As filed with the Securities and Exchange Commission on September 13, 1999.
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
FILE NUMBER 811-0560
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JOHN HANCOCK DECLARATION TRUST
(Name of Registrant as Specified in Its Charter)
JOHN HANCOCK DECLARATION TRUST
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6 (i) (1), or
14a-6 (i) (2) or Item 22(a) (2) or schedule 14A (sent by wire transmission).
[ ] Fee paid previously with preliminary materials.
[X] No fee required.
<PAGE>
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
October 5, 1999
Dear Declaration Contract or Certificate Owner:
I am writing to ask you to consider an important matter that will affect your
annuity contract or certificate. Some or all of the value of your variable
insurance contract or certificate, issued by either John Hancock Mutual Life
Insurance Company or John Hancock Variable Life Insurance Company (the
"insurance companies") is invested in the John Hancock V.A. International Fund
(the "fund"). The insurance companies hold shares of the V.A. International Fund
in separate accounts for the purpose of funding your annuity payments. For this
reason, you have the right to instruct your insurance company how to vote the
fund shares attributable to your variable insurance contract or certificate.
As you know, John Hancock Advisers, Inc. serves as your fund's investment
adviser. John Hancock Advisers International Limited serves as a subadviser to
your fund, providing the fund with investment advice. To provide the fund with
additional international advisory expertise, your fund's Trustees are asking you
to approve a new subadvisory contract between the adviser and Indocam
International Investment Services.
Your fund's Trustees are also asking you to amend investment restrictions that
limit your fund's abilities on borrowing and lending. Updating these
restrictions will give your fund the flexibility of being able to borrow from
other funds in the John Hancock family, rather than from banks.
No Cost to Your Fund or Change in Investment Objective Though these proposals
require your vote, please be assured that your fund will not bear the cost for
either the voting process or making the changes. In addition, these proposals do
not in any way signal a change in your fund's investment objective. Your fund's
portfolio management team will continue to seek long-term growth of capital by
investing primarily in stocks of companies outside the United States.
These proposals have been unanimously approved by the fund's Board of Trustees,
who believe they will benefit the fund's shareholders and, indirectly, you and
your fellow holders of variable contracts or certificates based in the fund.
They are detailed in the enclosed proxy statement and summarized in the
questions and answers on the following pages. I suggest you read both thoroughly
before voting.
Your Vote Makes a Difference!
No matter what size your investment may be, your vote is critical. I urge you to
review the enclosed materials and to complete, sign and return the enclosed
voting instruction card to the insurance company, which will vote its shares in
the fund in accordance with your instructions. Your prompt response will help
avoid the need for additional mailings. For your convenience, we have provided a
postage-paid envelope.
<PAGE>
If you have any questions or need additional information, please contact your
investment professional or call your Customer Service Representative at 1-800
- -824-0335, Monday through Friday between 8:00 A.M. and 8:00 P.M. Eastern Time.
I thank you for your prompt vote on this matter.
Sincerely,
/s/Edward J. Boudreau, Jr.
--------------------------
Edward J. Boudreau, Jr.
Chairman and CEO
The Declaration Variable Annuity is issued by John Hancock Mutual Life
Insurance Company, or its subsidiary John Hancock Variable Life Insurance
Company*, Boston, MA 02117. *Not Licensed in New York.
2
<PAGE>
Q: Who is Indocam International Investment Services?
A: Indocam International Investment Services (IIIS) is a wholly owned subsidiary
of Indocam, the asset management affiliate of Credit Agricole, a French banking
group. Indocam is an indirect subsidiary of certain holding companies of Caisse
Nationale de Credit Agricole, one of the largest financial and industrial groups
in Europe. As of December 31, 1998, the Indocam group had over $150 billion in
assets worldwide.
Indocam is a global investment firm, with a presence in financial centers around
the world, including Paris, London, Frankfurt, Hong Kong, Tokyo, Singapore, New
York and Boston. Based in Paris, Indocam is an asset management firm maintaining
established relationships with institutional, corporate and individual investors
around the world.
In addition to other management responsibilities, Indocam International
Investment Services serves as a subadviser to the retail John Hancock European
Equity Fund. Indocam Asia Advisers Limited, an affiliate of IIIS and subsidiary
of Indocam, serves as a subadviser to the retail John Hancock Pacific Basin
Equities Fund.
Q: How can the addition of Indocam International Investment Services to the
portfolio management team benefit me?
A: Upon approval of the proposed new subadvisory contract, the fund's day-to-day
portfolio management responsibilities will be assumed by Indocam International
Investment Services. Based in Paris, a team of portfolio managers at IIIS will
be able to draw on the vast investment experience of strategists, analysts and
portfolio managers in Indocam's offices around the world. Your fund's Trustees
believe that the investment advice and local insight IIIS will be able to
provide into European and other international financial markets should benefit
you and your fund.
Q: Does this change in portfolio management signify a change in the fund's
investment objective and strategy?
A: No, these proposals do not in any way signal a change in your fund's
investment objective or strategy. Your fund will continue to seek long-term
growth of capital by investing primarily in stocks of companies outside the
United States. To pursue this objective, your fund's portfolio management team
will continue to identify investment opportunities by focusing on country
allocation and stock selection.
Q: Will the addition of Indocam International Investment Services to the
portfolio management team cause an increase in my fund's management fee?
A: No, there will be no change to your fund's management fee.
3
<PAGE>
Q: Why are the fund's investment restrictions on borrowing money and making
loans being amended?
A: Updating these restrictions will provide your fund with the flexibility to
make loans to and borrow from other John Hancock mutual funds, rather than from
banks. Your fund will likely receive more favorable loan terms and incur fewer
transaction costs through interfund borrowing. Your fund also will benefit from
the flexibility of being able to invest excess cash by lending to other John
Hancock mutual funds. These updated policies will be consistent with other John
Hancock mutual funds.
Q: Will this change affect the number of units I currently have in the V.A.
International Fund? Will there be any tax implications?
A: No. There will be no impact to the number of units you have invested in
your variable annuity and there are no tax implications.
Q: How do I provide voting instructions ?
A: Complete, sign and return the enclosed voting instruction card using the
postage-paid envelope provided.
4
<PAGE>
JOHN HANCOCK V.A. INTERNATIONAL FUND
(a series of John Hancock Declaration Trust)
101 Huntington Avenue
Boston, MA 02199
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 1, 1999
This is the formal agenda for your fund's special meeting. It tells you, as
contract owners and the insurance companies that are the owners of the fund's
shares, what matters will be voted on and the time and place of the meeting, in
case you want to attend in person. The insurance companies will vote their fund
shares as the contract owners instruct.
To the shareholders of John Hancock V.A. International Fund:
A special meeting of shareholders of your fund will be held at 101 Huntington
Avenue, Boston, Massachusetts on Wednesday, December 1, 1999 at 9:00 a.m.,
Eastern time, to consider the following:
1. A proposal to approve a new sub-investment management contract between
John Hancock Advisers, Inc. and Indocam International Investment
Services. Your board of trustees recommends that you vote FOR this
proposal.
