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UNITED STATES FORM N-CSR Investment Company Act file number 811- 5615 John Hancock Patriot Premium Dividend Fund I 601 Congress Street, Boston, Massachusetts 02210 Alfred P. Ouellette Registrant's telephone number, including area code: 617-663-4324 CEO corner To Our Shareholders, We have always been firm believers in the powerful role the Internet can play in providing fund information to our shareholders and prospective investors. Recently, we launched a redesigned, completely overhauled Web site that is more visually pleasing, easier to navigate and, most importantly, provides more fund information and learning tools without overwhelming the user. Not long after we embarked on this major project, a study was released by the Investment Company Institute, the mutual fund industrys main trade group, which found that an overwhelming majority of shareholders consider the Internet the wave of the future for accessing fund information. Our new site sports fresher and faster ways to access account information. New innovations allow investors to view funds by risk level, track the performance of the John Hancock funds of their choice or sort funds by Morningstar, Inc.s star ratings. Investors who own a John Hancock fund through a qualified retirement plan and dont pay sales charges when making a purchase have the option of sorting by a Load Waived Morningstar Rating, thereby creating an apples-to-apples comparison with no-load funds that may also be available in their retirement plan. After youve read your shareholder report, we encourage you to visit our new Web site www.jhfunds.com and take a tour. Its easy, fast and fun and allows you to be in control of what you see and do. In short, its the wave of the future! Sincerely, Keith F. Hartstein, This commentary reflects the CEOs views as of September 30, 2006. They are subject to change at any time. Your fund at a glance The Fund seeks to provide high current income, consistent with modest growth of capital, for holders of its common shares by investing at least 80% of its assets in dividend-paying securities. Over the last twelve months ► Despite uncertainty over interest rates, preferred and utility common stocks posted solid gains. ► Utility common stock holdings aided the Funds returns. ► Tax-advantaged preferred holdings performed well, but those without tax benefits detracted from performance. As a percentage of net assets plus the value of preferred shares on September 30, 2006. 1 Managers report John Hancock Patriot Premium Dividend Fund I Preferred stocks and utility common stocks the two primary areas of emphasis for John Hancock Patriot Premium Dividend Fund I posted solid gains for the 12-month period ended September 30, 2006. The period began on a weak note, as a bout of profit-taking hurt both segments. Conditions improved significantly from December 2005 through February 2006 as signs of a slowing economy bolstered hopes that the Federal Reserve Board would soon stop raising interest rates. Because preferreds and utility commons typically make fixed income payments in the form of dividends, their prices generally are sensitive to interest rate movements. From March through June, fixed-income investments performed poorly, hurt by news of strong economic growth and mounting inflation pressures, which in turn fueled concerns about more rate hikes. During that period, preferreds also were forced to contend with a glut of new issuance, which typically came to market with higher yields than already-outstanding securities, making older issues less attractive and putting pressure on their prices. In June, July and August, preferreds and utility commons rallied strongly, bolstered by renewed optimism that the Fed would hold interest rates steady, which it did on August 8, 2006. Against that backdrop, preferred stocks that offered a certain tax advantage known as the dividends received deduction (DRD) outpaced those without the tax benefit. Utility common stocks also were helped by a mini wave of merger SCORECARD 2 Gregory K. Phelps and Mark T. Maloney for the MFC Global Investment Management (U.S.), LLCs Portfolio Management Team and acquisition activity, as well as by growing investor interest in defensive industries that tend to perform well amid slowing economic conditions. Even a decline in energy prices in the final weeks of the period didnt really hurt utility common stocks, which had been viewed by many investors as hidden energy plays. Performance For the 12 months ended September 30, 2006, John Hancock Patriot Premium Dividend Fund I returned 6.71% at net asset value and 3.27% at market value. The Funds yield at closing market price on September 30, 2006 was 5.42% . The difference in the Funds net asset value (NAV) performance and its market performance stems from the fact that the market share price is subject to the dynamics of secondary market trading, which could cause it to trade at a discount or premium to the Funds NAV share price at any time. By comparison, the average closed-end specialty-utilities fund returned 9.77% at net asset value, according to Morningstar, Inc. For the same 12-month period, the Lehman Brothers Aggregate Bond Index gained 3.67%, the Merrill Lynch Preferred Stock DRD Index rose 6.66% and the S&P 400 Mid-Cap Utilities Index returned 3.97% . Our utility common stock Patriot Premium Dividend Fund I 3 to resume growing its dividend, to rid itself of money-losing foreign investments and to renew its focus on core regulated utility businesses. National Fuel Gas Co. also performed well, thanks in large part to strong pricing conditions for natural gas. Kinder Morgan, Inc. also helped boost returns, soaring on news that the companys senior management and co-founder were teaming up to take the major energy pipeline company private in a deal that would be one of the largest management buyouts in history. Two of our telecommunications holdings AT&T, Inc. and Verizon Communications, Inc. also fared well due to growing recognition that these companies stocks provided attractive dividend yields, that their respective mergers were working and that they were gaining market share in the broadband and wireless segments. Among our preferred holdings, we enjoyed strong performance from PNM Resources, Inc., a New Mexico electric utility. It was helped by the companys move to reopen one of its nuclear plants that had been shut down due to mechanical problems. Our holdings in MetLife, Inc. also served us well, aided by strong demand for DRD-eligible preferreds. Bank of America Corp. preferred holdings, which we purchased very recently, also enjoyed a strong performance, helped by investor demand for attractively priced tax-advantaged preferred stocks issued by high-quality companies amid a dearth of such securities. In contrast, high-quality companies that didnt offer the DRD tax advantage and carried a dividend yield lower than that of newly issued preferred stocks proved to be our biggest disappointments during the year, languishing amid a lack of investor interest. Even high-quality holdings such as Georgia Power Co. and Baltimore Gas & Electric Co. languished because they couldnt buck investors growing preference for higher-yielding, tax-advantaged preferred stocks. A word about dividends The Federal Reserve Boards 17 quarter-point interest rate increases since June 2004 have significantly increased the Funds leverage costs, reducing the income available to the common shareholders. At the same time, longer-term interest rates have fallen below short-term rates. Furthermore, new Patriot Premium Dividend Fund I 4 preferred issuance has weighed heavily on our existing preferreds. With many of our higher-yielding preferred securities being called, the Fund has been forced to reinvest the proceeds at lower yields. In order to maintain our approach of only paying dividends from income generated by underlying securities within the portfolio, the Funds dividend has been reduced. We believe this is necessary at this time to avoid a return of capital. We declared a new monthly dividend on July 3, 2006. The new dividend amount of $0.0390 equates to an annualized yield of 5.42%, based on the Funds closing market price as of September 30, 2006. Over the longer term, we remain Outlook At the end of the period, the bond market was pricing in at least one rate cut by mid-2007. While we agree with the notion that the Feds next move will be to lower rates, rather than raise them further, we believe that such action will come later than the market currently anticipates. For that reason, we believe the Treasury market could be due for a sell off amid any signs of economic strength, which likely would weigh on preferred and utility common stocks as well over the short term. Over the longer term, we remain quite optimistic that gradually slowing economic conditions will bode well for fixed-income investments, including preferred and utility common stocks. We also believe that long-term demand driven by the baby boom generations increasing need for income-producing investments will continue to provide support for preferred and utility stocks. This commentary reflects the views of the portfolio management team through the end of the Funds period discussed in this report. The teams statements reflect their own opinions. As such they are in no way guarantees of future events and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant. The Fund normally will invest at least 25% of its managed assets in securities of companies in the utilities industry. Such an investment concentration makes the Fund more susceptible than a more broadly diversified fund to factors adversely affecting the utilities industry. Sector investing is subject to greater risks than the market as a whole. 1 As a percentage of the Funds portfolio on September 30, 2006. Patriot Premium Dividend Fund I 5 F I N A N C I A L S T A T E M E N T S Funds investments Securities owned by the Fund on 9-30-06 This schedule is divided into three main categories: common stocks, preferred stocks and short-term investments. Common stocks and preferred stocks are further broken down by industry group. Short-term investments, which represent the Funds cash position, are listed last. See notes to financial statements Patriot Premium Dividend Fund I 6 F I N A N C I A L S T A T E M E N T S See notes to financial statements Patriot Premium Dividend Fund I 7 F I N A N C I A L S T A T E M E N T S See notes to financial statements Patriot Premium Dividend Fund I 8 F I N A N C I A L S T A T E M E N T S (A) Credit ratings are unaudited and are rated by Moodys Investors Service where Standard & Poors ratings are not available unless indicated otherwise. (B) This security is fair valued in good faith under procedures established by the Board of Trustees. These securities amounted to $21,390 or .01% of the Funds net assets as of September 30, 2006. (G) Security rated internally by John Hancock Advisers, LLC. (S) This security is exempt from registration under Rule 144A of the Securities Act of 1933. Such security may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $2,840,471 or 1.88% of the Funds net assets as of September 30, 2006. Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer; however, security is U.S. dollar-denominated. The percentage shown for each investment category is the total value of that category as a percentage of the net assets of the Fund. See notes to financial statements Patriot Premium Dividend Fund I 9 F I N A N C I A L S T A T E M E N T S Financial statements See notes to financial statements Patriot Premium Dividend Fund I 10 F I N A N C I A L S T A T E M E N T S Statement of operations For the year ended 9-30-06. This Statement of Operations summarizes the Funds investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) and distributions paid to DARTS shareholders for the period stated. See notes to financial statements Patriot Premium Dividend Fund I 11 F I N A N C I A L S T A T E M E N T S Statement of changes in net assets These Statements of Changes in Net Assets show how the value of the Funds net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions. 1 Audited by previous auditor. 2 Includes accumulated net investment income of $458,807 and $104,554, respectively. See notes to financial statements Patriot Premium Dividend Fund I 12 F I N A N C I A L S T A T E M E N T S Financial highlights The Financial highlights show how the Funds net asset value for a share has changed since the end of the previous period. 1 Audited by previous auditor. See notes to financial statements Patriot Premium Dividend Fund I 13 Notes to financial statements Note 1 Accounting policies John Hancock Patriot Premium Dividend Fund I (the Fund) is a diversified closed-end management investment company registered under the Investment Company Act of 1940, as amended. Significant accounting policies of the Fund are as follows: Valuation of investments Securities in the Funds portfolio are valued on the basis of market quotations, valuations provided by independent pricing services or at fair value as determined in good faith in accordance with procedures approved by the Trustees. Short-term debt investments which have a remaining maturity of 60 days or less may be valued at amortized cost, which approximates market value. The Fund determines the net asset value of the common shares each business day. Investment transactions Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Net realized gains and losses on sales of investments are determined on the identified cost basis. Expenses The majority of the expenses are directly identifiable to an individual fund. Expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative sizes of the funds. Federal income taxes The Fund qualifies as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required. For federal income tax purposes, the Fund has $7,244,165 of a capital loss carryforward available, to the extent provided by regulations, to offset future net realized capital gains. To the extent that such carryforward is used by the Fund, no capital gain distributions will be made. The loss carryforward expires September 30, 2014. New accounting pronouncements In June 2006, Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (the Interpretation) was issued and is effective for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return and requires certain expanded disclosures. Management is currently evaluating the application of the Interpretation to the Fund and has not at this time quantified the impact, if any, resulting from the adoption of the Interpretation on the Funds financial statements. In September 2006, FASB Standard No. 157, Fair Value Measurements (FAS 157) was issued, and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishing a framework for measuring fair value and expands disclosure about fair value measurements. Management is currently evaluating the application of FAS 157 to the Fund and its impact, if any, resulting from the adoption of FAS 157 on the Funds financial statements. Dividends, interest and distributions Dividend income on investment securities is recorded on the ex-dividend date or, in the case of some foreign securities, on the date thereafter when the Fund identifies the 14 dividend. Interest income on investment securities is recorded on the accrual basis. The Fund may place a security on non-accrual status and reduce related investment income by ceasing current accruals or writing off interest, or dividends receivable, when the collection of income has become doubtful. Foreign income may be subject to foreign withholding taxes, which are accrued as applicable. The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended September 30, 2005, the tax character of distributions paid was as follows: ordinary income $10,889,885. During the year ended September 30, 2006, the tax character of distributions paid was as follows: ordinary income $10,612,693. As of September 30, 2006, the components of distributable earnings on a tax basis included $354,421 of undistributed ordinary income. Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Funds financial statements as a return of capital. Use of estimates The preparation of these financial statements, in accordance with accounting principles generally accepted in the United States of America, incorporates estimates made by management in determining the reported amount of assets, liabilities, revenues and expenses of the Fund. Actual results could differ from these estimates. Note 2 Management fee and transactions with affiliates and others The Fund has an investment management contract with John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (MFC). Under the investment management contract, the Fund pays a monthly management fee to the Adviser at an annual rate of 0.50% of the Funds average weekly net asset value plus the value attributable to the Dutch Auction Rate Transferable Securities preferred shares (collectively, managed assets), plus 5.00% of the Funds weekly gross income, $629,493 for the year ended September 30, 2006. The Advisers total fee is limited to a maximum amount equal to 1.00% annually of the Funds average weekly managed assets. For the year ended September 30, 2006, the advisory fee incurred did not exceed the maximum advisory fee allowed. Effective December 31, 2005, the investment management teams of the Adviser were reorganized into Sovereign Asset Management LLC (Sovereign), a wholly owned indirect subsidiary of John Hancock Life Insurance Company (JHLICO), a subsidiary of MFC. The Adviser remains the principal advisor on the Fund and Sovereign acts as subadviser under the supervision of the Adviser. The restructuring did not have an impact on the Fund, which continues to be managed using the same investment philosophy and process. The Fund is not responsible for payment of the subadvisory fees. Effective October 1, 2006, Sovereign changed its name to MFC Global Investment Management (U.S.), LLC. The Fund has an administrative agreement with the Adviser under which the Adviser oversees the custodial, auditing, valuation, accounting, legal, stock transfer and dividend disbursing services and maintains Fund communications with shareholders. The Fund pays the Adviser a monthly administration fee at an annual rate of 0.10% of the Funds average weekly managed assets. The compensation for the year amounted to $213,529. The Fund also paid the Adviser the amount of $104 for certain publishing services, included in the printing fees. The Fund also reimbursed JHLICO for certain compliance costs, included in the Funds Statement of Operations. Mr. James R. Boyle is Chairman of the Adviser, as well as an affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affiliates. The compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated Trustees may elect to defer, for tax purposes, 15 their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes investments into other John Hancock funds, as applicable, to cover its liability for the deferred compensation. Investments to cover the Funds deferred compensation liability are recorded on the Funds books as an other asset. The deferred compensation liability and the related other asset are always equal and are marked to market on a periodic basis to reflect any income earned by the investments as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund. The Fund is listed for trading on the New York Stock Exchange (NYSE) and has filed with the NYSE its chief executive officer certification regarding compliance with the NYSEs listing standards. The Fund also files with the Securities and Exchange Commission the certification of its chief executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act. Note 3 Fund share transactions This listing illustrates the Funds common shares dividend reinvestments, reclassification of the Funds capital accounts and the number of common shares outstanding at the beginning and end of the last two periods, along with the corresponding dollar value. 1 Audited by previous auditor. The Fund issued 685 shares of Dutch Auction Rate Transferable Securities preferred shares Series A (DARTS) in a public offering. The underwriting discount was recorded as a reduction of the capital of common shares. Dividends on the DARTS, which accrue daily, are cumulative at a rate that was established at the offering of the DARTS and has been reset every 49 days thereafter by an auction. Dividend rates on DARTS ranged from 2.85% to 4.19% during the year ended September 30, 2006. Accrued dividends on DARTS are included in the value of DARTS on the Funds Statement of Assets and Liabilities. The DARTS are redeemable at the option of the Fund, at a redemption price equal to $100,000 per share, plus accumulated and unpaid dividends on any dividend payment date. The DARTS are also subject to mandatory redemption at a redemption price equal to $100,000 per share, plus accumulated and unpaid dividends, if the Fund is in default on its asset coverage requirements with respect to the DARTS, as defined in the Funds bylaws. If the dividends on the DARTS shall remain unpaid in an amount equal to two full years dividends, the holders of the DARTS, as a class, have the right to elect a majority of the Board of Trustees. In general, the holders of the DARTS and the common shareholders have equal voting rights of one vote per share, except that the holders of the DARTS, as a class, vote to elect two members of the Board of Trustees, and separate class votes are required on certain matters that affect the respective interests of t
he DARTS and common shareholders. Note 4 Investment transactions Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during 16
the year ended September 30, 2006, aggregated $64,082,889 and $63,688,815, respectively.
The cost of investments owned on September 30, 2006, including short-term investments, for federal income tax purposes was $202,487,887. Gross unrealized appreciation and depreciation of investments aggregated
$19,042,071 and $4,090,135, respectively, resulting in net unrealized appreciation of $14,951,936. The difference between book basis and tax basis net unrealized appreciation of investments is attributable primarily to the tax deferral
of losses on certain sales of securities.
