|
892,396 |
|
Classic Value |
|
$ |
12,645,000 |
|
|
|
5,632,562 |
|
Classic Value II |
|
$ |
221,804 |
|
|
|
111,977 |
|
Global Opportunities |
|
$ |
11,291 |
|
|
|
77,715 |
|
International Classic Value |
|
$ |
44,750 |
|
|
|
29,752 |
|
Large Cap Equity |
|
$ |
1,873,786 |
|
|
|
3,116,806 |
|
Small Cap Intrinsic Value |
|
$ |
292,346 |
|
|
|
487,942 |
|
Sovereign Investors |
|
$ |
1,724,125 |
|
|
|
1,334,689 |
|
U.S. Global Leaders Growth |
|
$ |
3,350,292 |
|
|
|
2,193,886 |
|
C-5
APPENDIX D
ADVISORY FEE SCHEDULES AND
COMPARABLE FUNDS MANAGED BY THE ADVISER
This Appendix sets forth the advisory fee schedule under the current Advisory Agreements for
each of the Funds, the amount of advisory fees paid during the most recently completed fiscal
year, as well as other amounts paid to JHA. In addition to these Funds, JHA currently acts as
investment adviser to nine closed-end funds. This Appendix also discusses the Funds and other
investment companies advised by JHA or an affiliate that have investment objectives and policies
in common with those of the Funds.
Under the Advisory Agreements, the Adviser receives, as compensation for its services, a fee
from each Trust computed separately for each Fund. The tables below set forth each Funds advisory
fee schedule, as well as the following as of the end of the Funds most recent 12-month fiscal year
(and, in the case of the Funds of Capital Series and Investment Trust, for each such Funds
respective fiscal period ended October 31, 2008): net assets, the amount of advisory fees paid to
JHA, and the amount of accounting and legal service fees paid by to JHA. Information with respect
to applicable fee waivers and expense reimbursements is set forth in the notes following the
tables.
Net Assets, Advisory Fee Schedules and Payments to the Adviser for
Funds that Did Not Change Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting |
|
|
|
|
|
|
|
|
Advisory |
|
and Legal |
Fund (FYE) |
|
Net Assets |
|
Advisory Fee Schedule |
|
Fees |
|
Services Fees |
Bond (5-31-08) |
|
$ |
917,467,114 |
|
|
0.500% first $1.5 billion; |
|
$ |
4,713,492 |
|
|
$ |
104,139 |
|
|
|
|
|
|
|
0.450% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.400% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.350% excess over $2.5 billion. |
|
|
|
|
|
|
|
|
California Tax-Free Income (8-31-08) |
|
$ |
317,512,910 |
|
|
0.550% first $500 million; |
|
$ |
1,790,496 |
|
|
$ |
37,228 |
|
|
|
|
|
|
|
0.500% excess over $500 million. |
|
|
|
|
|
|
|
|
Financial Industries (10-31-08) |
|
$ |
340,263,522 |
|
|
0.800% first $500 million; |
|
$ |
4,335,887 |
|
|
$ |
63,351 |
|
|
|
|
|
|
|
0.750% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.735% next $1 billion; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.725% excess over $2 billion. |
|
|
|
|
|
|
|
|
Global Real Estate (1) (10-31-08) |
|
$ |
22,722,562 |
|
|
0.800% first $1.5 billion; |
|
$ |
234,353 |
|
|
$ |
5,689 |
|
|
|
|
|
|
|
0.750% excess over $1.5 billion. |
|
|
|
|
|
|
|
|
Government Income(2)(5-31-08) |
|
$ |
349,103,829 |
|
|
0.625% first $300 million; |
|
$ |
1,942,883 |
|
|
$ |
39,123 |
|
|
|
|
|
|
|
0.500% excess over $300 million. |
|
|
|
|
|
|
|
|
Greater China Opportunities (10-31-08) |
|
$ |
100,640,038 |
|
|
1.00% |
|
$ |
2,387,095 |
|
|
$ |
27,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Sciences (10-31-08) |
|
$ |
121,337,907 |
|
|
0.80% first $200 million; |
|
$ |
1,264,321 |
|
|
$ |
18,542 |
|
|
|
|
|
|
|
0.70% excess over $200 million. |
|
|
|
|
|
|
|
|
High Yield (5-31-08) |
|
$ |
1,178,996,229 |
|
|
0.625% first $75 million; |
|
$ |
6,969,027 |
|
|
$ |
144,239 |
|
|
|
|
|
|
|