2.(a)-(b)Proposals to amend the fund's investment restrictions on borrowing
money and making loans. Your board of trustees recommends that you vote
FOR this proposal.
3. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on September 14, 1999 are
entitled to vote at the meeting and any related follow-up meetings.
Whether or not you expect to attend the meeting, please complete and return the
enclosed proxy card (voting instruction card). Please take a few minutes to vote
now.
By order of the board of trustees,
/s/Susan S. Newton
------------------
Susan S. Newton
Secretary
October 5, 1999
1
<PAGE>
PROXY STATEMENT OF
JOHN HANCOCK V.A. INTERNATIONAL FUND
(a series of John Hancock Declaration Trust)
This proxy statement contains the information you should know before voting on
the proposals as summarized below.
Your fund will furnish without charge a copy of its most recent annual report to
any shareholder upon request. Shareholders who want to obtain a copy of the
fund's semiannual and annual report should direct all written requests to the
attention of the fund, 101 Huntington Avenue, Boston, Massachusetts 02199 or
call John Hancock Funds at 1-800-225-5291.
INTRODUCTION
This proxy statement is being used by the board of trustees of your fund to
solicit proxies to be voted at a special meeting of shareholders of your fund.
This meeting will be held at the principal executive offices of the fund, 101
Huntington Avenue, Boston, Massachusetts on Wednesday, December 1, 1999 at 9:00
a.m., Eastern time. The purpose of the meeting is to consider:
1. A proposal to approve a new sub-investment management contract between
John Hancock Advisers, Inc. and Indocam International Investment
Services.
2.(a)-(b) Proposals to amend the fund's investment restrictions on borrowing
money and making loans.
3. Any other business that may properly come before the meeting.
This proxy statement and the proxy card (voting instruction card) are being
mailed to insurance companies and contract owners on or about October 5, 1999.
Who is Eligible to Vote?
Shareholders of record on September 14, 1999 are entitled to attend and vote on
each proposal at the meeting or any adjourned meeting. This means that the
insurance companies that were shareholders of record on September 14, 1999 will
vote shares of the fund in accordance with contract holders' voting instructions
for shares held in contract holders' accounts on that date. Each share is
entitled to one vote. If you sign a voting instruction card, but do not fill in
a vote, your shares will be voted "for" the proposals. If any other business
comes before the meeting, contract holders' shares will be voted at the
discretion of the insurance companies or the persons named as their proxies.
2
<PAGE>
PROPOSAL 1
APPROVAL OF A NEW
SUB-INVESTMENT MANAGEMENT CONTRACT
John Hancock Advisers, Inc. (the "adviser") serves as your fund's investment
adviser and is responsible for providing the fund with a continuous investment
program under an investment management contract dated August 29, 1996 (the
"management contract"). The management contract was most recently approved by
the shareholders of the fund at a meeting for that purpose held on August 29,
1996.
The adviser hired John Hancock Advisers International Limited ("JHAI") to serve
as a sub-investment adviser to the fund under a sub-investment management
contract dated August 29, 1996 (the "existing contract"). JHAI, subject to the
review of the fund's trustees and the overall supervision of the adviser,
provides the fund with investment advice. The existing contract was approved by
the shareholders of the fund on August 29, 1996.
At a meeting of your fund's trustees held on September 14, 1999, the trustees,
including all of the independent trustees (those who are not "interested
persons" as defined in the Investment Company Act of 1940, as amended (the "1940
Act")), unanimously approved and voted to recommend that shareholders of your
fund approve a new subadvisory contract (the "proposed contract") between the
adviser and Indocam International Investment Services ("IIIS"). The form of
proposed contract is attached to this proxy statement as Exhibit A.
Pursuant to the proposed contract, IIIS will serve as a co-subadviser to the
fund, together with JHAI, in order to provide the fund with additional
international advisory expertise. IIIS, with its principal office in Paris,
France, will be able to provide the fund with investment advice and local
insight into European and other international financial markets.
Approval of the proposed contract will not result in any increase in fees
payable by the fund. As with JHAI under the existing contract, the adviser will
be solely responsible for paying the subadvisory fee to IIIS under the proposed
contract.
Under the proposed contract, IIIS will provide the fund with advice and
recommendations regarding the fund's investments. IIIS will also provide the
fund on a continuous basis with economic, financial and political information,
research and assistance concerning international markets.
3
<PAGE>
Indocam International Investment Services
IIIS is organized under the laws of France and is a wholly owned subsidiary of
Indocam, the asset management affiliate of Credit Agricole, a French banking
group. Indocam is an indirect subsidiary of certain holding companies of Caisse
Nationale de Credit Agricole ("CNCA"), one of the largest financial and
industrial groups in Europe. As of December 31, 1998, the Indocam group had over
$150 billion in assets worldwide.
IIIS currently serves as investment adviser to The France Growth Fund, Inc., a
registered closed-end investment company. In addition, IIIS serves as subadviser
to three open-end investment companies (mutual funds): BNY Hamilton
International Equity Fund, Victory International Growth Fund and John Hancock
European Equity Fund. For each fund managed or subadvised by IIIS with a similar
investment objective, the asset size and the fee rate payable to them are as
follows:
- --------------------------------------------------------------------------------
Fund
Fund Assets* Fee Rate
- --------------------------------------------------------------------------------
BNY Hamilton International $7.7 0.425% of average daily net assets
Equity Fund million (Sub-investment management fee)
Victory International Growth $133 0.55% of average daily net assets
Fund million (Sub-investment management fee)
*As of June 30, 1999.
Although IIIS operates on a fully independent basis and makes its own investment
decisions in rendering investment advice, it has access to the extensive
research and other resources of CNCA's group of affiliated entities. The
investment personnel of IIIS also are employed by and act as investment
personnel for Indocam and/or Indocam Hong Kong Limited, an affiliate of IIIS
that serves as adviser to certain Asian country funds.
The address of IIIS is 90 Boulevard Pasteur, Paris, France 75015.
The principal executive officer and the directors of IIIS are listed below,
along with their principal occupations.
- --------------------------------------------------------------------------------
Name* Principal Occupation
- --------------------------------------------------------------------------------
Jean-Claude Kaltenbach Chairman and Chief Executive Officer
Principal Executive Officer, Chairman of IIIS.
- --------------------------------------------------------------------------------
Ian Gerald McEvatt Managing Director and Chief Investment
Director Officer of Indocam Hong Kong Ltd.
- --------------------------------------------------------------------------------
Claude Rene Doumic Chairman of Societe de Port de Tanger
Director (closed-end fund).
- --------------------------------------------------------------------------------
Didier Guyot de la Pommeraye International Development for Indosuez
Director Asset Management.
- --------------------------------------------------------------------------------
Charles Denis Jules Vergnot Chairman of Danubexsa.
Director
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
Eric Harrison Jostrom Chief Executive Officer and Chief
Director Investment Officer of Constitution
Management Company, Inc.