Note 5
Reclassification of accounts
During the year ended September 30, 2006, the Fund reclassified amounts to reflect an increase in accumulated net investment income of $5,667 and a decrease in capital paid-in of $5,667. This represents the amounts
necessary to report these balances on a tax basis, excluding certain temporary differences, as of September 30, 2006. Additional adjustments may be needed in subsequent reporting periods. These reclassifications, which have no impact on the net
asset value of the Fund, are primarily attributable to certain differences in the computation of distributable income and capital gains under federal tax rules versus accounting principles generally accepted in the United States of America, book and
tax differences in accounting for federal excise tax. The calculation of net investment income per share in the Funds Financial Highlights excludes these adjustments.
17 Auditors report Report of Independent Registered Public Accounting Firm To the Board of Trustees and Shareholders of John Hancock Patriot Premium Dividend Fund I, PricewaterhouseCoopers LLP 18
Tax information
Unaudited
For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended September 30, 2006.
With respect to the ordinary dividends paid by the Fund for the fiscal year ended September 30, 2006, 88.69% of the dividends qualifies for the corporate dividends-received deduction.
The Fund hereby designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form
1099-DIV for the calendar year 2006.
Shareholders will be mailed a 2006 U.S. Treasury Department Form 1099-DIV in January 2007. This will reflect the total of all distributions that are taxable for calendar year 2006.
19 Investment objective and policy The Funds investment objective is to provide a high current income consistent with modest growth of capital for holders of its common shares of beneficial interest. The Fund will pursue its objective by investing in a diversified portfolio of dividend-paying preferred and common stocks. The Funds non-fundamental investment policy with respect to the quality of ratings of its portfolio investments, which was changed by a vote of the Funds Trustees on September 13, 1994 and became effective October 15, 1994, stipulates that preferred stocks and debt obligations in which the Fund will invest will be rated investment grade (at least BBB by S&P or Baa by Moodys) at the time of investment or will be preferred stocks of issuers of investment grade senior debt, some of which may have speculative characteristics, or, if not rated, will be of comparable quality as determined by the Adviser. The Fund will invest in common stocks of issuers whose senior debt is rated investment grade or, in the case of issuers that have no rated senior debt outstanding, whose senior debt is considered by the Adviser to be of comparable quality. This revised policy supersedes the requirement that at least 80% of the Funds total assets consist of preferred stocks and debt obligations rated A or higher and dividend-paying common stocks whose issuers have senior debt rated A or higher. On November 20, 2001, the Funds Trustees approved the following investment policy investment restriction change, effective December 15, 2001. Under normal circumstances, the Fund will invest at least 80% of its assets in dividend-paying securities. The Assets are defined as net assets, including the liquidation preference amount of the DARTS, plus borrowings for investment purposes. The Fund will notify shareholders at least 60 days prior to any change in this 80% investment policy. By-laws In November 2002, the Board of Trustees adopted several amendments to the Funds by-laws, including provisions relating to the calling of a special meeting and requiring advance notice of shareholder proposals or nominees for Trustee. The advance notice provisions in the by-laws require shareholders to notify the Fund in writing of any proposal that they intend to present at an annual meeting of shareholders, including any nominations for Trustee, between 90 and 120 days prior to the first anniversary of the mailing date of the notice from the prior years annual meeting of shareholders. The notification must be in the form prescribed by the by-laws. The advance notice provisions provide the Fund and its Trustees with the opportunity to thoughtfully consider and address the matters proposed before the Fund prepares and mails its proxy statement to shareholders. Other amendments set forth the procedures that must be followed in ord
er for a shareholder to call a special meeting of shareholders. Please contact the Secretary of the Fund for additional information about the advance notice requirements or the other amendments to the by-laws. On December 16, 2003, the Trustees approved the following change to the Funds by-laws. The auction preferred section of the Funds bylaws was changed to update the rating agency requirements, in keeping with recent changes to the agencies basic maintenance reporting requirements for leveraged closed-end funds. By-laws now require an independent accountants confirmation only once per year, at the Funds fiscal year end, and changes to the agencies basic maintenance reporting requirements that include modifications to the eligible assets and their respective discount factors. These revisions bring the Funds by-laws in line with current rating agency requirements. On September 14, 2004, the Trustees approved an amendment to the Funds by-laws increasing the maximum applicable dividend rate ceiling on the preferred shares to conform with the modern calculation methodology used by the industry and other John Hancock funds. Dividends and distributions During the year ended September 30, 2006, dividends from net investment income totaling $0.531 per share were paid to shareholders. The dates of payments and the amounts per share are as follows: 20 Dividend reinvestment plan The Fund offers its shareholders a Dividend Reinvestment Plan (the Plan), which offers the opportunity to earn compounded yields. Each holder of common shares will automatically have all distributions of dividends and capital gains reinvested by Mellon Investor Services, as Plan agent for the common shareholders (the Plan Agent), unless an election is made to receive cash. Holders of common shares who elect not to participate in the Plan will receive all distributions in cash, paid by check mailed directly to the shareholder of record (or, if the common shares are held in street or other nominee name, then to the nominee) by the Plan Agent, as dividend-disbursing agent. Shareholders whose shares are held in the name of a broker or a nominee should contact the broker or nominee to determine whether and how they may participate in the Plan. If the Fund declares a dividend payable either in common shares or in cash, non-participants will receive cash and participants in the Plan will receive the equivalent in common shares. If the market price of the common shares on the payment date of the dividend is equal to or exceeds their net asset value as determined on the payment date, participants will be issued common shares (out of authorized but unissued shares) at a value equal to the higher of net asset value or 95% of the market price. If the net asset value exceeds the market price of the common shares at such time, or if the Board of Trustees declares a dividend payable only in cash, the Plan Agent will, as agent for Plan participants, buy shares in the open market, on the New York Stock Exchange or elsewhere, for the participants accounts. Such purchases will be made promptly after the payable date for such dividend and, in any event, prior to the next ex-dividend
date after such date, except where necessary to comply with federal securities laws. If, before the Plan Agent has completed its purchases, the market price exceeds the net asset value of the common shares, the average per share purchase price paid by the Plan Agent may exceed the net asset value of the common shares, resulting in the acquisition of fewer shares than if the dividend had been paid in shares issued by the Fund. Each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agents open market purchases in connection with the reinvestment of dividends and distributions. The cost per share of the shares purchased for each participants account will be the average cost, including brokerage commissions, of any shares purchased on the open market plus the cost of any shares issued by the Fund. There will be no brokerage charges with respect to common shares issued directly by the Fund. There are no other charges to participants for reinvesting dividends or capital gain distributions. Participants in the Plan may withdraw from the Plan at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agents Web site at www.melloninvestor.com. Such withdrawal will be effective immediately if received prior to a dividend record date; otherwise, it will be effective for all subsequent dividend record dates. When a participant withdraws from the Plan or upon termination of the Plan, as provided below, certificates for whole common shares credited to his or her account under the Plan will be issued and a cash payment will be made for any fraction of a share credited to such account. The Plan Agent maintains each shareholders account in the Plan and furnishes monthly written confirmations of all transactions in the accounts, including information needed by the shareholders for personal and tax records. The Plan Agent will hold common shares in the account of each Plan participant in non-certificated form in the name of the participant. Proxy material relating to the shareholders meetings of 21 the Fund will include those shares purchased, as well as shares held pursuant to the Plan. The reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable or required to be withheld on such dividends or distributions. Participants under the Plan will receive tax information annually. The amount of dividend to be reported on 1099-DIV should be: (1) in the case of shares issued by the Fund, the fair market value of such shares on the dividend payment date and (2) in the case of shares purchased by the Plan Agent in the open market, the amount of cash used by the Plan Agent to purchase shares in the open market, including the amount of cash allocated to brokerage commissions paid on such purchases. Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund reserves the right to amend or terminate the Plan as applied to any dividend or distribution paid subsequent to written notice of the change sent to all shareholders of the Fund at least 90 days before the record date for the dividend or distribution. The Plan may be amended or terminated by the Plan Agent after at least 90 days written notice to all shareholders of the Fund. All correspondence or additional information concerning the Plan should be directed to the Plan Agent, Mellon Bank, N.A., c/o Mellon Investor Services, P.O. Box 3338, South Hackensack, NJ 07606-1938 (Telephone: 1-800-852-0218). Shareholder communication and assistance If you have any questions concerning the Fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the Fund to the transfer agent at: Mellon Investor Services If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance. 22
Shareholder meeting
On March 22, 2006, the Annual Meeting of the Fund was held to elect three Trustees and to ratify the actions of the Trustees in selecting independent auditors for the Fund.
Proxies covering 12,024,581 shares of beneficial interest were voted at the meeting. The common shareholders elected the following Trustees to serve until their respective successors are duly elected and qualified (there
were no current nominees for election by the preferred shareholders), with the votes tabulated as follows:
The preferred shareholders elected Ronald R. Dion as a Trustee of the Fund until his successor is duly elected and qualified, with the votes tabulated as follows: 392 FOR, 0 AGAINST and 0 ABSTAINING.
The common and preferred shareholders also ratified the Trustees selection of PricewaterhouseCoopers LLP as the Funds independent auditors for the fiscal year ending September 30, 2006, with the votes tabulated
as follows: 11,775,553 FOR, 89,112 AGAINST and 159,916 ABSTAINING.
23 Board Consideration of and Continuation of Investment Advisory Agreement and Sub-Advisory Agreement: John Hancock Patriot Premium Dividend Fund I The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Patriot Premium Dividend Fund I (the Fund), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not interested persons of the Fund, as defined in the 1940 Act (the Independent Trustees), annually to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser) and (ii) the investment sub-advisory agreement (the Sub-Advisory Agreement) with Sovereign Asset Management LLC (the Sub-Adviser). The Advisory Agreement and the Sub-Advisory Agreement are collectively referred to as the Advisory Agreements. At meetings held on May 12 and June 56, 2006,1 the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Sub-Adviser and the continuation of the Advisory Agreements. During such meetings, the Boards Contracts/Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel. In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and the Independent Trustees, reviewed a broad range of information requested for this purpose by the Independent Trustees, including: (i) the investment performance of the Fund and a peer group of comparable funds (the Peer Group) selected by Morningstar Inc. (Morningstar), an independent provider of investment company data, for a range of periods ended December 31, 2005,2 (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Peer Group, (iii) the Advisers financial results and condition, including its and certain of its affiliates profitability from services performed for the Fund, (iv) breakpoints in the Funds and the Peer Groups fees and information about economies of scale, (v) the Advi
sers and Sub-Advisers record of compliance with applicable laws and regulations, with the Funds investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Advisers and Sub-Advisers compliance department, (vi) the background and experience of senior management and investment professionals, and (vii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Sub-Adviser. The Boards review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. It was based on performance and other information as of December 31, 2005; facts may have changed between that date and the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below. Nature, extent and quality of services The Board considered the ability of the Adviser and the Sub-Adviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. The Board further considered the compliance programs and compliance records of the Adviser and Sub-Adviser. In addition, the Board took into account the administrative services provided to the Fund by the Adviser and its affiliates. Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Sub-Adviser were sufficient to support renewal of the Advisory Agreements. Fund performance The Board considered the performance results for the Fund over various time periods ended December 31, 2005. The Board also considered these results in comparison to the performance of the Peer Group, as well as the 24 Funds benchmark index. Morningstar determined the Peer Group for the Fund. The Board reviewed with a representative of Morningstar the methodology used by Morningstar to select the funds in the Peer Group. The Board noted the imperfect comparability of the Peer Group and that Morningstar was not able to select a comparative Category for the Fund. The Board noted that the Funds performance during the 5-year period was lower than the performance of the median of the Peer Group and its benchmark index, the Merrill Lynch Preferred Stock DRD Eligible Index. The Board also noted that Funds more recent performance during the 1- and 3-year periods was either higher than or not appreciably lower than the performance of the Peer Group median, and its benchmark index. Investment advisory fee and sub-advisory fee rates and expenses The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information comparing the Advisory Agreement Rate with the advisory fees for the Peer Group. The Board noted that the Advisory Agreement Rate was lower than the median rate of the Peer Group. The Board received and considered expense information regarding the Funds various components, including advisory fees, and other non-advisory fees, including administrative fees, transfer agent fees, custodian fees, and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Funds total operating expense ratio (Expense Ratio). The Board received and considered information comparing the Expense Ratio of the Fund to that of the Peer Group median. The Board noted that the Funds Expense Ratio was higher than the Peer Group median. The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Funds plans for improving overall performance and lowering the Expense Ratio supported the re-approval of the Advisory Agreements. The Board also received information about the investment sub-advisory fee rate (the Sub-Advisory Agreement Rate) payable by the Adviser to the Sub-Adviser for investment sub-advisory services. The Board concluded that the Sub-Advisory Agreement Rate was fair and equitable, based on its consideration of the factors described here. Profitability The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates, including the Sub-Adviser. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable. Economies of scale The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Funds ability to appropriately benefit from economies of scale under the Funds fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Boards understanding that most of the Advisers and Sub-Advisers costs are not specific to individual Funds, but rather are incurred across a variety of products and services. The Board observed that the Advisory Agreements did not offer breakpoints. However, the Board considered the limited relevance of economies of scale in the context of a closed-end fund that, unlike an open-end fund, does not continuously offer its shares. The Board noted that the Fund, as a closed-end investment company, was not expected to increase materially in size and that its assets 25 would grow (if at all) through the investment performance of the Fund. Therefore, the Board did not consider potential economies of scale as a principal factor in assessing the fees payable under the Advisory Agreements, but concluded that the fees were fair and equitable based on relevant factors. Other benefits to the Adviser The Board received information regarding potential fall-out or ancillary benefits received by the Adviser and its affiliates as a result of the Advisers relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser with the Fund and benefits potentially derived from an increase in the business of the Adviser as a result of its relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates). The Board also considered the effectiveness of the Advisers, Sub-Advisers and Funds policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation. Other factors and broader review As discussed above, the Board reviewed detailed materials received from the Adviser and Sub-Adviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser and Sub-Adviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year. After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements. 1 The Board previously considered information about the Sub-Advisory Agreement at the September and December 2005 Board meetings in connection with the Advisers reorganization. 2 Morningstar also provided a comparative analysis for most, but not all of the John Hancock Funds, of the investment performance and advisory and other fees incurred by, and the expense ratios of, the John Hancock Funds relative to a category of relevant funds (the Category). Morningstar was not able to select a comparative Category for the John Hancock Patriot Premium Dividend Fund I. Therefore, Morningstar did not provide such an analysis. 26 Information about the portfolio managers Management Biographies and Fund ownership Below is an alphabetical list of the portfolio managers who share joint responsibility for the day-to-day investment management of the Fund. It provides a brief summary of their business careers over the past five years and their range of beneficial share ownership in the Fund as of September 30, 2006. Gregory K. Phelps Senior Vice President, MFC Global Investment Management (U.S.), LLC since 2005 Mark T. Maloney Vice President, MFC Global Investment Management (U.S.), LLC since 2005 Other Accounts the Portfolio Managers are Managing The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of September 30, 2006. For purposes of the table, Other Pooled Investment Vehicles may include investment partnerships and group trusts, and Other Accounts may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. For the reasons outlined below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio managers responsibility for the management of the Fund as well as one or more other accounts. The Adviser and the Sub-Adviser have adopted procedures, overseen by the Chief Compliance Officer, that are intended to monitor compliance with the policies referred to in the following paragraphs. 27 The Sub-Adviser has policies that require a portfolio manager to allocate investment opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives. When a portfolio manager intends to trade the same security for more than one account, the policies of the Sub-Adviser generally require that such trades for the individual accounts are aggregated so each account receives the same price. Where not possible or may not result in the best possible price, the Sub-Adviser will place the order in a manner intended to result in as favorable a price as possible for such client. The investment performance on specific accounts is not a factor in determining the portfolio managers compensation. See Compensation of Portfolio Managers below. Neither the Adviser nor the Sub-Adviser receives a performance-based fee with respect to other accounts managed by the Funds portfolio managers. The Sub-Adviser imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts. The Sub-Adviser seeks to avoid portfolio manager assignments with potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. Compensation of Portfolio Managers The Sub-Adviser has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied consistently among investment professionals. At the Sub-Adviser, the structure of compensation of investment professionals is currently composed of the following basic components: fixed base salary, and an annual investment bonus plan, as well as customary benefits that are offered generally to all full-time employees of the Sub-Adviser. A limited number of senior portfolio managers, who serve as officers of both the Sub-Adviser and its parent company, may also receive options or restricted stock grants of common shares of Manulife Financial Corporation. Only investment professionals are eligible to participate in the Investment Bonus Plan on an annual basis. While the amount of any bonus is discretionary, the following factors are generally used in determining bonuses: 1) The investment performance of all accounts managed by the investment professional over one- and three-year periods are considered. The pre-tax performance of each account is measured relative to an appropriate peer group benchmark. 2) The profitability of the Sub-Adviser and its parent company are also considered in determining bonus awards, with greater emphasis placed upon the profitability of the Adviser. 3) The more intangible contributions of an investment professional to the Sub-Advisers business, including the investment professionals support of sales activities, new fund/strategy idea generation, professional growth and development, and management, where applicable, are evaluating in determining the amount of any bonus award. While the profitability of the Sub-Adviser and the investment performance of the accounts that the investment professionals maintain are factors in determining an investment professionals overall compensation, the investment professionals compensation is not linked directly to the net asset value of any fund. 28
Trustees and Officers
This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by
the Trustees.