0.5625% next $75 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.500% next $2.350 billion; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.475% next $2.5 billion; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.450% excess over $5 billion. |
|
|
|
|
|
|
|
|
High Yield Municipal Bond (8-31-08) |
|
$ |
124,642,830 |
|
|
0.625% first $75 million; |
|
$ |
602,797 |
|
|
$ |
11,478 |
|
|
|
|
|
|
|
0.5625% next $75 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.500% excess over $150 million. |
|
|
|
|
|
|
|
|
Investment Grade Bond (5-31-08) |
|
$ |
116,658,720 |
|
|
0.400% first $1.5 billion; |
|
$ |
479,267 |
|
|
$ |
13,372 |
|
|
|
|
|
|
|
0.385% excess over $1.5 billion. |
|
|
|
|
|
|
|
|
D-1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting |
|
|
|
|
|
|
|
|
Advisory |
|
and Legal |
Fund (FYE) |
|
Net Assets |
|
Advisory Fee Schedule |
|
Fees |
|
Services Fees |
Large Cap Select (12-31-08) |
|
|
|
|
|
0.75% first $2.7 billion; and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.00% excess over $2.7 billion. |
|
|
|
|
|
|
|
|
Massachusetts Tax-Free Income |
|
$ |
119,324,180 |
|
|
0.500% first $250 million; |
|
$ |
547,982 |
|
|
$ |
12,632 |
|
(8-31-08) |
|
|
|
|
|
0.450% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.425% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.400% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.300% excess over $1.250 billion. |
|
|
|
|
|
|
|
|
Mid Cap Equity(3) |
|
$ |
15,730,348 |
|
|
0.800% first $500 million; |
|
$ |
34,084 |
|
|
$ |
3,034 |
|
(10-31-08) |
|
|
|
|
|
0.750% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.700% excess over $1 billion. |
|
|
|
|
|
|
|
|
Money Market(4) |
|
$ |
382,832,124 |
|
|
0.500% first $500 million; |
|
$ |
1,158,557 |
|
|
$ |
32,004 |
|
(3-31-08) |
|
|
|
|
|
0.425% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.375% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.350% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.325% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.300% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.275% excess over $2.5 billion. |
|
|
|
|
|
|
|
|
New York Tax-Free Income |
|
$ |
54,905,280 |
|
|
0.500% first $250 million; |
|
$ |
270,335 |
|
|
$ |
5,595 |
|
(8-31-08) |
|
|
|
|
|
0.450% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.425% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.400% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.300% excess over $1.250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
billion. |
|
|
|
|
|
|
|
|
Regional Bank (10-31-08) |
|
$ |
905,880,621 |
|
|
0.800% first $500 million; |
|
$ |
7,780,676 |
|
|
$ |
118,447 |
|
|
|
|
|
|
|
0.750% next $500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.735% next $1 billion; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.725% excess over $2 billion. |
|
|
|
|
|
|
|
|
Small Cap(5) |
|
$ |
56,979,175 |
|
|
0.900% first $1 billion; |
|
$ |
1,155,876 |
|
|
$ |
14,729 |
|
(10-31-08) |
|
|
|
|
|
0.850% excess over $1 billion. |
|
|
|
|
|
|
|
|
Small Cap Equity (10-31-08) |
|
$ |
308,189,490 |
|
|
0.700% first $1 billion; |
|
$ |
3,788,958 |
|
|
$ |
68,947 |
|
|
|
|
|
|
|
0.685% excess over $1 billion. |
|
|
|
|
|
|
|
|
Strategic Income (5-31-08) |
|
$ |
1,161,003,963 |
|
|
0.600% first $100 million; |
|
$ |
4,414,875 |
|
|
$ |
132,653 |
|
|
|
|
|
|
|
0.450% next $150 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.400% next $250 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.350% next $150 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.300% excess over $650 million. |
|
|
|
|
|
|
|
|
Tax-Free Bond (8-31-08) |
|
$ |
443,074,144 |
|
|
0.550% first $550 million; |
|
$ |
2,455,139 |
|
|
$ |
51,330 |