- --------------------------------------------------------------------------------
* The business address of each person listed is 90 Boulevard Pasteur, Paris,
France 75015.
The Adviser
The adviser is a wholly owned subsidiary of The Berkeley Financial Group, Inc.
(the "Berkeley Group"), which is a wholly owned subsidiary of John Hancock
Subsidiaries, Inc., which is a wholly owned subsidiary of John Hancock Mutual
Life Insurance Company (the "Insurance Company"). The adviser currently has more
than $30 billion assets under management in its capacity as investment adviser
to the fund and other funds in the John Hancock Group of Funds as well as other
institutional accounts.
The principal executive officer and the directors of the adviser are listed
below, along with their principal occupations.
- --------------------------------------------------------------------------------
Name and Address Principal Occupation
- --------------------------------------------------------------------------------
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer
Principal Executive Officer, Chairman of the adviser, the Berkeley Group,
101 Huntington Avenue John Hancock Funds, Inc., Transamerica
Boston, MA 02199 Fund Management Company, Sovereign
Asset Management Corporation, NM
Capital Management, Inc., JHAI and
First Signature Bank & Trust Company;
Director of John Hancock Insurance
Agency, Inc. and John Hancock Advisers
International (Ireland) Ltd.
- --------------------------------------------------------------------------------
Foster L. Aborn Director of John Hancock Insurance
Director Agency, Inc., John Hancock Capital
John Hancock Place Growth Management, Inc., the Berkeley
P.O. Box 111 Group, the adviser, John Hancock
Boston, MA 02117 Funds, Inc., Independence Investment
Associates, Inc., the Insurance
Company, John Hancock Capital
Corporation and John Hancock
Subsidiaries, Inc.
- --------------------------------------------------------------------------------
Stephen L. Brown Chairman and Chief Executive Officer
Director of the Insurance Company; Director of
John Hancock Place John Hancock Insurance Agency, Inc.,
P.O. Box 111 the Berkeley Group, the adviser, John
Boston, MA 02117 Hancock Funds, Inc. and John Hancock
Subsidiaries, Inc.
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
David F. D'Alessandro Director of John Hancock Insurance
Director Agency, Inc., the adviser, the
John Hancock Place Berkeley Group, John Hancock Funds,
P.O. Box 111 Inc., John Hancock Subsidiaries, Inc.;
Boston, MA 02117 Chairman and Director, John Hancock
Variable Life Insurance Company and
John Hancock Mutual Life Insurance
Company of America; Director,
President and Chief Operating Officer
of the Insurance Company.
- --------------------------------------------------------------------------------
John M. DeCiccio Director of John Hancock Insurance
Director Agency, Inc., the Berkeley Group, the
John Hancock Place adviser, John Hancock Funds, Inc. and
P.O. Box 111 the Insurance Company.
Boston, MA 02117
- --------------------------------------------------------------------------------
William C. Fletcher President and Director of Independence
Director Investment Associates, Inc.; Director
John Hancock Place of Independence International
P.O. Box 111 Associates, Inc., John Hancock
Boston, MA 02117 Insurance Agency, Inc., the Berkeley
Group, the adviser, John Hancock
Funds, Inc., Hancock Natural Resource
Group, Inc., Hancock Energy Resources
Management, Inc.; Chairman and
Director of JHM Capital Management,
Inc.
- --------------------------------------------------------------------------------
Maureen R. Ford President of broker/dealer
Director distribution of the Insurance Company;
101 Huntington Avenue Director of the adviser, the Berkeley
Boston, MA 02199 Group, John Hancock Funds, Inc.;
President and Director of John Hancock
Insurance Agency, Inc.
- --------------------------------------------------------------------------------
Anne C. Hodsdon Director, President and Chief
Director, President, Chief Operating Operating Officer of the adviser and
Officer and Chief Investment Officer the Berkeley Group; Director and
101 Huntington Avenue Executive Vice President of John
Boston, MA 02199 Hancock Funds, Inc.; President and
Director of NM Capital Management,
Inc, Sovereign Asset Management
Corporation and Transamerica Fund
Management Company; Director of John
Hancock Insurance Agency, Inc., John
Hancock International (Ireland) Ltd.
and JHAI.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
David A. King Chief Executive Officer, President and
Director Director of John Hancock Signature
John Hancock Place Services, Inc.; Chairman of Networking
P.O. Box 111 Insurance Agency; Vice Chairman of
Boston, MA 02117 First Signature Bank & Trust; Director
of John Hancock Insurance Agency,
Inc., the adviser, the Berkeley Group
and John Hancock Funds, Inc.; Senior
Vice President of the Insurance
Company.
- --------------------------------------------------------------------------------
Jeanne M. Livermore Director of John Hancock Insurance
Director Agency, Inc., the Berkeley Group, the
John Hancock Place adviser, John Hancock Funds, Inc., and
P.O. Box 111 JHAI; Senior Vice President of the
Boston, MA 02117 Insurance Company.
- --------------------------------------------------------------------------------
Thomas E. Moloney Chief Financial Officer of the
Director Insurance Company; Director of John
John Hancock Place Hancock Insurance Agency, Inc., the
P.O. Box 111 adviser, the Berkeley Group, John
Boston, MA 02117 Hancock Funds, Inc., John Hancock
Realty Services and John Hancock
Capital Corporation; Chairman of John
Hancock Property & Casualty; Director
and Chief Financial Officer of John
Hancock Subsidiaries, Inc.; Director
and Chairman of John Hancock Signature
Services, Inc.
- --------------------------------------------------------------------------------
Richard S. Scipione General Counsel of the Insurance
Director Company; Director of John Hancock
John Hancock Place Insurance Agency, Inc., Sovereign
P.O. Box 111 Asset Management Corporation, NM
Boston, MA 02117 Capital Management, Inc., the Berkeley
Group, the adviser, John Hancock
Funds, Inc. and Signator Investors,
Inc.
- --------------------------------------------------------------------------------
Robert H. Watts Executive Vice President of Signator
Director Investors, Inc.; Senior Vice President
John Hancock Place of the Insurance Company; Director of
P.O. Box 111 John Hancock Insurance Agency, Inc.,
Boston, MA 02117 the Berkeley Group, the adviser and
JHAI.
- --------------------------------------------------------------------------------
John Hancock Advisers International Ltd.
JHAI is a wholly owned subsidiary of the adviser and currently manages more than
$400 million in assets.
The principal executive officer and the directors of JHAI are listed below,
along with their principal occupations.
7
<PAGE>
- --------------------------------------------------------------------------------
Name and Address Principal Occupation
- --------------------------------------------------------------------------------
Edward J. Boudreau, Jr. Chairman and Chief Executive Officer
Chairman of the adviser, the Berkley Group,
101 Huntington Avenue John Hancock Funds, Inc., Transamerica
Boston, MA 02199 Fund Management Company, Sovereign
Asset Management Corporation, NM
Capital Management, Inc., JHAI and
First Signature Bank & Trust Company;
Director of John Hancock Insurance
Agency, Inc. and John Hancock Advisers
International (Ireland) Ltd.