29
30
31 The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805. The Statement of Additional Information of the Fund includes additional information about members of the Board of Trustees of the Fund and is available, without charge, upon request, by calling 1-800-225-5291. 1Each Trustee serves until resignation, retirement age or until his or her successor is elected. 3Non-Independent Trustee holds positions with the Funds investment adviser, underwriter and certain other affiliates. 32 For more information The Funds proxy voting policies, procedures and records are available without charge, upon request: A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the Securities and Exchange Commissions Web site, www.sec.gov. 36 J O H N H A N C O C K F A M I L Y O F F U N D S EQUITY ASSET ALLOCATION & LIFESTYLE SECTOR INTERNATIONAL INCOME TAX-FREE INCOME MONEY MARKET CLOSED-END For more complete information on any John Hancock Fund and a prospectus, which includes charges and expenses, call your financial professional, or John Hancock Funds at 1-800-225-5291. Please read the prospectus carefully before investing or sending money.
1-800-852-0218
www.jhfunds. com
PRESORTED
P100A 9/06
ITEM 2. CODE OF ETHICS.
As of the end of the period, September 30, 2006, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer
(respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the Senior Financial Officers). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Charles L. Ladner is the audit committee financial expert and is independent, pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees billed for professional services rendered by the principal accountant(s) for the audit of the registrants annual financial statements or services that are normally provided by the accountant(s)
in connection with statutory and regulatory filings or engagements amounted to $33,000 for the fiscal year ended September 30, 2005 and $24,650 for the fiscal year ended September 30, 2006. These fees were billed to the registrant and were
approved by the registrants audit committee.
(b) Audit-Related Services
There were no audit-related fees during the fiscal year ended September 30, 2005 and fiscal year ended September 30, 2006 billed to the registrant or to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the
registrant ("control affiliates").
(c) Tax Fees
The aggregate fees billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning (tax fees) amounted to $2,400 for the fiscal year ended
September 30, 2005 and $3,500 for the fiscal year ended September 30, 2006. The nature of the services comprising the tax fees was the review of the registrants income tax returns and tax distribution requirements. These fees were billed
to the registrant and were approved by the registrants audit committee. There were no tax fees billed to the control affiliates.
(d) All Other Fees
The all other fees billed to the registrant for products and services provided by the principal accountant were $4,000 for the fiscal year ended September 30, 2005 and $3,000 for the fiscal year ended September
30, 2006. There were no other fees during the fiscal year ended September 30, 2005 and September 30, 2006 billed to control affiliates for products and services provided by the principal accountant. The nature of the services comprising the all
other fees was related to the principal accountants report on the registrants Eligible Asset Coverage. These fees were approved by the registrants audit committee.
(e)(1) See attachment "Approval of Audit, Audit-related, Tax and Other Services", with the audit committee pre-approval policies and procedures.
(e)(2) There were no fees that were approved by the audit committee pursuant to the de minimis exception for the fiscal years ended September 30, 2005 and September 30, 2006 on behalf of the registrant or on behalf of
the control affiliates that relate directly to the operations and financial reporting of the registrant. (f) According to the registrants principal accountant, for the fiscal year ended September 30, 2006, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%. (g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $71,400 or the fiscal year ended September 30, 2005, and $520,432 for the fiscal year ended September 30, 2006. (h) The audit committee of the registrant has considered the non-audit services provided by the registrants principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows: Charles L. Ladner - Chairman ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED- See attached Exhibit Proxy Voting Policies and Procedures. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. (a) The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached "John Hancock Funds - Governance Committee Charter". ITEM 11. CONTROLS AND PROCEDURES. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed
by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an
annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment
Company Act of 1940, are attached.
(b)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise
subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant
specifically incorporates them by reference.
(c)(1) Proxy Voting Policies and Procedures are attached.
(c)(2) Submission of Matters to a Vote of Security Holders is attached. See attached "John Hancock Funds - Governance Committee Charter".
(c)(3) Approval of Audit, Audit-related, Tax and Other Services is attached.
(c)(4) Contact person at the registrant. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. John Hancock Patriot Premium Dividend Fund I By: /s/ Keith F. Hartstein Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Keith F. Hartstein By: /s/ John G. Vrysen Date: November 29, 2006
CERTIFICATION
I, Keith F. Hartstein, certify that:
1. I have reviewed this report on Form N-CSR of the John Hancock Patriot Premium Dividend Fund I (the registrant);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal
control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within
90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 29, 2006
By: /s/ Keith F. Hartstein
CERTIFICATION
I, John G. Vrysen, certify that:
1. I have reviewed this report on Form N-CSR of the John Hancock Patriot Premium Dividend Fund I (the registrant);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal
control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within
90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record,
process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 29, 2006
By: /s/ John G. Vrysen
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
In connection with the attached Report of John Hancock Patriot Premium Dividend Fund I (the registrant) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the
undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.
/s/ Keith F. Hartstein
Dated: November 29, 2006
/s/ John G. Vrysen
Dated: November 29, 2006
A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon
request. JOHN HANCOCK FUNDS CODE OF ETHICS This is the code of ethics
of:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
(Exact name of registrant as specified in charter)
(Address of principal executive offices) (Zip code)
Senior Attorney and Assistant Secretary
601 Congress Street
Boston, Massachusetts 02210
(Name and address of agent for service)
Date of fiscal year end:
September 30
Date of reporting period:
September 30, 2006
ITEM 1. REPORT TO SHAREHOLDERS.
TABLE OF CONTENTS
Your fund at a glance
page 1
Managers report
page 2
Funds investments
page 6
Financial statements
page 1 0
Trustees and Officers
page 2 9
For more information
page 3 6
The future has arrived at John Hancock Funds.
The new site also has more educational tools and interactive modules to educate and assist investors with their financial goals, from college savings to retirement planning. A new I want to
feature allows investors to check performance, invest more money, update personal information or download prospectuses and forms quickly and easily.
In another of our ongoing efforts to provide our shareholders with top-notch service, we also redesigned our shareholder reports, as you may have noticed with this report. We hope the larger size, more colorful cover and redesigned presentation of the commentary and data tables will draw you in and make them easier to read.
President and Chief Executive Officer
Top 10 issuers
NSTAR
8.5%
Energy East Corp.
2.8%
Lehman Brothers Holdings, Inc.
4.3%
Alabama Power Co.
2.6%
CH Energy Group, Inc.
3.5%
South Carolina Electric & Gas Co.
2.5%
KeySpan Corp.
2.9%
PPL Electric Utilities Corp.
2.5%
Bear Stearns Cos., Inc. (The)
2.8%
Xcel Energy, Inc.
2.4%
INVESTMENT
PERIODS PERFORMANCE... AND WHATS BEHIND THE NUMBERS
Alliant Energy
▲
Renewed focus on core regulated business drives earnings
and dividends higher
Bank of America
▲
Securities coveted amid scarcity for high-quality, tax-advantaged securities
Georgia Power
▼
Lower coupon and lack of tax advantages mute returns
holdings provided the
biggest boost to the Funds
performance.
Leaders and laggards
Our utility common stock holdings provided the biggest boost to the Funds performance. Among the most significant contributors was KeySpan Corp., which operates regulated gas utilities throughout the northeastern United States. It was buoyed by news that it would be acquired by British network operator National Grid. Another big winner was Alliant Energy Corp., pushed higher by renewed investor interest after the company decided
SECTOR DISTRIBUTION1
Multi-utilities
39%
Electric utilities
30%
Investment
banking & brokerage
8%
Oil & gas
exploration &
production
6%
Gas utilities
5%
Integrated
telecommunication
services
3%
Regional banks
2%
Life & health insurance
2%
Diversified banks
1%
Agricultural products
1%
Thrifts & mortgage
finance
1%
Oil & gas storage &
transportation
1%
Consumer finance
1%
quite optimistic that gradually
slowing economic conditions
will bode well for fixed-income
investments, including preferred
and utility common stocks.
Issuer
Shares
Value
Common stocks 53.28%
$80,444,784
(Cost $67,558,055)
Electric Utilities 3.89%
5,878,290
FPL Group, Inc.
20,000
900,000
Pinnacle West Capital Corp.
37,000
1,666,850
Progress Energy, Inc.
72,500
3,290,050
Progress Energy, Inc., (Contingent Value Obligation) (B) (I)
69,000
21,390
Gas Utilities 3.01%
4,549,508
National Fuel Gas Co.
59,850
2,175,548
Peoples Energy Corp.
58,400
2,373,960
Integrated Telecommunication Services 2.93%
4,414,999
AT&T, Inc.
97,850
3,185,996
Verizon Communications, Inc.
33,100
1,229,003
Multi-Utilities 42.41%
64,029,237
Alliant Energy Corp.
144,380
5,158,697
Ameren Corp.
45,900
2,423,061
CH Energy Group, Inc.
151,050
7,774,544
Consolidated Edison, Inc.
32,000
1,478,400
Dominion Resources, Inc.
64,300
4,918,307
DTE Energy Co.
126,000
5,230,260
Duke Energy Corp.
84,650
2,556,430
Energy East Corp.
257,000
6,096,040
KeySpan Corp.
154,100
6,339,674
NiSource, Inc.
87,450
1,901,163
NSTAR
350,000
11,676,000
SCANA Corp.
21,700
873,859
TECO Energy, Inc.
173,000
2,707,450
WPS Resources Corp.
30,400
1,508,752
Xcel Energy, Inc.
164,000
3,386,600
Oil & Gas Storage & Transportation 1.04%
1,572,750
Kinder Morgan, Inc.
15,000
1,572,750
Credit
Issuer, description
rating (A)
Shares
Value
Preferred stocks 90.34%
$136,398,126
(Cost $133,901,981)
Agricultural Products 1.88%
2,840,471
Ocean Spray Cranberries, Inc.,
6.25%, Ser A (S)
BB+
35,000
2,840,471
Consumer Finance 0.80%
1,205,980
CIT Group, Inc., 6.35%, Ser A
BBB+
20,000
516,200
SLM Corp., 6.97%, Ser A
BBB+
13,000
689,780
Diversified Banks 1.97%
2,967,270
Abbey National Plc, 7.375%,
Depositary Shares, Ser B
(United Kingdom)
A
29,700
779,328
HSBC Holdings Plc, 6.20%, Ser A
(United Kingdom)
A
25,000
625,750
Royal Bank of Scotland Group Plc,
5.75%, Ser L (United Kingdom)
A
65,200
1,562,192
Electric Utilities 37.54%
56,674,097
Alabama Power Co., 5.20%
BBB+
240,000
5,736,000
Boston Edison Co., 4.25%
A
58,152
4,681,235
Boston Edison Co., 4.78%
A
25,558
2,312,999
Duquesne Light Co., 6.50%
BB+
105,900
5,216,634
Entergy Arkansas, Inc., 6.45%
BB+
50,000
1,265,625
Entergy Mississippi, Inc., 6.25%
BB+
150,000
3,707,820
FPC Capital I, 7.10%, Ser A
BB+
150,400
3,794,592
Georgia Power Co., 6.00%, Ser R
A
213,800
5,280,860
Great Plains Energy, Inc., 4.50%
BB+
12,510
1,013,310
Great Plains Energy, Inc.,
8.00%, Conv
BBB
99,900
2,497,500
HECO Capital Trust III, 6.50%
BBB
107,900
2,684,552
Interstate Power & Light Co.,
7.10%, Ser C
BBB
25,000
646,095
Interstate Power & Light Co.,
8.375%, Ser B
Baa3
25,000
775,000
PPL Electric Utilities
Corp., 4.60%
BBB
3,917
342,493
PPL Electric Utilities Corp.,
6.25%, Depositary Shares
BBB
200,000
5,093,760
PPL Energy Supply, LLC, 7.00%
BBB
70,000
1,785,000
Public Service Electric & Gas
Co., 4.30%, Ser C
BB+
8,280
662,400
Public Service Electric & Gas
Co., 6.92%
BB+
26,800
2,801,439
Southern California Edison Co.,
6.00%, Ser C
BBB
18,000
1,825,506
Credit
Issuer, description
rating (A)
Shares
Value
Electric Utilities (continued)
Southern California Edison
Co., 6.125%
BBB
35,000
$3,490,158
Virginia Electric & Power
Co., $7.05
BB+
10,200
1,061,119
Gas Utilities 3.43%
5,184,358
Southern Union Co., 7.55%, Ser A
BB+
201,100
5,184,358
Integrated Telecommunication Services 1.63%
2,457,828
Telephone & Data Systems,
Inc., 6.625%
A
101,900
2,457,828
Investment Banking & Brokerage 11.19%
16,901,739
Bear Stearns Cos., Inc. (The),
5.49%, Depositary Shares, Ser G
BBB
25,200
1,159,200
Bear Stearns Cos., Inc. (The),
5.72%, Depositary Shares, Ser F
BBB
102,460
4,984,679
Goldman Sachs Group, Inc., 6.20%,
Ser B
A
20,000
518,000
Lehman Brothers Holdings, Inc.,
5.67%, Depositary Shares, Ser D
A
102,700
4,929,600
Lehman Brothers Holdings, Inc.,
5.94%, Depositary Shares, Ser C
A
90,400
4,533,560
Merrill Lynch & Co., Inc.,
6.375%, Depositary Shares, Ser 3
A
30,000
776,700
Life & Health Insurance 1.97%
2,979,650
MetLife, Inc., 6.50%, Ser B
BBB
115,000
2,979,650
Multi-Utilities 15.23%
22,993,173
Baltimore Gas & Electric Co.,
6.99%, Ser 1995
Ba1
34,000
3,531,750
BGE Capital Trust II, 6.20%
BBB
205,000
4,901,550
PNM Resources, Inc., 6.75%, Conv
BBB
98,049
4,906,372
PSEG Funding Trust II, 8.75%
BB+
71,400
1,852,116
South Carolina Electric & Gas
Co., 6.52%
Baa1
55,000
5,515,472
TECO Capital Trust I, 8.50%
B
12,501
318,400
Xcel Energy, Inc., $4.11, Ser D
BB+
24,921
1,967,513
Oil & Gas Exploration & Production 8.61%
12,995,298
Apache Corp., 5.68%, Depositary
Shares, Ser B
BBB
26,700
2,660,823
Devon Energy Corp., 6.49%, Ser A
BB+
50,000
5,053,125
Nexen, Inc., 7.35% (Canada)
BB+
205,500
5,281,350
Credit
Issuer, description
rating (A)
Shares
Value
Regional Banks 4.49%
$6,786,262
Bank of America Corp., 6.204%,
Depositary Shares, Ser D
A
170,000
4,338,400
HSBC USA, Inc., $2.8575 (G)
A1
50,700
2,447,862
Thrifts & Mortgage Finance 1.60%
2,412,000
Sovereign Bancorp, Inc., 7.30%,
Depositary Shares, Ser C
BB+
90,000
2,412,000
Interest
Par value
Issuer, description, maturity date
rate
(000)
Value
Short-term Investments 0.40%
$596,913
(Cost $596,913)
Consumer Finance 0.40%
596,913
Chevron Texaco Corp., Due
10-2-2006
5.240%
$597
596,913
Total investments (cost $202,056,949) 144.02%
$217,439,823
Other assets and liabilities, net 1.50%
$2,261,623
Fund preferred shares and accrued dividends (45.52%)
($68,718,140)
Total net assets 100.00%
$150,983,306
(I) Non-income-producing security.
Statement of assets and liabilities 9-30-06
This Statement of Assets and Liabilities is the Funds balance sheet. It shows the value
of what the Fund owns, is due and owes. Youll also find the net asset value for each
common share.