|
|
|
|
|
|
|
0.500% next$500 million; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.450% excess over $1 billion. |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Global Real Estate Fund. The Adviser has contractually limited net operating expenses to
1.54% for Class A, 2.24% for Class B and 2.24% for Class C of the Funds average daily net
assets until June 30, 2009. |
|
(2) |
|
Government Income Fund. Effective September 13, 2005, the Adviser contractually limited the
management fee to 0.55% until at least September 30, 2009. |
|
(3) |
|
Mid Cap Equity Fund. The Adviser has contractually agreed to reimburse for certain fund
expenses (excluding transfer agent fees, 12b-1 fees, brokerage commissions, interest and other
extraordinary expenses not incurred in the ordinary course of the funds business) that exceed
0.90% of the Funds |
D-2
|
|
|
|
|
average net assets. In addition, the Adviser has agreed to a contractual expense limit on
class specific expenses (including transfer agent fees and 12b-1 fees). These limits are as
follows: 1.38% for Class A, 2.05% for Class B and 1.98% for Class C. The expense
reimbursement, expense limitation and transfer agent fee reimbursements shall continue in
effect until February 28, 2009 and thereafter until terminated by the Adviser and Transfer
Agent on notice to the Fund. The Adviser reserves the right to terminate this limitation in
the future. |
|
(4) |
|
Money Market Fund. The Adviser has contractually limited advisory fee to 0.40% until July
31, 2009 and includes fee reductions due to earnings credits received from its transfer agent
as a result of uninvested cash balances. |
|
(5) |
|
Small Cap Fund. The Adviser has contractually agreed to reimburse certain fund expenses
(excluding transfer agent fees, 12b-1 fees, brokerage commissions, interest, and other
extraordinary expenses not incurred in the ordinary course of the Funds business) that exceed
1.05% of the Funds average net assets. In addition, the Adviser has agreed to a contractual
expense limit on class specific expenses (including transfer agent fees and 12b-1 fees).
These limits are as follows: 1.65% for Class A, 2.35% for class B, and 2.35% for Class C. |
Advisory Fee Schedules for Funds that Changed Fiscal Year Ends in 2008
|
|
|
Fund |
|
Advisory Fee Schedule |
Balanced |
|
0.600% first $2 billion; |
|
|
0.550% excess over $2 billion. |
Classic Value(1) |
|
0.85% first $2.5 billion; |
|
|
0.825% next $2.5 billion; |
|
|
0.80% excess over $5 billion. |
Classic Value II(2) |
|
0.80% first $2.5 billion; |
|
|
0.78% next $2.5 billion; |
|
|
0.76% excess over $5 billion. |
Global Opportunities(3) |
|
0.850% first $500 million; |
|
|
0.825% next $500 million; |
|
|
0.800% excess over $1
billion. |
International Classic Value(4) |
|
1.05% first $1 billion; |
|
|
1.00% excess over $1 billion. |
Large Cap Equity |
|
0.625% first $3 billion; |
|
|
0.600% excess over $3 billion. |
Small Cap Intrinsic Value(5) |
|
0.900% first $1 billion; |
|
|
0.850% excess over $1 billion. |
Sovereign Investors |
|
0.600% first $750 million; |
|
|
0.550% next $750 million and $1.5 billion; |
|
|
0.500% next $1.5 billion and $2.5 billion; |
|
|
0.450% excess over $2.5 billion. |
U.S. Global Leaders Growth(6) |
|
0.750% first $2 billion; |
|
|
0.70% next $2 billion and $5 billion; |
|
|
0.650% excess over $5 billion. |
Fee Waivers and Expense Limits
|
|
|
(1) |
|
Classic Value Fund. The Adviser has contractually agreed to reimburse the fund for certain
fund expenses (excluding transfer agent fees, 12b-1 fees, brokerage commissions, interest, and
other extraordinary expenses not incurred in the ordinary course of the funds business) that