- --------------------------------------------------------------------------------
John L. Wills Managing Director and Director of
Managing Director JHAI; Senior Vice President of
Duke's Court, 6th Floor adviser; Director of John Hancock
32-36 Duke Street St. James's Advisers International (Ireland) Ltd.
London SWIY6DF
- --------------------------------------------------------------------------------
Anne C. Hodsdon Director, President and Chief
Director Operating Officer of the adviser and
101 Huntington Avenue the Berkeley Group; Director and
Boston, MA 02199 Executive Vice President of John
Hancock Funds, Inc.; President and
Director of NM Capital Management,
Inc, Sovereign Asset Management
Corporation and Transamerica Fund
Management Company; Director of John
Hancock Insurance Agency, Inc., John
Hancock International (Ireland) Ltd.
and JHAI.
- --------------------------------------------------------------------------------
Jeanne M. Livermore Director of John Hancock Insurance
Director Agency, Inc., the Berkeley Group, the
John Hancock Place adviser, John Hancock Funds, Inc., and
P.O. Box 111 JHAI; Senior Vice President of the
Boston, MA 02117 Insurance Company.
- --------------------------------------------------------------------------------
Robert H. Watts Executive Vice President of Signator
Director Investors, Inc.; Senior Vice President
John Hancock Place of the Insurance Company; Director of
P.O. Box 111 John Hancock Insurance Agency, Inc.,
Boston, MA 02117 the Berkeley Group, the adviser and
JHAI.
- --------------------------------------------------------------------------------
The Proposed and Existing Contracts
The following is a summary of the material terms of the proposed and existing
contracts. In describing the proposed contract, this summary is qualified by
reference to the form of proposed contract attached to this proxy statement as
Exhibit A.
8
<PAGE>
Compensation. The existing contract and the proposed contract (collectively, the
"contracts") provide that JHAI or IIIS, as the case may be, is required to pay
all expenses that it incurs in connection with the performance of its duties
under the contract. The contracts also provide that the adviser, not the fund,
will pay the subadvisory fees.
The proposed contract requires the adviser to pay quarterly to IIIS a
subadvisory fee, which is accrued daily and on an annual basis is equal to 55%
of the gross management fee received by the adviser with respect to the fund's
average daily net assets.
The existing contract requires the adviser to pay JHAI a subadvisory fee, which
is accrued daily, equal on an annual basis to 70% of the fund's gross management
fee received by adviser . For the fund's fiscal year ended December 31, 1998,
the adviser paid JHAI $32,611 in subadvisory fees.
If the proposed contract is approved by the fund's shareholders, JHAI will
voluntarily limit its subadvisory fee to 0.05% of the fund's average daily net
assets effective December 2, 1999 or such later date as determined by the
officers of the fund.
Term. If approved by shareholders of the fund, the proposed contract will take
effect as of December 1, 1999 and will remain in effect until December 1, 2001.
Thereafter, the proposed contract will continue in effect from year to year
subject to the annual approval of its continuance as described below under
"Provisions Contained in Both Contracts and in the Management Contract."
Provisions Contained in Both Contracts and in the Management Contract
Limitation of Liability. The management and the subadvisory contracts provide
that the adviser, JHAI and IIIS are not liable for any error of judgment or
mistake of law or for any loss suffered by the fund in connection with the
matters to which the respective contract relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the applicable
adviser, JHAI or IIIS in the performance of its duties or from the reckless
disregard of its obligations and duties under the contracts.
Termination, Continuance and Amendment. Except as described above for the
proposed contract, each contract continues from year to year subject to annual
approval of its continuance by a majority of the independent trustees, cast in
person at a meeting called for the purpose of voting on such approval, and
annual approval by either (a) your fund's trustees, or (b) a majority of your
fund's outstanding voting securities, as defined in the 1940 Act. Each contract
may be terminated at any time without penalty on 60 days' written notice by the
trustees, by a vote of a majority of the fund's outstanding voting securities,
or by the adviser, JHAI or IIIS, as the case may be. Each contract terminates
automatically in the event of its assignment or in the event that the adviser
ceases to act as the fund's investment adviser.
9
<PAGE>
Use of Name "John Hancock." Under the management contract and the existing
contract, if the adviser ceases to act as the fund's investment adviser, the
fund (to the extent that it lawfully can) must cease to use the name "John
Hancock V.A. International Fund" or any name derived from the name "John
Hancock" or any other name indicating that the fund is advised by or otherwise
associated with the adviser.
The Management Contract
Under the management contract, the adviser, subject to the direction of the
trustees, provides the fund with a continuous investment program for the
management of its assets, consistent with the fund's investment objective and
policies. The adviser furnishes the fund with advice and recommendations
consistent with the investment policies of the fund regarding the purchase,
holding and disposition of portfolio securities. The adviser:
o advises the fund in connection with policy decisions to be made by the
trustees;
o furnishes the fund with research, economic and statistical data in connection
with the fund's investments and policies;
o provides day-to-day administration;
o investigates and conducts relations with issuers of securities to be purchased
by the fund;
o provides required reports and recommendations to the trustees and maintains
the records of the fund; and
o assists the fund in any negotiations relating to the fund's investments with
issuers, investment banking firms, securities brokers or dealers and other
institutions or investors.
The adviser provides the fund with office space, supplies and other facilities
required for the business of the fund. The adviser pays the compensation of all
officers and employees of the fund and pays the expenses of clerical services
related to the administration of the fund. Other than expenses specifically
assumed by the adviser, all expenses incurred in the continuing operation of the
fund are borne by the fund, including fees of the independent trustees and all
fees of lawyers and accountants.
The Fund pays an investment management fee to the adviser approximately
equivalent on an annual basis to 0.90% of the fund's average daily net assets.
During the fiscal year ended December 31, 1998, the fund's management fees
totaled $49,454. [The adviser has agreed to reduce the fund's other expenses
payable, excluding management fees, in order to limit other expenses to 0.25% of
the fund's average daily net asset. This agreement may not be modified or
discontinued by the adviser at least until May 1, 2000.]
10
<PAGE>
Analysis of Proposal and Review of Trustees
The trustees have determined that the terms of the proposed contract are fair
and reasonable. In approving the proposed contract and recommending its approval
by the shareholders of the fund, the trustees, including the independent
trustees, considered the best interest of the shareholders of the fund and took
into account all factors they deemed relevant.
In evaluating the proposed contract, the trustees carefully reviewed materials
furnished by the adviser relating to IIIS and its affiliates and their
personnel, operations and financial condition. The trustees considered the
extensive international investment management expertise of IIIS as beneficial to
the fund. The trustees also deemed important the favorable history, reputation
and qualification of IIIS' parent company, Credit Agricole, and the level of
resources available to IIIS through Credit Agricole and its subsidiaries in
providing investment subadvisory services to the fund. Additionally, the
trustees considered that JHAI will voluntarily agree to limit its subadvisory
fee to 0.05% of the fund's average daily net assets effective as of December 1,
1999 or such later date as determined by the officers of the fund. Other factors
deemed important by the trustees in making their recommendation are (i) the
possibility of benefits that may be realized by the fund as a result of IIIS
serving as the fund's investment subadviser; and (ii) other factors deemed
relevant by the trustees.