Assets
Investments at value (cost $202,056,949)
$217,439,823
Cash
734
Receivable for investments sold
1,397,645
Dividends receivable
1,113,268
Other assets
29,294
Total assets
219,980,764
Liabilities
Payable to affiliates
Management fees
160,484
Other
17,975
Other payables and accrued expenses
100,859
Total liabilities
279,318
Dutch Auction Rate Transferable Securities preferred shares Series A
(DARTS), including accrued dividends, unlimited number of shares of
beneficial interest authorized with no par value, 685 shares issued,
liquidation preference of $100,000 per share
68,718,140
Net assets
Common shares capital paid-in
143,171,019
Accumulated net realized loss on investments
(7,675,141)
Net unrealized appreciation of investments
15,382,874
Accumulated net investment income
104,554
Net assets applicable to common shares
$150,983,306
Net asset value per common share
Based on 15,292,571 shares of beneficial interest outstanding unlimited
number of shares authorized with no par value
$9.87
Investment income
Dividends
$12,319,961
Interest
269,901
Total investment income
12,589,862
Expenses
Investment management fees (Note 2)
1,697,138
Administration fees (Note 2)
213,529
Compliance fees
4,011
DARTS auction fees
178,750
Printing
52,014
Registration and filing fees
48,598
Transfer agent fees
47,337
Custodian fees
44,901
Professional fees
32,348
Trustees fees
12,603
Federal excise tax
5,667
Interest
193
Total expenses
2,337,089
Net investment income
10,252,773
Realized and unrealized gain (loss)
Net realized loss on investments
(3,060,432)
Change in net unrealized appreciation (depreciation) of investments
3,838,279
Net realized and unrealized gain
777,847
Distributions to DARTS
(2,492,338)
Increase in net assets from operations
$8,538,282
Year
Year
ended
ended
9-30-051
9-30-06
Increase (decrease) in net assets
From operations
Net investment income
$9,914,661
$10,252,773
Net realized loss
(4,591,620)
(3,060,432)
Change in net unrealized appreciation (depreciation)
14,710,245
3,838,279
Distributions to DARTS
(1,717,338)
(2,492,338)
Increase in net assets resulting from operations
18,315,948
8,538,282
Distributions to common shareholders
From net investment income
(9,172,547)
(8,120,355)
From Fund share transactions
350,124
Net assets
Beginning of period
141,071,854
150,565,379
End of period2
$150,565,379
$150,983,306
Period ended
9-30-021
9-30-031
9-30-041
9-30-051
9-30-06
Per share operating performance
Net asset value, beginning of period
$9.74
$8.30
$8.82
$9.25
$9.85
Net investment income2
0.78
0.69
0.64
0.65
0.67
Net realized and unrealized gain
(loss) on investments
(1.49)
0.54
0.56
0.66
0.04
Distributions to DARTS
(0.08)
(0.06)
(0.05)
(0.11)
(0.16)
Total from investment operations
(0.79)
1.17
1.15
1.20
0.55
Less distributions to common shareholders
From net investment income
(0.65)
(0.65)
(0.72)
(0.60)
(0.53)
Net asset value, end of period
$8.30
$8.82
$9.25
$9.85
$9.87
Per share market value, end of period
$9.15
$9.24
$9.38
$8.90
$8.63
Total return at market value3 (%)
12.03
8.91
9.76
1.09
3.27
Ratios and supplemental data
Net assets applicable to common
shares, end of period (in millions)
$125
$134
$141
$151
$151
Ratio of expenses to average
net assets4 (%)
1.79
1.90
1.70
1.65
1.61
Ratio of net investment income to
average net assets5 (%)
8.42
8.33
7.06
6.69
7.07
Portfolio turnover (%)
11
10
16
17
30
SENIOR SECURITIES
Total value of DARTS outstanding
(in millions)
$68
$69
$69
$69
$69
Involuntary liquidation preference
per unit (in thousands)
$100
$100
$100
$100
$100
Average market value per unit
(in thousands)
$100
$100
$100
$100
$100
Asset coverage per unit6
$280,462
$287,811
$304,418
$320,275
$318,822
2 Based on the average of the shares outstanding.
3 Assumes dividend reinvestment.
4 Ratios calculated on the basis of expenses relative to the average net assets of common shares. Without the exclusion of preferred shares, the ratio of expenses would have been 1.20%, 1.23%, 1.14%, 1.13% and 1.09%, respectively.
5 Ratios calculated on the basis of net investment income relative to the average net assets of common shares. Without the exclusion of preferred shares, the ratio of net investment income would have been 5.65%, 5.39%, 4.73%, 4.57% and 4.80%, respectively.
6 Calculated by subtracting the Fund s total liabilities from the Fund s total assets and dividing such amount by the number of DARTS outstanding as of the applicable 1940 Act Evaluation Date, which may differ from the financial reporting date.
Year ended 9-30-051
Year ended 9-30-06
Shares
Amount
Shares
Amount
Beginning of period
15,255,559
$142,897,046
15,292,571
$143,176,686
Distributions reinvested
37,012
350,124
Reclassification of
capital accounts
(70,484)
(5,667)
End of period
15,292,571
$143,176,686
15,292,571
$143,171,019
Dutch Auction Rate Transferable Securities preferred shares Series A
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Patriot Premium Dividend Fund I (the Fund) as of September 30, 2006, the results of its operations, the changes in its net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as financial statements) are the responsibility of the Funds management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States)
. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities as of September 30, 2006 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The statement of changes in net assets of the Fund for the year ended September 30, 2005 and the financial highlights for each of the four years ended on or before September 30, 2005 were audited by another independent registered public accounting firm, whose report dated November 11, 2005 expressed an unqualified opinion thereon.
Boston, Massachusetts
November 8, 2006
INCOME
PAYMENT DATE
DIVIDEND
October 31, 2005
$0.046
November 30, 2005
0.046
December 30, 2005
0.046
January 31, 2006
0.046
February 28, 2006
0.046
March 31, 2006
0.046
April 28, 2006
0.046
June 2, 2006
0.046
June 30, 2006
0.046
July 31, 2006
0.039
August 31, 2006
0.039
September 29, 2006
0.039
Newport Office Center VII
480 Washington Boulevard
Jersey City, NJ 07310
Telephone: 1-800-852-0218
WITHHELD
FOR
AUTHORITY
James R. Boyle
11,673,322
351,259
Charles L. Ladner
11,678,444
346,137
John A. Moore
11,680,916
343,665
Senior Vice President, John Hancock Advisers, LLC (19952005)
Began business career in 1981
Joined fund team in 1995
Fund ownership None
Vice President, John Hancock Advisers, LLC (19822005)
Began business career in 1976
Joined fund team in 1997
Fund ownership None
P O R T F O L I O M A N A G E R
O T H E R A C C O U N T S M A N A G E D B Y T H E P O R T F O L I O M A N A G E R S
Gregory K. Phelps
Other Registered Investment Companies: 8 (eight) funds
with total assets of approximately $4.9 billion.
Other Pooled Investment Vehicles: 2 (two) accounts with
total assets of approximately $45 million.
Other Accounts: None
Mark T. Maloney
Other Registered Investment Companies: 8 (eight) funds
with total assets of approximately $4.9 billion.
Other Pooled Investment Vehicles: 2 (two) accounts with
total assets of approximately $45 million.
Other Accounts: None
Independent Trustees
Name, age
Number of
Position(s) held with Fund
Trustee
John Hancock
Principal occupation(s) and other
of Fund
funds overseen
directorships during past 5 years
since1
by Trustee
Ronald R. Dion, Born: 1946
1998
53
Independent Chairman (since 2005); Chairman and Chief Executive Officer,
R.M. Bradley & Co., Inc.; Director, The New England Council and Massachusetts
Roundtable; Trustee, North Shore Medical Center; Director, Boston Stock
Exchange; Director, BJs Wholesale Club, Inc. and a corporator of the Eastern
Bank; Trustee, Emmanuel College; Director, Boston Municipal Research Bureau;
Member of the Advisory Board, Carroll Graduate School of Management at
Boston College.
James F. Carlin , Born: 1940
1988
53
Director and Treasurer, Alpha Analytical Laboratories Inc. (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); Director and Treasurer, Rizzo Associates
(engineering) (until 2000); Chairman and CEO, Carlin Consolidated, Inc.
(management/investments) (since 1987); Director and Partner, Proctor Carlin
& Co., Inc. (until 1999); Trustee, Massachusetts Health and Education Tax
Exempt Trust (since 1993); Director of the following: Uno Restaurant Corp.
(until 2001), Arbella Mutual (insurance) (until 2000), HealthPlan Services, Inc.
(until 1999), Flagship Healthcare, Inc. (until 1999), Carlin Insurance Agency, Inc.
(until 1999); Chairman, Massachusetts Board of Higher Education (until 1999).
Richard P. Chapman, Jr.,2 Born: 1935
2005
53
President and Chief Executive Officer, Brookline Bancorp, Inc. (lending) (since
1972); Chairman and Director, Lumber Insurance Co. (insurance) (until 2000);
Chairman and Director, Northeast Retirement Services, Inc. (retirement
administration) (since 1998); Vice Chairman, Northeastern University Board
of Trustees (since 2004).
William H. Cunningham , Born: 1944
1995
160
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: 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)
Independent Trustees (continued)
Name, age
Number of
Position(s) held with Fund
Trustee
John Hancock
Principal occupation(s) and other
of Fund
funds overseen
directorships during past 5 years
since1
by Trustee
William H. Cunningham , Born: 1944 (continued)
1995
160
(until 2001), eCertain (until 2001), ClassMap.com (until 2001), Agile Ventures
(until 2001), AskRed.com (until 2001), Southwest Airlines, Introgen and
Viasystems Group, Inc. (electronic manufacturer) (until 2003); Advisory
Director, Interactive Bridge, Inc. (college fundraising) (until 2001); Advisory
Director, Q Investments (until 2003); Advisory Director, JPMorgan Chase Bank
(formerly Texas Commerce Bank Austin), LIN Television (since 2002), WilTel
Communications (until 2003) and Hayes Lemmerz International, Inc.
(diversified automotive parts supply company) (since 2003).
Charles L. Ladner,2 Born: 1938
1992
160
Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (until 2003);
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 2007).
John A. Moore,2 Born: 1939
2002
53
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 and Deputy
Administrator, Environmental Protection Agency; Principal, Hollyhouse
(consulting) (since 2000); Director, CIIT Center for Health Science Research
(nonprofit research) (since 2002).
Patti McGill Peterson,2 Born: 1943
2002
53
Executive Director, Council for International Exchange of Scholars and Vice
President, Institute of International Education (since 1998); Senior Fellow, Cornell
Institute of Public Affairs, Cornell University (until 1998); Former President of
Wells College and St. Lawrence University; Director, Niagara Mohawk Power
Corporation (until 2003); Director, Ford Foundation, International Fellowships
Program (since 2002); Director, Lois Roth Endowment (since 2002); Director,
Council for International Educational Exchange (since 2003).
Steven R. Pruchansky, Born: 1944
1992
53
Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc.
(since 2000); Director and President, Greenscapes of Southwest Florida, Inc.
(until 2000); Managing Director, JonJames, LLC (real estate) (since 2001);
Director, First Signature Bank & Trust Company (until 1991); Director, Mast
Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991).
Non-Independent Trustee3
Name, age
Number of
Position(s) held with Fund
Trustee
John Hancock
Principal occupation(s) and other
of Fund
funds overseen
directorships during past 5 years
since1
by Trustee
James R. Boyle, Born: 1959
2005
262
President, John Hancock Annuities; Executive Vice President, John Hancock
Life Insurance Company (since June, 2004); Chairman and Director, John
Hancock Advisers, LLC (the Adviser), John Hancock Funds, LLC and The
Berkeley Financial Group, LLC (The Berkeley Group) (holding company) (since
2005); President, U.S. Annuities; Senior Vice President, The Manufacturers
Life Insurance Company (U.S.A.) (until 2004).
Principal officers who are not Trustees
Name, age
Position(s) held with Fund
Officer
Principal occupation(s) and
of Fund
directorships during past 5 years
since
Keith F. Hartstein, Born: 1956
2005
President and Chief Executive Officer
Senior Vice President, Manulife Financial Corporation (since 2004); Director,
President and Chief Executive Officer, the Adviser, The Berkeley Group, John
Hancock Funds, LLC (since 2005); Director, MFC Global Investment Management
(U.S.), LLC (MFC Global (U.S.)) (since 2005); Director, John Hancock Signature
Services, Inc. (since 2005); President and Chief Executive Officer, John Hancock
Investment Management Services, LLC (since 2006); President and Chief Executive
Officer, John Hancock Funds II, John Hancock Funds III and John Hancock Trust;
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.)
(20052006); Executive Vice President, John Hancock Funds, LLC (until 2005).
Thomas M. Kinzler, Born: 1955
2006
Secretary and Chief Legal Officer
Vice President and Counsel, John Hancock Life Insurance Company (U.S.A.)
(since 2006); Secretary and Chief Legal Officer, John Hancock Funds, John
Hancock Funds II, John Hancock Funds III and John Hancock Trust (since 2006);
Vice President and Associate General Counsel, Massachusetts Mutual Life
Insurance Company (19992006); Secretary and Chief Legal Counsel, MML
Series Investment Fund (20002006); Secretary and Chief Legal Counsel,
MassMutual Institutional Funds (20002004); Secretary and Chief Legal Counsel,
MassMutual Select Funds and MassMutual Premier Funds (20042006).
Francis V. Knox, Jr., Born: 1947
2005
Chief Compliance Officer
Vice President and Chief Compliance Officer, John Hancock Investment
Management Services, LLC, the Adviser and MFC Global (U.S.) (since 2005);
Vice President and Chief Compliance Officer, John Hancock Funds II, John
Hancock Funds III and John Hancock Trust (since 2005); Vice President and
Assistant Treasurer, Fidelity Group of Funds (until 2004); Vice President and
Ethics & Compliance Officer, Fidelity Investments (until 2001).
Principal officers who are not Trustees (continued)
Name, age
Position(s) held with Fund
Officer
Principal occupation(s) and
of Fund
directorships during past 5 years
since
Gordon M. Shone, Born: 1956
2006
Treasurer
Treasurer, John Hancock Funds (since 2006), John Hancock Funds II, John
Hancock Funds III and John Hancock Trust (since 2005); Vice President and
Chief Financial Officer, John Hancock Trust (20032005); Senior Vice President,
John Hancock Life Insurance Company (U.S.A.) (since 2001); Vice President,
John Hancock Investment Management Services, Inc., John Hancock Advisers,
LLC (since 2006) and The Manufacturers Life Insurance Company (U.S.A.)
(19982000).
John G. Vrysen, Born: 1955
2005
Chief Financial Officer
Director, Executive Vice President and Chief Financial Officer, the Adviser, The
Berkeley Group and John Hancock Funds, LLC (since 2005); Executive Vice
President and Chief Financial Officer, John Hancock Investment Management
Services, LLC (since 2005); Vice President and Chief Financial Officer, MFC Global
(U.S.) (since 2005); Director, John Hancock Signature Services, Inc. (since 2005);
Chief Financial Officer, John Hancock Funds II, John Hancock Funds III and John
Hancock Trust (since 2005); Vice President and General Manager, Fixed Annuities,
U.S. Wealth Management (until 2005); Vice President, Operations, Manulife
Wood Logan (20002004).
2Member of Audit Committee.
By phone
On the Funds Web site
On the SECs Web site
1-800-225-5291
www.jhfunds.com/proxy
www.sec.gov
Investment adviser
Transfer agent for
Independent registered
John Hancock Advisers, LLC
common shareholders
public accounting firm
601 Congress Street
Mellon Investor Services
PricewaterhouseCoopers LLP
Boston, MA 02210-2805
Newport Office Center VII
125 High Street
480 Washington Boulevard
Boston, MA 02110
Subadviser
Jersey City, NJ 07310
MFC Global Investment
Stock symbol
Management (U.S.), LLC
Transfer agent for
Listed New York Stock
101 Huntington Avenue
preferred shareholders
Exchange:
Boston, MA 02199
Deutsche Bank Trust
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Company Americas
280 Park Avenue
For shareholder assistance
Custodian
New York, NY 10017
refer to page 22
The Bank of New York
One Wall Street
New York, NY 10286
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Kirkpatrick & Lockhart
Nicholson Graham LLP
1 Lincoln Street
Boston, MA 02111-2950
How to contact us
Internet
www.jhfunds.com
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Regular mail:
Mellon Investor Services
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480 Washington Boulevard
Jersey City, NJ 07310
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Portfolio commentary
1-800-344-7054
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STANDARD
U.S. POSTAGE
PAID
MIS
11/06
Richard P. Chapman, Jr.
Dr. John A. Moore
Patti McGill Peterson
END MANAGEMENT INVESTMENT COMPANIES.
COMPANIES.
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer
Date: November 29, 2006
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer
Date: November 29, 2006
- -------------------------------------
John G. Vrysen
Executive Vice President and Chief Financial Officer
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer
-------------------------------------
John G. Vrysen
Executive Vice President and Chief Financial Officer
the Sarbanes-Oxley Act of 2002
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer
-------------------------------------
John G. Vrysen
Executive Vice President and Chief Financial Officer
John Hancock Advisers, LLC
MFC Global Investment Management (U.S.), LLC (formerly known as Sovereign Asset Management LLC)
each open-end and
closed-end fund advised by John Hancock Advisers, LLC
John
Hancock Funds, LLC
(together, called "John Hancock Funds" or "JHF")
1. General Principles
Each person within the John Hancock Funds organization is responsible for maintaining the very highest ethical standards when conducting our business.
This means that:
You have a fiduciary duty at all times to place the interests of our clients and fund investors first.
All of your personal securities transactions must be conducted consistent with the provisions of this code of ethics that apply to you and in such a manner as to avoid any actual or potential conflict of interest or other abuse of your position of trust and responsibility.
You should not take inappropriate advantage of your position or engage in any fraudulent or manipulative practice (such as front-running or manipulative market timing) with respect to our clients' accounts or fund investors.
You must treat as confidential any information concerning the identity of security holdings and financial circumstances of clients or fund investors.
You must comply with all applicable federal securities laws.
You must promptly report any violation of this code of ethics that comes to your attention to the Chief Compliance Officer of your company -see Appendix F.
The General Principles discussed above govern all conduct, whether or not
The General Principles discussed above govern all conduct, whether or not the conduct is also covered by more specific standards and procedures in this code of ethics. As described below under the heading "Interpretation and Enforcement", failure to comply with the code of ethics may result in disciplinary action, including termination of employment.
2. To Whom Does This Code Apply?
This code of ethics applies to you if you are a director, officer or employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, John Hancock Funds, LLC or a John Hancock open-end or closed-end fund registered under the Investment Company Act of 1940 (the "'40 Act") and advised by John Hancock Advisers, LLC ("John Hancock funds"). It also applies to you if you are trustee of the John Hancock Financial Trends Fund, Inc. or an employee of Manulife Financial Corporation or its subsidiaries who participates in making recommendations for, or receives information about, portfolio trades or holdings of the John Hancock funds or accounts. However, notwithstanding anything herein to the contrary, it does not apply to any trustees/directors of any open-end or closed-end funds advised by John Hancock Advisers, LLC who are not "interested persons" of such funds as defined in Section 2(a)(19) of the '40 Act, so long as they are subject to a separate Code of Ethics (each, an "Excluded Independent Director"). Also, in some cases only a limited number of provisions will apply to you, based on your access category. For example, only a limited number of provisions apply to directors of the John Hancock open-end funds and closed-end funds who are not Excluded Independent Directors-- see Appendix C for more information.