exceed 0.89% of the funds average net assets. |
D-3
|
|
|
(2) |
|
Classic Value Fund II. The Adviser has contractually agreed to reimburse the fund for
certain fund expenses (excluding transfer agent fees, 12b-1 fees, brokerage commissions,
interest, and other
extraordinary expenses not incurred in the ordinary course of the funds business) that
exceed 0.89% of the funds average net assets. |
|
(3) |
|
Global Opportunities Fund. The Adviser has contractually agreed to reimburse the fund for
certain fund expenses (excluding transfer agent fees, 12b-1 fees, brokerage commissions,
interest, and other extraordinary expenses not incurred in the ordinary course of the funds
business) that exceed 1.05% of the funds average net assets. |
|
(4) |
|
International Classic Value Fund. The Adviser has contractually agreed to reimburse the fund
for certain fund expenses (excluding transfer agent fees, 12b-1 fees, brokerage commissions,
interest, and other extraordinary expenses not incurred in the ordinary course of the funds
business) that exceed 1.11% of the funds average net assets. This expense reimbursement shall
continue in effect until April 30, 2009. |
|
(5) |
|
Small Cap Intrinsic Value. The Adviser contractually limited the Funds expenses (excluding
12b-1 and transfer agent fees) to 1.15% of the Funds average daily net assets until April 30,
2008. |
|
(6) |
|
U.S. Global Leaders Growth. Effective May 1, 2008, the Adviser agreed to voluntarily limit
the Funds expenses (excluding transfer agent and 12b-1 fees) to 0.79% of the Funds average
daily net assets and net operating expenses on Class A, B and C shares to 1.32% for Class A
shares and 2.07% for Class B and Class C shares. The Adviser may terminate this limitation at
any time. |
Net Assets and Payments to the Adviser for
Funds that Changed Fiscal Year Ends in 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting and |
|
|
Net Assets (millions) |
|
Advisory Fee (Net) |
|
Legal Services Fees |
|
|
FYE |
|
FPE |
|
FYE |
|
FPE |
|
FYE |
|
FPE |
Fund |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
|
12-31-07 |
|
10-31-08 |
Balanced |
|
$ |
356.8 |
|
|
$ |
705.2 |
|
|
$ |
1,197,620 |
|
|
|
3,427,797 |
|
|
$ |
23,511 |
|
|
|
74,906 |
|
Classic Value |
|
$ |
5,998.3 |
|
|
$ |
2,665.3 |
|
|
$ |
72,747,627 |
|
|
|
29,919,406 |
|
|
$ |
1,059,992 |
|
|
$ |
436,006 |
|
Classic Value II |
|
$ |
119.9 |
|
|
$ |
43.1 |
|
|
$ |
942,691 |
|
|
$ |
407,935 |
|
|
$ |
14,464 |
|
|
$ |
7,931 |
|
Global Opportunities |
|
$ |
35.9 |
|
|
$ |
71.0 |
|
|
$ |
16,867 |
|
|
$ |
564,434 |
|
|
$ |
1,158 |
|
|
$ |
30,270 |
|
International Classic Value |
|
$ |
28.2 |
|
|
$ |
13.0 |
|
|
$ |
167,255 |
|
|
$ |
11,619 |
|
|
$ |
3,632 |
|
|
$ |
2,329 |
|
Large Cap Equity |
|
$ |
1,784.6 |
|
|
$ |
1,777.8 |
|
|
$ |
6,450,574 |
|
|
$ |
13,727,299 |
|
|
$ |
118,189 |
|
|
$ |
273,902 |
|
Small Cap Intrinsic Value |
|
$ |
518.8 |
|
|
$ |
228.1 |
|
|
$ |
2,617,767 |
|
|
$ |
3,532,621 |
|
|
$ |
29,521 |
|
|
$ |
47,376 |
|
Sovereign Investors |
|
$ |
852.7 |
|
|
$ |
555.3 |
|
|
$ |
5,360,276 |
|
|
$ |
3,632,478 |
|
|
$ |
116,220 |
|
|
$ |
73,616 |
|
U.S. Global Leaders Growth |
|
$ |
1,252.4 |
|
|
$ |
723.3 |
|
|
$ |
10,004,470 |
|
|
$ |
6,035,967 |
|
|
$ |
186,866 |
|
|
$ |
109,110 |
|
Information Concerning Comparable Funds
As shown below, certain Funds have similar investment objectives and policies. The previous
table shows information regarding the amount of assets under management of these Funds, advisory
fee rates and whether the Adviser has waived fees or reimbursed expenses. Other than the groups of
Funds shown below, the Adviser does not manage other funds with the same investment objectives and
policies.
Large Cap Funds the following Funds invest primarily in the equity securities of large cap
companies:
Large Cap Equity
Large Cap Select
D-4
Small Cap Funds the following Funds invest primarily in the equity securities of small cap
companies.
Small Cap
Small Cap Equity
Small Cap Intrinsic Value
Value Funds the following Funds invest primarily in the equity securities of U.S. companies
that the Funds subadvisers believe to be under-valued:
Classic Value
Classic Value Fund II
D-5
APPENDIX E
JOHN HANCOCK FUNDS
CLASS SHARES
FORM OF
DISTRIBUTION PLAN PURSUANT TO RULE 12b-1
___, , as amended ___, 2009
WHEREAS, John Hancock (the Trust) is an open-end management
investment company registered under the Investment Company Act of 1940, as amended (1940 Act),
and offers for public sale shares of beneficial interest in several series (each series a Fund);
WHEREAS, the shares of beneficial interest of each Fund are divided into one or more classes,
one of which is designated Class ;
WHEREAS, the Trust desires to adopt a plan pursuant to Rule 12b-1 under the 1940 Act for the Class
shares, and the Board of Trustees has determined that there is a reasonable likelihood
that adoption of said plan will benefit the Class and its shareholders; and
WHEREAS, the Trust has entered into a Distribution Agreement with John Hancock Funds, LLC
(John Hancock) pursuant to which John Hancock has agreed to serve as Distributor of the Class
shares of each Fund of the Trust;
NOW, THEREFORE, the Trust, with respect to the Class shares, hereby adopts this Plan
Pursuant to Rule 12b-1 (Plan) in accordance with Rule 12b-1 under the 1940 Act on the following
terms and conditions:
1. This Plan applies to the Fund(s) listed on Schedule A.
2. A. The Class shares of each Fund shall pay to John Hancock, as compensation for
distribution of Class shares and/or for providing services to Class shareholders, a fee
at the rate specified for that Fund on Schedule A, such fee to be calculated and accrued and paid
daily or at such other intervals as the Board shall determine.
B. The distribution and service fees payable hereunder are payable without regard to the
aggregate amount that may be paid over the years, provided that, so long as the limitations
set forth in Rule 2830 of the Conduct Rules (Rule 2830) of the Financial Industry Regulatory
Authority (formerly the National Association of Securities Dealers, Inc.) remain in effect and
apply to recipients of payments made under this Plan, the amounts paid hereunder shall not exceed
those limitations, including permissible interest. Amounts expended in support of the activities
described in Paragraph 3.B. of this Plan may be excluded in determining whether expenditures under
the Plan exceed the appropriate percentage of new gross assets specified in Rule 2830. Amounts
expended in support of the activities described in Paragraph 3.B. of this Plan will not exceed
0.25% of the Funds average daily net assets attributable to Class shares.
3. A. As Distributor of the Trusts shares, John Hancock may spend such amounts as it deems
appropriate on any activities or expenses primarily intended to result in the sale of Class shares of the Funds, including, but not limited to, (i) compensation to selling firms and others
(including affiliates of John Hancock) that engage in or support the sale of Class shares of
the Funds; and (ii) marketing, promotional and overhead expenses incurred in connection with the
distribution of Class shares of the Funds. John Hancock may use service fees to compensate
selling firms and others for providing personal and account maintenance services to shareholders.
E-1
B. John Hancock may spend such amounts as it deems appropriate on the administration and
servicing of Class shareholder accounts, including, but not limited to, responding to
inquiries from shareholders or their representatives requesting information regarding matters such
as shareholder account or transaction status, net asset value of shares, performance, services,
plans and options, investment policies, portfolio holdings, and distributions and taxation thereof;
and dealing with complaints and correspondence of shareholders; including compensation to
organizations and employees who service Class shareholder accounts, and expenses of such
organizations, including overhead and telephone and other communications expenses.
4. Amounts paid to the John Hancock by Class shares of the Fund will not be used to pay
the expenses incurred with respect to any other class of shares of the Fund; provided, however,
that expenses attributable to the Fund as a whole will be allocated, to the extent permitted by
law, according to a formula based upon gross sales dollars and/or average daily net assets of each
such class, as may be approved from time to time by a vote of a majority of the Trustees. From time
to time, a Fund may participate in joint distribution activities with other Funds and the costs of
those activities will be borne by each Fund in proportion to the relative net asset value of each
such participating Fund.
5. Each Fund pays, and will continue to pay, a management fee to John Hancock Advisers, LLC
(JHA) pursuant to a management agreement between the Fund and JHA. It is recognized that JHA may
use its management fee revenue, as well as its past profits or its other resources from any other
source, to make payments with respect to any expenses incurred in connection with the distribution
of Class shares, including the activities referred to in Paragraph 3 above. To the extent
that the payment of management fees by the Fund to JHA should be deemed to be indirect financing of
any activity primarily intended to result in the sale of Class shares within the meaning of
Rule 12b-1, then such payment shall be deemed to be authorized by this Plan.
6. This Plan shall take effect on ___,
and shall continue in effect with
respect to each Fund for successive periods of one year from its execution for so long as such
continuance is specifically approved with respect to such Fund at least annually together with any
related agreements, by votes of a majority of both (a) the Board of Trustees of the Trust and (b)
those Trustees who are not interested persons of the Trust, as defined in the 1940 Act, and who
have no direct or indirect financial interest in the operation of this Plan or any agreements
related to it (the Rule 12b-1 Trustees), cast in person at a meeting or meetings called for the
purpose of voting on this Plan and such related agreements; and only if the Trustees who approve
the implementation or continuation of the Plan have reached the conclusion required by Rule
12b-1(e) under the 1940 Act.
7. Any person authorized to direct the disposition of monies paid or payable by a Fund
pursuant to this Plan or any related agreement shall provide to the Trusts Board of Trustees and
the Board shall review, at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made.
8. This Plan may be terminated without penalty with respect to a Fund at any time (a) by the
vote of a majority of the Funds Board of Trustees, Independent Trustees, or by a vote of a
majority of the Funds outstanding Class shares, or (b) upon 60 days written notice to John
Hancock. John Hancock may terminate the Plan without penalty with respect to any Fund upon 60
days written notice to the Fund.
9. This Plan may not be amended to increase materially the amount of fees to be paid by any
Fund hereunder unless such amendment is approved by a vote of a majority of the outstanding
securities (as defined in the 1940 Act) of the Class shares of that Fund, and no material
amendment to the Plan shall be made unless such amendment is approved in the manner provided in
Paragraph 6 hereof for annual approval.
10. While this Plan is in effect, the selection and nomination of Trustees who are not
interested persons of the Trust, as defined in the 1940 Act, shall be committed to the discretion
of Trustees who are themselves not interested persons.
11. The Trust shall preserve copies of this Plan and any related agreements for a period of
not less than six years from the date of expiration of the Plan or agreement, as the case may be,
the first two years in an easily accessible place; and shall preserve copies of each report made
pursuant to Paragraph 5 hereof for a period of not less than six years from the date of such
report, the first two years in an easily accessible place.
E-2
IN WITNESS WHEREOF, the Trust has executed this Plan, as amended, pursuant to Rule 12b-1 as of
the day and year set forth below.
|
|
|
|
|
|
JOHN HANCOCK
|
|
|
By: |
|
|
|
|
Name |
|
|
|
Title |
|
|
Agreed and assented to:
JOHN HANCOCK FUNDS, LLC
DATE: ___, , as amended
___, 2009
E-3
APPENDIX F
OUTSTANDING SHARES AND SHARE OWNERSHIP
This table shows, as of the Record Date, the number of shares of each class of each Fund
eligible to be voted at the Meeting. Certain Funds have issued Class NAV shares, which are held
primarily by other investment companies managed by the Adviser or its affiliates.
|
|
|
|
|
Fund |
|
Share Class |
|
Number of Eligible Shares |
Balanced
|
|
Class A
Class B
Class C
Class I
Class R
Class R1
Class R2
Class R3
Class R4
Class R5 |
|
|
|
|
|
|
|
Bond
|
|
Class A
Class B
Class C
Class I
Class R1 |
|
|
|
|
|
|
|
California Tax-Free Income
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
Classic Value
|
|
Class A
Class B
Class C
Class I
Class R1 |
|
|
|
|
|
|
|
Classic Value II
|
|
Class A
Class B
Class C
Class I
Class R1 |
|
|
|
|
|
|
|
Financial Industries
|
|
Class A
Class B
Class C
Class I |
|
|
|
|
|
|
|
Global Opportunities
|
|
Class A
Class B
Class C
Class I
Class NAV |
|
|
|
|
|
|
|
Global Real Estate
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
Government Income
|
|
Class A
Class B
Class C |
|
|
F-1
|
|
|
|
|
Fund |
|
Share Class |
|
Number of Eligible Shares |
Greater China Opportunities
|
|
Class A
Class B
Class C
Class I
Class NAV |
|
|
|
|
|
|
|
Health Sciences
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
High Yield
|
|
Class A
Class B
Class C
Class I |
|
|
|
|
|
|
|
High Yield Municipal Bond
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
Investment Grade Bond
|
|
Class A
Class B
Class C
Class I |
|
|
|
|
|
|
|
International Classic Value
|
|
Class A
Class B
Class C
Class I
Class NAV |
|
|
|
|
|
|
|
Large Cap Equity
|
|
Class A
Class B
Class C
Class I |
|
|
|
|
|
|
|
Large Cap Select
|
|
Class A
Class B
Class C
Class I
Class R1 |
|
|
|
|
|
|
|
Massachusetts Tax-Free Income
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
Mid Cap Equity
|
|
Class A
Class B
Class C
Class I |
|
|
|
|
|
|
|
Money Market
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
Regional Bank
|
|
Class A
Class B
Class C |
|
|
|
|
|
|
|
New York Tax-Free Income
|
|
Class A
Class B
Class C |
|
|
|
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Small Cap
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Class A
Class B
Class C
Class I |
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F-2
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Small Cap Equity
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Class A
Class B
Class C
Class I
Class R1 |
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Small Cap Intrinsic Value
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Class A
Class B
Class C
Class I
Class NAV |
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Sovereign Investors
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Class A
Class B
Class C
Class I
Class R1 |
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Strategic Income
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Class A
Class B
Class C
Class I
Class R1 |
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Tax-Free Bond
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Class A
Class B
Class C |
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U. S. Global Leaders Growth
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Class A
Class B
Class C
Class I
Class R1 |
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Set forth below for each Fund is information as to shareholders, if any, known by the Fund to
own beneficially or of record 5% or more of the outstanding shares of any class of shares of the
Fund as of the Record Date.
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Record or |
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% of |
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Class |
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Name |
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Address |
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Shares |
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Ownership |
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Ownership |
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As of the Record Date, the Trustees and officers of the Trusts, in the aggregate, beneficially
owned less than 1% of the outstanding shares of any class of any of the Funds, except for [ ], who
owned [ ]% of the Class [ ] shares of the Fund.
F-3
33 Vote this proxy card TODAY! Your prompt response will save the expense PROXY TABULATOR of
additional mailings P.O. BOX 859232 BRAINTREE, MA 02185-9232 CALL: To vote by phone call toll-free
1-800-830-3542 and follow the recorded instructions. LOG-ON: Vote on the internet at
www.jhfunds.com/proxy and follow the on-screen instructions. MAIL: Return the signed proxy card in
the enclosed envelope. JOHN HANCOCK FUNDS PROXY FOR A SPECIAL JOINT MEETING OF SHAREHOLDERS TO BE
HELD APRIL 16, 2009 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST FUND
NAME The undersigned hereby appoints Keith F. Hartstein, Gordon Shone and Thomas M. Kinzler, or any
of them, as Proxies of the undersigned with full power of substitution, to vote and act with
respect to all interests in the Fund referenced above with respect to which the undersigned is
entitled to vote at the Special Joint Meeting of Shareholders to be held at 601 Congress Street,
Boston, Massachusetts 02210, on April 16, 2009 at 2:00 p.m. (Eastern time), and at any adjournments
or postponements thereof. The undersigned acknowledges receipt of the Notice of Special Joint
Meeting of Shareholders and of the accompanying Proxy Statement, and revokes any proxy previously
given with respect to such meeting. This proxy will be voted as instructed. If no specification is
made for a proposal, the proxy will be voted FOR the proposals. The Proxies are authorized in
their discretion to vote upon such other matters as may come before the Meeting or any adjournments
or postponements thereof. PLEASE SIGN, DATE, AND RETURN PROMPTLY IN ENCLOSED ENVELOPE IF YOU ARE
NOT VOTING BY PHONE OR INTERNET Dated ___Signature(s) (Title(s), if
applicable)(Sign in the Box) NOTE: Signature(s) should be exactly as name or names appearing on
this proxy. If shares are held jointly each holder should sign. If signing is by attorney,
executor, administrator, trustee, or guarding please give full title. JHF-PXC 0409 ?> |
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST. THE BOARD RECOMMENDS A
VOTE, IN THE CASE OF PROPOSAL I, FOR ELECTION OF ALL NOMINEES AND, IN THE CASE OF ALL OTHER
PROPOSALS, FOR APPROVAL OF EACH PROPOSAL. FOR all nominees listed WITHHOLDPlease fill in box(es)
as shown using black or blue ink or number 2 pencil. . (except as noted on the line at left)
authority to vote for all PLEASE DO NOT USE FINE POINT PENS. nominees 1.Election of eleven Trustees
as members of the Board of Trustees of each of the Trusts (all Trusts): 3 3(01) James R. Boyle (05)
Deborah Jackson (09) Patti McGill Peterson (02) John G. Vrysen (06) Charles L. Ladner (10) Steven
R. Pruchansky (03) James F. Carlin (07) Stanley Martin (11) Gregory A. Russo (04) William H.
Cunningham (08) John A. Moore (Instruction: To withhold authority to vote for any individual
nominee(s), write the name(s) of the nominee(s) on the line above.) FOR AGAINST ABSTAIN Approval of
a new form of Advisory Agreement between each Trust and John Hancock Advisers, LLC 2.3 3 3 (all
Funds). Approval of the following changes to fundamental investment restrictions (See Proxy
Statement for 3. Fund(s) voting on this Proposal): Revise: 3(a) Concentration; 3 3 3 3(b)
Diversification; 3 3 3 3(c) Underwriting; 3 3 3 3(d) Real Estate; 3 3 3 3(e) Loans; and 3 3 3 3(f)
Senior Securities. 3 3 3 Eliminate: 3(g) Oil, Gas & Mineral Programs; 3 3 3 3(h) Investment to
Exercise Control; 3 3 3 3(i) Trustee and Officer Ownership; 3 3 3 3(j) Margin Investment; Short
Selling; 3 3 3 3(k) Restricted Securities; 3 3 3 3(l) Pledging Assets; 3 3 3 3(m) Unseasoned
Companies; 3 3 3 3(n) Loans to Trust Officers & Trustees; and 3 3 3 3(o) Warrants. 3 3 3 Approval
of amendments changing Rule 12b-1 Plans for certain classes of the Funds from 4.3 3 3
reimbursement to compensation Plans (All Fund Classes Except Classes I and NAV). Proposal
adopting a manager of manager structure (All Funds Except Classic Value II, International 5.3 3 3
Classic Value, and Small Cap Funds).6.Revision to merger approval requirements (all Trusts).3 3 3
PLEASE SIGN ON REVERSE SIDE JHF-PXC-0409 |