The trustees also considered possible benefits to IIIS under the proposed
contract, including the ability of IIIS (a) to cause the fund to execute
securities transactions with brokers that are affiliated with Credit Agricole,
subject to compliance with the requirements of the 1940 Act and procedures
adopted by, and with the oversight of, the trustees and (b) to obtain soft
dollar brokerage and research services from brokers that are not affiliated with
Credit Agricole who effect securities transactions on behalf of the fund.
Throughout the review process the independent trustees were advised by their
independent legal counsel, who was not counsel to the trust, the adviser, JHAI
or IIIS.
Trustees' Evaluation and Recommendation
The trustees, including all of the independent trustees, by a vote cast at a
meeting held on September 14, 1999 unanimously approved and voted to recommend
to the shareholders of the fund that they adopt the proposed contract. If the
shareholders of the fund approve the proposed contract, the proposed contract
will take effect as of December 1, 1999.
The trustees of your fund recommend that the shareholders of your fund vote
"for" the proposed contract.
11
<PAGE>
PROPOSALS 2(a) AND 2(b)
AMENDMENTS TO THE FUND'S INVESTMENT RESTRICTIONS ON
BORROWING MONEY AND MAKING LOANS
The adviser and your fund's board of trustees recommend that the following
changes be made to your fund's fundamental investment restrictions on borrowing
money and making loans. These changes will provide your fund with the
flexibility to make loans to and borrow from other John Hancock mutual funds. We
are asking you to vote on these changes because the restrictions are fundamental
and may be changed only with shareholder approval. Before any John Hancock
mutual fund can engage in interfund borrowing, it will require an exemptive
order from the Securities and Exchange Commission. Your fund currently does not
have such an order, but would like the flexibility to seek one.
The adviser expects that you will benefit from the proposed changes to your
fund's fundamental investment restrictions. Your fund will benefit from the
flexibility of being able to borrow money from other funds in the John Hancock
family, rather than from banks. In addition, your fund will likely receive more
favorable loan terms and incur fewer transaction costs through interfund
borrowing. Your fund also will benefit from the flexibility of being able to
invest excess cash by making loans to other John Hancock mutual funds. In
addition, the borrowing restrction will be liberalized to the extent permitted
under the 1940 Act, consistent with other John Hancock mutual funds.
Proposed Amendments to Investment Restrictions
The table below sets forth the fund's current fundamental restrictions on
borrowing money and making loans in the left hand column and the proposed
amended restrictions in the right hand column.
12
<PAGE>
<TABLE>
<CAPTION>
Proposal 2(a)
<S> <C> <C>
----------------------------------------- -----------------------------------------
Current Fundamental Restriction Amended Fundamental Restriction
----------------------------------------- -----------------------------------------
The Fund may not borrow money, except The fund may not borrow money, except:
for the following extraordinary or (i) for temporary or short-term
emergency purposes: (i) from banks for purposes or for the clearance of
temporary or short-term purposes or for transactions in amounts not to exceed
the clearance of; (ii) in connection 33 1/3% of the value of the fund's
with the redemption of Fund shares or total assets (including the amount
to finance failed settlements of borrowed) taken at market value; (ii)
portfolio trades without immediately in connection with the redemption of
liquidating portfolio securities or fund shares or to finance failed
other assets; and (iii) in order to settlements of portfolio trades without
fulfill commitments or plans to immediately liquidating portfolio
purchase additional securities pending securities or other assets; (iii) in
the anticipated sale of other portfolio order to fulfill commitments or plans
securities or assets, but only if after to purchase additional securities
each such borrowing there is asset pending the anticipated sale of other
coverage of at least 300% as defined in portfolio securities or assets; (iv) in
the 1940 Act. For purposes of this connection with entering into reverse
investment restriction, the deferral of repurchase agreements and dollar rolls,
trustees' fees and transactions in but only if after each such borrowing
short sales, futures contracts and there is asset coverage of at least
options on futures contracts, 300% as defined in the 1940 Act; and
securities or indices and forward (v) as otherwise permitted under the
commitment transactions shall not 1940 Act. The fund may borrow money
constitute borrowing. This restriction from other investment companies managed
does not apply to transactions in or distributed by the fund's investment
reverse repurchase agreements in adviser or any affiliate of the
amounts not to exceed 33 1/3% of the investment adviser. For purposes of
value of the fund's total assets this investment restriction, the
(including the amount borrowed) taken deferral of trustees' fees and
at market value. transactions in all types of derivative
transactions are not considered to be
borrowing.
----------------------------------------- -----------------------------------------
13
<PAGE>
Proposal 2(b)
----------------------------------------- -----------------------------------------
Current Fundamental Restriction Amended Fundamental Restriction
----------------------------------------- -----------------------------------------
The Fund may not make loans, except The Fund may not make loans, except
that the Fund (1) may lend portfolio that the Fund may (i) purchase or hold
securities in accordance with the debt instruments in accordance with the
Fund's investment policies up to 33 Fund's investment policies, (ii) make
1/3% of the Fund's total assets taken loans to other investment companies
at market value, (2) enter into managed or distributed by the fund's
repurchase agreements, and (3) purchase investment adviser or any affiliate of
all or a portion of an issue of debt the investment adviser, and (iii) make
securities, bank loan participation loans of portfolio securities provided
interests, bank certificates of that as a result no more than 33 1/3%
deposit, bankers' acceptances, of the Fund's total assets taken at
debentures or other securities, whether current value would be so loaned. The
or not the purchase is made upon the Fund does not, for this purpose,
original issuance of the securities. consider the purchase of repurchase
agreements, bank certificates of
deposit, bank loan participation
agreements, bankers' acceptances, a
portion of an issue of publicly
distributed bonds, debentures or other
securities, whether or not the purchase
is made upon the original issuance of
the securities, to be the making of a
loan.
----------------------------------------- -----------------------------------------
</TABLE>
Board Evaluation and Recommendation
The trustees believe that the proposed amendments to the fund's investment
restrictions will more clearly reflect current regulatory practice and will
expand the borrowing and lending opportunities available to the fund.
Accordingly, the trustees recommend that you approve the proposals to change the
fund's fundamental investment restrictions as described above.
Each proposal will be voted on separately, so that if the required approval of a
change to a restriction is not obtained, the existing investment restriction
will continue in effect.
The trustees of your fund recommend that the shareholders of your fund vote
"for" the proposals to amend the fund's investment restrictions.