Please note that if a policy described below applies to you, it also applies to all accounts over which you have a beneficial interest. Normally, you will be deemed to have a beneficial interest in your personal accounts, those of a spouse, "significant other," minor children or family members sharing a household, as well as all accounts over which you have discretion or give advice or information. "Significant others" are defined for these purposes as two people who (1) share the same primary residence; (2) share living expenses; and (3) are in a committed relationship and intend to remain in the relationship indefinitely.
There are three main categories for persons covered by this code of ethics, taking into account their positions, duties and access to information regarding fund portfolio trades. You have been notified about which of these categories applies to you, based on the JHF Investment Compliance Department's understanding of your current role. If you have a level of investment access beyond your assigned category, or if you are promoted or change duties and as a result should more appropriately be included in a different category, it is your responsibility to notify the Chief Compliance Officer of your company.
The basic definitions of the three main categories, with examples, are provided below. The more detailed definitions of each category are attached as Appendix A.
Investment Access person | Regular Access person | Non-Access person | ||||||||
A person who regularly has access | ||||||||||
to (1) fund portfolio trades or (2) | A person who does not regularly | |||||||||
A person who regularly participates | non-public information regarding | participate in a funds investment | ||||||||
in a funds investment process or | holdings or securities | process or obtain information | ||||||||
makes securities recommendations | recommendations to clients. | regarding fund portfolio trades | ||||||||
to clients. | ||||||||||
examples: | examples: | |||||||||
examples: | ||||||||||
| personnel in Investment | | wholesalers | |||||||
| portfolio managers | Operations or Compliance | ||||||||
| inside wholesalers who | |||||||||
| analysts | | most FFM personnel | dont attend investment | ||||||
morning meetings | ||||||||||
| traders | | Technology personnel with | |||||||
access to investment | | certain administrative | ||||||||
systems | personnel | |||||||||
| attorneys and some legal | |||||||||
administration personnel | ||||||||||
| investment admin. | |||||||||
personnel | ||||||||||
|
3. Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions?
If this code of ethics describes "Personal Trading Requirements" (i.e. John Hancock Mutual Fund reporting requirement and holding period, the preclearance requirement, the ban on short-term profits, the ban on IPOs, the disclosure of private placement conflicts and the reporting requirements) that apply to your access category as described above, then the requirements apply to trades for any account in which you have a beneficial interest. Normally, this includes your personal accounts, those of a spouse, "significant other," minor children or family members sharing your household, as well as all accounts over which you have discretion or give advice or information. This includes all brokerage accounts that contain securities (including brokerage accounts that only contain securities exempt from reporting). Accounts over which you have no direct or indirect influence or control are exempt. To prevent potential violations of this code of ethics, you are strongly encouraged to request clarification for any accounts that are in question.
These personal trading requirements do not apply to the following securities:
Direct obligations of the U.S. government (e.g., treasury securities);
Bankers' acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt obligations, including repurchase agreements;
Shares of open-end mutual funds registered under the '40 Act that are not advised or sub-advised by John Hancock Advisers, John Hancock Investment Management Services or another Manulife entity;
Shares issued by money market funds; and
Securities in accounts over which you have no direct or indirect influence or control.
Except as noted above, the Personal Trading Requirements apply to all securities, including:
Stocks;
Bonds;
Government securities that are not direct obligations of the U.S. government, such as Fannie Mae or municipal securities;
Closed-end funds;
Options on securities, on indexes, and on currencies;
Limited partnerships;
Domestic unit investment trusts;
Exchange traded funds;
Non-US unit investment trusts and Non-US mutual funds;
Private investment funds and hedge funds; and
Futures, investment contracts or any other instrument that is considered a "security" under the Investment Advisers Act.
Different requirements apply to shares of open-end mutual funds that are advised or sub-advised by John Hancock Advisers, LLC or another Manulife entity--see the section below titled "John Hancock Mutual Funds Reporting Requirement and Holding Period".
4. Overview of Policies
Investment Access | Regular Access | Non-Access Person | ||||
Person | Person | |||||
| ||||||
General principles | yes | yes | yes | |||
| ||||||
Policies outside the code | ||||||
| ||||||
Conflict of interest policy | yes | yes | yes | |||
| ||||||
Inside information policy | yes | yes | yes | |||
| ||||||
Policy regarding dissemination of mutual fund | yes | yes | yes | |||
portfolio information | ||||||
|
Policies in the code | ||||||
| ||||||
Restriction on gifts | yes | yes | yes | |||
| ||||||
John Hancock mutual funds reporting | yes | yes | yes | |||
requirement and holding period | ||||||
| ||||||
Pre-clearance requirement | yes | yes | Limited | |||
| ||||||
Heightened preclearance of securities | yes | yes | no | |||
transactions for Significant Personal | ||||||
Positions | ||||||
| ||||||
Ban on short-term profits | yes | no | no | |||
| ||||||
Ban on IPOs | yes | no | no | |||
| ||||||
Disclosure of private placement conflicts | yes | no | no | |||
| ||||||
Seven day blackout period | yes | no | no | |||
| ||||||
Reports and other disclosures outside the code | ||||||
| ||||||
Broker letter/duplicate confirms | yes | yes | yes | |||
| ||||||
Reports and other disclosures in the code | ||||||
| ||||||
Annual recertification form | yes | yes | yes | |||
| ||||||
Initial/annual holdings reports | yes | yes | no | |||
| ||||||
Quarterly transaction reports | yes | yes | no | |||
|
5. Policies Outside of the Code of Ethics
John Hancock Funds have certain policies that are not part of the code of ethics, but are equally important. The two most important of these policies are (1) the Company Conflict and Business Practice Policy; and (2) the Inside Information Policy.
>> Company Conflict & Business Practice Policy
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons -------------------------------------------------------------------------------- |
This Policy covers a number of important issues for officers and employees of John Hancock Funds. For example, you cannot serve as a director of any company without first obtaining the required written executive approval.
This Policy includes significant requirements to be followed if your personal securities holdings overlap with John Hancock funds investment activity. For example, if you or a member of your family own:
a 5% or greater interest in a company, John Hancock Funds and its affiliates may not make any investment in that company;
a 1% or greater interest in a company, you cannot participate in any decision by John Hancock Funds and its affiliates to buy or sell that company's securities;
ANY interest in a company, you cannot recommend or participate in a decision by John Hancock Funds and its affiliates to buy or sell that company's securities unless your personal interest is fully disclosed at all stages of the investment decision.
(This is just a summary of these requirements--please read Section IV of the Company Conflict and Business Practices Policy for more detailed information.)
Other important issues in this Policy include:
personal investments or business relationships
misuse of inside information
receiving or giving of gifts, entertainment or favors
misuse or misrepresentation of your corporate position
disclosure of confidential or proprietary information
antitrust activities
political campaign contributions and expenditures on public officials
>> Inside Information Policy and Procedures
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons -------------------------------------------------------------------------------- |
The antifraud provisions of the federal securities laws generally prohibit persons with material non-public information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences. While Investment Access persons are most likely to come in contact with material non-public information, the rules (and sanctions) in this area apply to all John Hancock Funds personnel and extend to activities both related and unrelated to your job duties.
The Inside Information Policy and Procedures covers a number of important issues, such as:
The misuse of material non-public information
The information barrier procedure
The "restricted list" and the "watch list"
broker letters and duplicate confirmation statements (see section 7 of this code of ethics)
>> Policy Regarding Dissemination of Mutual Fund Portfolio Information
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons -------------------------------------------------------------------------------- |
Information about securities held in a mutual fund cannot be disclosed except in accordance with this Policy, which generally requires time delays of approximately one month and public posting of the information to ensure that it uniformly enters the public domain.
6. Policies in the Code of Ethics
>> Restriction on Gifts
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons -------------------------------------------------------------------------------- |
You and your family cannot accept preferential treatment or favors (for example, gifts) from securities brokers or dealers or other organizations with which John Hancock Funds might transact business, except in accordance with the Company Conflict and Business Practice Policy. For the protection of both you and John Hancock Funds, the appearance of a possible conflict of interest must be avoided. You should exercise caution in any
instance in which business travel and lodging are paid for by someone other than John Hancock Funds. The purpose of this policy is to minimize the basis for any charge that you used your John Hancock Funds position to obtain for yourself opportunities which otherwise would not be offered to you. Please see the Company Conflict and Business Practice Policy's "Compensation and Gifts" section for additional details regarding restrictions on gifts and exceptions for "nominal value" gifts.
>> John Hancock Mutual Funds Reporting Requirement and Holding Period
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons -------------------------------------------------------------------------------- |
You must follow the reporting requirement and the holding period requirement specified below if you purchase either:
a "John Hancock Mutual Fund" (i.e. a '40 Act mutual fund that is advised by John Hancock Advisers, LLC, John Hancock Investment Management Services LLC or by another Manulife entity); or
a "John Hancock Variable Product" (i.e. contracts funded by insurance company separate accounts that use one or more portfolios of John Hancock Trust). The John Hancock Mutual Funds reporting requirement and the holding period requirement are excluded for the money market funds and any dividend reinvestment, payroll deduction, systematic investment/withdrawal and/or other program trades.
Reporting Requirement: You must report your holdings and your trades in a John Hancock Mutual Fund or a John Hancock Variable Product. This is not a preclearance requirement--you can report your holdings after you trade by submitting duplicate confirmation statements to the JHF Investment Compliance Department. If you are an Investment Access Person or a Regular Access Person, you must also make sure that your holdings in a John Hancock fund or a John Hancock variable product are included in your Initial Holdings Report (upon hire) and Annual Holdings Report (each year end).
If you purchase a John Hancock Variable Product, you must notify the JHF Investment Compliance Department. The JHF Investment Compliance Department will then obtain directly from the contract administrators the personal trade and holdings information regarding the portfolios underlying the Manulife or John Hancock variable insurance contracts.
The JHF Investment Compliance Department will obtain personal securities trades and holdings information in the 401(k) plan for John Hancock funds directly from the plan administrators.
Holding Requirement: You cannot profit from the purchase and sale of a John Hancock Mutual Fund within 30 calendar days. The purpose of this policy is to address the risk, real or perceived, of manipulative market timing or other abusive practices involving short-term personal trading in the John Hancock Mutual Funds. Any profits realized on short-term trades must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity, upon determination by the Compliance and Business Practices Committee. If you donate or gift a security, it is considered a sale. You may request an exemption from this policy for involuntary sales due to unforeseen corporate activity (such as a merger), or for sales due to hardship reasons (such as unexpected medical expenses) by sending an e-mail to the Chief Compliance Officer of your company.
>> Preclearance of Securities Transactions
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Also, for a limited category of trades: ------------------------------------ Non-Access Persons -------------------------------------------------------------------------------- |
Limited Category of Trades for Non-Access Persons: If you are a Non-Access person, you must preclear transactions in securities of any closed-end funds advised by John Hancock Advisers, LLC. A Non-Access person is not required to preclear other trades. However, please keep in mind that a Non-Access person is required to report securities transactions after every trade (even those that are not required to be precleared) by requiring your broker to submit duplicate confirmation statements, as described in section 7 of this code of ethics.
Investment Access persons and Regular Access persons: If you are an Investment Access person or Regular Access person, you must "preclear" (i.e.: receive advance approval of) any personal securities transactions in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Due to this preclearance requirement, participation in investment clubs is prohibited.
Preclearance of private placements requires some special considerations--the decision will take into account whether, for example: (1) the investment opportunity should be reserved for John Hancock Funds clients; and (2) it is being offered to you because of your position with John Hancock Funds.
How to preclear: You preclear a trade by following the steps outlined in the preclearance procedures, which are attached as Appendix B. Please note that:
You may not trade until clearance is received.
Clearance approval is valid only for the date granted (i.e. the preclearance date and the trade date should be the same).
A separate procedure should be followed for requesting preclearance of a private placement or a derivative, as detailed in Appendix B. The JHF Investment Compliance Department must maintain a five-year record of all clearances of private placement purchases by Investment Access persons, and the reasons supporting the clearances.
The preclearance policy is designed to proactively identify potential "problem trades" that raise front-running, manipulative market timing or other conflict of interest concerns (example: when an Investment Access person trades a security on the same day as a John Hancock fund).
Certain transactions in securities that would normally require pre-clearance are exempt from the pre-clearance requirement in the following situations; (1) shares are being purchased as part of an automatic investment plan; (2) shares are being purchased as part of a dividend reinvestment plan; or (3) transactions are being made in an account over which you have designated a third party as having discretion to trade (you must have approval from the Chief Compliance Officer to establish a discretionary account).
>> Heightened Preclearance of Securities Transactions for "Significant Personal Positions"
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons -------------------------------------------------------------------------------- |
If you are an Investment Access person or Regular Access person with a personal securities position that is worth $100,000 or more, this is deemed to be a "Significant Personal Position". This applies to any personal securities positions in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Before you make personal trades to establish, increase or decrease a Significant Personal Position, you must notify either the Chief Fixed Income Officer or the Chief Equity Officer that (1) you intend to trade in a Significant Personal Position and (2) confirm that you are not aware of any clients for whom related trades should be completed first. You must receive their pre-approval to proceed--their approval will be based on their conclusion that your personal trade in a Significant Personal Position will not "front-run" any action that John Hancock Funds should take for a client. This Heightened Preclearance requirement is in addition to, not in place of, the regular preclearance requirement described above--you must also receive the regular preclearance before you trade.
>> Ban on Short-Term Profits |
--------------------------------------------------------------------------------
Applies to: Investment Access Persons
--------------------------------------------------------------------------------
If you are an Investment Access person, you cannot profit from the purchase and sale (or sale and purchase) of the same (or equivalent) securities within 60 calendar days. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions".
You may invest in derivatives or sell short provided the transaction period exceeds the 60-day holding period (30 days for '40 Act mutual funds advised by John Hancock Advisers, LLC, John Hancock Investment Management Services LLC or another Manulife entity). If you donate or gift a security, it is considered a sale.
The purpose of this policy is to address the risk, real or perceived, of front-running, manipulative market timing or other abusive practices involving short-term personal trading. Any profits realized on short-term trades must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity, upon determination by the Compliance and Business Practices Committee.
You may request an exemption from this policy for involuntary sales due to unforeseen corporate activity (such as a merger), or for sales due to hardship reasons (such as unexpected medical expenses) from the JHF Investment Compliance Department.
>> Ban on IPOs |
--------------------------------------------------------------------------------
Applies to: Investment Access Persons
--------------------------------------------------------------------------------
If you are an Investment Access person, you may not acquire securities in an initial public offering (IPO). You may not purchase any newly-issued securities until the next business (trading) day after the offering date. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions".
There are two main reasons for this prohibition: (1) these purchases may suggest that persons have taken inappropriate advantage of their positions for personal profit; and (2) these purchases may create at least the appearance that an investment opportunity that should have been available to the John Hancock funds was diverted to the personal benefit of an individual employee.
You may request an exemption for certain investments that do not create a potential conflict of interest, such as: (1) securities of a mutual bank or mutual insurance company received as compensation in a demutualization and other similar non-voluntary stock acquisitions; (2) fixed rights offerings; or (3) a family member's participation as a form of employment compensation in their employer's IPO.
>> Disclosure of Private Placement Conflicts
--------------------------------------------------------------------------------
Applies
to: Investment Access Persons
--------------------------------------------------------------------------------
If you are an Investment Access person and you own securities purchased in a private placement, you must disclose that holding when you participate in a decision to purchase or sell that same issuer's securities for a John Hancock fund. This applies to any private placement holdings in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Private placements are securities exempt from SEC registration under section 4(2), section 4(6) or rules 504 -506 of the Securities Act of 1933.
The investment decision must be subject to an independent review by investment personnel with no personal interest in the issuer.
The purpose of this policy is to provide appropriate scrutiny in situations in which there is a potential conflict of interest.
>> Seven Day Blackout
Period |
--------------------------------------------------------------------------------
Applies
to: Investment Access Persons
--------------------------------------------------------------------------------
If you are a portfolio manager (or were identified to the JHF Investment Compliance Department as part of a portfolio management team) you are prohibited from buying or selling a security within seven calendar days before and after that security is traded for a fund that you manage unless no conflict of interest exists in relation to that security (as determined by the Compliance and Ethics Committee).
In addition, all investment access persons are prohibited from knowingly buying or selling a security within seven calendar days before and after that security is traded for a John Hancock fund unless no conflict of interest exists in relation to that security. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". If a John Hancock fund trades in a security within seven calendar days before or after you trade in that security, you may be required to demonstrate that you did not know that the trade was being considered for that John Hancock fund.
You will be required to sell any security purchased in violation of this policy unless it is determined that no conflict of interest exists in relation to that security (as determined by the Compliance and Ethics Committee). Any profits realized on trades determined by the Compliance and Ethics Committee to be in violation of this policy must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity.
7. Reports and Other Disclosures Outside the Code of Ethics
>> Broker Letter/Duplicate Confirm Statements
--------------------------------------------------------------------------------
Applies
to: Investment Access Persons
Regular Access Persons
Non-Access Persons
--------------------------------------------------------------------------------
As required by the Inside Information Policy, you must inform your stockbroker that you are employed by an investment adviser or broker. Your broker is subject to certain rules designed to prevent favoritism toward your accounts. You may not accept negotiated commission rates that you believe may be more favorable than the broker grants to accounts with similar characteristics.
When a brokerage account is opened for which you have a beneficial interest, before any trades are made, you must:
Notify the broker-dealer with which you are opening an account that you are a registered associate of John Hancock Funds;
Ask the firm in writing to have duplicate written confirmations of any trade, as well as statements or other information concerning the account, sent to the John Hancock Funds Investment Compliance Department (contact: Fred Spring), 8th Floor, 101 Huntington Avenue, Boston, MA 02199; and
Notify the JHF Investment Compliance Department, in writing, that you have an account before you place any trades.
This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions" as well as trades in John Hancock Mutual Funds and John Hancock Variable Products. The JHF Investment Compliance Department may rely on information submitted by your broker as part of your reporting requirements under this code of ethics.
8. Reports and Other Disclosures In the Code of Ethics
>> Initial Holdings Report and Annual Holdings Report
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons -------------------------------------------------------------------------------- |
You must file an initial holdings report within 10 calendar days after becoming an Investment Access person or a Regular Access person. The information must be current as of a date no more than 45 days prior to your becoming an Investment Access person or a Regular Access person.
You must also file an annual holdings report (as of December 31st) within 45 calendar days after the calendar year end. This applies to any personal securities holdings in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions" as well as holdings in John Hancock Mutual Funds and John Hancock Variable Products.
Your reports must include:
the title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each reportable security;
the name of any broker, dealer or bank with which you maintain an account; and
the date that you submit the report.
>> Quarterly Transaction Certification
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons -------------------------------------------------------------------------------- |
On a quarterly basis, Investment Access Persons and Regular Access persons are required to certify transactions in their brokerage accounts and the John Hancock Funds 401(k) Plan. Within 30 calendar days after the end of each calendar quarter you will be asked to log into the John Hancock Personal Trading and Reporting System to verify that the system has captured accurately all transactions for the preceding calendar quarter for accounts and trades which are required to be reported pursuant to the above noted section entitled "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Even if you have no transactions to report you will be asked to complete the certification.
For each transaction you must report the following information:
the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each reportable security involved;
the nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition);
the price at which the transaction was effected;
the name of the broker, dealer or bank with or through which the transaction was effected; and
>> Quarterly Brokerage Account Certification
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons -------------------------------------------------------------------------------- |
Each quarter, all Investment Access Persons, Regular Access Persons and Non-Access Persons will be required to provide a complete list of all brokerage accounts as described above in the section entitled "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". This includes all brokerage accounts, including brokerage accounts that only contain securities exempt from reporting.
You will be asked to log into the John Hancock Personal Trading and Reporting System and verify that all brokerage accounts are listed and the following information is accurate:
Account number; Account registration; Brokerage firm |
>> Annual Certification
-------------------------------------------------------------------------------- Applies to: Investment Access Persons Regular Access Persons Non-Access Persons Limited Access Persons -------------------------------------------------------------------------------- |
At least annually (or additionally when the code of ethics has been significantly changed), you must provide a certification at a date designated by the Investment Compliance Department that:
(1) you have read and understood this code of ethics;
(2) you recognize that you are subject to its policies; and
(3) you have complied with its requirements.
You are required to make this certification to demonstrate that you understand the importance of these policies and your responsibilities under the code of ethics.
9. Limited Access Persons
There is an additional category of persons called "Limited Access" persons. This category consists only of directors of John Hancock Advisers, LLC, trustees of the John Hancock Financial Trends Fund, Inc. or an "interested person" of the John Hancock funds who:
(a) are not also officers of John Hancock Advisers, LLC; and
(b) do not ordinarily obtain information about fund portfolio trades
An "interested person" of the John Hancock funds has the meaning given to the term in Section 2(a)(19) of the '40 Act.
A more detailed definition of Limited Access persons, and a list of the policies that apply to them, is attached as Appendix C.
10. Subadvisers
A subadviser to a John Hancock fund has a number of code of ethics responsibilities, as described in Appendix D.
11. Reporting Violations
If you know of any violation of our code of ethics, you have a responsibility to promptly report it to the Chief Compliance Officer of your company. You should also report any deviations from the controls and procedures that safeguard John Hancock Funds and the assets of our clients. You can request confidential treatment of your reporting action.
12. Interpretation and Enforcement
This code of ethics cannot anticipate every situation in which personal interests may be in conflict with the interests of our clients and fund investors. You should be responsive to the spirit and intent of this code of ethics as well as its specific provisions.
When any doubt exists regarding any code of ethics provision or whether a conflict of interest with clients or fund investors might exist, you should
discuss the situation in advance with the Chief Compliance Officer of your company. The code of ethics is designed to detect and prevent fraud against clients and fund investors, and to avoid the appearance of impropriety. If you feel inequitably burdened by any policy, you should feel free to contact your Chief Compliance Officer or the Compliance and Business Practices Committee. Exceptions may be granted where warranted by applicable facts and circumstances. For example, exemption from some Personal Trading Requirements may be granted for transactions effected pursuant to an automatic investment plan.
To provide assurance that policies are effective, the JHF Investment Compliance Department will monitor and check personal securities transaction reports and certifications against fund portfolio transactions. Additional administration and recordkeeping procedures are described in Appendix E.
The Chief Compliance Officer of your company has general administrative responsibility for this code of ethics as it applies to the access persons of your company; an appropriate Compliance Department will administer procedures to review personal trading reports. The Compliance and Business Practices Committee of John Hancock Funds approves amendments to the code of ethics and dispenses employee/officer sanctions for violations of the code of ethics. The Boards of Trustees/Directors of the open-end mutual funds and closed-end funds also approve amendments to the code of ethics and dispenses sanctions for access persons of the Funds who are not employees/officers. Accordingly, the Investment Compliance Department will refer violations to the Compliance and Business Practices Committee and/or the Boards of Trustees/Directors of the John Hancock '40 Act funds, respectively, for review and appropriate action. The following factors will be considered when determining a fine or other disciplinary action:
the person's position and function (senior personnel may be held to a higher standard);
the amount of the trade;
whether the funds or accounts hold the security and were trading the same day;
whether the violation was by a family member.
whether the person has had a prior violation and which policy was involved.
whether the employee self-reported the violation.
You can request reconsideration of any disciplinary action by submitting a written request.
No less frequently than annually, a written report of all material violations and sanctions, significant conflicts of interest and other related issues will be submitted to the boards of directors of the John
Hancock funds for their review. Sanctions for violations could include (but are not limited to) fines, limitation of personal trading activity, suspension or termination of the violator's position with John Hancock Funds and/or a report to the appropriate regulatory authority.
13. Education of Employees
The JHF Investment Compliance Department will provide a paper copy or electronic version of the Code of Ethics (and any amendments) to each person subject to this Code of Ethics. The JHF Investment Compliance Department will also administer training of employees on the principles and procedures of the code of ethics.
Appendix A: Categories of Personnel
You have been notified about which of these categories applies to you, based on the JHF Investment Compliance Department's understanding of your current role. If you have a level of investment access beyond that category, or if you are promoted or change duties and as a result should more appropriately be included in a different category, it is your responsibility to immediately notify the Chief Compliance Officer of your company.
1) Investment Access person: You are an Investment Access person if you are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, a John Hancock fund, or Manulife Financial Corporation or its subsidiaries who, in connection with your regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by a John Hancock fund.
(examples: portfolio managers, analysts, traders)
2) Regular Access person: You are a Regular Access person if you do not fit the definition of Investment Access Person, but you do fit one of the following two sub-categories:
You are an officer (vice president and higher) or director of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC or a John Hancock fund, unless you qualify as a Limited Access person--please see Appendix C for this definition.)
You are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, a John Hancock fund or Manulife Financial Corporation or its subsidiaries , or a director, officer (vice president and higher) or employee of John Hancock Funds, LLC who has access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund or who is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic.
(examples: Investment Operations personnel, Investment Compliance Department personnel, most Fund Financial Management personnel, investment administrative personnel, Technology Resources personnel with access to investment systems, attorneys and some legal administration personnel)
3) Non-Access person: You are a non-access person if you are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, John Hancock Funds, LLC or a John Hancock fund who does not fit the definitions of any of the other three categories (Investment Access Person, Regular Access Person or Limited Access Person). To be a non-access person, you must not have access to information regarding the purchase or sale of securities by a John Hancock fund or nonpublic information regarding the portfolio holdings in connection with your regular functions or duties.
(examples: wholesalers, inside wholesalers, certain administrative staff)
4) Limited Access Person: Please see Appendix C for this definition.
Appendix B: Preclearance Procedures
You should read the Code of Ethics to determine whether you must obtain a preclearance before you enter into a securities transaction. If you are required to obtain a preclearance, you should follow the procedures detailed below.
1. Pre-clearance for Public Securities including Derivatives, Futures, Options and Selling Short:
A request to pre-clear should be entered into the John Hancock Personal Trading & Reporting System.
The John Hancock Personal Trading & Reporting System is located under your Start Menu on your Desktop. It can be accessed by going to Programs/Personal Trading & Reporting/ Personal Trading & Reporting and by entering your Web Security Services user id and password.
If the John Hancock Personal Trading & Reporting System is not on your Desktop, please contact the HELP Desk at (617) 572-6950 for assistance.
The Trade Request Screen:
At times you may receive a message like "System is currently unavailable". The system is scheduled to be offline from 8:00 PM until 7:00 AM each night.
[GRAPHIC: Trade Request Screen]
Ticker/Security Cusip: Fill in either the ticker, cusip or security name with the proper information of the security you want to buy or sell. Then
click the [Lookup] button. Select one of the hyperlinks for the desired security, and the system will populate the proper fields Ticker, Security Cusip, Security Name and Security Type automatically on the Trade Request Screen.
If You Don't Know the Ticker, Cusip, or Security Name:
If you do not know the full ticker, you may type in the first few letters followed by an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of Intel, but all you can remember of the ticker is that it begins with int, so you enter int* for Ticker. If any tickers beginning with int are found, they are displayed on a new screen. Select the hyperlink of the one you want, and the system will populate Security Cusip, Security Name and Security Type automatically on the Trade Request Screen. If you do not know the full cusip, you may type in the first few numbers followed by an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of Microsoft, but all you can remember of the cusip is that it begins with 594918, so you enter 594918* for Ticker. If any cusips beginning with 594918 are found, they are displayed on a new screen. Select the hyperlink of the one you want, and the system will fill in Ticker, Security Name and Security Type automatically on the Trade Request Screen. If you do not know the Ticker but have an idea of what the Security Name is, you may type in an asterisk, a few letters of the name and an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of American Brands, so you enter *amer* for Security Name. Any securities whose names have amer in them are displayed on a new screen, where you are asked to select the hyperlink of the one you want, and the system will fill in Ticker, Cusip and Security Type automatically on the Trade Request Screen.
Other Items on the Trade Request Screen:
Brokerage Account: Click on the dropdown arrow to the right of the Brokerage Account field to choose the account to be used for the trade.
Transaction Type: Choose one of the values displayed when you click the dropdown arrow to the right of this field.
Trade Date: You may only submit trade requests for the current date.
Note: One or more of these fields may not appear on the Request Entry screen if the information is not required. Required fields are determined by the Investment Compliance Department.
Click the [Submit Request] button to send the trade request to your Investment Compliance department.
Once you click the [Submit Request] button, you will be asked to confirm the values you have entered. Review the information and click the [Confirm] button if all the information is correct. After which, you will receive
immediate feedback in your web browser. (Note: We suggest that you print out this confirmation and keep it as a record of the trade you have made). After this, you can either submit another trade request or logout.
Attention Investment Access Persons: If the system identifies a potential violation of the Ban on Short Term Profits Rule, your request will be sent to the Investment Compliance Department for review and you will receive feedback via the e-mail system.
Starting Over:
To clear everything on the screen and start over, click the [Clear Screen] button.
Exiting Without Submitting the Trade Request:
If you decide not to submit the trade request before clicking the [Submit Request] button, simply exit from the browser by clicking the [X] button on the upper right or by pressing [Alt+F4], or by clicking the Logout hyperlink on the lower left side of the screen.
Ticker/Security Name Lookup Screen:
You arrive at this screen from the Trade Request Screen, where you've clicked the [Lookup] button (see above, "If You Don't Know the Ticker, Cusip, or Security Name"). If you see the security you want to trade, you simply select its corresponding hyperlink, and you will automatically return to the Trade Request Screen, where you finish making your trade request. If the security you want to trade is not shown, that means that it is not recognized by the system under the criteria you used to look it up. Keep searching under other names (click the [Return to Request] button) until you are sure that the security is not in the system. If you determine that the desired security is not in the system, please contact a member of the Investment Compliance department to add the security for you. Contacts are listed below:
Fred Spring (617) 375-4987
Adding Brokerage Accounts:
To access this functionality, click on the Add Brokerage Account hyperlink on the left frame of your browser screen. You will be prompted to enter the Brokerage Account Number, Brokerage Account Name, Date Opened, and Broker. When you click the [Create New Brokerage Account] button, you will receive a message that informs you whether the account was successfully created.
[GRAPHIC: Add Brokerage Account screen]
3. Pre-clearance for Private Placements and Initial Public Offerings:
You may request a preclearance of private placement securities or an Initial Public Offering by contacting Fred Spring via email (please "cc." Frank Knox on all such requests). Please keep in mind that the code of ethics prohibits Investment Access persons from purchasing securities in an initial public offering.
The request must include:
|_| the associate's name;
|_| the associate's John Hancock Funds' company;
|_| the complete name of the security;
|_| the seller (i.e the selling party if identified and/or the broker-dealer or placement agent) and whether or not the associate does business with those individuals or entities on a regular basis;
|_| the basis upon which the associate is being offered this investment opportunity;
|_| any potential conflict, present or future, with fund trading activity and whether the security might be offered as inducement to later recommend publicly traded securities for any fund or to trade through a particular broker-dealer or placement agent; and
|_| the date of the request.
Clearance of private placements or initial public offerings may be denied for any appropriate reason, such as if the transaction could create the appearance of impropriety. Clearance of initial public offerings will also be denied if the transaction is prohibited for a person due to his or her access category under the code of ethics.
Appendix C: Limited Access Persons
There are three types of Limited Access Persons--(1) Certain directors of the Adviser and (2) the trustees of the John Hancock Financial Trends Fund, Inc. and (3) the directors of the John Hancock open-end funds and closed-end funds who are not Excluded Independent Directors
(1) Certain Directors of the Adviser:
You are a Limited Access person if you are a director of John Hancock Advisers, LLC or MFC Global Investment Management (U.S.), LLC and you meet the three following criteria:
(a) you are not also an officer of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC or a John Hancock fund;
(b) you do not have access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any John Hancock fund or account; and
(c) you are not involved in making securities recommendations to clients and do not have access to such recommendations that are nonpublic.
(examples: directors of John Hancock Advisers, LLC or MFC Global Investment Management (U.S.), LLC who are not involved in the daily operations of the adviser)
If you are a Limited Access Person who fits this definition, the following policies apply to your category. These policies are described in detail in the code of ethics.
General principles
Inside information policy and procedures
Broker letter/Duplicate Confirms*
Initial/annual holdings reports*
Quarterly transaction reports*
Annual recertification
Preclearance requirement LIMITED: You only need to preclear any direct or indirect acquisition of beneficial ownership in any security in an initial public offering (an IPO) or in a limited offering (i.e. a private placement). To request preclearance of these securities, contact
Fredrick Spring at fspring@jhancock.com and/or Frank Knox at Frank_Knox@manulifeusa.com.
--------------------------------------------------------------------------------
*A Limited Access Person may complete
this requirement under the code of
ethics of another Manulife/John Hancock
adviser or fund by the applicable
regulatory deadlines and arrange for
copies of the required information to
be sent to the John Hancock Funds
Compliance Department.
--------------------------------------------------------------------------------
(2) The Independent Directors of the Funds: If you are a trustee of the John Hancock Financial Trends Fund, Inc. or a director to a John Hancock fund and an "interested person" of the fund within the meaning of the Investment Company Act of 1940, the following policies apply to your category. These policies are described in detail in the code of ethics.
General principles
Annual recertification
Quarterly transaction report, but only if you knew (or should have known) that during the 15 calendar days before or after you trade a security, either:
(i) a John Hancock fund purchased or sold the same security, or
(ii) a John Hancock fund or John Hancock Advisers, LLC considered purchasing or selling the same security.
This policy applies to holdings in your personal accounts, those of a spouse, "significant other" or family members sharing your household, as well as all accounts over which you have discretion or give advice or information. If this situation occurs, it is your responsibility to contact the Chief Compliance Officer of your company and he will assist you with the requirements of the quarterly transaction report.
This means that the independent directors of the funds will not usually be required to file a quarterly transaction report--they are only required to file in the situation described above and only if they are not Excluded Independent Directors.
Appendix D: Subadvisers
Each subadviser to a John Hancock fund is subject to its own code of ethics, which must meet the requirements of Rule 17j-1 and Rule 204A-1.
Approval of Code of Ethics
Each subadviser to a John Hancock fund must provide a copy of its code of ethics to the trustees of the relevant John Hancock funds for approval initially and within 60 calendar days of any material amendment. The trustees will give their approval if they determine that the code:
contains provisions reasonably necessary to prevent the subadviser's Access Persons (as defined in Rule 17j-1) from engaging in any conduct prohibited by Rule 17j-1;
requires the subadviser's Access Persons to make reports to at least the extent required in Rule 17j-1(d);
requires the subadviser to institute appropriate procedures for review of these reports by management or compliance personnel (as contemplated by Rule 17j-1(d)(3));
provides for notification of the subadviser's Access Persons in accordance with Rule 17j-1(d)(4); and
requires the subadviser's Access Persons who are Investment Personnel to obtain the pre-clearances required by Rule 17j-1(e);
Reports and Certifications
Each subadviser must provide an annual report and certification to John Hancock Advisers, LLC and the fund's trustees in accordance with Rule 17j-1(c)(2)(ii). The subadviser must also provide other reports or information that John Hancock Advisers, LLC may reasonably request.
Recordkeeping Requirements
The subadviser must maintain all records for its Access Persons as required by Rule 17j-1(f).
Appendix E: Administration and Recordkeeping
Adoption and Approval
The trustees of a John Hancock fund must approve the code of ethics of an adviser, subadviser or affiliated principal underwriter before initially retaining its services.
Any material change to a code of ethics of a John Hancock fund, John Hancock Funds, LLC, John Hancock Advisers, LLC or a subadviser to a fund must be approved by the trustees of the John Hancock funds, including a majority of trustees who are not interested persons, no later than six months after adoption of the material change.
Administration
No less frequently than annually, John Hancock Funds, LLC, John Hancock Advisers, LLC, each subadviser and each John Hancock fund will furnish to the trustees of each John Hancock fund a written report that:
describes issues that arose during the previous year under the code of ethics or the related procedures, including, but not limited to, information about material code or procedure violations, and
certifies that each entity has adopted procedures reasonably necessary to prevent its access persons from violating its code of ethics.
Recordkeeping
The Investment Compliance Department will maintain:
a copy of the current code of ethics for John Hancock Funds, LLC, John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, and each John Hancock fund, and a copy of each code of ethics in effect at any time within the past five years.
a record of any violation of the code of ethics, and of any action taken as a result of the violation, for six years.
a copy of each report made by an Access person under the code of ethics, for six years (the first two years in a readily accessible place).
a record of all persons, currently or within the past five years, who are or were required to make reports under the code of ethics. This record will also indicate who was responsible for reviewing these reports.
a copy of each code of ethics report to the trustees, for six years (the first two years in a readily accessible place).
a record of any decision, and the reasons supporting the decision, to approve the acquisition by an Investment Access person of initial public offering securities or private placement securities, for six years.
Appendix F: Chief Compliance Officers
Entity | Chief Compliance Officer | |
| ||
John Hancock Advisers, LLC | Frank Knox | |
| ||
MFC Global Investment Management (U.S.), LLC | Frank Knox | |
| ||
Each open-end and closed-end fund advised | Frank Knox | |
by John Hancock Advisers, LLC | ||
| ||
John Hancock Funds, LLC | Michael Mahoney | |
|
JOHN HANCOCK FUNDS
AUDIT COMMITTEE CHARTER
A. Membership. The Audit Committee shall be composed exclusively of Trustees who are not "interested persons" as defined in the Investment Company Act of 1940 of any of the funds, or of any fund's investment adviser or principal underwriter (the "Independent Trustees") and who satisfy the independence and financial literacy requirements in this charter. The Audit Committee shall be composed of at least three Independent Trustees who are designated for membership from time to time by the Board of Trustees of Trustees. In selecting Independent Trustees to serve on the Audit Committee, the Board should select members who are free of any relationship that, in the opinion of the Board, may interfere or give the appearance of interfering with such member's individual exercise of independent judgment. Unless otherwise determined by the Board, no member of the Audit Committee may serve on the audit committee of more than two other public companies (other than another John Hancock Fund). Except as otherwise permitted by the applicable rules of the New York Stock Exchange, each member of the Audit Committee shall be independent as defined by such rules and Rule 10A-3(b)(1) of the Exchange Act. Each member of the Audit Committee must be financially literate, as such qualification is interpreted by the Board of Trustees in its business judgment, or must become financially literate within a reasonable period of time after his or her appointment to the Audit Committee. At least one member of the Audit Committee must have accounting or related financial management expertise, as the Board of Trustees interprets such qualification in its business judgment.
B. Overview. The Audit Committee's purpose is to:
1. assist the Board of Trustee's oversight of (1) the integrity of the funds' financial statements, (2) the funds' compliance with legal and regulatory requirements (except to the extent such responsibility is delegated to another committee), (3) the independent auditor's qualifications and independence, and (4) the performance of the funds' internal audit function and independent auditors;
2. act as a liaison between the funds' independent accountants and the Board of Trustees;
3. prepare an Audit Committee Report as required by the Securities and Exchange Commission (the "SEC") to the extent required to be included in the funds' annual proxy statement or other filings;
The Audit Committee shall discharge its responsibilities, and shall access
the information provided by the funds' management and independent auditors, in accordance with its business judgment. Management is responsible for the preparation of the fund's financial statements and the independent auditors are responsible for auditing those financial statements. The Audit Committee and the Board of Trustees recognize that management (including the internal audit staff) and the independent auditors have more experience, expertise, resources and time, and more detailed knowledge and information regarding a fund's accounting, auditing, internal control and financial reporting practices than the Audit Committee does. Accordingly, the Audit Committee's oversight role does not provide any expert or special assurance as to the financial statements and other financial information provided by a fund to its shareholders and others. The independent auditors are responsible for auditing the funds' annual financial statements. The authority and responsibilities set forth in this charter do not reflect or create any duty or obligation of the Audit Committee to plan or conduct any audit, to determine or certify that any fund's financial statements are complete, accurate, fairly presented, or in accordance with generally accepted accounting principles or applicable law, or to guarantee any independent auditor's report.
C. Oversight. The independent auditors shall report directly to the Audit Committee, and the Audit Committee shall be responsible for oversight of the work of the independent auditors, including resolution of any disagreements between any fund's management and the independent auditors regarding financial reporting. In connection with its oversight role, the Audit Committee should also review with the independent auditors, from time to time as appropriate: significant risks and uncertainties with respect to the quality, accuracy or fairness of presentation of a fund's financial statements; recently disclosed problems with respect to the quality, accuracy or fairness of presentation of the financial statements of companies similarly situated to the funds and recommended actions which might be taken to prevent or mitigate the risk of problems at the funds arising from such matters; accounting for unusual transactions; adjustments arising from audits that could have a significant impact on the funds' financial reporting process; and any recent SEC comments on the funds' SEC reports, including, in particular, any compliance comments. The Audit Committee should inquire of the independent auditor concerning the quality, not just the acceptability, of the funds' accounting determinations and other judgmental areas and question whether management's choices of accounting principles are, as a whole, conservative, moderate or aggressive.
D. Specific Responsibilities. The Audit Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall deem necessary or appropriate:
1. To oversee the funds' auditing and accounting process.
2. To approve, and recommend to the Board of Trustees of Trustees for its ratification and approval in accord with applicable law, the selection, appointment and retention of an independent auditor for each fund prior to the engagement of such independent auditor and, at an appropriate time, its compensation. The Committee should meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit. The Committee should periodically consider whether, in order to assure continuing auditor independence, there should be regular rotation of the independent audit firm and obtain and review a copy of the most recent report on the independent auditor issued by the Public Company Accounting Oversight Board pursuant to Section 104 of the Sarbanes-Oxley Act.
3. To periodically review and evaluate the lead partner and other senior members of the independent auditor's team and confirm the regular rotation of the lead audit partner and reviewing partner as required by Section 203 of the Sarbanes-Oxley Act.
4. To confirm that the officers of the funds were not employed by the independent auditor, or if employed, did not participate in any capacity in the audit of the funds, in each case, during the one-audit-year period preceding the date of initiation of the audit, as required by Section 206 of the Sarbanes-Oxley Act.
5. To pre-approve all non-audit services provided by the independent auditor to the fund or to the fund's investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the fund, if the engagement relates directly to the operations and financial reporting of the fund.
6. The Committee is authorized to delegate, to the extent permitted by law, pre-approval responsibilities to one or more members of the Committee who shall report to the Committee regarding approved services at the Committee's next regularly scheduled meeting. The Committee is also authorized to adopt policies and procedures which govern the pre-approval of audit, audit-related, tax and other services provided by the independent accountants to the funds or to a service provider as referenced in Paragraph 5, provided however, that any such policies and procedures are detailed as to particular services, the Audit Committee is informed of each service, and any such policies and procedures do not include the delegation of the Audit Committee's responsibilities under the Securities Exchange Act of 1934 or applicable rules or listing requirements.
7. To monitor the independent auditor of each fund throughout the engagement to attempt to identify: conflicts of interest between management and the independent auditor as a result of employment relationships; the provision of prohibited non-audit services to a fund by its independent
auditor; violations of audit partner rotation requirements; and prohibited independent auditor compensation arrangements whereby individuals employed by the auditor are compensated based on selling non-audit services to the fund. The independent auditors should promptly contact the Audit Committee or its Chair about any significant issue or disagreement concerning a fund's accounting practices or financial statements that is not resolved to their satisfaction or if Section 10A(b) of the Exchange Act has been implicated.
8. To meet with independent auditors, including private meetings, as necessary, management's internal auditors, and the funds' senior management (i) to review the arrangements for and scope of the annual audit and any special audits; (ii) to review the form and substance of the funds' financial statements and reports, including each fund's disclosures under "Management's Discussion of Fund Performance" and to discuss any matters of concern relating to the funds' financial statements, including any adjustments to such statements recommended by the independent accountants, or other results of an audit; (iii) to consider the independent accountants' comments with respect to the funds' financial policies, procedures and internal accounting controls and management's responses thereto; (iv) to review the resolution of any disagreements between the independent accountants and management regarding the funds' financial reporting; and (v) to review the form of opinion the independent accountants propose to render to the Board and shareholders. The Audit Committee should request from the independent auditors a frank assessment of management.
9. With respect to any listed fund, to consider whether it will recommend to the Board of Trustees that the audited financial statements be included in a fund's annual report. The Board delegates to the Audit Committee the authority to release the funds' financial statements for publication in the annual and semi-annual report, subject to the Board's right to review and ratify such financial statements following publication. With respect to each fund, to review and discuss with each fund's management and independent auditor the funds' audited financial statements and the matters about which Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU 380) requires discussion. The Audit Committee shall prepare an annual committee report for inclusion where necessary in the proxy statement of a fund relating to its annual meeting of security holders or in any other filing required by the SEC's rules.
10. To receive and consider reports on the audit functions of the independent auditors and the extent and quality of their auditing programs.
11. To assist the Board of Trustees in monitoring the Office of the Chief Compliance Officer (the "CCO") by:
Reviewing, no less frequently than annually, the CCO's report on the operation of the compliance programs of the funds and compliance programs of the funds' adviser, sub-advisers, principal underwriter, administrator, and transfer agent (collectively, "service providers").
Reviewing matters relating to the compliance programs of the funds and the compliance programs of their service providers and compliance matters relating to the funds and their service providers as may be presented to the Committee by the CCO.
Making recommendations to the Board of Trustees regarding changes to the funds' compliance program, as may be necessary or appropriate from time to time.
Reviewing the compliance programs for proposed service providers to the funds, including subadvisers, and making recommendations regarding approval of such compliance programs to the Board of Trustees.
Reviewing regulatory inquiries relating to the funds and their service providers as may be presented to the Committee by the CCO.
Reviewing the CCO's goals and objectives and making recommendations to the Board of Trustees regarding the CCO's compensation, including bonus and merit components.
Reviewing the CCO's annual budget and making recommendations to the Board of Trustees regarding its approval and the amount of such budget that should be an expense of the funds.
12. To obtain and review, at least annually, a report by the independent auditor describing: the firm's internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and all relationships between the independent auditor and each fund, including the disclosures required by any applicable Independence Standards Board Standard. The Audit Committee shall engage in an active dialogue with each independent auditor concerning any disclosed relationships or services that might impact the objectivity and independence of the auditor.
13. To review with the independent auditor any problems that may be reported to it arising out of a fund's accounting, auditing or financial reporting functions and management's response, and to receive and consider reports on critical accounting policies and practices and alternative
treatments discussed with management.
14. To review the procedures for allocating fund brokerage, the allocation of trades among various accounts under management and the fees and other charges for fund brokerage.
15. To receive and consider reports from the independent auditors regarding reviews of the operating and internal control structure of custodian banks and transfer agents, including procedures to safeguard fund assets.
16. To monitor securities pricing procedures and review their implementation with management, management's internal auditors, independent auditors and others as may be required.
17. To establish and monitor, or cause to be established and monitored, procedures for the receipt, retention, and treatment of complaints received by a fund regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the investment adviser, administrator, principal underwriter or any other provider of accounting-related services for a listed fund, as well as employees of the fund, if any, regarding questionable accounting or auditing matters, as and when required by applicable rules or listing requirements. The procedures currently in effect are attached as Exhibit A.
18. To report regularly to the Board of Trustees, including providing the Audit Committee's conclusions with respect to the independent auditor and the funds' financial statements and accounting controls.
E. Subcommittees. The Audit Committee may, to the extent permitted by applicable law, form and delegate authority to one or more subcommittees (including a subcommittee consisting of a single member), as it deems appropriate from time to time under the circumstances. Any decision of a subcommittee to preapprove audit or non-audit services shall be presented to the full Audit Committee at its next meeting.
F. Additional Responsibilities. The Committee shall serve as the "qualified legal compliance committee" (as such term is defined in 17 CFR Part 205)("QLCC"), the duties of which are listed on Exhibit B to this charter; and shall also perform other tasks assigned to it from time to time by the Board of Trustees, and will report findings and recommendations to the Board of Trustees, as appropriate.
G. Funding. Each fund shall provide for appropriate funding, as determined by the Audit Committee, in its capacity as a committee of the Board of Trustees, for payment of:
1. Compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the fund.
2. Compensation to any counsel, advisers, experts or consultants engaged by the Audit Committee under Paragraph J of this charter.
3. Ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.
H. Governance. One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, presiding over meetings, and making reports to the Board of Trustees, as appropriate. The designation of a person as an "audit committee financial expert", within the meaning of the rules under Section 407 of the Sarbanes-Oxley Act of 2002, shall not impose any greater responsibility or liability on that person than the responsibility and liability imposed on such person as a member of the Committee, nor shall it decrease the duties and obligations of other Committee members or the Board of Trustees. Any additional compensation of Audit Committee members shall be as determined by the Board of Trustees. No member of the Audit Committee may receive, directly or indirectly, any consulting, advisory or other compensatory fee from a fund, other than fees paid in his or her capacity as a member of the Board of Trustees or a committee of the Board of Trustees. The members of the Audit Committee should confirm that the minutes of the Audit Committee's meetings accurately describe the issues considered by the Committee, the process the Committee used to discuss and evaluate such issues and the Committee's final determination of how to proceed. The minutes should document the Committee's consideration of issues in a manner that demonstrates that the Committee acted with due care.
I. Evaluation. At least annually, the Audit Committee shall evaluate its own performance, including whether the Audit Committee is meeting frequently enough to discharge its responsibilities appropriately.
J. Miscellaneous. The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds' expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and service providers to the funds as it deems desirable.
K. Review. The Committee shall review this charter at least annually
and shall recommend such changes to the Board of Trustees as it deems desirable.
EXHIBIT A
Policy for Raising and Investigating Complaints or Concerns About Accounting or Auditing Matters
As contemplated by the Audit Committee Charter, the Committee has established the following procedures for:
the receipt, retention and treatment of complaints received by a fund regarding accounting, internal accounting controls or auditing matters; and
the confidential, anonymous submission by employees of the investment adviser, administrator, principal underwriter or any other provider of accounting-related services for a listed fund, as well as employees of the fund ("covered persons") of concerns regarding questionable accounting or auditing matters.
A. Policy Objectives
The objective of this policy is to provide a mechanism by which complaints and concerns regarding accounting, internal accounting controls or auditing matters may be raised and addressed without the fear or threat of retaliation. The funds desire and expect that covered persons will report any complaints or concerns they may have regarding accounting, internal accounting controls or auditing matters.
B. Procedures for Raising Complaints and Concerns
The funds' Secretary shall be responsible for communicating these procedures to covered persons. Covered persons with complaints regarding accounting, internal accounting controls or auditing matters or concerns regarding questionable accounting or auditing matters may submit such complaints or concerns to the attention of the funds' Secretary by sending a letter or other writing to the funds' principal executive offices. Complaints and concerns may be made anonymously. Alternatively, any complaints or concerns may also be communicated anonymously directly to any member of the Audit Committee.
C. Procedures for Investigating and Resolving Complaints and Concerns
If any complaints or concerns regarding internal accounting controls or auditing matters that could affect the funds are received through the
Ethics Line or any other similar facility maintained by John Hancock Financial Services, they shall be communicated promptly to the funds' Secretary and shall be reported by the funds' Secretary to the Audit Committee, promptly or quarterly according to the guidelines set forth below.
The funds' Secretary shall report to the Audit Committee as to whether those responsible for the Ethics Line or similar facility have a procedure in place to communicate promptly any such complaints or concerns to the funds' Secretary, and whether any such communication would violate the terms thereof.
All complaints and concerns received will be promptly forwarded to the Audit Committee or the chair of the Audit Committee, unless they are determined to be without merit by Secretary of the funds. If sent only to the chair, the chair may determine the appropriate response or may refer the issues to the entire Audit Committee. In any event, the funds' Secretary will provide a record of all complaints and concerns received (whether or not determined to have merit) to the Audit Committee quarterly.
The Audit Committee will evaluate any complaints or concerns received (including those reported to the committee on a quarterly basis and which the funds' Secretary has previously determined to be without merit). If the Audit Committee requires additional information to evaluate any complaint or concern, it may conduct an investigation, including interviews of persons believed to have relevant information. The Audit Committee may, in its discretion, assume responsibility for directing or conducting any investigation or may delegate such responsibility to another person or entity.
After its evaluation of the complaint or concern, the Audit Committee will authorize such follow-up actions, if any, as deemed necessary and appropriate to address the substance of the complaint or concern. The funds reserve the right to take whatever action the Audit Committee believes appropriate, up to and including discharge of any employee deemed to have engaged in improper conduct.
Regardless of whether a complaint or concern is submitted anonymously, the Audit Committee will strive to keep all complaints and concerns and the identity of those who submit them and participate in any investigation as confidential as possible, limiting disclosure to those with a business need to know or as required by law or recommended by legal counsel.
No covered person shall penalize or retaliate against any other covered person for reporting a complaint or concern, unless it is determined that the complaint or concern was made with knowledge that it was false. The funds will not tolerate retaliation against any covered person for
submitting, or for cooperating in the investigation of, a complaint or concern. Moreover, any such retaliation is unlawful and may result in criminal action. Any retaliation will warrant disciplinary action against the offending party, up to and including termination of employment.
John Hancock Advisers, LLC shall include this policy in its employee manual and shall distribute, at least annually, the policy to all of its employees.
The funds' Secretary shall retain records of all complaints and concerns received, and the disposition thereof, for five years.
D. Notification of Others |
At any time during an evaluation or investigation of a complaint or concern, the chair of the Audit Committee may notify the funds' CCO, the QLCC, or any other party with a need to know of the receipt of a complaint or concern and/or the progress or results of any review and/or investigation of a complaint or concern. The chair of the Audit Committee may provide such level of detail as may be necessary to allow the appropriate consideration by such parties in light of the funds' ongoing obligations, including, but not limited to, disclosure obligations or any required officer certifications.
EXHIBIT B |
QLCC DUTIES AND RESPONSIBILITIES
The QLCC shall adopt written procedures for the confidential receipt, retention, and consideration of any report of evidence of a material violation.
The QLCC has the authority and responsibility, once a report of evidence of a material violation by a fund, its officers, directors, employees or agents has been received by the QLCC:
1. to inform the CLO and CEO of such report (except in the case where the reporting attorney reasonably believes that it would be futile to report evidence of a material violation to the CLO and CEO, and has informed the QLCC of such belief); and
2. to determine whether an investigation is necessary or appropriate, and, if it determines an investigation is necessary or appropriate, to:
(A) notify the Board of Trustees; |
(B) notify the funds' CCO;
(C) initiate an investigation, which may be conducted either by the CLO or by outside attorneys; and
(D) retain such additional expert personnel as the QLCC deems necessary;
and, at the conclusion of such investigation, to:
(A) recommend, by majority vote, that the fund implement an appropriate response to evidence of a material violation; and
(B) inform the CLO, CEO the funds' CCO and the Board of Trustees of the results of any such investigation and the appropriate remedial measures.
3. by majority vote, to take all other appropriate action, including notifying the U.S. Securities and Exchange Commission in the event that the fund fails in any material respect to implement an appropriate response that the QLCC has recommended.
JOHN HANCOCK
FUNDS |
GOVERNANCE COMMITTEE CHARTER
A. Composition. The Governance Committee shall be composed entirely of Trustees who are "independent" as defined in the rules of the New York Stock Exchange ("NYSE") and the NASDAQ Stock Market, Inc. ("NASDAQ") or any other exchange, as applicable, and are not "interested persons" as defined in the Investment Company Act of 1940 of any of the funds, or of any fund's investment adviser or principal underwriter (the "Independent Trustees") who are designated for membership from time to time by the Board of Trustees. The Chairman of the Board shall be a member of the Governance Committee.
B. Overview. The overall charter of the Governance Committee is to make recommendations to the Board on issues related to corporate governance applicable to the Independent Trustees and to the composition and operation of the Board, and to assume duties, responsibilities and functions to recommend nominees to the Board, together with such additional duties, responsibilities and functions as are delegated to it from time to time.
C. Specific Responsibilities. The Governance Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall deem necessary or appropriate:
1. Except where the funds are legally required to nominate individuals recommended by others, to recommend to the Board of Trustees individuals for nomination to serve as Trustees.
2. To consider, as it deems necessary or appropriate, the criteria for persons to fill existing or newly created Trustee vacancies. The Governance Committee shall use the criteria and principles set forth in Annex A to guide its Trustee selection process.
3. To consider and recommend the amount of compensation to be paid by the funds to the Independent Trustees, including incremental amounts, if any, payable to Committee Chairmen, and to address compensation-related matters.
4. To consider and recommend the duties and compensation of the Chairman of the Board.
5. To consider and recommend changes to the Board regarding the size, structure, and composition of the Board.
6. To evaluate, from time to time, the retirement policies for the Independent Trustees.
7. To develop and recommend to the Board guidelines for corporate governance ("Corporate Governance Guidelines") for the funds that take into account the rules of the NYSE and any applicable law or regulation, and to periodically review and assess the Corporate Governance Guidelines and recommend any proposed changes to the Board for approval.
8. To monitor all expenditures of the Board or the Committees or the Independent Trustees not otherwise incurred and/or monitored by a particular Committee, including, but not limited to: legal, consulting, and D&O insurance costs; association dues, including Investment Company Institute membership dues; meeting expenditures and policies relating to
reimbursement of travel expenses and expenses associated with offsite meetings; expenses associated with Trustee attendance at educational or informational conferences; and publication expenses.
9. To consider, evaluate and make recommendations and necessary findings regarding independent legal counsel and any other advisers, experts or consultants, that may be engaged by the Board of Trustees, by the Trustees who are not "interested persons" as defined in the Investment Company Act of 1940 of any of the funds or any fund's investment adviser or principal underwriter, or by the Governance Committee, from time to time, other than as may be engaged directly by another Committee.
10. To periodically review the Board's committee structure and the charters of the Board's committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate.
11. To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of funds in the fund complex and the effectiveness of its committee structure.
12. To report its activities to Board of Trustees and to make such recommendations with respect to the matters described above and other matters as the Governance Committee may deem necessary or appropriate.
D. Additional Responsibilities. The Committee will also perform other tasks assigned to it from time to time by the Chairman of the Board or by the Board of Trustees, and will report findings and recommendations to the Board of Trustees, as appropriate.
E. Governance. One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, and making reports to the Board of Trustees, as appropriate.
F. Miscellaneous. The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds' expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and service providers to the funds as it deems desirable.
G. Review. The Committee shall review this Charter periodically and recommend such changes to the Board of Trustees as it deems desirable.
ANNEX A General Criteria |
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 Governance Committee shall consider the existing Trustee's 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 Governance Committee. In evaluating a nominee recommended by a shareholder, the Governance 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 shareholder's candidate among the slate of its designated nominees, the candidate's 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 shareholder's 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 Governance 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 Governance Committee will consider nominees recommended by shareholders to serve as trustees, the Governance Committee may only act upon such recommendations if there is a vacancy on the Board, or the Governance 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 Governance Committee will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed by members of the Governance Committee. The Governance Committee may retain a consultant to assist the Committee in a search for a qualified candidate.
JOHN HANCOCK FUNDS
PROXY VOTING POLICIES
John Hancock Advisers, LLC MFC Global Investment Management (U.S.), LLC (formerly known as Sovereign Asset Management LLC) Proxy Voting Guidelines |
We believe in placing our clients' interests first. Before we invest in a particular stock or bond, our team of portfolio managers and research analysts look closely at the company by examining its earnings history, its management team and its place in the market. Once we invest, we monitor all our clients' holdings, to ensure that they maintain their potential to produce results for investors.
As part of our active investment management strategy, we keep a close eye on each company we invest in. Routinely, companies issue proxies by which they ask investors like us to vote for or against a change, such as a new management team, a new business procedure or an acquisition. We base our decisions on how to vote these proxies with the goal of maximizing the value of our clients' investments.
Currently, John Hancock Advisers, LLC ("JHA") and MFC Global Investment Management (U.S.), LLC ("MFC") manage open-end funds, closed-end funds and portfolios for institutions and high-net-worth investors. Occasionally, we utilize the expertise of an outside asset manager by means of a subadvisory agreement. In all cases, JHA or MFC makes the final decision as to how to vote our clients' proxies. There is one exception, however, and that pertains to our international accounts. The investment management team for international investments votes the proxies for the accounts they manage. Unless voting is specifically retained by the named fiduciary of the client, JHA and MFC will vote proxies for ERISA clients.
In order to ensure a consistent, balanced approach across all our investment teams, we have established a proxy oversight group comprised of associates from our investment, operations and legal teams. The group has developed a set of policies and procedures that detail the standards for how JHA and MFC vote proxies. The guidelines of JHA have been approved and adopted by each fund client's board of trustees who have voted to delegate proxy voting authority to their investment adviser, JHA. JHA and MFC's other clients have granted us the authority to vote proxies in our advisory contracts or comparable documents.
JHA and MFC have hired a third party proxy voting service which has been instructed to vote all proxies in accordance with our established guidelines except as otherwise instructed.
In evaluating proxy issues, our proxy oversight group may consider information
from many sources, including the portfolio manager, management of a company presenting a proposal, shareholder groups, and independent proxy research services. Proxies for securities on loan through securities lending programs will generally not be voted, however a decision may be made to recall a security for voting purposes if the issue is material.
Below are the guidelines we adhere to when voting proxies. Please keep in mind that these are purely guidelines. Our actual votes will be driven by the particular circumstances of each proxy. From time to time votes may ultimately be cast on a case-by-case basis, taking into consideration relevant facts and circumstances at the time of the vote. Decisions on these matters (case-by-case, abstention, recall) will normally be made by a portfolio manager under the supervision of the chief investment officer and the proxy oversight group. We may abstain from voting a proxy if we conclude that the effect on our clients' economic interests or the value of the portfolio holding is indeterminable or insignificant.
Proxy Voting Guidelines
Board of Directors
We believe good corporate governance evolves from an independent board.
We support the election of uncontested director nominees, but will withhold our vote for any nominee attending less than 75% of the board and committee meetings during the previous fiscal year. Contested elections will be considered on a case by case basis by the proxy oversight group, taking into account the nominee's qualifications. We will support management's ability to set the size of the board of directors and to fill vacancies without shareholder approval but will not support a board that has fewer than 3 directors or allows for the removal of a director without cause.
We will support declassification of a board and block efforts to adopt a classified board structure. This structure typically divides the board into classes with each class serving a staggered term.
In addition, we support proposals for board indemnification and limitation of director liability, as long as they are consistent with corporate law and shareholders' interests. We believe that this is necessary to attract qualified board members.
Selection of Auditors
We believe an independent audit committee can best determine an auditor's qualifications.
We will vote for management proposals to ratify the board's selection of auditors, and for proposals to increase the independence of audit committees.
Capitalization
We will vote for a proposal to increase or decrease authorized common or preferred stock and the issuance of common stock, but will vote against a proposal to issue or convert preferred or multiple classes of stock if the board has unlimited rights to set the terms and conditions of the shares, or if the shares have voting rights inferior or superior to those of other shareholders.
In addition, we will support a management proposal to: create or restore preemptive rights; approve a stock repurchase program; approve a stock split or reverse stock split; and, approve the issuance or exercise of stock warrants
Acquisitions, mergers and corporate restructuring
Proposals to merge with or acquire another company will be voted on a case-by-case basis, as will proposals for recapitalization, restructuring, leveraged buyout, sale of assets, bankruptcy or liquidation. We will vote against a reincorporation proposal if it would reduce shareholder rights. We will vote against a management proposal to ratify or adopt a poison pill or to establish a supermajority voting provision to approve a merger or other business combination. We would however support a management proposal to opt out of a state takeover statutory provision, to spin-off certain operations or divisions and to establish a fair price provision.
Corporate Structure and Shareholder Rights
In general, we support proposals that foster good corporate governance procedures and that provide shareholders with voting power equal to their equity interest in the company.
To preserve shareholder rights, we will vote against a management proposal to restrict shareholders' right to: call a special meeting and to eliminate a shareholders' right to act by written consent. In addition, we will not support a management proposal to adopt a supermajority vote requirement to change certain by-law or charter provisions or a non-technical amendment to by-laws or a charter that reduces shareholder rights.
Equity-based compensation
Equity-based compensation is designed to attract, retain and motivate talented executives and independent directors, but should not be so significant as to materially dilute shareholders' interests.
We will vote against the adoption or amendment of a stock option plan if the:
plan dilution is more than 10% of outstanding common stock,
plan allows for non-qualified options to be priced at less than 85% of the fair market value on the grant date,
company allows or has allowed the re-pricing or replacement of underwater options in the past fiscal year (or the exchange of underwater options).
With respect to the adoption or amendment of employee stock purchase plans or a stock award plan, we will vote against management if:
the plan allows stock to be purchased at less than 85% of fair market value;
this plan dilutes outstanding common equity greater than 10%;
all stock purchase plans, including the proposed plan, exceed 15% of outstanding common equity.
Other Business
For routine business matters which are the subject of many proxy related questions, we will vote with management proposals to:
change the company name;
approve other business;
adjourn meetings;
make technical amendments to the by-laws or charters;
approve financial statements;
approve an employment agreement or contract.
Shareholder Proposals
Shareholders are permitted per SEC regulations to submit proposals for inclusion in a company's proxy statement. We will generally vote against shareholder proposals and in accordance with the recommendation of management except as
follows where we will vote for proposals:;
calling for shareholder ratification of auditors;
calling for auditors to attend annual meetings;
seeking to increase board independence;
requiring minimum stock ownership by directors;
seeking to create a nominating committee or to increase the independence of the nominating committee;
seeking to increase the independence of the audit committee.
Corporate and social policy issues
We believe that "ordinary business matters" are primarily the responsibility of management and should be approved solely by the corporation's board of directors.
Proposals in this category, initiated primarily by shareholders, typically request that the company disclose or amend certain business practices. We generally vote against business practice proposals and abstain on social policy issues, though we may make exceptions in certain instances where we believe a proposal has substantial economic implications.
John Hancock Advisers,
LLC MFC Global Investment Management (U.S.), LLC (formerly known as Sovereign Asset Management LLC) Proxy Voting Procedures |
The role of the proxy voting service
John Hancock Advisers, LLC ("JHA") and MFC Global Investment Management (U.S.), LLC ("MFC") have hired a proxy voting service to assist with the voting of client proxies. The proxy service coordinates with client custodians to ensure that proxies are received for securities held in client accounts and acted on in a timely manner. The proxy service votes all proxies received in accordance with the proxy voting guidelines established and adopted by JHA and MFC. When it is unclear how to apply a particular proxy voting guideline or when a particular proposal is not covered by the guidelines, the proxy voting service will contact the proxy oversight group coordinator for a resolution.
The role of the proxy oversight group and coordinator
The coordinator will interact directly with the proxy voting service to resolve any issues the proxy voting service brings to the attention of JHA or MFC. When a question arises regarding how a proxy should be voted the coordinator contacts the firm's investment professionals and the proxy oversight group for a resolution. In addition the coordinator ensures that the proxy voting service receives responses in a timely manner. Also, the coordinator is responsible for identifying whether, when a voting issue arises, there is a potential conflict of interest situation and then escalating the issue to the firm's Executive Committee. For securities out on loan as part of a securities lending program, if a decision is made to vote a proxy, the coordinator will manage the return/recall of the securities so the proxy can be voted.
The role of mutual fund trustees |
The boards of trustees of our mutual fund clients have reviewed and adopted the proxy voting guidelines of the funds' investment adviser, JHA. The trustees will periodically review the proxy voting guidelines and suggest changes they deem advisable.
Conflicts of interest |
Conflicts of interest are resolved in the best interest of clients.
With respect to potential conflicts of interest, proxies will be voted in accordance with JHA's or MFC's predetermined policies. If application of the predetermined policy is unclear or does not address a particular proposal, a special internal review by the JHA Executive Committee or MFC Executive Committee will determine the vote. After voting, a report will be made to the client (in the case of an investment company, to the fund's board of trustees), if requested. An example of a conflict of interest created with respect to a proxy solicitation is when JHA or MFC must vote the proxies of companies that they provide investment advice to or are currently seeking to provide investment advice to, such as to pension plans.
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