VOTING RIGHTS AND REQUIRED VOTE
Each share of your fund is entitled to one vote for each proposal. Approval of
each proposal requires the affirmative vote of a majority of the shares of your
fund outstanding and entitled to vote. For this purpose, a majority of the
outstanding shares of your fund means with respect to each proposal the vote of
the lesser of
14
<PAGE>
(1) 67% or more of the shares present at the meeting, if the holders of
more than 50% of the shares of the fund are present or represented by
proxy,
or
(2) more than 50% of the outstanding shares of the fund.
Shares of your fund represented in person or by proxy, including shares which
abstain or do not vote with respect to a proposal, will be counted for purposes
of determining whether there is a quorum at the meeting. Accordingly, an
abstention from voting has the same effect as a vote against a proposal.
Contract owners use the voting instruction card as a ballot to give the
insurance company voting instructions for those shares attributable to the
variable contract as of the record date. When the contract owner completes the
voting instruction card and sends it to the insurance company, the insurance
company votes its proxy in accordance with the contract owner's instructions. If
the contract owner completes and signs the voting instruction card, the shares
attributable to the variable contract will be voted as instructed. If the
contract owner merely signs and returns the card, the life insurance company
will vote those shares in favor of the proposal. If the contract owner does not
return the card, the life insurance company will vote those shares in the same
proportion as shares for which instructions were received from other contract
owners.
Shares of the fund that are not attributable to variable contracts will be
represented and voted by one of the insurance companies in the same proportion
as the voting instructions received from contract owners. These shares include
shares purchased with contributions made as seed capital to the fund by the
adviser.
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be solicited by
telephone, by fax or in person by the trustees, officers and employees of your
fund; by personnel of the adviser, the fund's principal distributor, John
Hancock Funds, Inc., and the fund's transfer agent, John Hancock Signature
Services, Inc., or by broker-dealer firms. Signature Services, together with a
third party solicitation firm, has agreed to provide proxy solicitation services
at a cost of approximately $400, which will be paid by the adviser.
The mailing address of the fund, the adviser and John Hancock Funds is 101
Huntington Avenue, Boston, Massachusetts, 02199.
15
<PAGE>
Revoking Proxies
A shareholder signing and returning a proxy has the power to revoke it at any
time before it is exercised:
o By filing a written notice of revocation with your fund's transfer agent,
John Hancock Signature Services, Inc., 1 John Hancock Way, Suite 1000,
Boston, Massachusetts 02217-1000,
o By returning a duly executed proxy with a later date before the time of the
meeting, or
o If a shareholder has executed a proxy but is present at the meeting and
wants to vote in person, by notifying the secretary of the fund (without
complying with any formalities) at any time before it is voted.
Being present at the meeting alone does not revoke a previously executed and
returned proxy.
Contract owners may revoke their voting instructions at any time before the
proxy is voted by the life insurance company by following the procedures
outlined above for revoking proxies.
Outstanding Shares and Quorum
As of September 14, 1999, _____________ shares of beneficial interest of the
fund were outstanding. Only shareholders of record on September 14, 1999 (record
date) are entitled to notice of and to vote at the meeting. A majority of the
outstanding shares of the fund that are entitled to vote will be considered a
quorum for the transaction of business.
Other Business
The fund's board of trustees knows of no business to be presented for
consideration at the meeting other than the proposal. If other business is
properly brought before the meeting, proxies will be voted according to the best
judgment of the persons named as proxies.
Adjournments
If a quorum is not present in person or by proxy at the time any session of the
meeting is called to order, the persons named as proxies may vote those proxies
that have been received to adjourn the meeting to a later date. If a quorum is
present but there are not sufficient votes in favor of the proposal, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies concerning the proposal. Any adjournment will
require the affirmative vote of a majority of the fund's shares at the session
of the meeting to be adjourned. If an adjournment of the meeting is proposed
because there are not sufficient votes in favor of the proposal, the persons
named as proxies will vote those proxies favoring the proposal in favor of
adjournment, and will vote those proxies against the proposal against
adjournment.
16
<PAGE>
Telephone Voting
In addition to soliciting proxies by mail, by fax or in person, the fund may
also arrange to have votes recorded by telephone by officers and employees of
the fund or by personnel of the adviser or transfer agent. The telephone voting
procedure is designed to verify a shareholder's identity, to allow a shareholder
to authorize the voting of shares in accordance with the shareholder's
instructions and to confirm that the voting instructions have been properly
recorded. If these procedures were subject to a successful legal challenge,
these telephone votes would not be counted at the meeting. The fund has not
obtained an opinion of counsel about telephone voting, but is currently not
aware of any challenge.
o A shareholder will be called on a recorded line at the telephone number in
the fund's account records and will be asked to provide the shareholder's
social security number or other identifying information.
o The shareholder will then be given an opportunity to authorize proxies to
vote his or her shares at the meeting in accordance with the shareholder's
instructions.
o To ensure that the shareholder's instructions have been recorded correctly,
the shareholder will also receive a confirmation of the voting instructions
by mail.
o A toll-free number will be available in case the voting information
contained in the confirmation is incorrect.
o If the shareholder decides after voting by telephone to attend the meeting,
the shareholder can revoke the proxy at that time and vote the shares at
the meeting.
The Fund may arrange to have contract owner votes recorded by telephone by
following the procedures outlined above for telephone voting.
OWNERSHIP OF SHARES IN THE FUNDS
To the knowledge of the fund, as of September 14, 1999, the following persons
owned of record or beneficially 5% or more of the outstanding shares of your
fund.
- --------------------------------------------------------------------------------
Name and Address Number of Shares Owned
- --------------------------------------------------------------------------------
17
<PAGE>
Exhibit A
JOHN HANCOCK DECLARATION TRUST
John Hancock V.A. International Fund
Sub-Investment Management Contract
Dated December 1, 1999
<PAGE>
JOHN HANCOCK ADVISERS, INC.
101 Huntington Avenue
Boston, Massachusetts 02199
JOHN HANCOCK DECLARATION TRUST
- John Hancock V.A. International Fund
101 Huntington Avenue
Boston, Massachusetts 02199
INDOCAM INTERNATIONAL INVESTMENT SERVICES
90 Boulevard Pasteur
Paris, FRANCE 75015
Sub-Investment Management Contract
Ladies and Gentlemen:
John Hancock Declaration Trust (the "Trust") has been organized as a
business trust under the laws of The Commonwealth of Massachusetts to engage in
the business of an investment company. The Trust's shares of beneficial interest
may be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. Series may be established or
terminated from time to time by action of the Board of Trustees of the Trust. As
of the date hereof, the Trust has fourteen series of shares, representing
interests in John Hancock V.A. Bond Fund, John Hancock V.A. Large Cap Growth
Fund, John Hancock V.A. Small Cap Growth Fund, John Hancock V.A. 500 Index Fund,
John Hancock V.A. Financial Industries Fund, John Hancock V.A. Large Cap Value
Fund, John Hancock V.A. High Yield Bond Fund, John Hancock V.A. Core Equity
Fund, John Hancock V.A. International Fund, John Hancock V.A. Money Market Fund,
John Hancock V.A. Regional Bank Fund, John Hancock V.A. Sovereign Investors
Fund, John Hancock V.A. Mid Cap Growth Fund, and John Hancock V.A. Strategic
Income Fund.
The Board of Trustees of the Trust (the "Trustees") has selected John
Hancock Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the John Hancock V.A. International Fund (the "Fund"), and to
provide certain other services, under the terms and conditions provided in the
Investment Management Contract, dated August 29, 1996, between the Trust, the
Fund and the Adviser (the "Investment Management Contract").
The Adviser and the Trustees have selected Indocam International
Investment Services (the "Sub-Adviser") to provide the Adviser and the Fund with
the advice and services set forth below, and the Sub-Adviser is willing to
provide such advice and services, subject to the review of the Trustees and
overall supervision of the Adviser, under the terms and conditions hereinafter
set forth. The Sub-Adviser hereby represents and warrants that it is registered
as an investment adviser under the Investment Advisers Act of 1940, as amended.
Accordingly, the Trust, on behalf of the Fund, and the Adviser agree with the
Sub-Adviser as follows:
<PAGE>
1. Delivery of Documents. The Trust has furnished the Sub-Adviser with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated November 15, 1995, as
amended from time to time (the "Declaration of Trust");
(b) By-Laws of the Trust as in effect on the date hereof;
(c) Resolutions of the Trustees approving the form of this Agreement by
and among the Adviser, the Sub-Adviser and the Trust, on behalf of the Fund;
(d) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Fund and approving the form of the Investment Management
Contract;
(e) the Investment Management Contract;
(f) the Fund's portfolio compliance checklists;
(g) the Fund's current Registration Statement, including the Fund's
Prospectus and Statement of Additional Information; and
(h) the Fund's Code of Ethics.
The Trust will furnish to the Sub-Adviser from time to time copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best efforts to
provide to the Fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund as set forth in the Fund's Prospectus and Statement of
Additional Information. In the performance of the Sub-Adviser's duties
hereunder, subject always (x) to the provisions contained in the documents
delivered to the Sub-Adviser pursuant to Section 1, as each of the same may from
time to time be amended or supplemented, and (y) to the limitations set forth in
the Registration Statement of the Trust, on behalf of the Fund, as in effect
from time to time under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended (the "1940 Act"), the Sub-Adviser
will, have investment discretion with respect to the Fund and will at its own
expense:
(a) furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions of the Fund
as set forth in the Fund's Prospectus and Statement of Additional Information,
with respect to the purchase, holding and disposition of portfolio securities
including the purchase and sale of options;
2
<PAGE>
(b) furnish the Adviser and the Fund with advice as to the manner in
which voting rights, subscription rights, rights to consent to corporate action
and any other rights pertaining to the Fund's assets shall be exercised, the
Fund having the responsibility to exercise such voting and other rights;
(c) furnish the Adviser and the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) subject to prior consultation with the Adviser, engage in
negotiations relating to the Fund's investments with issuers, investment banking
firms, securities brokers or dealers and other institutions or investors;
(f) consistent with provisions of Section 7 of this Agreement, place
orders for the purchase, sale or exchange of portfolio securities with brokers
or dealers selected by the Adviser or the Sub-Adviser, provided that in
connection with the placing of such orders and the selection of such brokers or
dealers the Sub-Adviser shall seek to obtain execution and pricing within the
policy guidelines determined by the Trustees and set forth in the Prospectus and
Statement of Additional Information of the Fund as in effect and furnished to
the Sub-Adviser from time to time;
(g) from time to time or at any time requested by the Adviser or the
Trustees, make reports to the Adviser or the Trust of the Sub-Adviser's
performance of the foregoing services;
(h) subject to the supervision of the Adviser, maintain all books and
records with respect to the Fund's securities transactions required by the 1940
Act, and preserve such records for the periods prescribed therefor by the 1940
Act (the Sub-Adviser agrees that such records are the property of the Trust and
copies will be surrendered to the Trust promptly upon request therefor);
(i) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment of cash for the
account of the Fund, and advise the Adviser on the same day such instructions
are given; and
(j) cooperate generally with the Fund and the Adviser to provide
information necessary for the preparation of registration statements and
periodic reports to be filed with the Securities and Exchange Commission,
including Form N-1A, periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings with state "blue
sky" authorities and with United States agencies responsible for tax matters,
and other reports and filings of like nature.
3
<PAGE>
3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost
of maintaining the staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of office rent, telephone,
telecommunications and other facilities it is obligated to provide in order to
perform the services specified in Section 2, and any other expenses incurred by
it in connection with the performance of its duties hereunder.
4. Expenses of the Fund Not Paid by the Sub-Adviser. The Sub-Adviser
will not be required to pay any expenses which this Agreement does not expressly
make payable by the Sub-Adviser. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 3, the
Sub-Adviser will not be required to pay under this Agreement:
(a) the compensation and expenses of Trustees and of independent
advisers, independent contractors, consultants, managers and other agents
employed by the Trust or the Fund other than through the Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the Trust or
the Fund;
(c) the fees and disbursements of custodians and depositories of the
Trust or the Fund's assets, transfer agents, disbursing agents, plan agents and
registrars;
(d) taxes and governmental fees assessed against the Trust or the
Fund's assets and payable by the Trust or the Fund;
(e) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Trust or the Fund
except that the Sub-Adviser shall bear the costs of providing the information
referred to in Section 2(j) to the Adviser;
(f) brokers' commissions and underwriting fees; and
(g) the expense of periodic calculations of the net asset value of the
shares of the Fund.
5. Compensation of the Sub-Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided for the Fund, the Adviser will pay the Sub-Adviser quarterly, in
arrears, a fee at the annual rate of 55% of the investment advisory fee received
by the Adviser.
The "average daily net assets" of the Fund shall be determined on the
basis set forth in the Fund's Prospectus or otherwise consistent with the 1940
Act and the regulations promulgated thereunder. The Sub-Adviser will receive a
pro rata portion of such fee for any periods in which the Sub-Adviser advises
the Fund less than a full quarter. Fund shall not be liable to the Sub-Adviser
for the Sub-Adviser's compensation hereunder. Calculations of the Sub-Adviser's
fee will be based on average net asset values as provided by the Adviser.
4
<PAGE>
In addition to the foregoing, the Sub-Adviser may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by it. Any such fee reduction or
undertaking may be discontinued or modified by the Sub-Adviser at any time.
6. Other Activities of the Sub-Adviser and Its Affiliates. Nothing
herein contained shall prevent the Sub-Adviser or any associate of the
Sub-Adviser from engaging in any other business or from acting as investment
adviser or investment manager for any other person or entity, understood that
officers, directors and employees of the Sub-Adviser or its affiliates may
continue to engage in providing portfolio management services and advice to
other investment companies, whether or not registered, to other investment
advisory clients of the Sub-Adviser or its affiliates and to said affiliates
themselves.
7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the
Sub-Adviser nor any of its investment management subsidiaries nor any of such
investment management subsidiaries' directors, officers or employees will act as
principal or agent or receive any commission, except as may be permitted by the
1940 Act and rules and regulations promulgated thereunder. The Sub-Adviser shall
not knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction.
Nothing herein contained shall limit or restrict the Sub-Adviser or any
of its officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. The Trust and Fund
acknowledge the Sub-Adviser and its officers, affiliates, and employees, and its
other clients may at any time have, acquire, increase, decrease or dispose of
positions in investments which are at the same time being acquired or disposed
of hereunder. The Sub-Adviser shall have no obligation to acquire with respect
to the Fund, a position in any investment which the Sub-Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for the
account of another client, if in the sole discretion of the Sub-Adviser, it is
not feasible or desirable to acquire a position in such investment on behalf of
the Fund. Nothing herein contained shall prevent the Sub-Adviser from purchasing
or recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security.
8. No Partnership or Joint Venture. The Trust, the Fund, the Adviser
and the Sub-Adviser are not partners of or joint venturers with each other and
nothing herein shall be construed so as to make them such partners or joint
venturers or impose any liability as such on any of them.
9. Name of the Trust and the Fund. The Trust and the Fund may use the
name "John Hancock" or any name or names derived from or similar to the names
"John Hancock Advisers, Inc." or "John Hancock Mutual Life Insurance Company"
only for so long as this Agreement remains in effect. At such time as this
Agreement shall no longer be in effect, the Trust and the Fund will (to the
extent that they lawfully can) cease to use such a name or any other name
indicating that the Fund is advised by or otherwise connected with the Adviser.
The Fund acknowledges that it has adopted the name John Hancock V.A.
International Fund through permission of John Hancock Mutual Life Insurance
Company, a Massachusetts insurance company, and agrees that John Hancock Mutual
Life Insurance Company reserves to itself and any successor to its business the
right to grant the nonexclusive right to use the name "John Hancock" or any
similar name or names to any other corporation or entity, including but not
limited to any investment company of which John Hancock Mutual Life Insurance
Company or any subsidiary or affiliate thereof shall be the investment adviser.
5
<PAGE>
10. Limitation of Liability of Sub-Adviser. The Sub-Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust or the Fund or the Adviser in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also employed by the Sub-Adviser, who may be
or become an employee of and paid by the Trust or the Fund shall be deemed, when
acting within the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the Sub-Adviser's
employee or agent.
11. Duration and Termination of this Agreement. This Agreement shall
remain in force until June 30, 2001, and from year to year thereafter, but only
so long as such continuance is specifically approved at least annually by (a) a
majority of the Trustees who are not interested persons of the Adviser, the
Sub-Adviser, or (other than as Board members) of the Trust or the Fund, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
either (i) the Trustees or (ii) a majority of the outstanding voting securities
of the Fund. This Agreement may, on 60 days' written notice, be terminated at
any time without the payment of any penalty by the Trust or the Fund by vote of
a majority of the outstanding voting securities of the Fund, by the Trustees,
the Adviser or the Sub-Adviser. Termination of this Agreement with respect to
the Fund shall not be deemed to terminate or otherwise invalidate any provisions
of any contract between the Sub-Adviser and any other series of the Trust. This
Agreement shall automatically terminate in the event of its assignment or upon
termination of the Investment Management Contract. In interpreting the
provisions of this Section 11, the definitions contained in Section 2(a) of the
1940 Act (particularly the definitions of "assignment," "interested person" or
"voting security"), shall be applied.
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment, transfer, assignment,
sale, hypothecation or pledge of this Agreement shall be effective until
approved by (a) the Trustees, including a majority of the Trustees who are not
interested persons of the Adviser, the Sub-Adviser, or (other than as Board
members) of the Trust or the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) a majority of the outstanding voting
securities of the Fund, as defined in the 1940 Act.
6
<PAGE>
13. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
14. Severability. The provisions of this Agreement are independent of
and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.
15. Miscellaneous. (a) The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock Declaration Trust is the
designation of the Trustees under the Declaration of Trust dated November 15,
1995, as amended from time to time. The Declaration of Trust has been filed with
the Secretary of The Commonwealth of Massachusetts. The obligations of the Trust
and the Fund are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund, but only the Fund's property shall be bound. The Trust or
the Fund shall not be liable for the obligations of any other series of the
Trust. (b) Any information supplied by the Sub-Adviser, which is not otherwise
in the public domain, in connection with the performance of its duties hereunder
is to be regarded as confidential and for use only by the Fund and/or its
agents, and only in connection with the Fund and its investments.
Yours very truly,
JOHN HANCOCK DECLARATION TRUST
on behalf of John Hancock V.A. International Fund
By: ______________________________________
President
The foregoing contract is hereby agreed to as of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By: ______________________________________
Vice Chairman and Chief Investment Officer
INDOCAM INTERNATIONAL INVESTMENT SERVICES
By: ____________________________
Name:
Title:
7
<PAGE>
VOTE THIS CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
These voting instructions will be used
by the Insurance companies in connection
with a solicitation of proxies by the trustees
of the Fund.
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK V.A. INTERNATIONAL FUND
A series of John Hancock Declaration Trust
The undersigned, revoking previous instructions, hereby instructs the above
referenced insurance companies to vote all the shares of beneficial interest of
John Hancock V.A. International Fund ("V.A. International Fund") attributable to
the undersigned's variable annuity contract at the Special Meeting of
Shareholders (the Meeting") of V.A. International Fund to be held at 101
Huntington Avenue, Boston, Massachusetts, on Wednesday, December 1, 1999 at 9:00
a.m. eastern time, and any adjournment(s) of the Meeting. Receipt of the
Proxy Statement dated December 5, 1999 is hereby acknowledged. If not revoked,
this card shall be voted for the proposals.
Thomas J. Lee and Michele G. Van Lear, and each of them, with power of
substitution in each, are hereby instructed to vote the shares held in the fund
portfolio attributable to the undersigned at the special meeting of shareholders
and at any adjournment thereof, as specified on the reverse side.
Date___________________________________,
o Please complete, sign, date and return this proxy in the enclosed
envelope as soon as possible.
o Please sign exactly as your name or names appear left. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title as such.
o If a Corporation, please sign in full corporate name by president or
other authorized officer.
o If a partnership, please sign in partnership name by authorized
person
- ----------------------------------------
Signature
<PAGE>
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
John Hancock V.A. International Fund
Special Meeting of Shareholders to
be held on December 1, 1999
Indicate you voting instructions below by filing in the appropriate boxes using
blue or black ink or dark pencil.
This voting instruction card, if properly executed, will be voted in the manner
directed by the contract owner. If this voting instruction is executed and no
direction is made, this voting instruction will be voted or all proposals and in
the discretion of the insurance company upon such other business as may properly
come before the meeting.
Please vote by filling in the appropriate boxes below
1 To approve a new sub-investment management contract between John
Hancock Advisers, Inc. and Indocam International Investment Services.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2(a) To amend the fund's investment restriction on borrowing money.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2(b) To amend the fund's investment restriction on making loans.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD
