<PAGE> 1
Registration No. 2-10156
ICA No. 811-00560
AS FILED ON MAY 10, 1995
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 73 /x/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 25 /x/
JOHN HANCOCK INVESTMENT TRUST
(Exact Name of Registrant as Specified in Articles of Incorporation)
101 Huntington Avenue, Boston, Massachusetts 02199-7603
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (617) 375-1700
Thomas H. Drohan, Esq.
John Hancock Advisers, Inc.
101 Huntington Avenue, Boston, Massachusetts 02199-7603
(Name and Address of Agent for Service)
__________________________
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
- ---
X on May 15, 1995 pursuant to paragraph (b)
- ---
60 days after filing pursuant to paragraph (a)
- ---
on [date] pursuant to paragraph (a) of rule 485
- ---
Registrant has previously elected, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, to register an indefinite number of its shares
of beneficial interest for sale under the Securities Act of 1933 and filed its
Rule 24f-2 Notice on or about October 27, 1994.
<PAGE> 2
JOHN HANCOCK INVESTMENT TRUST
CROSS REFERENCE SHEET
<TABLE>
Cross Reference Sheet
---------------------
Pursuant to Rule 495(a) under the Securities Act of 1933
<CAPTION>
ITEM NUMBER FORM N-1A, PROSPECTUS CAPTION STATEMENT OF ADDITIONAL
PART A INFORMATION CAPTION
- -------------------------------------------------------------------------------
<S> <C> <C>
1 Front Cover Page *
2 Expense Information; The *
Fund's Expenses; Share Price
3 The Fund's Financial *
Highlights; Performance
4 Investment Objectives and *
Policies; Organization and
Management of the Fund
5 Organization and Management *
of the Fund; The Fund's
Expenses; Back Cover Page
6 Organization and Management *
of the Fund; Dividends and
Taxes; How to Buy Shares; How
to Redeem Shares; Additional
Services and Programs
7 How to Buy Shares; Shares *
Price; Additional Services
and Programs; Alternative
Purchase Arrangements; The
Fund's Expenses; Back Cover
Page
8 How to Redeem Shares *
9 Not Applicable *
10 * Front Cover Page
11 * Table of Contents
12 * Organization of the Fund
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
13 * Investment Objectives
and Policies; Certain
Investment Practices;
Investment Restrictions
14 * Those Responsible for
Management
15 * Those Responsible for
Management
16 * Investment Advisory and
Other Services;
Distribution Contract;
Transfer Agent Services;
Custody of Portfolio;
Independent Auditors
17 * Brokerage Allocation
18 * Description of Fund's
Shares
19 * Net Asset Value;
Additional Services and
Programs
20 * Tax Status
21 * Distribution Contract
22 * Calculation of
Performance
23 * Financial Statements
</TABLE>
<PAGE> 4
JOHN HANCOCK
GROWTH AND
INCOME FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MAY 15, 1995
- --------------------------------------------------------------------------------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 5
Organization and Management of the Fund............................................... 7
Alternative Purchase Arrangements..................................................... 8
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 10
Performance........................................................................... 12
How to Buy Shares..................................................................... 13
Share Price........................................................................... 14
How to Redeem Shares.................................................................. 20
Additional Services and Programs...................................................... 22
Investments, Techniques and Risk Factors.............................................. 26
</TABLE>
This Prospectus sets forth the information about John Hancock Growth and
Income Fund (the "Fund"), a diversified series of John Hancock Investment Trust
(the "Trust"), that you should know before investing. Please read and retain it
for future reference.
Additional information about the Fund and the Trust has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated May 15, 1995 and incorporated
by reference into this Prospectus, free of charge by writing or telephoning:
John Hancock Investor Services Corporation, P.O. Box 9116, Boston, Massachusetts
02205-9116, 1-800-225-5291 (1-800-554-6713 TDD).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 5
<TABLE>
EXPENSE INFORMATION
The purpose of the following information is to help you to understand the
various fees and expenses you will bear, directly or indirectly, when you
purchase Fund shares. The operating expenses included in the table and
hypothetical example below are based on fees and expenses for the Fund's fiscal
year ended August 31, 1994 adjusted to reflect current sales charges. Actual
fees and expenses in the future of Class A and Class B shares may be greater or
less than those indicated.
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of offering price)....................... 5.00% None
Maximum sales charge imposed on reinvested dividends................................................ None None
Maximum deferred sales charge....................................................................... None* 5.00%
Redemption fee+..................................................................................... None None
Exchange fee........................................................................................ None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee...................................................................................... 0.625% 0.625%
12b-1 fee**......................................................................................... 0.250% 1.000%
Other expenses***................................................................................... 0.435% 0.435%
Total Fund operating expenses....................................................................... 1.300% 2.000%
<FN>
* No sales charge is payable at the time of purchase on investments of $1
million or more, but for these investments a contingent deferred sales
charge may be imposed, as described below under the caption "Share Price,"
in the event of certain redemption transactions within one year of purchase.
** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average net assets, and the remaining portion will be
used to cover distribution expenses.
*** Other Expenses include transfer agent, legal, audit, custody and other
expenses.
+ Redemption by wire fee (currently $4.00) not included.
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on a
hypothetical $1,000 investment, assuming 5% annual return
Class A Shares............................................................... $ 63 $89 $ 118 $200
Class B Shares
-- Assuming complete redemption at end of period......................... $ 71 $95 $ 131 $220
-- Assuming no redemption................................................ $ 21 $65 $ 111 $220
</TABLE>
(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.)
The Fund's payment of a distribution fee may result in a long-term shareholder
indirectly paying more than the economic equivalent of the maximum front-end
sales charge permitted under the National Association of Securities Dealers,
Inc.'s Rules of Fair Practice.
The management and 12b-1 fees referred to above are more fully explained in
this Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."
2
<PAGE> 6
<TABLE>
THE FUND'S FINANCIAL HIGHLIGHTS
The information in the following table of financial highlights for each of the
ten years in the period ended August 31, 1994 has been audited by Ernst & Young
LLP, the Fund's independent auditors, whose unqualified report is included in
the Statement of Additional Information. The financial highlights for the
six-month period ended February 28, 1995 are unaudited. Further information
about the performance of the Fund is contained in the Fund's Annual and
Semi-Annual Reports to shareholders which may be obtained free of charge by
writing or telephoning John Hancock Investor Services Corporation ("Investor
Services"), at the address or telephone number listed on the front page of this
Prospectus.
Selected data for each class of shares outstanding throughout each period is
as follows:
<CAPTION>
CLASS A SHARES
--------------------------------------------------------------------------------------------------------------
PERIOD ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1995 ------------------------------------------------------------------------------------------
(UNAUDITED)(1) 1994(2) 1993(2) 1992(2) 1991 1990 1989 1988 1987 1986 1985
----------------- ------- ------- ------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year.... $ 11.42 $ 12.08 $ 12.43 $ 11.77 $ 9.87 $ 10.19 $ 8.83 $ 12.04 $ 11.11 $ 10.42 $ 9.11
INCOME FROM
INVESTMENT
OPERATIONS:
Net Investment income.. 0.11 0.32 0.40 0.32 0.20 0.20 0.55 0.50 0.42 0.35 0.50
Net realized and
unrealized gain
(loss) on
investments.......... (0.02) (0.61) 1.12 0.89 2.07 (0.18) 1.42 (1.73) 1.77 1.48 1.45
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations........... 0.09 (0.29) 1.52 1.21 2.27 0.02 1.97 (1.23) 2.19 1.83 1.95
LESS DISTRIBUTIONS:
Dividends from net
investment income.... (0.08) (0.37) (0.42) (0.25) (0.19) (0.27) (0.61) (0.49) (0.38) (0.36) (0.57)
Distributions from
realized gains....... -- -- (1.45) (0.30) (0.18) (0.07) -- (1.49) (0.88) (0.78) (0.07)
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions.... (0.08) (0.37) (1.87) (0.55) (0.37) (0.34) (0.61) (1.98) (1.26) (1.14) (0.64)
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of year.......... $ 11.43 $ 11.42 $ 12.08 $ 12.43 $ 11.77 $ 9.87 $ 10.19 $ 8.83 $ 12.04 $ 11.11 $ 10.42
======== ======== ======== ======= ======= ======= ======= ======= ======= ======= =======
Total Return(3)........ 0.86% (2.39)% 13.64% 10.47% 23.80% 0.18% 23.47% (9.86)% 22.58% 19.90% 22.43%
======== ======== ======== ======= ======= ======= ======= ======= ======= ======= =======
RATIOS AND
SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets... 1.34%* 1.31% 1.29% 1.34% 1.38% 1.29% 1.12% 1.29% 1.21% 1.12% 1.16%
Ratio of net investment
income to average net
assets............... 2.06%* 2.82% 3.43% 2.75% 1.90% 1.96% 6.07% 5.45% 3.86% 3.53% 5.14%
Portfolio turnover..... 53% 195% 107% 119% 70% 69% 214% 120% 138% 150% 168%
Net Assets, end of
year (in thousands).. $120,515 $121,160 $115,780 $89,682 $77,461 $63,150 $70,513 $69,555 $90,974 $69,516 $56,386
<FN>
- ---------------
(1) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser to the Fund.
(2) Per share information has been calculated using the average number of shares outstanding.
(3) Total return does not include the effect of the initial sales charge.
* On an annualized basis.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
CLASS B SHARES
-----------------------------------------------------------------------------
PERIOD ENDED YEAR ENDED AUGUST 31, PERIOD
FEBRUARY 28, 1995(1) ------------------------------- AUGUST 22, 1991 TO
(UNAUDITED) 1994(2) 1993(2) 1992(2) AUGUST 31, 1991(3)
-------------------- ------- ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $ 11.44 $ 12.10 $ 12.44 $ 11.77 $11.52
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................ 0.07 0.24 0.30 0.23 0.00
Net realized and unrealized gain (loss) on
investments.................................... (0.02) (0.61) 1.12 0.99 0.25
-------- -------- -------- -------- ------
Total from Investment Operations................. 0.05 (0.37) 1.42 1.12 0.25
LESS DISTRIBUTIONS:
Dividends from net investment income............. (0.04) (0.29) (0.31) (0.15) --
Distributions from realized gains................ -- -- (1.45) (0.30) --
-------- -------- -------- -------- ------
Total Distributions.............................. (0.04) (0.29) (1.76) (0.45) 0.00
-------- -------- -------- -------- ------
Net asset value, end of period................... $ 11.45 $ 11.44 $ 12.10 $ 12.44 $11.77
======== ======== ======= ======= ======
Total Return(4).................................. 0.48% (3.11) % 12.64% 9.67% 2.17%
======== ======== ======= ======= ======
RATIOS AND SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......... 2.09%* 2.19% 2.07% 0.06% --
Ratio of net investment income to average net
assets......................................... 1.31%* 2.07% 2.53% 2.02% 0.04%
Portfolio turnover............................... 53% 195% 107% 119% 70%
Net Assets, end of period (in thousands)......... $109,215 $114,025 $65,010 $29,826 $7,690
<FN>
- ---------------
(1) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser to the Fund.
(2) Per share information has been calculated using the average number of shares outstanding.
(3) Financial highlights, including total return, have not been annualized.
Portfolio turnover is for the year ended August 31, 1991.
(4) Total return does not include the effect of the contingent deferred sales charge.
* On an annualized basis.
</TABLE>
4
<PAGE> 8
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to obtain the highest total return, a
combination of capital appreciation and current income, consistent with
reasonable safety of capital. The Fund seeks to achieve its objective by
allocating its assets between equity and fixed-income securities, including
money market instruments. The Fund is designed primarily, but not exclusively,
for the long-term investor as a base or central investment which may be termed a
"core portfolio." While there is no limitation as to the proportion of the
Fund's portfolio which may be invested in any type of security (unless otherwise
stated below), the Fund does not intend to concentrate its investments in any
particular industry. Depending upon the judgment of John Hancock Advisers, Inc.
(the "Adviser") as to general market and economic conditions and other factors,
the Fund may emphasize growth-oriented or income-oriented investments at
different times and in varying degrees in pursuit of its objective.
- -------------------------------------------------------------------------------
THE FUND SEEKS TO OBTAIN THE HIGHEST TOTAL
RETURN, A COMBINATION OF CAPITAL
APPRECIATION AND CURRENT INCOME,
CONSISTENT WITH REASONABLE SAFETY OF
CAPITAL.
- -------------------------------------------------------------------------------
Under normal circumstances, the Fund's equity investments will consist of common
and preferred stocks which have yielded their holders a dividend return within
the preceding 12 months and have the potential to increase dividends in the
future; however, non-income-producing securities may be held for anticipated
increase in value.
The Fund may invest in fixed-income securities consisting of (1) debt securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities
and (2) corporate bonds, notes and debentures and other debt securities (which
may have common stock or other equity conversion privileges,) determined to be
appropriate investments in view of its investment objective. In addition, the
Fund may also invest in depository type obligations of banks and savings and
loan associations, as well as other high quality money market instruments
consisting of short-term obligations of the U.S. Government or its agencies,
banker's acceptances (each being of investment grade) and commercial paper rated
at least P-1 by Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard
and Poor's Ratings Group ("S&P").
Although the Fund invests primarily in securities traded in U.S. financial
markets, it may invest up to 25% of its assets (and up to 35% during times of
adverse U.S. market conditions as determined by the Adviser) in equity and
fixed-income securities principally traded in foreign markets.
Although the Fund's flexible asset allocation investment policy allows its
portfolio to be invested substantially in stocks, bonds, or money market
securities at any given time, the Adviser expects that over longer periods
(barring long-term adverse market conditions), the largest portion of the Fund's
portfolio will consist of equity securities. The Fund strives to accomplish its
investment objective with reasonable safety of capital through continual
reassessment of the Fund's asset allocation as well as through constant
supervision, careful selection and broad diversification of its investments.
Inasmuch as the Fund seeks to provide for its shareholders an "all-weather"
investment program that is responsive to all market conditions, there can be no
assurance that it will achieve its investment objective.
5
<PAGE> 9
Because the values of the securities in which the Fund invests will fluctuate,
the Fund's net asset value per share at the time shares are redeemed may be more
or less than the net asset value per share at the time of purchase.
In pursuing its investment objective, the Fund may invest in restricted and
illiquid securities, purchase warrants, invest in instruments subject to
repurchase agreements, engage in reverse repurchase agreements for investment
purposes, lend its portfolio securities and write (sell) covered options and
purchase options on securities and foreign currencies in which it is authorized
to invest, including options on debt securities indexes and stock indexes. These
investment techniques may involve a greater degree of risk than those inherent
in more conservative investment approaches and the use of reverse repurchase
agreements will have the effect of leveraging the Fund's portfolio. See
"Investments, Techniques and Risk Factors."
The extent to which the Fund will be able to achieve its investment objective
will depend upon the Adviser's ability to evaluate and develop the information
it receives into a successful investment program.
The Fund generally invests in equity and debt securities including convertible
securities that are listed on U.S. securities exchanges or traded in the
over-the-counter market. Foreign securities in which the Fund may invest may be
listed on foreign securities exchanges or traded in the over-the-counter market.
The Fund considers its investment objective (consistent with safety of capital)
to place limitations on its investments in corporate fixed-income securities as
to quality of such portfolio holdings. Thus, in general, the portion of the
Fund's investments in corporate fixed-income securities will be those of
investment grade quality, that is, rated at least Baa by Moody's and BBB by S&P.
The Fund may, however, purchase securities rated lower than BBB or Baa only
where, in the opinion of the Adviser, the rating does not accurately reflect the
true quality of the credit of the issuer and these securities are determined to
be of a quality comparable to investment grade, provided that no more than 5% of
the Fund's total assets are invested in these securities. The Fund will not
invest in any securities rated lower than B by either Moody's or S&P. The Fund
may invest in unrated corporate fixed-income securities only where, in the
opinion of the Adviser, these securities are determined to be of a quality
comparable to investment grade. Of these securities eligible for investment by
the Fund, bonds rated BBB or Baa or lower and unrated securities can pose more
risks than higher quality securities and are considered, to varying degrees,
speculative in that changes in economic conditions or other circumstances are
more likely to lead to a weakened capacity to make principal and interest
payments than in the case of higher quality securities. See the Statement of
Additional Information for a description of ratings.
Transactions in options may be entered into on U.S. exchanges and in the over-
the-counter market. Over-the-counter transactions involve certain risks which
may not be present in an exchange environment. The Fund intends to limit its
investments in over-the-counter options, together with other illiquid
securities, to 10% of the Fund's assets.
6
<PAGE> 10
The Fund may be emphasizing growth-oriented or income-oriented investments
during any given period of time which will effect the Fund's total return.
Investors should consider their investment needs, e.g., steady income or tax
considerations making ordinary income more or less desirable than capital gains,
before purchasing shares of the Fund.
The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's nonfundamental
restrictions, however, may be changed by a vote of the Trustees without
shareholder approval. Notwithstanding the Fund's fundamental investment
restriction prohibiting investments in other investment companies, the Fund may,
pursuant to an order granted by the SEC, invest in other investment companies in
connection with a deferred compensation plan for the non-interested trustees of
the John Hancock funds. There can be no assurance that the Fund will achieve its
investment objective.
- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES WHICH
MAY HELP TO REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------
The primary consideration in choosing brokerage firms to carry out the Fund's
transactions is execution at the most favorable prices, taking into account the
broker's professional ability and quality of service. Consideration may also be
given to the broker's sales of Fund shares. Pursuant to procedures determined by
the Trustees, the Adviser may place securities transactions with brokers
affiliated with the Adviser. These brokers include Tucker Anthony Incorporated,
Sutro and Company, Inc. and John Hancock Distributors, Inc., which are
indirectly owned by the John Hancock Mutual Life Insurance Company (the "Life
Company"), which in turn indirectly owns the Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a diversified series of the Trust, an open-end management investment
company organized as a Massachusetts business trust in 1984. The Trust reserves
the right to create and issue a number of series of shares, or funds or classes
thereof, which are separately managed and have different investment objectives.
The Trustees have authorized the issuance of two classes of the Fund, designated
Class A and Class B. The shares of each class represent an interest in the same
portfolio of investments of the Fund. Each class has equal rights as to voting,
redemption, dividends and liquidation. However, each class bears different
distribution and transfer agent fees and other expenses. Also, Class A and Class
B shareholders have exclusive voting rights with respect to their distribution
plans. The Trust is not required to and does not intend to hold annual meetings
of shareholders, although special meetings may be held for such purposes as
electing or removing Trustees, changing fundamental policies or approving a
management contract. The Fund, under certain circumstances, will assist in
shareholder communications with other shareholders.
- -------------------------------------------------------------------------------
THE TRUSTEES ELECT OFFICERS AND RETAIN THE
INVESTMENT ADVISER WHO IS RESPONSIBLE FOR
THE DAY-TO-DAY OPERATIONS OF THE FUND,
SUBJECT TO THE TRUSTEES' POLICIES AND
SUPERVISION.
- -------------------------------------------------------------------------------
7
<PAGE> 11
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the Life Company, a financial services company. The Adviser provides the Fund,
and other investment companies in the John Hancock group of funds, with
investment research and portfolio management services. John Hancock Funds, Inc.
("John Hancock Funds") distributes shares for all of the John Hancock mutual
funds through brokers which have agreements with John Hancock Funds ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds.
- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $13 BILLION.
- -------------------------------------------------------------------------------
Investment decisions are made by the portfolio manager, Brian Grove. Mr. Grove
has served as the Fund's portfolio manager since June 1994. Prior to managing
the Fund, Mr. Grove was portfolio manager at Daniel Breen and Company, Houston,
Texas (1989-1994) and assistant vice president and investment analyst of Texas
Commerce Investment Management, Houston, Texas (1988-1989).
In order to avoid any conflict with portfolio trades for the Fund, the Adviser
and the Fund have adopted extensive restrictions on personal securities trading
by personnel of the Adviser and its affiliates. Some of these restrictions are:
preclearance for all personal trades and a ban on the purchase of initial public
offerings, as well as contributions to specified charities of profits on
securities held for less than 91 days. These restrictions are a continuation of
the basic principle that the interests of the Fund and its shareholders come
first.
ALTERNATIVE PURCHASE ARRANGEMENTS
You can purchase shares of the Fund at a price equal to their net asset value
per share plus a sales charge. At your election, this charge may be imposed
either at the time of the purchase (see "Initial Sales Charge Alternative,"
Class A shares) or on a contingent deferred basis (the "Contingent Deferred
Sales Charge Alternative," Class B shares). If you do not specify on your
account application the class of shares you are purchasing, it will be assumed
that you are investing in Class A shares.
- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount of your purchase is $1 million or more.
If you purchase $1 million or more of Class A shares, you will not be subject to
an initial sales charge, but you will incur a sales charge if you redeem your
shares within one year of purchase. Class A shares are subject to ongoing
distribution and service fees at a combined annual rate of up to 0.25% of the
Fund's average daily net assets attributable to the Class A shares. Certain
purchases of Class A shares qualify for reduced initial sales charges. See
"Share Price -- Qualifying for a Reduced Sales Charge."
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS A SHARES ARE SUBJECT
TO AN INITIAL SALES CHARGE.
- -------------------------------------------------------------------------------
CLASS B SHARES. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them within
six years of purchase (the "contingent deferred sales charge" or the "CDSC").
Class B shares are subject to ongoing distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to the Class B shares. Investing in Class B shares permits all of
your dollars to work from
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS B SHARES ARE SUBJECT
TO A CONTINGENT DEFERRED SALES CHARGE.
- -------------------------------------------------------------------------------
8
<PAGE> 12
the time you make your investment, but the higher ongoing distribution fee will
cause these shares to have higher expenses than those of Class A shares. To the
extent that any dividends are paid by the Fund, these higher expenses will also
result in lower dividends than those paid on Class A shares.
Class B shares are not available for full-service defined contribution plans
administered by Investor Services or the Life Company that had more than 100
eligible employees at the inception of the Fund account.
FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE
The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares, given the amount of your purchase, the length of time you
expect to hold your shares and other circumstances. You should consider whether,
during the anticipated life of your Fund investment, the CDSC and accumulated
fees on Class B shares would be less than the initial sales charge and
accumulated fees on Class A shares purchased at the same time, and to what
extent this differential would be offset by the Class A shares' lower expenses.
To help you make this determination, the table under the caption "Expense
Information" on the inside cover page of this Prospectus shows examples of the
charges applicable to each class of shares. Class A shares will normally be more
beneficial if you qualify for reduced sales charges. See "Share
Price -- Qualifying for a Reduced Sales Charge."
- -------------------------------------------------------------------------------
YOU SHOULD CONSIDER WHICH CLASS OF SHARES
WOULD BE MORE BENEFICIAL TO YOU.
- -------------------------------------------------------------------------------
Class A shares are subject to lower distribution fees and, accordingly, pay
correspondingly higher dividends per share, to the extent any dividends are
paid. However, because initial sales charges are deducted at the time of
purchase, you would not have all of your funds invested initially and,
therefore, would initially own fewer shares. If you do not qualify for reduced
initial sales charges and expect to maintain your investment for an extended
period of time, you might consider purchasing Class A shares. This is because
the accumulated distribution and service charges on Class B shares may exceed
the initial sales charge and accumulated distribution and service charges on
Class A shares during the life of your investment.
Alternatively, you might determine that it is more advantageous to purchase
Class B shares to have all of your funds invested initially. However, you will
be subject to higher distribution and service fees and, for a six-year period, a
CDSC.
In the case of Class A shares, the distribution expenses that John Hancock Funds
incurs in connection with the sale of the shares will be paid from the proceeds
of the initial sales charge and ongoing distribution and service fees. In the
case of Class B shares, the expenses will be paid from the proceeds of the
ongoing distribution and service fees, as well as from the CDSC incurred upon
redemption within six years of purchase. The purpose and function of the Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
the Class A shares' initial sales charge and ongoing distribution and service
fees. Sales personnel distributing the Fund's shares may receive different
compensation for selling each class of shares.
9
<PAGE> 13
Dividends, if any, on Class A and Class B shares will be calculated in the same
manner, at the same time and on the same day. They also will be in the same
amount, except for differences resulting from each class bearing only its own
distribution and service fees, shareholder meeting expenses and any incremental
transfer agency costs. See "Dividends and Taxes."
THE FUND'S EXPENSES
For managing its investment and business affairs, the Fund pays a monthly fee to
the Adviser in an amount equal to 0.625% of the Fund's average daily net assets.
The Class A and Class B shareholders have adopted distribution plans (each a
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). Under these Plans, the Fund will pay distribution and service fees
at an aggregate annual rate of up to 0.25% of the Class A shares' average daily
net assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. In each case, up to 0.25% is for service expenses and the
remaining amount is for distribution expenses. The distribution fees will be
used to reimburse John Hancock Funds for its distribution expenses, including
but not limited to: (i) initial and ongoing sales compensation to Selling
Brokers and others (including affiliates of John Hancock Funds) engaged in the
sale of Fund shares; (ii) marketing, promotional and overhead expenses incurred
in connection with the distribution of Fund shares; (iii) unreimbursed
distribution expenses under the Fund's prior distribution plans; (iv)
distribution expenses incurred by other investment companies which sell all or
substantially all of their assets to, merge with or otherwise engage in a
reorganization transaction with the Fund; and (v) with respect to Class B shares
only, interest expenses on unreimbursed distribution expenses. The service fees
will be used to compensate Selling Brokers for providing personal and account
maintenance services to shareholders.
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
In the event John Hancock Funds is not fully reimbursed for payments it makes or
expenses it incurs under the Class A Plan, these expenses will not be carried
beyond one year from the date they were incurred. Unreimbursed expenses under
the Class B Plan will be carried forward together with interest on the balance
of these unreimbursed expenses.
For the fiscal year ended August 31, 1994, an aggregate of $4,187,781 of
distribution expenses or 4.60% of the average net assets of the Fund's Class B
shares was not reimbursed or recovered by John Hancock Funds through the receipt
of deferred sales charges or Rule 12b-1 fees in prior periods.
Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.
DIVIDENDS AND TAXES
DIVIDENDS. The Fund generally declares and distributes dividends quarterly,
representing all or substantially all of its net investment income. The Fund
will distribute net realized capital gains, if any, annually.
10
<PAGE> 14
Dividends are reinvested in additional shares of your class unless you elect the
option to receive them in cash. If you elect the cash option and the U.S. Postal
Service cannot deliver your checks, your election will be converted to the
reinvestment option. Because of the higher expenses associated with Class B
shares, any dividend on these shares will be lower than a dividend on the Class
A shares. See "Share Price."
- -------------------------------------------------------------------------------
YOU SHOULD KEEP YOUR ACCOUNT STATEMENTS
RECEIVED FROM THE FUND FOR YOUR PERSONAL
TAX RECORDS.
- -------------------------------------------------------------------------------
TAXATION. Dividends from the Fund's net investment income, certain net foreign
exchange gains, and net short-term capital gains are taxable to you as ordinary
income. Dividends from the Fund's net long-term capital gains are taxable as
long-term capital gain. These dividends are taxable whether received in cash or
reinvested in additional shares. Corporate shareholders may be entitled to take
a corporate dividends received deduction for dividends paid by the Fund
attributable to the dividends it receives from U.S. domestic corporations,
subject to certain restrictions in the Code. Certain dividends may be paid in
January of a given year but may be taxable as if you received them the previous
December. The Fund will send you a statement by January 31 showing the tax
status of the dividends you received for the prior year.
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As a regulated investment company, the Fund will not be
subject to Federal income tax on any net investment income or net realized
capital gains distributed to its shareholders within the time period prescribed
by the Code. When you redeem (sell) or exchange shares, you may realize a
taxable gain or loss.
The Fund anticipates that it will be subject to foreign withholding taxes or
other foreign taxes on income (possibly including capital gains) on certain
foreign investments, which will reduce the yield on those investments. The Fund
does not expect to qualify to pass such taxes and any associated tax deductions
or credits through to its shareholders.
On the account application you must certify that the social security or other
taxpayer identification number you provide is correct and that you are not
subject to backup withholding of Federal income tax. If you do not provide this
information or are otherwise subject to this withholding, the Fund may be
required to withhold 31% of your dividends and the proceeds of redemptions and
exchanges.
In addition to Federal taxes, you may be subject to state and local or foreign
taxes with respect to your investment in and distributions from the Fund.
Non-U.S. shareholders and tax-exempt shareholders are subject to different tax
treatment not described above. A state income (and possibly local income and/or
intangible property) tax exemption is generally available to the extent the
Fund's distributions are derived from interest on (or, in the case of
intangibles taxes, the value of its assets is attributable to) certain U.S.
Government obligations, provided in some states that certain thresholds for
holdings of such obligations and/or reporting requirements are satisfied. You
should consult your tax adviser for specific advice.
11
<PAGE> 15
PERFORMANCE
Yield reflects the Fund's rate of income on portfolio investments as a
percentage of its share price. Yield is computed by annualizing the result of
dividing the net investment income per share over a 30 day period by the maximum
offering price per share on the last day of that period. Yield is also
calculated according to accounting methods that are standardized for all stock
and bond funds. Because yield accounting methods differ from the methods used
for other accounting purposes, the Fund's yield may not equal the income paid on
shares or the income reported in the Fund's financial statements.
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS YIELD AND TOTAL
RETURN.
- -------------------------------------------------------------------------------
The Fund's total return shows the overall dollar or percentage change in value
of a hypothetical investment in the Fund, assuming the reinvestment of all
dividends. Cumulative total return shows the Fund's performance over a period of
time. Average annual total return shows the cumulative return divided over the
number of years included in the period. Because average annual total return
tends to smooth out variations in the Fund's performance, you should recognize
that it is not the same as actual year-to-year results.
Both total return and yield calculations for Class A shares generally include
the effect of paying the maximum sales charge (except as shown in "The Fund's
Financial Highlights"). Investments at lower sales charges would result in
higher performance figures. Total return and yield for Class B shares reflect
the deduction of the applicable CDSC imposed on a redemption of shares held for
the applicable period. All calculations assume that all dividends are reinvested
at net asset value on the reinvestment dates during the periods. Total return
and yield of Class A and Class B shares will be calculated separately and,
because each class is subject to different expenses, the total return may differ
with respect to that class for the same period. The relative performance of the
Class A and Class B shares will be affected by a variety of factors, including
the higher operating expenses attributable to the Class B shares, whether the
Fund's investment performance is better in the earlier or later portions of the
period measured and the level of net assets of the classes during the period.
The Fund will include the total return of Class A and Class B shares in any
advertisement or promotional materials including Fund performance data. The
value of Fund shares, when redeemed, may be more or less than their original
cost. Both yield and total return are historical calculations, and are not an
indication of future performance. See "Alternative Purchase
Arrangements -- Factors to Consider in Choosing an Alternative."
12
<PAGE> 16
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
<TABLE>
The minimum initial investment in Class A and Class B is $1,000 ($250 for group
investments and retirement plans). Complete the Account Application attached to
this Prospectus. Indicate whether you are purchasing Class A or Class B shares. If
you do not specify which class of shares you are purchasing, Investor Services
will assume that you are investing in Class A shares.
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- -------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
<S> <C> <C>
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA, 02205-9115.
2. Deliver the completed application and check to your registered
representative or Selling Broker or mail it directly to
Investor Services.
- ---------------------------------------------------------------------------------
BY WIRE 1. Obtain an account number by contacting your registered
representative or Selling Broker, or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Growth and Income Fund
Class A or Class B shares
Your Account Number
Name(s) under which account is registered
3. Deliver the completed application to your registered
representative or Selling Broker or mail it directly to
Investor Services.
- ---------------------------------------------------------------------------------
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application designating a
ACCUMULATION bank account from which funds may be drawn.
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES.
- -------------------------------------------------------------------------------
PROGRAM 2. The amount you elect to invest will be automatically withdrawn
(MAAP) from your bank or credit union account.
- ---------------------------------------------------------------------------------
BY TELEPHONE 1. Complete the "Invest-By-Phone" and "Bank Information" sections
on the Account Privileges Application designating a bank
account from which your funds may be drawn. Note that in order
to invest by phone, your account must be in a bank or credit
union that is a member of the Automated Clearing House system
(ACH).
2. After your authorization form has been processed, you may
purchase additional Class A or Class B shares by calling
Investor Services toll-free 1-800-225-5291.
3. Give the Investor Services representative the name(s) in which
your account is registered, the Fund name, the class of shares
you own, your account number, and the amount you wish to
invest.
4. Your investment normally will be credited to your account the
business day following your phone request.
- ---------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 17
<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C>
BY CHECK 1. Either complete the detachable stub included on your account
statement or include a note with your investment listing the
name of the Fund, the class of shares you own, your account
number and the name(s) in which the account is registered.
- -------------------------------------------------------------------------------
BUYING ADDITIONAL
CLASS A AND CLASS B
SHARES. (CONTINUED)
- -------------------------------------------------------------------------------
2. Make your check payable to John Hancock Investor Services
Corporation.
3. Mail the account information and check to:
John Hancock Investor Services Corporation
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling
Broker.
- ---------------------------------------------------------------------------------
BY WIRE Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Growth and Income Fund
Class A or Class B shares
Your Account Number
Name(s) under which account is registered
- ---------------------------------------------------------------------------------
Other Requirements: All purchases must be made in U.S. dollars. Checks written on
foreign banks will delay purchases until U.S. funds are received, and a collection
charge may be imposed. Shares of the Fund are priced at the offering price based
on the net asset value computed after Investor Services receives notification of
the dollar equivalent from the Fund's custodian bank. Wire purchases normally take
two or more hours to complete and, to be accepted the same day, must be received
by 4:00 P.M., New York time. Your bank may charge a fee to wire funds. Telephone
transactions are recorded to verify information. Certificates are not issued
unless a request is made in writing to Investor Services.
- ---------------------------------------------------------------------------------
</TABLE>
You will receive a statement of your account after any transaction that affects
your share balance or registration (statements related to reinvestment of
dividends and automatic investment/withdrawal plans will be sent to you
quarterly). A tax information statement will be mailed to you by January 31 of
each year.
- -------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT STATEMENTS THAT
YOU SHOULD KEEP TO HELP WITH YOUR PERSONAL
RECORDKEEPING.
- -------------------------------------------------------------------------------
SHARE PRICE
The net asset value per share ("NAV") is the value of one share. The NAV is
calculated by dividing the net assets of each class by the number of outstanding
shares of that class. The NAV of each class can differ. Securities in the Fund's
portfolio are valued on the basis of market quotations, valuations provided by
independent pricing services or fair value as determined in good faith in
accordance with procedures approved by the Trustees. Short-term debt investments
maturing within 60 days are valued at amortized cost, which approximates market
value. Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency into
U.S. dollars using current exchange rates. If quotations are not readily
available or the value has been materially affected by events occurring after
the closing of a foreign market, assets are valued by a method that the Trustees
believe accurately reflects fair value. The NAV is calculated once daily as of
the close of regular trading on the New York Stock Exchange (the "Exchange")
(generally at 4:00 P.M., New York time) on each day that the Exchange is open.
- -------------------------------------------------------------------------------
THE OFFERING PRICE OF YOUR SHARES IS THEIR
NET ASSET VALUE PLUS A SALES CHARGE, IF
APPLICABLE, WHICH WILL VARY WITH THE
PURCHASE ALTERNATIVE YOU CHOOSE.
- -------------------------------------------------------------------------------
14
<PAGE> 18
Shares of the Fund are sold at the offering price based on the NAV computed
after your investment request is received in good order by John Hancock Funds.
If you buy shares of the Fund through a Selling Broker, the Selling Broker must
receive your investment before the close of regular trading on the Exchange and
transmit it to John Hancock Funds before its close of business to receive that
day's offering price.
<TABLE>
INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES. The offering price you pay
for Class A shares of the Fund equals the NAV plus a sales charge as follows:
<CAPTION>
COMBINED
SALES CHARGE AS REALLOWANCE REALLOWANCE TO
AMOUNT INVESTED SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS SELLING BROKERS AS
(INCLUDING SALES A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF A PERCENTAGE OF
CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) THE OFFERING PRICE(*)
--------------- -------------- --------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to $249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to $499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to $999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
<FN>
(*) Upon notice to Selling Brokers with whom it has sales agreements, John
Hancock Funds may reallow an amount up to the full applicable sales
charge. In addition to the reallowance allowed to all Selling Brokers,
John Hancock Funds will pay the following: round trip airfare to a resort
will be offered to each registered representative of a Selling Broker (if
the Selling Broker has agreed to participate) who sells certain amounts of
shares of John Hancock Funds. John Hancock Funds will make these incentive
payments out of its own resources. A Selling Broker to whom substantially
the entire sales charge is reallowed or who receives these incentives may
be deemed to be an underwriter under the Securities Act of 1933. Other
than distribution and service fees, the Fund does not bear distribution
expenses.
(**) No sales charge is payable at the time of purchase of Class A shares of $1
million or more, but a CDSC may be imposed in the event of certain
redemption transactions within one year of purchase.
(***) John Hancock Funds may pay a commission and the first year's service fee
(as described in (+) below) to Selling Brokers who initiate and are
responsible for purchases of $1 million or more in aggregate as follows:
1% on sales to $4,999,999, 0.50% on the next $5 million and 0.25% on
amounts of $10 million and over.
(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance in an amount equal to 0.25% of the net
assets invested in the Fund, and thereafter, it pays the service fee
periodically in arrears in an amount up to 0.25% of the Fund's average
annual net assets. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.
</TABLE>
15
<PAGE> 19
Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
Class A shares of the Fund.
In addition, John Hancock Funds will pay certain affiliated Selling Brokers at
an annual rate of up to 0.05% of the daily net assets of accounts attributable
to these brokers.
Under certain circumstances described below, investors in Class A shares may be
entitled to pay reduced sales charges. See "Qualifying for a Reduced Sales
Charge."
<TABLE>
CONTINGENT DEFERRED SALES CHARGE -- INVESTMENTS OF $1 MILLION OR MORE IN CLASS A
SHARES. Purchases of $1 million or more of Class A shares will be made at net
asset value with no initial sales charge, but if the shares are redeemed within
12 months after the end of the calendar month in which the purchase was made
(the CDSC period), a CDSC will be imposed. The rate of the CDSC will depend on
the amount invested as follows:
<CAPTION>
AMOUNT INVESTED CDSC RATE
--------------- ---------
<S> <C>
$1 million to $4,999,999............................................. 1.00%
Next $5 million to $9,999,999........................................ 0.50%
Amounts of $10 million and over...................................... 0.25%
</TABLE>
Existing full service clients of the Life Company who were group annuity
contract holders as of September 1, 1994 and participant directed defined
contribution plans with at least 100 eligible employees at the inception of the
Fund account may purchase Class A shares with no initial sales charge. However,
if the shares are redeemed within 12 months after the end of the calendar year
in which the purchase was made, a CDSC will be imposed at the above rate.
The CDSC will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the redeemed Class A shares. Accordingly,
no CDSC will be imposed on increases in account value above the initial purchase
price, including any distributions which have been reinvested in additional
Class A shares.
In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
Therefore, it will be assumed that the redemption is first made from any shares
in your account that are not subject to the CDSC. The CDSC is waived on
redemptions in certain circumstances. See "Waiver of Contingent Deferred Sales
Charge" below.
QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $50,000 in Class
A shares of the Fund or a combination of funds within the John Hancock family of
funds (except money market funds), you may qualify for a reduced sales charge on
your investments in Class A shares through a LETTER OF INTENTION. You may also
be able to use the ACCUMULATION PRIVILEGE and the COMBINATION PRIVILEGE to take
advantage of the value of your previous investments in Class A shares of the
John Hancock funds in meeting the breakpoints for a
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENT IN CLASS A SHARES.
- -------------------------------------------------------------------------------
16
<PAGE> 20
reduced sales charge. For the ACCUMULATION PRIVILEGE and COMBINATION PRIVILEGE,
the applicable sales charge will be based on the total of:
1. Your current purchase of Class A shares of the Fund.
2. The net asset value (at the close of business on the previous day) of (a) all
Class A shares of the Fund you hold, and (b) all Class A shares of any other
John Hancock funds you hold; and
3. The net asset value of all shares held by another shareholder eligible to
combine his or her holdings with you into a single "purchase."
EXAMPLE:
If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000 and, subsequently, invest $30,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00% (the
rate that would otherwise be applicable to investments of less than $50,000. See
"Initial Sales Charge Alternative -- Class A Shares.)"
If you are in one of the following categories, you may purchase Class A shares
of the Fund without paying a sales charge:
- - A Trustee/Director or officer of the Fund; a Director or officer of the
Adviser and its affiliates or Selling Brokers; employees or sales
representatives of any of the foregoing; retired officers, employees or
Directors of any of the foregoing; a member of the immediate family of any of
the foregoing; or any fund, pension, profit sharing or other benefit plan for
the individuals described above.
- -------------------------------------------------------------------------------
CLASS A SHARES MAY BE AVAILABLE WITHOUT A
SALES CHARGE TO CERTAIN INDIVIDUALS AND
ORGANIZATIONS.
- -------------------------------------------------------------------------------
- - Any state, county, city or any instrumentality, department, authority, or
agency of these entities that is prohibited by applicable investment laws from
paying a sales charge or commission when it purchases shares of any registered
investment management company.*
- - A bank, trust company, credit union, savings institution or other type of
depository institution, its trust departments or common trust funds if it is
purchasing $1 million or more for non-discretionary customers or accounts.*
- - A broker, dealer or registered investment adviser that has entered into an
agreement with John Hancock Funds providing specifically for the use of Fund
shares in fee-based investment products made available to their clients.
- - A former participant in an employee benefit plan with John Hancock Funds, when
he/she withdraws from his/her plan and transfers any or all of his/her plan
distributions directly to the Fund.
- ------------------
*For investments made under these provisions, John Hancock Funds may make a
payment out of its own resources to the Selling Broker in an amount not to
exceed 0.25% of the amount invested.
Class A shares of the Fund may be purchased without an initial sales charge in
connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.
17
<PAGE> 21
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE -- CLASS B SHARES. Class B shares
are offered at net asset value per share without a sales charge so that your
entire initial investment will go to work at the time of purchase. However,
Class B shares redeemed within six years of purchase will be subject to a CDSC
at the rates set forth below. This charge will be assessed on an amount equal to
the lesser of the current market value or the original purchase cost of the
shares being redeemed. Accordingly, you will not be assessed a CDSC on increases
in account value above the initial purchase price, including shares derived from
dividend reinvestment.
In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the six-year CDSC redemption period or those you acquired through
reinvestment of dividends, and next from the shares you have held the longest
during the six-year period. The CDSC is waived on redemptions in certain
circumstances. See the discussion "Waiver of Contingent Deferred Sales Charge"
below.
EXAMPLE:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:
<TABLE>
<S> <C>
- - Proceeds of 50 shares redeemed at $12 per share $ 600
- - Minus proceeds of 10 shares not subject to CDSC because they were
acquired through dividend reinvestment (10 X $12) -120
- - Minus appreciation on remaining shares, also not subject to CDSC (40 X
$2) - 80
------
- - Amount subject to CDSC $ 400
</TABLE>
Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
part of them to defray its expenses related to providing the Fund with
distribution services connected to the sale of Class B shares, such as
compensating Selling Brokers for selling these shares. The combination of the
CDSC and the distribution and service fees makes it possible for the Fund to
sell Class B shares without deducting a sales charge at the time of the
purchase.
18
<PAGE> 22
The amount of the CDSC, if any, will vary depending on the number of years from
the time you purchase your Class B shares until the time you redeem them. Solely
for the purposes of determining this holding period, any payments you make
during the month will be aggregated and deemed to have been made on the last day
of the month.
<TABLE>
<CAPTION>
YEAR IN WHICH
CLASS B SHARES CONTINGENT DEFERRED SALES
REDEEMED FOLLOWING CHARGE AS A PERCENTAGE OF
PURCHASE DOLLAR AMOUNT SUBJECT TO CDSC
- ------------------ -----------------------------
<S> <C>
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
</TABLE>
A commission equal to 3.75% of the amount invested and a first year's service
fee equal to 0.25% of the amount invested are paid to Selling Brokers. The
initial service fee is paid in advance at the time of sale for the provision of
personal and account maintenance services to shareholders during the twelve
months following the sale, and thereafter the service fee is paid in arrears.
WAIVER OF CONTINGENT DEFERRED SALES CHARGES. The CDSC will be waived on
redemptions of Class B shares and of Class A shares that are subject to a CDSC,
unless indicated otherwise, in these circumstances:
- - Redemptions of Class B shares made under Systematic Withdrawal Plan (see "How
to Redeem Shares"), as long as your annual redemptions do not exceed 10% of
your account value at the time you establish your Systematic Withdrawal Plan
and 10% of the value of your subsequent investments (less redemptions) in that
account at the time you notify Investor Services. This waiver does not apply
to Systematic Withdrawal Plan redemptions of Class A shares that are subject
to a CDSC.
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CERTAIN CLASS A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
- - Redemptions made to effect distributions from an Individual Retirement Account
either before or after age 59 1/2, as long as the distributions are based on
the life expectancy or the joint-and-last survivor life expectancy of you and
your beneficiary. These distributions must be free from penalty under the
Code.
- - Redemptions made to effect mandatory distributions under the Code after age
70 1/2 from a tax-deferred retirement plan.
- - Redemptions made to effect distributions to participants or beneficiaries from
certain employer-sponsored retirement plans including those qualified under
Section 401(a) of the Code, custodial accounts under Section 403(b)(7) of the
Code and deferred compensation plans under Section 457 of the Code. The waiver
also applies to certain returns of excess contributions made to these plans.
In all cases, the distributions must be free from penalty under the Code.
- - Redemptions due to death or disability.
19
<PAGE> 23
- - Redemptions made under the Reinvestment Privilege, as described in "Additional
Services and Programs" of this Prospectus.
- - Redemptions made pursuant to the Fund's right to liquidate your account if you
have less than $100 invested in the Fund.
- - Redemptions made in connection with certain liquidation, merger or acquisition
transactions involving other investment companies or personal holding
companies.
- - Redemptions from certain IRA and retirement plans that purchased shares prior
to October 1, 1992.
If you qualify for a CDSC waiver under one of these situations, you must notify
Investor Services either directly or through your Selling Broker at the time you
make your redemption. The waiver will be granted once Investor Services has
confirmed that you are entitled to the waiver.
CONVERSION OF CLASS B SHARES. Your Class B shares and an appropriate portion of
reinvested dividends on those shares will be converted into Class A shares
automatically. This will occur no later than the month following eight years
after the shares were purchased, and will result in lower annual distribution
fees. If you exchanged Class B shares into the Fund from another John Hancock
fund, the calculation will be based on the time you purchased the shares in the
original fund. The Fund has been advised that the conversion of Class B shares
to Class A shares should not be taxable for Federal income tax purposes and
should not change a shareholder's tax basis or tax holding period for the
converted shares.
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Investor Services, less any applicable CDSC. The Fund
may hold payment until it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------
Once your shares are redeemed, the Fund generally sends you payment on the next
business day. When you redeem your shares, you may realize a taxable gain or
loss depending usually on the difference between what you paid for them and what
you receive for them, subject to certain tax rules. Under unusual circumstances,
the Fund may suspend redemptions or postpone payment for up to seven days or
longer, as permitted by Federal securities laws.
20
<PAGE> 24
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
BY TELEPHONE All Fund shareholders are automatically eligible for the
telephone redemption privilege. Call 1-800-225-5291, from
8:00 A.M. to 4:00 P.M. (New York time), Monday through
Friday, excluding days on which the Exchange is closed.
Investor Services employs the following procedures to
confirm that instructions received by telephone are
genuine. Your name, the account number, taxpayer
identification number applicable to the account and other
relevant information may be requested. In addition,
telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last thirty
days. A check will be mailed to the exact name(s) shown on
the account.
If reasonable procedures, such as those described above,
are not followed, the Fund may be liable for any loss due
to unauthorized or fraudulent telephone instructions. In
all other cases, neither the Fund nor Investor Services
will be liable for any loss or expense for acting upon
telephone instructions made in accordance with the
telephone transaction procedures mentioned above.
Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that
are in certificate form.
During periods of extreme economic conditions or market
changes, telephone requests may be difficult to implement
due to a large volume of calls. During these times, you
should consider placing redemption requests in writing or
use EASI-Line. EASI-Line's telephone number is
1-800-338-8080.
- ---------------------------------------------------------------------------------
BY WIRE If you have a telephone redemption form on file with the
Fund, redemption proceeds of $1,000 or more can be wired on
the next business day to your designated bank account, and
a fee (currently $4.00) will be deducted. You may also use
electronic funds transfer to your assigned bank account,
and the funds are usually collectible after two business
days. Your bank may or may not charge a fee for this
service. Redemptions of less than $1,000 will be sent by
check or electronic funds transfer.
This feature may be elected by completing the "Telephone
Redemption" section on the Account Privileges Application
included with this Prospectus.
- ---------------------------------------------------------------------------------
IN WRITING Send a stock power or "letter of instruction" specifying
the name of the Fund, the dollar amount or the number of
shares to be redeemed, your name, class of shares, your
account number and the additional requirements listed below
that apply to your particular account.
- ---------------------------------------------------------------------------------
<CAPTION>
TYPE OF REGISTRATION REQUIREMENTS
-------------------- ------------
<S> <C>
Individual, Joint Tenants, Sole A letter of instruction signed (with titles
Proprietorship, Custodial where applicable) by all persons authorized
(Uniform Gifts or Transfer to to sign for the account, exactly as it is
Minors Act), General Partners registered with the signature(s) guaran-
teed.
Corporation, Association A letter of instruction and a corporate
resolution, signed by person(s) authorized
to act on the account with the signature(s)
guaranteed.
Trusts A letter of instruction signed by the
trustee(s) with the signature(s) guaranteed.
(If the trustee's name is not registered on
your account, also provide a copy of the
trust document, certified within the last 60
days.)
If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.
- ---------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 25
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less, John
Hancock Funds may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Investor Services: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or meets certain net capital
requirements; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v) a
national securities exchange, a registered securities exchange or a clearing
agency.
- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- ---------------------------------------------------------------------------------
THROUGH YOUR BROKER. Your broker may be able to initiate the redemption.
Contact your broker for instructions.
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
- ---------------------------------------------------------------------------------
If you have certificates for your shares, you must submit them with your stock
power or a letter of instructions. Unless you specify to the contrary, any
outstanding Class A shares will be redeemed before Class B shares. You may not
redeem certificated shares by telephone.
Due to the proportionately high cost of maintaining small accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds less than $100 (except accounts under retirement plans) and to mail the
proceeds to the shareholder, or the transfer agent may impose an annual fee of
$10.00. No account will be involuntarily redeemed or additional fee imposed, if
the value of the account is in excess of the Fund's minimum initial investment
or if the value of the account falls below the required minimum as a result of
market action. No CDSC will be imposed on involuntary redemptions of shares.
Shareholders will be notified before these redemptions are to be made or this
fee is imposed, and will have 30 days to purchase additional shares to bring
their account balance up to the required minimum. Unless the number of shares
acquired by further purchases and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- ---------------------------------------------------------------------------------
</TABLE>
ADDITIONAL SERVICES AND PROGRAMS
EXCHANGE PRIVILEGE
If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of each class
of the Fund only for shares of the same class of another John Hancock fund. For
this purpose, John Hancock funds with only one class of shares will be treated
as Class A, whether or not they have been so designated.
- -------------------------------------------------------------------------------
YOU MAY EXCHANGE SHARES OF THE FUND ONLY
FOR SHARES OF THE SAME CLASS OF ANOTHER
JOHN HANCOCK FUND.
- -------------------------------------------------------------------------------
Exchanges between funds with shares that are not subject to a CDSC are based on
their respective net asset values. No sales charge or transaction charge is
imposed. Class B shares of the Fund that are subject to a CDSC may be exchanged
into Class B shares of another John Hancock fund without incurring the CDSC;
however, these shares will be subject to the CDSC schedule of the shares
acquired (except that exchanges into John Hancock Short-Term Strategic Income
Fund, John Hancock Limited-Term Government Fund and John Hancock Adjustable U.S.
Government Trust will be subject to the initial fund's CDSC). For purposes of
computing the CDSC payable upon redemption of shares acquired in an exchange,
the holding period of the original shares is added to the holding period of the
shares
22
<PAGE> 26
acquired in an exchange. However, if you exchange Class B shares purchased prior
to January 1, 1994 for Class B shares of any other John Hancock Fund, you will
be subject to the CDSC schedule in effect on your initial purchase date.
You may exchange Class B shares of the Fund into shares of a John Hancock money
market fund at net asset value. However, you will continue to be subject to a
CDSC upon redemption. The rate of the CDSC will be the rate in effect for the
original Fund at the time of exchange.
The Fund reserves the right to require you to keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted to
execute a new exchange. The Fund may also terminate or alter the terms of the
exchange privilege, upon 60 days' notice to shareholders.
An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares in another for Federal income tax purposes. An exchange may
result in a taxable gain or loss.
When you make an exchange, your account registration in both the existing and
new account must be identical. The exchange privilege is available only in
states where the exchange can be made legally.
Under exchange agreements with John Hancock Funds, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the
terms of those agreements and John Hancock Funds' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders directly,
as described above.
Because Fund performance and shareholders can be hurt by excessive trading, the
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt the
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely. The
Fund may also temporarily or permanently terminate the exchange privilege for
any person who makes seven or more exchanges out of the Fund per calendar year.
Accounts under common control or ownership will be aggregated for this purpose.
Although the Fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time.
BY TELEPHONE
1. When you complete the application for your initial purchase of Fund shares,
you automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to authorize telephone exchanges.
2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone
representative.
23
<PAGE> 27
3. Investor Services employs the following procedures to confirm that
instructions received by telephone are genuine. Your name, the account
number, taxpayer identification number applicable to the account and other
relevant information may be requested. In addition, telephone instructions
are recorded.
IN WRITING
1. In a letter, request an exchange and list the following:
-- the name and class of the Fund whose shares you currently own
-- your account number
-- the name(s) in which the account is registered
-- the name of the fund in which you wish your exchange to be invested
-- the number of shares, all shares or dollar amount you wish to exchange
Sign your request exactly as the account is registered.
2. Mail the request and information to:
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
REINVESTMENT PRIVILEGE
1. You will not be subject to a sales charge on Class A shares reinvested in
shares of any John Hancock fund that is otherwise subject to a sales charge
as long as you reinvest within 120 days from the redemption date. If you paid
a CDSC upon a redemption, you may reinvest at net asset value in the same
class of shares from which you redeemed within 120 days. Your account will be
credited with the amount of the CDSC previously charged, and the reinvested
shares will continue to be subject to a CDSC. For purposes of computing the
CDSC payable upon a subsequent redemption, the holding period of the shares
acquired through reinvestment will include the holding period of the redeemed
shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF THE FUND, YOU MAY
BE ABLE TO REINVEST ALL OR PART OF THE
PROCEEDS IN THE FUND OR ANOTHER JOHN
HANCOCK FUND WITHOUT PAYING AN ADDITIONAL
SALES CHARGE.
- -------------------------------------------------------------------------------
2. Any portion of your redemption may be reinvested in Fund shares or in shares
of any of the other John Hancock funds, subject to the minimum investment
limit of that fund.
3. To reinvest, you must notify Investor Services in writing. Include the Fund's
name, the account number and class from which your shares were originally
redeemed.
SYSTEMATIC WITHDRAWAL PLAN
1. You can elect the Systematic Withdrawal Plan at any time by completing the
Account Privileges Application which is attached to this Prospectus. You can
also obtain this application by calling your registered representative or by
calling 1-800-225-5291.
2. To be eligible, you must have at least $5,000 in your account.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT, OR MAKE PERIODIC DISBURSEMENTS OF
FUNDS FROM YOUR RETIREMENT ACCOUNT TO
COMPLY WITH IRS REGULATIONS.
- -------------------------------------------------------------------------------
24
<PAGE> 28
3. Payments from your account can be made monthly, quarterly, semi-annually or
annually or on a selected monthly basis to yourself or any other designated
payee.
4. There is no limit on the number of payees you may authorize, but all payments
must be made at the same time or intervals.
5. It is not advantageous to maintain a Systematic Withdrawal Plan concurrently
with purchases of additional Class A or Class B shares, because you may be
subject to initial sales charges on your purchases of Class A shares or to a
CDSC on your redemptions of Class B shares. In addition, your redemptions are
taxable events.
6. Redemptions will be discontinued if the U.S. Postal Service cannot deliver
your checks or if deposits to a bank account are returned for any reason.
MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP)
1. You can authorize an investment to be automatically withdrawn each month from
your bank, for investment in Fund shares under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------
2. You can also authorize automatic investment through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
3. You can terminate your Monthly Automatic Accumulation Program plan at any
time.
4. There is no charge to you for this program, and there is no cost to the Fund.
5. If you have payments being withdrawn from a bank account and we are notified
that the account has been closed, your withdrawals will be discontinued.
GROUP INVESTMENT PROGRAM
1. An individual account will be established for each participant, but the
initial sales charge for Class A shares will be based on the aggregate dollar
amount of all participants' investments. To determine how to qualify for this
program, contact your registered representative or call 1-800-225-5291.
- -------------------------------------------------------------------------------
ORGANIZED GROUPS OF AT LEAST FOUR PERSONS
MAY ESTABLISH ACCOUNTS.
- -------------------------------------------------------------------------------
2. The initial aggregate investment of all participants in the group must be at
least $250.
3. There is no additional charge for this program. There is no obligation to
make investments beyond the minimum, and you may terminate the program at any
time.
RETIREMENT PLANS
1. You may use the Fund as a funding medium for various types of qualified
retirement plans, including Individual Retirement Accounts, Keough Plans
25
<PAGE> 29
(H.R. 10), Pension and Profit Sharing Plans (including 401(k) Plans), Tax
Sheltered Annuity Retirement Plans (403(b) Plans) and 457 Plans.
2. The initial investment minimum or aggregate minimum for any of the above
plans is $250. However, accounts being established as Group IRA, SEP, SARSEP,
TSA, 401(k) and 457 Plans will be accepted without an initial minimum
investment.
INVESTMENTS, TECHNIQUES AND RISK FACTORS
The Fund's investments are subject to the following practices, techniques and
restrictions and may involve certain risks. The Statement of Additional
Information contains more detailed information about these practices, including
limitations designed to reduce these risks. Each of the investment practices
described in this section, unless otherwise specified, is deemed to be a
fundamental policy and may not be changed without shareholder approval.
WARRANTS. Warrants entitle the holder to buy equity securities at a specific
price for a specific period of time. The market value of warrants tends to be
more volatile than that of their underlying securities. Also, the value of the
warrant does not necessarily change with the value of the underlying securities
and a warrant ceases to have value if it is not exercised prior to the
expiration date. The Fund will not purchase warrants or rights if its holdings
in warrants (valued at lower of cost or market) would exceed 5% of the value of
the Fund's total net assets as a result of the purchase. In addition, the Fund
will not purchase a warrant or right which is not listed on the New York or
American Stock Exchanges if the purchase would result in the Fund's owning
unlisted warrants in an amount exceeding 2% of its net assets.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 10% of its net
assets in illiquid investments, which include repurchase agreements maturing in
more than seven days, restricted securities and securities not readily
marketable. The Fund may also invest up to 10% of its assets in restricted
securities eligible for resale to certain institutional investors pursuant to
Rule 144A under the Securities Act of 1933.
LENDING OF SECURITIES AND REPURCHASE AGREEMENTS. For the purpose of realizing
additional income, the Fund may lend to broker-dealers portfolio securities
amounting to not more than 33% of its total assets taken at current value or may
enter into repurchase agreements. In a repurchase agreement, the Fund buys a
security subject to the right and obligation to sell it back to the issuer at
the same price plus accrued interest. These transactions must be fully
collateralized at all times. The Fund may reinvest any cash collateral in
short-term, liquid debt securities. However, these transactions may involve some
credit risk to the Fund if the other party should default on its obligation and
the Fund is delayed in or prevented from recovering the collateral. Securities
loaned by the Fund will remain subject to fluctuations of market value.
REVERSE REPURCHASE AGREEMENTS. A reverse repurchase agreement involves the sale
of a security by the Fund and its agreement to repurchase the instrument at a
26
<PAGE> 30
specified time and price. The Fund will maintain a segregated account consisting
of liquid, high grade securities to cover its obligations under reverse
repurchase agreements with selected firms approved in advance by the Board of
Trustees. The Fund will use the proceeds to purchase other investments. Reverse
repurchase agreements are considered to be borrowings by the Fund and as an
investment practice may be considered speculative. Repurchase agreements magnify
the potential for gain or loss on the portfolio securities of the Fund and
therefore increase the possibility of fluctuation in the Fund's net asset value.
The Fund will limit its investments in reverse repurchase agreements and other
borrowings to no more than 33 1/3% of its total net assets.
SECURITIES OF FOREIGN ISSUERS. The Fund may, as a matter of non-fundamental
policy, invest up to 25% of its assets (up to 35% during times when the Adviser
determines that adverse U.S. market conditions make it more favorable to invest
in foreign markets) in securities of foreign issuers (excluding issuers located
in emerging countries). The Fund intends to invest in foreign securities only
when the potential benefits are deemed to outweigh the risks. Investments in
foreign securities may involve a greater degree of risk than those in domestic
securities due to exchange controls, less publicly available information, more
volatile or less liquid securities markets, and the possibility of
expropriation, confiscatory taxation or political, economic or social
instability. There may be difficulty in enforcing legal rights outside the
United States. Some foreign companies are not generally subject to the same
uniform accounting, auditing and financial reporting requirements as domestic
companies; also foreign regulation may differ considerably from domestic
regulation of stock exchanges, brokers and securities. Security trading
practices abroad may offer less protection to investors such as the Fund.
Additionally, because foreign securities may be quoted or denominated in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the Fund's net asset value, the value of dividends and
interest earned, gains and losses realized on the sale of securities, and net
investment income and gains, if any, that the Fund distributes to shareholders.
Securities transactions undertaken in some foreign markets may not be settled
promptly. Therefore, the Fund's investments on foreign exchanges may be less
liquid and subject to exchange rates pending settlement. The expense ratio of
mutual funds investing significant amounts of their assets in foreign securities
can be expected to be higher than those of mutual funds investing solely in
domestic securities since the expenses of these funds, such as the cost of
maintaining custody of foreign securities and advisory fees, are higher.
DEPOSITARY RECEIPTS. The Fund may invest in securities of foreign issuers in
the form of American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs") or other securities convertible into securities of corporations in
which the Fund is permitted to invest. ADRs (sponsored and unsponsored) are
receipts typically issued by an American bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation, and are
designed for trading in United States securities markets. Issuers of the shares
underlying unsponsored ADRs are not contractually obligated to disclose material
information
27
<PAGE> 31
in the United States and, therefore, there may not be a correlation between such
information and the market value of the unsponsored ADR.
FOREIGN CURRENCY TRANSACTIONS. The Fund may purchase, as a matter of non-
fundamental policy, securities quoted or denominated in foreign currencies. The
value of investments in such securities and the value of dividends and interest
earned thereon may be significantly affected by changes in currency exchange
rates. Some foreign currency values may be volatile, and there is the
possibility of governmental controls on currency exchange or governmental
intervention in currency markets, which could adversely affect the Fund. As a
result, the Fund may enter into forward foreign currency exchange contracts to
protect against changes in foreign currency exchange rates. The Fund will not
speculate in foreign currencies or in forward foreign currency exchange
contracts, but will enter into such transactions only in connection with its
hedging strategies. A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date at a price
set at the time of the contract. Although certain strategies could minimize the
risk of loss due to a decline in the value of the hedged foreign currency, they
could also limit any potential gain which might result from an increase in the
value of the currency. See the Statement of Additional Information for further
discussion of the uses and risks of forward foreign currency exchange contracts.
SHORT TERM TRADING AND PORTFOLIO TURNOVER. Short-term trading means the
purchase and subsequent sale of a security after it has been held for a
relatively brief period of time. Short term trading may have the effect of
increasing portfolio turnover. The Fund does not intend to invest for the
purpose of seeking short-term profits. The Fund's portfolio securities may be
changed, however, without regard to the holding period of these securities
(subject to certain tax restrictions), when the Adviser deems that this action
will help achieve the Fund's objective given a change in an issuer's operations
or changes in general market conditions. A high rate of portfolio turnover (100%
or more) involves transaction expenses and may, under certain circumstances,
make it more difficult for the Fund to qualify as a regulated investment company
under the Code. The Fund's portfolio turnover rate is set forth in the table
under the caption "Financial Highlights."
OPTIONS TRANSACTIONS. The Fund may buy and sell options contracts on
securities, indices and currencies. Options contracts are bought and sold to
manage the Fund's exposure to changing interest rates and security prices. Some
options strategies, including buying puts and writing calls, tend to hedge the
Fund's investments against price fluctuations. Other strategies, including
writing puts, and buying calls, tend to increase market exposure. Options may be
combined with forward contracts in order to adjust the risk and return
characteristics of the overall strategy. The Fund may enter into transactions in
options on securities, indices and currencies for both hedging and non-hedging
purposes.
The Fund will not purchase a call or put option if as a result the premium paid
for the option together with premiums paid for all other stock options and
options on stock indexes then held by the Fund, exceed 10% of the Fund's total
net assets.
28
<PAGE> 32
The Fund's transactions in options contracts may be limited by the requirements
of the Code for qualification as a regulated investment company.
RISKS ASSOCIATED WITH OPTIONS. The risks associated with the Fund's
transactions in options include the following: (1) market risk; (2) leverage and
volatility risk; (3) correlation risk; (4) credit risk; and (5) liquidity and
valuation risk. See the Statement of Additional Information for further
discussion of options transactions, including tax effects and investment risks.
Market Risk. Transactions in options involve the risk that the applicable
market will move against the Fund's derivative position and that the Fund will
incur a loss.
Leverage and Volatility Risk. Options may increase or leverage the Fund's
exposure to a particular market risk, which may increase the volatility of the
Fund's net asset value. The Fund may partially offset the leverage inherent in
options by maintaining a segregated account consisting of cash and liquid, high
grade debt securities, by holding offsetting portfolio securities or currency
positions or by covering written options.
Correlation Risk. A Fund's success in using options to hedge portfolio assets
depends on the degree of price correlation between the instrument and the hedged
asset. Imperfect correlation may be caused by several factors, including
temporary price disparities among the trading markets for the derivative
instruments, the assets underlying the instrument and the Fund's portfolio
assets.
Credit Risk. Over-the-counter options involve a risk that the counterparty will
fail to perform its contractual obligations.
Liquidity and Valuation Risk. Some options are not readily marketable and may
become illiquid under adverse market conditions. In addition, during periods of
extreme market volatility, an exchange may suspend or limit trading in an
exchange-traded option, which may make the options temporarily illiquid and
difficult to price. The staff of the SEC takes the position that certain
over-the-counter options are subject to the Fund's 10% limit on illiquid
investments. The Fund's ability to terminate over-the-counter options may depend
on the cooperation of the counterparties to these instruments. For options that
are not heavily traded, the only source of price quotations may be the selling
dealer or counterparty.
29
<PAGE> 33
(NOTES)
<PAGE> 34
(NOTES)
<PAGE> 35
JOHN HANCOCK JOHN HANCOCK
GROWTH AND INCOME FUND GROWTH AND
INCOME FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CLASS A AND CLASS B SHARES
PROSPECTUS
PRINCIPAL DISTRIBUTOR MAY 15, 1995
John Hancock Funds, Inc. A MUTUAL FUND SEEKING TO
101 Huntington Avenue OBTAIN THE HIGHEST TOTAL
Boston, Massachusetts 02199-7603 RETURN, A COMBINATION
OF CAPITAL APPRECIATION
AND CURRENT INCOME,
CONSISTENT WITH REASONABLE
SAFETY OF PRINCIPAL.
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110
TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For Service Information
For Telephone Exchange call 1-800-225-5291
For Investment-by-Phone
For Telephone Redemption
For TDD call 1-800-554-6713 101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
T160P 5/95 (RECYCLE LOGO) Printed on Recycled Paper
<PAGE> 36
JOHN HANCOCK GROWTH AND INCOME FUND
CLASS A AND CLASS B SHARES
STATEMENT OF ADDITIONAL INFORMATION
May 15, 1995
This Statement of Additional Information ("SAI") provides
information about John Hancock Growth and Income Fund (the
"Fund"), a series of John Hancock Investment Trust (the "Trust"),
in addition to the information that is contained in the Fund's
Prospectus, dated May 15, 1995.
This SAI is not a prospectus. It should be read in
conjunction with the Fund's Prospectus, a copy of which can be
obtained free of charge by writing or telephoning:
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-5291
1-800-225-5291
TABLE OF CONTENTS
Statement Cross-
of Additional Referenced
Information to Prospectus
Page Page
------------- -------------
Organization of the Trust................ 2 7
Certain Investment Practices............. 2 26
Investment Restrictions.................. 13 7
Those Responsible for Management......... 16 7
Investment Advisory and Other Services .. 25 10
Distribution Contract.................... 28 10
Net Asset Value.......................... 31 14
Initial Sales Charge on Class A Shares... 32 15
Deferred Sales Charge on Class B Shares.. 34 8
Special Redemptions...................... 35 20
Additional Services and Programs......... 35 22
Description of the Fund's Shares......... 37 7
Tax Status............................... 39 10
Calculation of Performance............... 44 12
Brokerage Allocation..................... 50 7
Transfer Agent Services.................. 52 Back Cover
Custody of Portfolio..................... 53 Back Cover
Independent Auditors..................... 53 Back Cover
Appendix A .............................. A-1 N/A
Financial Statements..................... F-1 3
<PAGE> 37
ORGANIZATION OF THE TRUST
The Trust is an open-end management investment company
organized as a Massachusetts business trust under a Declaration of
Trust dated December 12, 1984. The Trust currently has only one
series. Prior to December 22, 1994, the Fund was called
Transamerica Growth and Income Fund.
The Fund is managed by John Hancock Advisers, Inc. (the
"Adviser"), a wholly-owned indirect subsidiary of John Hancock
Mutual Life Insurance Company (the "Life Company"), chartered in
1862 with national headquarters at John Hancock Place, Boston,
Massachusetts. John Hancock Funds, Inc. ("John Hancock Funds")
acts as principal distributor of the shares of the Fund.
CERTAIN INVESTMENT PRACTICES
Each of the investment practices described in this section,
unless otherwise specified, is deemed to be a fundamental policy
and may not be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities.
PURCHASES OF WARRANTS. The Fund's investment policies permit
the purchase of rights and warrants, which represent rights to
purchase the common stock of companies at designated prices. No
such purchase will be made by the Fund, however, if the Fund's
holdings of warrants (valued at lower of cost or market) would
exceed 5% of the value of the Fund's total net assets as a result
of the purchase. In addition, the Fund will not purchase a
warrant or right which is not listed on the New York or American
Stock Exchanges if the purchase would result in the Fund's owning
unlisted warrants in an amount exceeding 2% of its net assets.
LENDING OF PORTFOLIO SECURITIES. In order to generate
additional income, the Fund may, from time to time, lend up to 33%
of its portfolio securities to brokers, dealers and financial
institutions such as banks and trust companies. Such loans will
be secured by collateral consisting of cash or U.S. Government
securities which will be maintained in an amount equal to at least
100% of the current market value of the loaned securities. During
the period of the loan, the Fund will receive the income on both
the loaned securities and the collateral and thereby increase its
return. Cash collateral will be invested in short-term high
quality debt securities, which will increase the current income of
the Fund. The loans will be terminable by the Fund at any time
and by the borrower on one day's notice. The Fund will have the
right to regain record ownership of loaned securities to exercise
beneficial rights such as rights to interest or other
distributions or voting rights on important issues. The Fund may
pay reasonable fees to persons unaffiliated with the Fund for
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services in arranging such loans. Lending of portfolio securities
involves a risk of failure by the borrower to return the loaned
securities, in which event the Fund may incur a loss.
AMERICAN DEPOSITORY RECEIPTS (ADRS) AND EUROPEAN DEPOSITORY
RECEIPTS (EDRs). The Fund may invest in securities of non-U.S.
issuers directly or in the form of American Depository Receipts
(ADRs), European Depository Receipts (EDRs) or other similar
securities representing interests in the common stocks of foreign
issuers. ADRs are receipts, typically issued by a U.S. bank or
trust company, which evidence ownership of underlying securities
issued by a foreign corporation. EDRs are receipts issued in
Europe which evidence a similar ownership arrangement. Generally,
ADRs, in registered form, are designed for use in the U.S.
securities markets and EDRs are designed for use in the European
securities markets. The underlying securities are not always
quoted or denominated in the same currency as the ADRs or the
EDRs.
FOREIGN SECURITIES. The Fund may, as a matter of
nonfundamental policy, invest up to 25% (and up to 35% during
times of adverse U.S. market conditions) of its total assets in
securities of foreign issuers.
Investing in securities of non-U.S. issuers may entail
greater risks than investing in securities of issuers in the U.S.
These risks include (i) less social, political and economic
stability; (ii) the small current size of the markets for many
such securities and the currently low or nonexistent volume of
trading, which result in a lack of liquidity and in greater price
volatility; (iii) certain national policies which may restrict the
Fund's investment opportunities, including restrictions on
investment in issuers or industries deemed sensitive to national
interests; (iv) foreign taxation; and (v) the absence of developed
structures governing private or foreign investment or allowing for
judicial redress for injury to private property.
Investing in securities of non-U.S. companies may entail
additional risks due to the potential political and economic
instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on
foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other
confiscation by any country, the Fund could lose its entire
investment in any such country.
Foreign companies are subject to accounting, auditing and
financial standards and requirements that differ, in some cases
significantly, from those applicable to U.S. companies. In
particular, the assets, liabilities and profits appearing on the
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financial statements of such a company may not reflect its
financial position or results of operations in the way they would
be reflected had such financial statements been prepared in
accordance with U.S. generally accepted accounting principles.
Most foreign securities held by the Fund will not be registered
with the Securities and Exchange Commission (the "SEC") and such
issuers thereof will not be subject to the SEC's reporting
requirements. Thus, there will be less available information
concerning foreign issuers of securities held by the Fund than is
available concerning U.S. issuers. In instances where the
financial statements of an issuer are not deemed to reflect
accurately the financial situation of the issuer, the Adviser will
take appropriate steps to evaluate the proposed investment, which
may include on-site inspection of the issuer, interviews with its
management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available
information about foreign companies than there are reports and
ratings published about U.S. companies and the U.S. Government.
In addition, where public information is available, it may be less
reliable than such information regarding U.S. issuers.
Because the Fund may invest up to 25% (35% during times of
adverse U.S. market conditions) of its total assets in securities
which are denominated or quoted in foreign currencies, the
strength or weakness of the U.S. dollar against such currencies
may account for part of the Fund's investment performance. A
decline in the value of any particular currency against the U.S.
dollar will cause a decline in the U.S. dollar value of the Fund's
holdings of securities denominated in such currency and,
therefore, will cause an overall decline in the Fund's net asset
value and any net investment income and capital gains to be
distributed in U.S. dollars to shareholders of the Fund.
The rate of exchange between the U.S. dollar and other
currencies is determined by several factors including the supply
and demand for particular currencies, central bank efforts to
support particular currencies, the movement of interest rates, the
pace of business activity in certain other countries and the U.S.,
and other economic and financial conditions affecting the world
economy.
Although the Fund values its assets daily in terms of U.S.
dollars, the Fund does not intend to convert its holdings of
foreign currencies into U.S. dollars on a daily basis. However,
the Fund may do so from time to time, and investors should be
aware of the costs of currency conversion. Although currency
dealers do not charge a fee for conversion, they do realize a
profit based on the difference ("spread") between the prices at
which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency to the Fund at one
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rate, while offering a lesser rate of exchange should the Fund
desire to sell that currency to the dealer.
Securities of foreign issuers may be less liquid and their
prices more volatile than securities of comparable U.S. issuers.
In addition, foreign securities exchanges and brokers are
generally subject to less governmental supervision and regulation
than in the U.S., and foreign securities exchange transactions are
usually subject to fixed commissions, which are generally higher
than negotiated commissions on U.S. transactions. In addition,
foreign securities exchange transactions may be subject to
difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets
of the Fund are uninvested and no return is earned thereon. The
inability of the Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive
investment opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses
to the Fund due to subsequent declines in value of the portfolio
security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.
The Fund's investment income or, in some cases, capital gains
from foreign issuers may be subject to foreign withholding or
other foreign taxes, thereby reducing the Fund's net investment
income and/or net realized capital gains. See "Tax Status."
OPTIONS ON FOREIGN CURRENCIES. Although the Fund has no
current intention of doing so, the Fund may purchase and write put
and call options on foreign currencies for the purpose of
protecting against declines in the dollar value of portfolio
securities and against increases in the dollar cost of securities
to be acquired.
As in the case of other types of options, however, the
writing of an option on foreign currency will constitute only a
partial hedge, up to the amount of the premium received, and the
Fund could be required to purchase or sell foreign currencies at
disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an
effective hedge against fluctuations in exchange rates although,
in the event of rate movements adverse to the Fund's position, it
may forfeit the entire amount of the premium plus related
transaction costs.
Options on foreign currencies are traded in a manner
substantially similar to options on securities. In particular, an
option on foreign currency provides the holder with the right to
purchase, in the case of a call option, or to sell, in the case of
a put option, a stated quantity of a particular currency for a
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fixed price up to a stated expiration date. The writer of the
option undertakes the obligation to deliver, in the case of a call
option, or to purchase, in the case of a put option, the quantity
of the currency called for in the option, upon exercise of the
option by the holder.
As in the case of other types of options, the holder of an
option on foreign currency is required to pay a one-time, non-
refundable premium, which represents the cost of purchasing the
option. The holder can lose the entire amount of this premium, as
well as related transaction costs, but not more than this amount.
The writer of the option, in contrast, generally is required to
make initial and variation margin payments similar to margin
deposits required in the trading of futures contracts and the
writing of other types of options. The writer is therefore
subject to risk of loss beyond the amount originally received and
above the value of the option at the time it is entered into.
Certain options on foreign currencies, like forward contracts, are
traded over-the-counter through financial institutions acting as
market-makers in such options and the underlying currencies. Such
transactions therefore involve risks not generally associated with
exchange-traded instruments. Options on foreign currencies may
also be traded on national securities exchanges regulated by the
SEC or commodities exchanges regulated by the Commodity Futures
Trading Commission.
FORWARD FOREIGN CURRENCY CONTRACTS. The Fund may, as a
matter of nonfundamental policy, engage in forward foreign
currency transactions. Generally, the foreign currency exchange
transactions of the Fund may be conducted on a spot (i.e., cash)
basis at the spot rate for purchasing or selling currency
prevailing in the foreign exchange market. The Fund may also deal
in forward foreign currency exchange contracts involving
currencies of the different countries in which it may invest as a
hedge against possible variations in the foreign exchange rate
between these currencies. This is accomplished through
contractual agreements to purchase or sell a specified currency at
a specified future date and price set at the time of the contract.
The Fund's dealings in forward foreign currency exchange contracts
will be limited to hedging either specified transactions or
portfolio positions. Transaction hedging is the purchase or sale
of forward foreign currency contracts with respect to specific
receivables or payables of the Fund accruing in connection with
the purchase and sale of its portfolio securities denominated in
foreign currencies. Portfolio hedging is the use of forward
foreign currency contracts to offset portfolio security positions
denominated or quoted in such foreign currencies. The Fund will
not attempt to hedge all of its foreign portfolio positions and
will enter into such transactions only to the extent, if any,
deemed appropriate by the Adviser. The Board of Trustees has
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adopted a policy of monitoring the Fund's foreign currency
contract transactions to seek to assure that the Fund qualifies as
a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"). The Fund will not engage in
speculative forward foreign currency exchange transactions.
If the Fund purchases a forward contract, its custodian bank
will segregate cash or high grade liquid debt securities in a
separate account of the Fund in an amount equal to the value of
the Fund's total assets committed to the consummation of such
forward contract. Those assets will be valued at market daily,
and, if the value of the securities in the separate account
declines, additional cash or securities will be placed in the
account so that the value of the account will be equal to the
amount of the Fund's commitment with respect to such contracts.
Hedging against a decline in the value of currency does not
eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Such
transactions also preclude the opportunity for gain if the value
of the hedged currency rises. Moreover, it may not be possible
for the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the
currency at a price above the devaluation level it anticipates.
The cost to the Fund of engaging in foreign currency exchange
transactions varies with such factors as the currency involved,
the length of the contract period and the market conditions then
prevailing. Since transactions in foreign currency are usually
conducted on a principal basis, no fees or commissions are
involved.
REPURCHASE AGREEMENTS. In order to enhance liquidity or
preserve capital, the Fund may invest temporarily in repurchase
agreements. A repurchase agreement is a contract under which the
Fund would acquire a security for a relatively short period
(generally not more than seven days) subject to the obligation of
the seller to repurchase and the Fund to resell such security at a
fixed time and price (representing the Fund's cost plus interest).
The Fund will enter into repurchase agreements only with member
banks of the Federal Reserve System and with securities dealers.
The Adviser will continuously monitor the creditworthiness of the
parties with whom the Fund enters into repurchase agreements. The
Fund has established a procedure providing that the securities
serving as collateral for each repurchase agreement must be
delivered to the Fund's custodian either physically or in book-
entry form and that the collateral must be marked to market daily
to ensure that each repurchase agreement is fully collateralized
at all times. In the event of bankruptcy or other default by a
seller of a repurchase agreement, the Fund could experience delays
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in liquidating the underlying securities and could experience
losses, including the possible decline in the value of the
underlying securities during the period in which the Fund seeks to
enforce its rights thereto, possible subnormal levels of income
and lack of access to income during this period, and the expense
of enforcing its rights. The Fund will not invest in a repurchase
agreement maturing in more than seven days, if such investment,
together with other illiquid securities held by the Fund
(including restricted securities) would exceed 10% of the Fund's
total assets.
REVERSE REPURCHASE AGREEMENTS. The Fund may also enter into
reverse repurchase agreements which involve the sale of government
securities held in its portfolio to a bank or securities firm with
an agreement that the Fund will buy back the securities at a fixed
future date at a fixed price plus an agreed amount of interest
which may be reflected in the repurchase price. Reverse
repurchase agreements are considered to be borrowings by the Fund.
The Fund will use proceeds obtained from the sale of securities
pursuant to reverse repurchase agreements to purchase other
investments. The use of borrowed funds to make investment is a
practice known as "leverage," which is considered speculative.
Use of reverse repurchase agreements is an investment technique
that is intended to increase income. Thus, the Fund will enter
into a reverse repurchase agreement only when the Adviser
determines that the interest income to be earned from the
investment of the proceeds is greater than the interest expense of
the transaction. However, there is a risk that interest expense
will nevertheless exceed the income earned. Reverse repurchase
agreements involve the risk that the market value of securities
purchased by the Fund with proceeds of the transaction may decline
below the repurchase price of the securities sold by the Fund
which it is obligated to repurchase. The Fund would also continue
to be subject to the risk of a decline in the market value of the
securities sold under the agreements because it will reacquire
those securities upon effecting their repurchase. To minimize
various risks associated with reverse repurchase agreements, the
Fund would establish and maintain with the Fund's custodian a
separate account consisting of highly liquid, marketable
securities in an amount at least equal to the repurchase prices of
the securities (plus any accrued interest thereon) under such
agreements. In addition, the Fund would not enter into reverse
repurchase agreements exceeding in the aggregate 33 1/3% of the
market value of its total net assets. The Fund will enter into
reverse repurchase agreements only with selected registered
broker/dealers or with federally insured banks or savings and loan
associations which are approved in advance as being creditworthy
by the Board of Trustees. Under procedures established by the
Board of Trustees, the Adviser will monitor the creditworthiness
of the firms involved.
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OPTIONS TRANSACTIONS. The Fund may write listed and
over-the-counter covered call options and covered put options on
securities in which it is authorized to invest in order to earn
additional income from the premiums received. In addition, the
Fund may purchase listed and over-the-counter call and put
options. The extent to which covered options will be used by the
Fund will depend upon market conditions and the availability of
alternative strategies.
The Fund will not purchase a call or put option if as a
result the premium paid for the option together with premiums paid
for all other securities options and options on securities indexes
(see "-- Options on Stock Indexes") then held by the Fund, exceed
20% of the Fund's total net assets. In addition, the Fund may not
write put options on securities or securities indexes with
aggregate exercise prices in excess of 50% of the Fund's total net
assets measured at the Fund's net asset value at the time the
option is written. The Fund may not write uncovered options.
The Fund will write listed and over-the-counter call options
only if they are "covered," which means that the Fund owns or has
the immediate right to acquire the securities underlying the
options without additional cash consideration upon conversion or
exchange of other securities held in its portfolio. A call option
written by the Fund may also be "covered" if the Fund holds on a
share-for-share basis a covering call on the same securities where
(i) the exercise price of the covering call held is (a) equal to
or less than the exercise price of the call written or (b) greater
than the exercise price of the call written, if the difference is
maintained by the Fund in cash, U.S. Treasury bills or high grade
liquid debt obligations in a segregated account with the Fund's
custodian, and (ii) the covering call expires at the same time as
the call written. If a covered call option is not exercised, the
Fund would keep both the option premium and the underlying
security. If the covered call option written by the Fund is
exercised and the exercise price, less the transaction costs,
exceeds the cost of the underlying security, the Fund would
realize a gain in addition to the amount of the option premium it
received. If the exercise price, less transaction costs, is less
than the cost of the underlying security, the Fund's loss would be
reduced by the amount of the option premium.
As the writer of a covered put option, the Fund will write a
put option only with respect to securities it intends to acquire
for its portfolio and will maintain in a segregated account with
its custodian bank cash, U.S. Government securities or high-grade
liquid debt securities with a value equal to the price at which
the underlying security may be sold to the Fund in the event the
put option is exercised by the purchaser. The Fund may also write
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a "covered" put option by purchasing on a share-for-share basis a
put on the same security as the put written by the Fund if the
exercise price of the covering put held is equal to or greater
than the exercise price of the put written and the covering put
expires at the same time or later than the put written.
When writing listed and over-the-counter covered put options
on securities in which it is authorized to invest, the Fund would
earn income from the premiums received. If a covered put option
is not exercised, the Fund would keep the option premium and the
assets maintained to cover the option. If the option is exercised
and the exercise price, including transaction costs, exceeds the
market price of the underlying security, the Fund would realize a
loss, but the amount of the loss would be reduced by the amount of
the option premium.
If the writer of an exchange-traded option wishes to
terminate its obligation prior to its exercise, it may effect a
"closing purchase transaction." This is accomplished by buying an
option of the same series as the option previously written. The
effect of the purchase is that the Fund's position will be offset
by the Options Clearing Corporation. The Fund may not effect a
closing purchase transaction after it has been notified of the
exercise of an option. There is no guarantee that a closing
purchase transaction can be effected. Although the Fund will
generally write only those options for which there appears to be
an active secondary market, there is no assurance that a liquid
secondary market on an exchange or board of trade will exist for
any particular option or at any particular time, and for some
options no secondary market on an exchange may exist.
In the case of a written call option, effecting a closing
transaction will permit the Fund to write another call option on
the underlying security with either a different exercise price,
expiration date or both. In the case of a written put option, it
will permit the Fund to write another put option to the extent
that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will
permit the cash or proceeds from the concurrent sale of any
securities subject to the option to be used for other investments.
If the Fund desires to sell a particular security from its
portfolio on which it has written a call option, it will effect a
closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a gain from a closing transaction if
the cost of the closing transaction is less than the premium
received from writing the option. The Fund will realize a loss
from a closing transaction if the cost of the closing transaction
is more than the premium received for writing the option.
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However, because increases in the market price of a call option
will generally reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a
call option is likely to be offset in whole or in part by
appreciation of the underlying security owned by the Fund.
OVER-THE-COUNTER OPTIONS. The Fund may engage in options
transactions on exchanges and in the over-the-counter markets.
The Adviser does not currently anticipate investments in options
through exchanges other than domestic securities exchanges. In
general, exchange-traded options are third-party contracts (i.e.,
performance of the parties' obligations is guaranteed by an
exchange or clearing corporation) with standardized strike prices
and expiration dates. Over-the-counter ("OTC") transactions are
two-party contracts with price and terms negotiated by the buyer
and seller. The Fund will acquire only those OTC options for
which management believes the Fund can receive on each business
day at least two separate bids or offers (one of which will be
from an entity other than a party to the option) or those OTC
options valued by an independent pricing service. The Fund will
write and purchase OTC options only with member banks of the
Federal Reserve System and primary dealers in U.S. Government
securities or their affiliates which have capital of at least $50
million or whose obligations are guaranteed by an entity having
capital of at least $50 million. The SEC has taken the position
that OTC options are illiquid securities subject to the
restriction that illiquid securities are limited to not more than
10% of the Fund's net assets. The SEC, however, has a partial
exemption from the above restrictions on transactions in OTC
options. The SEC allows the Fund to exclude from the 10%
limitation on illiquid securities a portion of the value of the
OTC options written by the Fund, provided that certain conditions
are met. First, the other party to the OTC options has to be a
primary U.S. Government securities dealer designated as such by
the Federal Reserve Bank. Second, the Fund must have an absolute
contractual right to repurchase the OTC options at a formula
price. If the above conditions are met, the Fund may treat as
illiquid only that portion of the OTC option's value (and the
value of its underlying securities) which is equal to the formula
price for repurchasing the OTC option, less the OTC option's
intrinsic value.
RISKS OF OPTIONS ON SECURITIES INDEXES. As discussed in the
Prospectus, the Fund's purchase and sale of options on indexes of
debt securities (if and when such options are traded) and equity
securities will be subject to risks applicable to options
transactions generally. In addition, the distinctive
characteristics of options on indexes create certain risks that
are not present with stock options.
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Index prices may be distorted if trading of certain
securities included in the index is interrupted. Trading in index
options also may be interrupted in certain circumstances such as
if trading were halted in a substantial number of securities
included in the index or if dissemination of the current level of
an underlying index is interrupted. If this occurred the Fund
would not be able to close out options which it had purchased and,
if restrictions on exercise were imposed, may be unable to
exercise an option it holds, which could result in losses to the
Fund if the underlying index moves adversely before trading
resumes. However, it is the Fund's policy to purchase options
only on indexes which include a sufficient number of stocks so
that the likelihood of a trading halt in the index is minimized.
The purchaser of an index option may also be subject to a
timing risk. If an option is exercised by the Fund before final
determination of the closing index value for that day, the risk
exists that the level of the underlying index may subsequently
change. If such a change caused the exercised option to fall out-
of-the-money (that is the exercising of the option would result in
a loss, not a gain), the Fund would be required to pay the
difference between the closing index value and the exercise price
of the option (times the applicable multiple) to the assigned
writer. Although the Fund may be able to minimize this risk by
withholding exercise instructions until just before the daily
cutoff time, it may not be possible to eliminate this risk
entirely because the exercise cutoff times for index options may
be earlier than those fixed for other types of options and may
occur before definitive closing index values are announced.
Alternatively, when the index level is close to the exercise
price, the Fund may sell rather than exercise the option.
Although the markets for certain index option contracts have
developed rapidly, the markets for other index options are still
relatively illiquid. The ability to establish and close out
positions on such options will be subject to the development and
maintenance of a liquid secondary market. It is not certain that
this market will develop in all index option contracts. The Fund
will not purchase or sell any index option contract unless and
until in the opinion of the Adviser the market for such options
has developed sufficiently that such risk in connection with such
transactions is no greater than such risk in connection with
options on securities.
LIMITATION ON TRANSACTIONS IN OPTIONS ON SECURITIES INDEXES.
The Fund will write put options on indexes only if they are
covered by segregating with the Fund's custodian an amount of
cash, short-term investments equal to the aggregate exercise
prices of such put options or an offsetting option. In addition,
the Fund will write call options on indexes only if, on the date
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on which any such option is written, it holds securities qualified
to serve as "cover" under applicable rules of the national
securities exchanges or maintains in a segregated account an
amount of cash or short-term investments equal to the aggregate
exercise price of such call options with a value at least equal to
the value of the index times the multiplier or an offsetting
option. In the case of both put and call options on indexes, the
Fund will satisfy the foregoing conditions while such options are
outstanding.
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental investment
restrictions upon its investments as set forth below which may not
be changed without the approval of the holders of a majority of
the outstanding shares of the Fund. A majority for this purpose
means: (a) more than 50% of the outstanding shares of the Fund or
(b) 67% or more of the shares represented at a meeting where more
than 50% of the outstanding shares of the Fund are represented,
whichever is less. Under these restrictions, the Fund may not:
1. Invest in real estate (including interests in real
estate investment trusts) or commodities or in the
securities of another investment company (other than
pursuant to a plan of merger or consolidation).
2. Invest in a company having a record of less than three
years' continuous operation, which may include the
operations of any predecessor company or enterprise to
which the company has succeeded by merger,
consolidation, reorganization or purchase of assets.
3. Buy securities on margin or sell short.
4. Purchase securities of a company in which any officer or
trustee of the Trust or the Adviser owns beneficially
more than of 1% of the securities of such company and
all such officers and trustees own beneficially in the
aggregate more than 5% of the securities of such
company.
5. Borrow money except for temporary or emergency purposes,
and then not in excess of 10% of its gross assets taken
at cost. Assets taken at market may not be pledged to
an extent greater than 15% of gross assets taken at cost
(although this would permit the Fund to pledge, mortgage
or hypothecate its portfolio securities to the extent
than the percentage of pledged securities would exceed
10% of the offering price of the Fund's shares, it will
not do so as a matter of operating policy in order to
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<PAGE> 49
comply with certain state statutes or investment
restrictions); any such loan must be from a bank and the
value of the Fund's assets, including the proceeds of
the loan, less other liabilities of the Fund, must be at
least three times the amount of the loan. (Although the
Fund has never borrowed any money or pledged any portion
of its assets, and has no intention of doing so, in the
event that such borrowing became necessary, the Fund
expects that additional portfolio securities would not
be purchased while the borrowing is outstanding). The
borrowing restriction set forth above does not prohibit
the use of reverse repurchase agreements, in an amount
(including any borrowings) not to exceed 33 1/3% of net
assets.
6. Make loans to any of its officers or trustees, or to any
firms, corporations or syndicates in which officers or
trustees of the Trust have an aggregate interest of 10%
or more. It is the intention of the Trust not to make
loans of any nature, except the Fund may enter into
repurchase agreements and lend its portfolio securities
(as permitted by the Investment Company Act of 1940) as
referred to under "Certain Investment Practices" above.
In addition, the purchase of a portion of an issue of a
publicly issued corporate debt security is not
considered to be the making of a loan.
7. Purchase any securities, other than obligations of
domestic banks or of the U.S. Government, or its
agencies or instrumentalities, if as a result of such
purchase more than 25% of the value of the Fund's total
assets would be invested in the securities of issuers in
any one industry.
8. Issue senior securities as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), and
the rules thereunder; except insofar as the Fund may be
deemed to have issued a senior security by reason of
entering into a repurchase agreement or engaging in
permitted borrowings.
9. Purchase securities which will result in the Fund's
holdings of the issuer thereof to be more than 5% of the
value of the Fund's total assets (exclusive of U.S.
government securities).
10. Purchase more than 10% of the voting securities of any
class of securities of any one issuer.
-14-
<PAGE> 50
The Fund has also undertaken to one or more states to abide
by additional restrictions so long as its securities are
registered for sale in such states. The most restrictive
undertakings presently in effect are that the Fund shall not
invest in oil, gas or other mineral or development programs and
that the Fund's use of margins shall be for such short-term loans
as are necessary for the clearance of purchases and sales of
securities.
The Fund's Board of Trustees has approved the following non-
fundamental investment policy pursuant to an order of the SEC:
Notwithstanding any investment restriction to the contrary, the
Fund may, in connection with the John Hancock Group of Funds
Deferred Compensation Plan for Independent Trustees/Directors,
purchase securities of other investment companies within the John
Hancock Group of Funds provided that, as a result, (i) no more
than 10% of the Fund's assets would be invested in securities of
all other investment companies, (ii) such purchase would not
result in more than 3% of the total outstanding voting securities
of any one such investment company being held by the Fund and
(iii) no more than 5% of the Fund's assets would be invested in
any one such investment company.
-15-
<PAGE> 51
THOSE RESPONSIBLE FOR MANAGEMENT
The business of the Fund is managed by its Trustees who elect
officers who are responsible for the day-to-day operations of the
Fund and who execute policies formulated by the Trustees. Several
of the officers and Trustees of the Fund are also officers and
directors of the Adviser or officers and directors of John Hancock
Funds.
<TABLE>
Set forth below is the principal occupatio or employment of
the Trustees and principal officers of the Fund during the past
five years.
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ----------------------
<S> <C> <C>
EDWARD J. BOUDREAU, JR.* Trustee, Chairman and Chairman and Chief Executive
101 Huntington Ave. Chief Executive Officer, the Adviser and The
Boston, MA 02199 Officer (1)(2) Berkeley Financial Group ("The
Berkeley Group"); Chairman, NM
Capital Management, Inc. ("NM
Capital"); John Hancock Advisers
International Limited ("Advisers
International"); John Hancock
Funds, Inc.; John Hancock
Investor Services Corporation
("Investor Services"); and
Sovereign Asset Management
Corporation ("SAMCorp");
(hereinafter the Adviser, the
Berkeley Group, NM Capital,
Advisers International, John
Hancock Funds, Inc., Investor
Services and SAMCorp are
collectively referred to as the
"Affiliated Companies");
Chairman, First Signature Bank &
Trust; Director, John Hancock
Freedom Securities Corporation,
<FN>
________________________
* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
</TABLE>
-16-
<PAGE> 52
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ----------------------
<S> <C> <C>
John Hancock Capital Corporation,
New England/Canada Business
Council; Member, Investment
Company Institute Board of
Governors; Trustee, Museum of
Science; President, the Adviser
(until July 1992); Trustee or
Director of other investment
companies managed by the Adviser;
and Chairman, John Hancock
Distributors, Inc. (until April,
1994).
JAMES F. CARLIN Trustee Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc. (insurance);
Natick, MA 01760 Director, Arbella Mutual
Insurance Company (insurance),
Consolidated Group Trust (group
health plan), Carlin Insurance
Agency, Inc. and West Insurance
Agency, Inc.; Receiver, the City
of Chelsea (until August 1992);
and Trustee or Director of other
investment companies managed by
the Adviser.
WILLIAM H. CUNNINGHAM Trustee Chancellor, University of Texas
O'Henry Hall System and former President of
601 Colorado Street the University of Texas, Austin,
Austin, TX 78701 Texas; Regents Chair in Higher
Education Leadership; James L.
Bayless Chair for Free
Enterprise; Professor of
Marketing and Dean College of
Business Administration/Graduate
School of Business (1983-1985);
Centennial Chair in Business
Education Leadership, 1983-1985;
Director, LaQuinta Motor Inns,
<FN>
________________________
* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
</TABLE>
-17-
<PAGE> 53
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ----------------------
<S> <C> <C>
Inc. (hotel management company);
Director, Jefferson-Pilot
Corporation (diversified life
insurance company); Director,
Freeport-McMoran Inc. (oil and
gas company); Director, Barton
Creek Properties, Inc.
(1988-1990) (real estate
development) and LBJ Foundation
Board (education foundation); and
Advisory Director, Texas Commerce
Bank - Austin.
CHARLES L. LADNER Trustee (3) Director, Energy North, Inc.
UGI Corporation (public utility holding company);
460 North Gulph Road Senior Vice President, Finance
King of Prussia, PA UGI Corp (public utility holding
19406 company) (until 1992); and
Trustee or Director of other
investment companies managed by
the Adviser.
LEO E. LINBECK, JR. Trustee Chairman, President, Chief
3810 W. Alabama Executive Officer and Director,
Houston, TX 77027-5204 Linbeck Corporation (a holding
company engaged in various phases
of the construction industry and
warehousing interests); Director
and Chairman, Federal Reserve
Bank of Dallas; Chairman of the
Board and Chief Executive
Officer, Linbeck Construction
Corporation; Director, Panhandle
Eastern Corporation (a
diversified energy company);
Director, Daniel Industries, Inc.
(manufacturer of gas measuring
products and energy related
equipment); Director, GeoQuest
<FN>
________________________
* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
</TABLE>
-18-
<PAGE> 54
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ----------------------
<S> <C> <C>
International, Inc. (a
geophysical consulting firm); and
Director, Greater Houston
Partnership.
PATRICIA P. MCCARTER Trustee (3) Director and Secretary, the
Swedesford Road McCarter Corp. (machine
RD #2, Box 121 manufacturer); and Trustee or
Malvern, PA 19355 Director of other investment
companies managed by the Adviser.
STEVEN R. PRUCHANSKY Trustee (1,3) Director and Treasurer, Mast
360 Horse Creek Dr. Holdings, Inc.; Director, First
#208 Signature Bank & Trust Company
Naples, FL 33942 (until August 1991); General
Partner, Mast Realty Trust;
President, Maxwell Building Corp.
(until 1991); and Trustee or
Director of other investment
companies managed by the Adviser.
NORMAN H. SMITH Trustee (3) Lieutenant General, USMC, Deputy
Rt. 1, Box 249E Chief of Staff for Manpower and
Linden, VA 22642 Reserve Affairs, Headquarters
Marine Corps; Commanding General
III Marine Expeditionary Force/
3rd Marine Division (retired
1991); and Trustee or Director of
other investment companies
managed by the Adviser.
JOHN P. TOOLAN Trustee (3) Director, The Smith Barney Muni
13 Chadwell Place Bond Funds, The Smith Barney Tax-
Morristown, NJ 07960 Free Money Fund, Inc., Vantage
Money Market Funds (mutual
funds), The Inefficient-Market
Fund, Inc. (closed-end investment
company) and Smith Barney Trust
Company of Florida; Chairman,
<FN>
________________________
* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
</TABLE>
-19-
<PAGE> 55
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ----------------------
<S> <C> <C>
Smith Barney Trust Company
(retired December, 1991);
Director, Smith Barney, Inc.,
Mutual Management Company and
Smith, Barney Advisers, Inc.
(investment advisers) (retired
1991); and Senior Executive Vice
President, Director and member of
the Executive Committee, Smith
Barney, Harris Upham & Co.,
Incorporated (investment bankers)
(until 1991); and Trustee or
Director of other investment
companies managed by the Adviser.
ROBERT G. FREEDMAN* Vice Chairman and President and Chief Investment
101 Huntington Ave. Chief Investment Officer, the Adviser.
Boston, MA 02199 Officer (2)
ANNE C. HODSDON* President (2) Executive Vice President, the
101 Huntington Ave. Adviser.
Boston, MA 02199
JAMES B. LITTLE* Senior Vice President Senior Vice President, the
101 Huntington Ave. and Chief Financial Adviser
Boston, MA 02199 Officer
THOMAS H. DROHAN* Senior Vice President Senior Vice President and
101 Huntington Ave. and Secretary Secretary, the Adviser.
Boston, MA 02199
MICHAEL P. DICARLO* Senior Vice President Senior Vice President, the
101 Huntington Ave. (2) Adviser
Boston, MA 02199
EDGAR LARSEN* Senior Vice President Senior Vice President, the
101 Huntington Ave. Adviser
Boston, MA 02199
<FN>
________________________
* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
</TABLE>
-20-
<PAGE> 56
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ----------------------
<S> <C> <C>
B.J. WILLINGHAM* Senior Vice President Senior Vice President, the
101 Huntington Ave. Adviser. Formerly, Director and
Boston, MA 02199 Chief Investment Officer of
Transamerica Fund Management
Company.
JAMES J. STOKOWSKI* Vice President and Vice President, the Adviser.
101 Huntington Ave. Treasurer.
Boston, MA 02199
SUSAN S. NEWTON* Vice President and Vice President and Assistant
101 Huntington Ave. Compliance Officer Secretary, the Adviser.
Boston, MA 02199
JOHN A. MORIN* Vice President Vice President, the Adviser.
101 Huntington Ave.
Boston, MA 02199
<FN>
________________________
* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.
</TABLE>
-21-
<PAGE> 57
All of the officers listed are officers or employees of the
Adviser or affiliated companies. Some of the Trustees and
officers may also be officers and/or Directors and/or Trustees of
one or more of the other funds for which the Adviser serves as
investment adviser.
As of April 28, 1995, there were 19,192,828 shares of the
Fund outstanding and officers and trustees of the Fund as a group
beneficially owned less than 1% of these outstanding shares. At
such date, no person owned of record or was known by the Fund to
own beneficially as much as 5% of the outstanding shares of the
Fund.
As of December 22, 1994, the Trustees have established an
Advisory Board which acts to facilitate a smooth transition of
management over a two-year period (between Transamerica Fund
Management Company ("TFMC"), the prior investment adviser, and the
Adviser). The members of the Advisory Board are distinct from the
Board of Trustees, do not serve the Fund in any other capacity and
are persons who have no power to determine what securities are
purchased or sold on behalf of the Fund. Each member of the
Advisory Board may be contacted at 101 Huntington Avenue, Boston,
Massachusetts 02199.
Members of the Advisory Board and their respective principal
occupations during the past five years are as follows:
R. Trent Campbell, President, FMS, Inc. (financial and management
services); former Chairman of the Board, Mosher Steel
Company.
Mrs. Lloyd Bentsen, Formerly National Democratic Committeewoman
from Texas; co-founder, Houston Parents' League; former board
member of various civic and cultural organizations in
Houston, including the Houston Symphony, Museum of Fine Arts
and YWCA. Mrs. Bentsen is presently active in various civic
and cultural activities in the Washington, D.C. area,
including membership on the Area Board for The March of Dimes
and is a National Trustee for the Botanic Gardens of
Washington, D. C.
Thomas R. Powers, Formerly Chairman of the Board, President and
Chief Executive Officer, TFMC; Director, West Central
Advisory Board, Texas Commerce Bank; Trustee, Memorial
Hospital System; Chairman of the Board of Regents of Baylor
University; Member, Board of Governors, National Association
-22-
<PAGE> 58
of Securities Dealers, Inc.; Formerly, Chairman, Investment
Company Institute; formerly, President, Houston Chapter of
Financial Executive Institute.
Thomas B. McDade, Chairman and Director, TransTexas Gas Company;
Director, Houston Industries and Houston Lighting and Power
Company; Director, TransAmerican Companies (natural gas
producer and transportation); Member, Board of Managers,
Harris County Hospital District; Advisory Director,
Commercial State Bank, El Campo; Advisory Director, First
National Bank of Bryan; Advisory Director, Sterling
Bancshares; Former Director and Vice Chairman, Texas Commerce
Bancshares; and Vice Chairman, Texas Commerce Bank.
Compensation of the Board of Trustees and Advisory Board. The
following table provides information regarding the compensation
paid by the Fund and the other investment companies in the John
Hancock Fund Complex to the Independent Trustees and the Advisory
Board members for their services. Mr. Boudreau, a non-Independent
Trustee, and each of the officers of the Funds are interested
persons of the Adviser, are compensated by the Adviser and
received no compensation from the Funds for their services.
Total
Pension or Compensation
Retirement from all Funds in
Aggregate Benefits Accrued John Hancock
Compensation as Part of the Fund Complex to
Trustees from the Fund Fund's Expenses Trustees**
-------- ------------- ---------------- -----------------
James F. Carlin $ 0 $ 0 $ 60,450
William H. Cunningham 3,800* 0 0
Charles L. Ladner 0 0 60,450
Leo E. Linbeck, Jr. 5,200* 0 0
Patricia P. McCarter 0 0 60,200
Steven R. Pruchansky 0 0 62,450
Norman H. Smith 0 0 62,450
John P. Toolan 0 0 60,450
* Compensation made pursuant to different compensation
arrangements then in effect for the fiscal year ended
August 31,1994.
** The total compensation paid by the John Hancock Fund Complex
to the Independent Trustees is $366,450 as of the calendar
year ended December 31, 1994. All Trustees/Directors except
Messrs. Cunningham and Linbeck are Trustees/Directors of 39
-23-
<PAGE> 59
funds in the John Hancock Fund Complex. Messrs. Cunningham
and Linbeck are Trustees/Directors of 21 funds. (The Fund
was not part of the John Hancock Fund Complex until
December 22, 1994 and Messrs. Cunningham and Linbeck were not
trustees or directors of any funds in the John Hancock Fund
Complex prior to December 22, 1994.)
Pension or Total Compensation
Retirement from all Funds in
Aggregate Benefits Accrued John Hancock
Compensation as Part of the Fund Complex to
Advisory Board*** from the Fund Fund's Expenses Advisory Board***
------------------ ------------- --------------- ------------------
R. Trent Campbell $ 2,765 $ 0 $ 47,000
Mrs. Lloyd Bentsen 2,765 0 47,000
Thomas R. Powers 2,765 0 47,000
Thomas B. McDade 2,765 0 47,000
------- --------
TOTAL $11,060 $188,000
*** Estimated for the Fund's current fiscal year ending August 31, 1995.
INVESTMENT ADVISORY AND OTHER SERVICES
As described in the Prospectus, the Fund receives its
investment advice from the Adviser. Investors should refer to the
Prospectus for a description of certain information concerning the
investment management contract. Each of the Trustees and
principal officers affiliated with the Fund who is also an
affiliated person of the Adviser is named above, together with the
capacity in which such person is affiliated with the Fund and the
Adviser.
The Adviser, located at 101 Huntington Avenue, Boston,
Massachusetts 02199-7603, was organized in 1968 and currently has
more than $13 billion in assets under management in its capacity
as investment adviser to the Fund and the other mutual funds and
publicly traded investment companies in the John Hancock group of
funds having a combined total of over 1,060,000 shareholders. The
Adviser is a wholly-owned subsidiary of The Berkeley Financial
Group, which is in turn a wholly-owned subsidiary of John Hancock
Subsidiaries, Inc., which is in turn a wholly-owned subsidiary of
the Life Company) one of the most recognized and respected
financial institutions in the nation. With total assets under
management of $80 billion, the Life Company is one of the ten
-24-
<PAGE> 60
largest life insurance companies in the United States and carries
Standard & Poor's and A.M. Best's highest ratings. Founded in
1862, the Life Company has been serving clients for over 130
years.
As described in the Prospectus under the caption
"Organization an Management of the Fund," the Fund has entered
into an investment management contract with the Adviser. Under
the investment management contract, the Adviser provides the Fund
with (i) a continuous investment program, consistent with the
Fund's stated investment objective and policies, (ii) supervision
of all aspects of the Fund's operations except those that are
delegated to a custodian, transfer agent or other agent and
(iii) such executive, administrative and clerical personnel,
officers and equipment as are necessary for the conduct of its
business. The Adviser is responsible for the day-to-day
management of the Fund's portfolio assets.
No person other than the Adviser and its directors and
employees regularly furnishes advice to the Fund with respect to
the desirability of the Fund investing in, purchasing or selling
securities. The Adviser may from time to time receive statistical
or other similar factual information, and information regarding
general economic factors and trends, from the Life Company and its
affiliates.
Under the terms of the investment management contract with
the Fund, the Adviser provides the Fund with office space,
equipment and supplies and other facilities and personnel 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 relating to the administration of the Fund. All
expenses which are not specifically paid by the Adviser and which
are incurred in the operation of the Fund including, but not
limited to, (i) the fees of the Trustees of the Fund who are not
"interested persons," as such term is defined in the 1940 Act (the
"Independent Trustees"), (ii) the fees of the members of the
Fund's Advisory Board (described above) and (iii) the continuous
public offering of the shares of the Fund are borne by the Fund.
Subject to the conditions set forth in a private letter ruling
that the Fund has received from the Internal Revenue Service
relating to its multiple-class structure, class expenses properly
allocable to any Class A or Class B shares will be borne
exclusively by such class of shares.
As provided by the investment management contract, the Fund
pays the Adviser an investment management fee, which is accrued
-25-
<PAGE> 61
daily and paid monthly in arrears, equal on an annual basis to a
0.625% of the Fund's average daily net asset value.
The Adviser may voluntarily and temporarily reduce its
advisory fee or make other arrangements to limit the Fund's
expenses to a specified percentage of average daily net assets.
The Adviser retains the right to re-impose the advisory fee and
recover any other payments to the extent that, at the end of any
fiscal year, the Fund's annual expenses fall below this limit.
In the event normal operating expenses of the Fund, exclusive
of certain expenses prescribed by state law, are in excess of any
state limit where the Fund is registered to sell shares of
beneficial interest, the fee payable to the Adviser will be
reduced to the extent of such excess and the Adviser will make any
additional arrangements necessary to eliminate any remaining
excess expenses. Currently, the most restrictive limit applicable
to the Fund is 2.5% of the first $30,000,000 of the Fund's average
daily net asset value, 2% of the next $70,000,000 and 1.5% of the
remaining average daily net asset value.
Pursuant to the investment management contract, the Adviser
is not liable to the Fund or its shareholders for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which its contract relates, except
a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its
duties or from its reckless disregard of the obligations and
duties under the applicable contract.
The initial term of the investment management contract
expires on December 22, 1996, and will continue in effect from
year to year thereafter if approved annually by a vote of a
majority of the Independent Trustees of the Fund, cast in person
at a meeting called for the purpose of voting on such approval,
and by either a majority of the Trustees or the holders of a
majority of the Fund's outstanding voting securities. The
management contract may, on 60 days' written notice, be terminated
at any time without the payment of any penalty by the Fund by vote
of a majority of the outstanding voting securities of the Fund, by
the Trustees or by the Adviser. The management contract
terminates automatically in the event of its assignment.
Securities held by the Fund may also be held by other funds
or investment advisory clients for which the Adviser or its
affiliates provide investment advice. Because of different
investment objectives or other factors, a particular security may
-26-
<PAGE> 62
be bought for one or more funds or clients when one or more are
selling the same security. If opportunities for purchase or sale
of securities by the Adviser or for other funds or clients for
which the Adviser renders investment advice arise for
consideration at or about the same time, transactions in such
securities will be made, insofar as feasible, for the respective
funds or clients in a manner deemed equitable to all of them. To
the extent that transactions on behalf of more than one client of
the Adviser or its affiliates may increase the demand for
securities being purchased or the supply of securities being sold,
there may be an adverse effect on price.
Under the investment management contract, the Fund may use
the name "John Hancock" or any name derived from or similar to it
only for so long as the investment management contract or any
extension, renewal or amendment thereof remains in effect. If the
Fund's investment management contract is no longer in effect, the
Fund (to the extent that it lawfully can) will cease to use such
name or any other name indicating that it is advised by or
otherwise connected with the Adviser. In addition, the Adviser or
the Life Company may grant the non-exclusive right to use the name
"John Hancock" or any similar name to any other corporation or
entity, including but not limited to any investment company of
which the Life Company or any subsidiary or affiliate thereof or
any successor to the business of any subsidiary or affiliate
thereof shall be the investment adviser.
For the fiscal years ended August 31, 1992, 1993 and 1994
advisory fees payable by the Fund to TFMC, the Fund's former
investment adviser, amounted to $603,910, $905,355 and $1,322,162,
respectively.
Administrative Services Agreement. The Fund was a party to
an administrative services agreement with TFMC (the "Services
Agreement"), pursuant to which TFMC performed bookkeeping and
accounting services and functions, including preparing and
maintaining various accounting books, records and other documents
and keeping such general ledgers and portfolio accounts as are
reasonably necessary for the operation of the Fund. Other
administrative services included communications in response to
shareholder inquiries and certain printing expenses of various
financial reports. In addition, such staff and office space,
facilities and equipment was provided as necessary to provide
administrative services to the Fund. The Services Agreement was
amended in connection with the appointment of the Adviser as
-27-
<PAGE> 63
adviser to the Fund to permit services under the Agreement to be
provided to the Fund by the Adviser and its affiliates. The
Services Agreement was terminated during the current fiscal year.
For the fiscal years ended August 31, 1992, 1993 and 1994,
the Fund paid to TFMC (pursuant to the Services Agreement)
$69,374, $111,174 and $153,060, respectively, of which $69,374,
$92,522 and $132,005, respectively, was paid to TFMC and $0,
$18,652 and $21,055, respectively, were paid for certain data
processing and pricing information services.
DISTRIBUTION CONTRACT
Distribution Contract. As discussed in the Prospectus, the
Fund's shares are sold on a continuous basis at the public
offering price. John Hancock Funds, a wholly-owned subsidiary of
the Adviser, has the exclusive right, pursuant to the Distribution
Contract dated December 22, 1994 (the "Distribution Contract"), to
purchase shares from the Fund at net asset value for resale to the
public or to broker-dealers at the public offering price. Upon
notice to all broker-dealers ("Selling Brokers") with whom it has
sales agreements, John Hancock Funds may allow such Selling
Brokers up to the full applicable sales charge during periods
specified in such notice. During these periods, such Selling
Brokers may be deemed to be underwriters as that term is defined
in the Securities Act of 1933.
The Distribution Contract was initially adopted by the
affirmative vote of the Fund's Board of Trustees including the
vote of a majority of the Independent Trustees, cast in person at
a meeting called for such purpose. The Distribution Contract
shall continue in effect until December 22, 1996 and from year to
year thereafter if approved by either the vote of the Fund's
shareholders or the Board of Trustees, including the vote of a
majority of the Independent Trustees, cast in person at a meeting
called for such purpose. The Distribution Contract may be
terminated at any time, without penalty, by either party upon
sixty (60) days' written notice or by a vote of a majority of the
outstanding voting securities of the Fund and terminates
automatically in the case of an assignment by John Hancock Funds.
Total underwriting commissions for sales of the Fund's
Class A Shares for the fiscal years ended August 31, 1992, 1993
and 1994, respectively, were $438,480, $762,955 and $883,435,
respectively. Of such amounts $49,104, $56,633 and $56,079,
respectively, were retained by the Fund's former distributor,
-28-
<PAGE> 64
Transamerica Fund Distributors, Inc. and the remainder was
reallowed to dealers.
Distribution Plan. The Board of Trustees, including the
Independent Trustees of the Fund, approved new distribution plans
pursuant to Rule 12b-1 under the 1940 Act for Class A Shares
("Class A Plan") and Class B Shares ("Class B Plan"). Such Plans
were approved by a majority of the outstanding shares of each
respective class on December 16, 1994 and became effective on
December 22, 1994.
Under the Class A Plan, the distribution or service fee will
not exceed an annual rate of 0.25% of the average daily net asset
value of the Class A Shares of the Fund (determined in accordance
with such Fund's Prospectus as from time to time in effect). Any
expenses under the Class A Plan not reimbursed within 12 months of
being presented to the Fund for repayment are forfeited and not
carried over to future years. Under the Class B Plan, the
distribution or service fee to be paid by the Fund will not exceed
an annual rate of 1.00% of the average daily net assets of the
Class B Shares of the Fund (determined in accordance with the
Fund's prospectus as from time to time in effect); provided that
the portion of such fee used to cover Service Expenses (described
below) shall not exceed an annual rate of 0.25% of the average
daily net asset value of the Class B Shares of the Fund. In
accordance with generally accepted accounting principles, the Fund
does not treat unreimbursed distribution expenses attributable to
Class B shares as a liability of the Fund and does not reduce the
current net assets of Class B by such amount, although the amount
may be payable under Class B Plan in the future.
Under the Plans, expenditures shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trustees
shall determine. The fee may be spent by John Hancock Funds on
Distribution Expenses or Service Expenses. "Distribution
Expenses" include any activities or expenses primarily intended to
result in the sale of shares of the relevant class of the Fund,
including, but not limited to: (i) initial and ongoing sales
compensation payable out of such fee as such compensation is
received by John Hancock Funds or by Selling Brokers, (ii) direct
out-of-pocket expenses incurred in connection with the
distribution of shares, including expenses related to printing of
prospectuses and reports; (iii) preparation, printing and
distribution of sales literature and advertising material; (iv) an
allocation of overhead and other branch office expenses of the
Distributor related to the distribution of Fund shares;
(v) distribution expenses that were incurred by the Fund's former
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distributor and not recovered through payments under the Class A
or Class B former plans or through receipt of contingent deferred
sales charges; and (vi) in the event that any other investment
company (the "Acquired Fund") sells all or substantially all of
its assets to, merges with or otherwise engages in a combination
with the Fund, distribution expenses originally incurred in
connection with the distribution of the Acquired Fund's shares.
Service Expenses under the Plans include payments made to, or on
account of, account executives of selected broker-dealers
(including affiliates of John Hancock Funds) and others who
furnish personal and shareholder account maintenance services to
shareholders of the relevant class of the Fund.
During the fiscal year ended August 31, 1994, total payments
made by the Fund under the former Class A Rule 12b-1 plan to the
former distributor amounted to $301,437, and of such amount
$27,625, $54,596, $70,822, $67,211 and $81,183 represented
payments for (1) the cost of printing and distribution
prospectuses and financial reports to investors, (2) various sales
literature, (3) advertising expenses, (4) distribution and/or
administrative services and (5) service fees, respectively.
During the fiscal year ended August 31, 1994, total payments
made by the Fund under the former Class B Rule 12b-1 plan to the
former distributor amounted to $909,709 of which:
** (1) $227,427 represented service fees which were comprised
of $84,659 for distribution and/or administrative
services provided by the Fund's former distributor and
$142,768 for service fees paid to broker/dealers.
(2) $682,282 represented as the total of distribution fees
paid to the former distributor which are comprised of:
a) $352,141 for dealer commission payments;
b) $88,035 for underwriting fees; and
c) $242,106 for interest or the carrying charges.
For the fiscal year ended August 31, 1994, the former
distributor received $183,054 in contingent deferred sales charges
from redemption of the Fund's Class B shares.
Each of the Plans provides that it will continue in effect
only as long as its continuance is approved at least annually by a
majority of both the Trustees and the Independent Trustees. Each
of the Plans provides that it may be terminated (a) at any time by
vote of a majority of the Trustees, a majority of the Independent
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Trustees, or a majority of the respective Class' outstanding
voting securities or (b) by John Hancock Funds on 60 days' notice
in writing to the Fund. Each of the Plans further provides that
it may not be amended to increase the maximum amount of the fees
for the services described therein without the approval of a
majority of the outstanding shares of the class of the Fund which
has voting rights with respect to the Plan. Each of the Plans
provides that no material amendment to the Plan will, in any
event, be effective unless it is approved by a majority vote of
the Trustees and the Independent Trustees of the Fund. The
holders of Class A Shares and Class B Shares have exclusive voting
rights with respect to the Plan applicable to their respective
class of shares. In adopting the Plans, the Board of Trustees has
determined that, in its judgment, there is a reasonable likelihood
that each Plan will benefit the holders of the applicable class of
shares of the Fund.
Information regarding the services rendered under the Plans
and the Distribution Contract and the amounts paid therefore by
the respective class of the Fund are provided to, and reviewed by,
the Board of Trustees on a quarterly basis. In this quarterly
review, the Board of Trustees considers the continued
appropriateness of the Plans and the Distribution Contract and the
level of compensation provided therein.
When the Fund seeks an Independent Trustee to fill a vacancy
or as a nominee for election by shareholders, the selection or
nomination of the Independent Trustee is, under resolutions
adopted by the Trustees contemporaneously with their adoption of
the Plans, committed to the discretion of the Committee on
Administration of the Trustees. The members of the Committee on
Administration are all Independent Trustees and identified in this
Statement of Additional Information under the heading "Those
Responsible for Management."
NET ASSET VALUE
For purposes of calculating the net asset value ("NAV") of
the Fund's shares, the following procedures are utilized wherever
applicable.
Debt investment securities are valued on the basis of
valuations furnished by a principal market maker or a pricing
service, both of which generally utilize electronic data
processing techniques to determine valuations for normal
institutional size trading units of debt securities without
exclusive reliance upon quoted prices.
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Equity securities traded on a principal exchange or NASDAQ
National Market Issues are generally valued at last sale price on
the day of valuation. Securities in the aforementioned category
for which no sales are reported and other securities traded over-
the-counter are generally valued at the mean between the current
closing bid and asked prices.
Short-term debt investments which have a remaining maturity
of 60 days or less are generally valued at amortized cost, which
approximates market value. If market quotations are not readily
available or if in the opinion of the Adviser any quotation or
price is not representative of true market value, the fair value
of the security may be determined in good faith in accordance with
procedures approved by the Trustees.
Any assets or liabilities expressed in terms of foreign
currencies are translated into U.S. dollars by the custodian bank
based on London currency exchange quotations as of 5:00 p.m.,
London time (12:00 noon, New York time) on the date of any
determination of the Fund's NAV.
The Fund will not price its securities on the following
national holidays: New Year's Day; Presidents' Day; Good Friday;
Memorial Day; Independence Day; Labor Day; Thanksgiving Day; and
Christmas Day. On any day an international market is closed and
the New York Stock Exchange is open, any foreign securities will
be valued at the prior day's close with the current day's exchange
rate. Trading of foreign securities may take place on Saturdays
and U.S. business holidays on which the Fund's NAV is not
calculated. Consequently, the Fund's portfolio securities may
trade and the NAV of the Fund's redeemable securities may be
significantly affected on days when a shareholder has no access to
the Fund.
INITIAL SALES CHARGE ON CLASS A SHARES
The sales charges applicable to purchases of Class A shares
of the Fund are described in the Fund's Class A and Class B
Prospectus. Methods of obtaining reduced sales charges referred
to generally in the Prospectus are described in detail below. In
calculating the sales charge applicable to current purchases of
Class A shares, the investor is entitled to cumulate current
purchases with the greater of the current value (at offering
price) of the Class A shares of the Fund, or if Investor Services
is notified by the investor's dealer or the investor at the time
of the purchase, the cost of the Class A shares owned.
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Combined Purchases. In calculating the sales charge
applicable to purchases of Class A shares made at one time, the
purchases will be combined if made by (a) an individual, his or
her spouse and their children under the age of 21 purchasing
securities for his or her own account, (b) a trustee or other
fiduciary purchasing for a single trust, estate or fiduciary
account and (c) certain groups of four or more individuals making
use of salary deductions or similar group methods of payment whose
funds are combined for the purchase of mutual fund shares.
Further information about combined purchases, including certain
restrictions on combined group purchases, is available from
Investor Services or a Selling Broker's representative.
Without Sales Charge. As described in the Prospectus,
Class A shares of the Fund may be sold without a sales charge to
certain persons described in the Prospectus.
Accumulation Privilege. Investors (including investors
combining purchases) who are already Class A shareholders may also
obtain the benefit of the reduced sales charge by taking into
account not only the amount then being invested but also the
purchase price or value of the Class A shares already held by such
person.
Combination Privilege. Reduced sales charges (according to
the schedule set forth in the Class A and Class B Prospectus) also
are available to an investor based on the aggregate amount of his
concurrent and prior investments in Class A shares of the Fund and
shares of all other John Hancock funds which carry a sales charge.
Letter of Intention. The reduced sales loads are also
applicable to investments made over a specified period pursuant to
a Letter of Intention (LOI), which should be read carefully prior
to its execution by an investor. The Fund offers two options
regarding the specified period for making investments under the
LOI. All investors have the option of making their investments
over a period of thirteen (13) months. Investors who are using
the Fund as a funding medium for a qualified retirement plan,
however, may opt to make the necessary investments called for by
the LOI over a forty-eight (48) month period. These qualified
retirement plans include IRA'S, SEP, SARSEP, TSA, 401(k) plans,
TSA plans and 457 plans. Such an investment (including
accumulations and combinations) must aggregate $50,000 or more
invested during the specified period from the date of the LOI or
from a date within ninety (90) days prior thereto, upon written
request to Investor Services. The sales charge applicable to all
amounts invested under the LOI is computed as if the aggregate
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amount intended to be invested had been invested immediately. If
such aggregate amount is not actually invested, the difference in
the sales charge actually paid and the sales charge payable had
the LOI not been in effect is due from the investor. However, for
the purchases actually made with the specified period (either 13
or 48 months), the sales charge applicable will not be higher than
that which would have been applied (including accumulations and
combinations) had the LOI been for the amount actually invested.
The LOI authorizes Investor Services to hold in escrow
sufficient Class A shares (approximately 5% of the aggregate) to
make up any difference in sales charges on the amount intended to
be invested and the amount actually invested, until such
investment is completed within the specified period, at which time
the escrow shares will be released. If the total investment
specified in the LOI is not completed, the Class A shares held in
escrow may be redeemed and the proceeds used as required to pay
such sales charge as may be due. By signing the LOI, the investor
authorizes Investor Services to act as his attorney-in-fact to
redeem any escrow shares and adjust the sales charge, if
necessary. A LOI does not constitute a binding commitment by an
investor to purchase, or by the Fund to sell, any additional
shares and may be terminated at any time.
DEFERRED SALES CHARGE ON CLASS B SHARES
Investments in Class B shares are purchased at net asset
value per share without the imposition of a sales charge so that
the Fund will receive the full amount of the purchase payment.
Contingent Deferred Sales Charge. Class B shares which are
redeemed within six years of purchase will be subject to a
contingent deferred sales charge ("CDSC") at the rates set forth
in the Class A and Class B Prospectus as a percentage of the
dollar amount subject to the CDSC. The charge will be assessed on
an amount equal to the lesser of the current market value or the
original purchase cost of the Class B shares being redeemed.
Accordingly, no CDSC will be imposed on increases in account value
above the initial purchase prices, including Class B shares
derived from reinvestment of dividends or capital gains
distributions.
The amount of the CDSC, if any, will vary depending on the
number of years from the time of payment for the purchase of
Class B shares until the time of redemption of such shares.
Solely for purposes of determining the number of years from the
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time of any payment for the purchases of shares, all payments
during a month will be aggregated and deemed to have been made on
the last day of the month.
Proceeds from the CDSC are paid to the Distributor and are
used in whole or in part by the Distributor to defray its expenses
related to providing distribution-related services to the Fund in
connection with the sale of the Class B shares, such as the
payment of compensation to select Selling Brokers for selling
Class B shares. The combination of the CDSC and the distribution
and service fees facilitates the ability of the Fund to sell the
Class B shares without a sales charge being deducted at the time
of the purchase. See the Class A and Class B Prospectus for
additional information regarding the CDSC.
SPECIAL REDEMPTIONS
Although it would not normally do so, the Fund has the right
to pay the redemption price of shares of the Fund in whole or in
part in portfolio securities as prescribed the Trustees. When the
shareholder sells portfolio securities received in this fashion,
he would incur a brokerage charge. Any such securities would be
valued for the purposes of making such payment at the same value
as used in determining net asset value. The Fund has elected to
be governed by Rule 18f-1 under the 1940 Act, pursuant to which
the Fund is obligated to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund during
any 90 day period for any one account.
ADDITIONAL SERVICES AND PROGRAMS
Exchange Privilege. As described more fully in the
Prospectus, the Fund permits exchanges of shares of any class of
the Fund for shares of the same class in any other John Hancock
fund offering that class.
Systematic Withdrawal Plan. As described briefly in the
Class A and Class B Prospectus, the Fund permits the establishment
of a Systematic Withdrawal Plan. Payments under this plan
represent proceeds arising from the redemption of Fund shares.
Since the redemption price of Fund shares may be more or less than
the shareholder's cost, depending upon the market value of the
securities owned by the Fund at the time of redemption, the
distribution of cash pursuant to this plan may result in
realization of gain or loss for purposes of Federal, state and
local income taxes. The maintenance of a Systematic Withdrawal
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Plan concurrently with purchases of additional Class A or Class B
shares of the Fund could be disadvantageous to a shareholder
because of the initial sales charge payable on such purchases of
Class A shares and the CDSC imposed on redemptions of Class B
shares and because redemptions are taxable events. Therefore, a
shareholder should not purchase Fund shares at the same time as a
Systematic Withdrawal Plan is in effect. The Fund reserves the
right to modify or discontinue the Systematic Withdrawal Plan of
any shareholder on 30 days' prior written notice to such
shareholder, or to discontinue the availability of such plan in
the future. The shareholder may terminate the plan at any time by
giving proper notice to Investor Services.
Monthly Automatic Accumulation Program ("MAAP"). This
program is explained fully in the Fund's Class A and Class B
Prospectus and the Account Privileges Application. The program,
as it relates to automatic investment checks, is subject to the
following conditions:
The investments will be drawn on or about the day of the
month indicated.
The privilege of making investments through the Monthly
Automatic Accumulation Program may be revoked by Investor Services
without prior notice if any investment is not honored by the
shareholder's bank. The bank shall be under no obligation to
notify the shareholder as to the non-payment of any check.
The program may be discontinued by the shareholder either by
calling Investor Services or upon written notice to Investor
Services which is received at least five (5) business days prior
to the due date of any investment.
Reinvestment Privilege. A shareholder who has redeemed Fund
shares may, within 120 days after the date of redemption, reinvest
without payment of a sales charge any part of the redemption
proceeds in shares of the same class of the Fund or another John
Hancock mutual fund, subject to the minimum investment limit in
that fund. The proceeds from the redemption of Class A shares may
be reinvested at net asset value without paying a sales charge in
Class A shares of the Fund or in Class A shares of another John
Hancock mutual fund. If a CDSC was paid upon a redemption, a
shareholder may reinvest the proceeds from that redemption at net
asset value in additional shares of the class from which the
redemption was made. The shareholder's account will be credited
with the amount of any CDSC charged upon the prior redemption and
the new shares will continue to be subject to the CDSC. The
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holding period of the shares acquired through reinvestment will,
for purposes of computing the CDSC payable upon a subsequent
redemption, include the holding period of the redeemed shares.
The Fund may modify or terminate the reinvestment privilege at any
time.
A redemption or exchange of Fund shares is a taxable
transaction for Federal income tax purposes even if the
reinvestment privilege is exercised, and any gain or loss realized
by a shareholder on the redemption or other disposition of Fund
shares will be treated for tax purposes as described under the
caption "Tax Status."
DESCRIPTION OF THE FUND'S SHARES
Ownership of the Fund is represented by transferable shares
of beneficial interest. The Declaration of Trust permits the
Trustees to create an unlimited number of series and classes of
shares of the Fund and, with respect to each series and class, to
issue an unlimited number of full or fractional shares and to
divide or combine the shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial
interests of the Fund.
Each share of each series or class of the Fund represents an
equal proportionate interest with each other in that series or
class, none having priority or preference over other shares of the
same series or class. The interest of investors in the various
series or classes of the Fund is separate and distinct. All
consideration received for the sales of shares of a particular
series or class of the Fund, all assets in which such
consideration is invested and all income, earnings and profits
derived from such investments will be allocated to and belong to
that series or class. As such, each such share is entitled to
dividends and distributions out of the net income belonging to
that series or class as declared by the Board of Trustees. Shares
of the Fund have a par value of $0.01 per share. The assets of
each series are segregated on the Fund's books and are charged
with the liabilities of that series and with a share of the Fund's
general liabilities. The Board of Trustees determines those
assets and liabilities deemed to be general assets or liabilities
of the Fund, and these items are allocated among each series in
proportion to the relative total net assets of each series. In
the unlikely event that the liabilities allocable to a series
exceed the assets of that series, all or a portion of such
liabilities may have to be borne by the other series.
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Pursuant to the Declaration of Trust, the Trustees may
authorize the creation of additional series of shares (the
proceeds of which would be invested in separate, independently
managed portfolios) and additional classes within any series
(which would be used to distinguish among the rights of different
categories of shareholders, as might be required by future
regulations or other unforeseen circumstances). As of the date of
this Statement of Additional Information, the Trustees have
authorized the issuance of two classes of shares of the Fund
designated as Class A and Class B. Class A and Class B Shares of
the Fund represent an equal proportionate interest in the
aggregate net asset values attributable to that class of the Fund.
Holders of Class A Shares and Class B Shares each have certain
exclusive voting rights on matters relating to the Class A Plan
and the Class B Plan, respectively. The different classes of the
Fund may bear different expenses relating to the cost of holding
shareholder meetings necessitated by the exclusive voting rights
of any class of shares.
Dividends paid by the Fund, if any, with respect to each
class of shares will be calculated in the same manner, at the same
time and on the same day and will be in the same amount, except
that (i) the distribution and service fees relating to Class A and
Class B shares will be borne exclusively by that class;
(ii) Class B shares will pay higher distribution and service fees
than Class A shares; and (iii) each of Class A shares and Class B
shares will bear any class expenses properly allocable to such
class of shares, subject to the conditions set forth in a private
letter ruling that the Fund has received from the Internal Revenue
Service relating to its multiple-class structure. Accordingly,
the net asset value per share may vary depending whether Class A
shares or Class B shares are purchased.
Voting Rights. Shareholders are entitled to a full vote for
each full share held. The Trustees themselves have the power to
alter the number and the terms of office of Trustees, and they may
at any time lengthen their own terms or make their terms of
unlimited duration (subject to certain removal procedures) and
appoint their own successors, provided that at all times at least
a majority of the Trustees have been elected by shareholders. The
voting rights of shareholders are not cumulative, so that holders
of more than 50 percent of the shares voting can, if they choose,
elect all Trustees being selected, while the holders of the
remaining shares would be unable to elect any Trustees. Although
the Fund need not hold annual meetings of shareholders, the
Trustees may call special meetings of shareholders for action by
shareholder vote as may be required by the 1940 Act or the
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Declaration of Trust. Also, a shareholder's meeting must be
called if so requested in writing by the holders of record of 10%
or more of the outstanding shares of the Fund. In addition, the
Trustees may be removed by the action of the holders of record of
two-thirds or more of the outstanding shares.
Shareholder Liability. The Declaration of Trust provides
that no Trustee, officer, employee or agent of the Fund is liable
to the Fund or to a shareholder, nor is any Trustee, officer,
employee or agent liable to any third persons in connection with
the affairs of the Fund, except as such liability may arise from
his or its own bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties. It also provides that all third
persons shall look solely to the Fund's property for satisfaction
of claims arising in connection with the affairs of the Fund.
With the exceptions stated, the Declaration of Trust provides that
a Trustee, officer, employee or agent is entitled to be
indemnified against all liability in connection with the affairs
of the Fund.
As a Massachusetts business trust, the Fund is not required
to issue share certificates. The Fund shall continue without
limitation of time subject to the provisions in the Declaration of
Trust concerning termination by action of the shareholders.
Under Massachusetts law, shareholders of a Massachusetts
business trust could, under certain circumstances, be held
personally liable for acts or obligations of the trust. However,
the Fund's Declaration of Trust contains an express disclaimer of
shareholder liability for acts, obligations and affairs of the
Fund. The Declaration of Trust also provides for indemnification
out of the Fund's assets for all losses and expenses of any
shareholder held personally liable by reason of being or having
been a shareholder. Liability is therefore limited to
circumstances in which the Fund itself would be unable to meet its
obligations, and the possibility of this occurrence is remote.
TAX STATUS
The Fund has qualified and elected to be treated as a
"regulated investment company" under Subchapter M of the Code, and
intends to continue to so qualify in the future. As such and by
complying with the applicable provisions of the Code regarding the
sources of its income, the timing of its distributions, and the
diversification of its assets, the Fund will not be subject to
Federal income tax on its net income (including net short-term and
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long-term capital gains) which is distributed to shareholders at
least annually in accordance with the timing requirements of the
Code.
The Fund will be subject to a 4% non-deductible Federal
excise tax on certain amounts not distributed (and not treated as
having been distributed) on a timely basis in accordance with
annual minimum distribution requirements. The Fund intends under
normal circumstances to avoid liability for such tax by satisfying
such distribution requirements.
Distributions from the Fund's current or accumulated earnings
and profits ("E&P"), as computed for Federal income tax purposes,
will be taxable as described in the Fund's Prospectus whether
taken in shares or in cash. Distributions, if any, in excess of
E&P will constitute a return of capital, which will first reduce
an investor's tax basis in Fund shares and thereafter (after such
basis is reduced to zero) will generally give rise to capital
gains. Shareholders electing to receive distributions in the form
of additional shares will have a cost basis for Federal income tax
purposes in each share so received equal to the amount of cash
they would have received had they elected to receive the
distributions in cash, divided by the number of shares received.
If the Fund acquires stock in certain non-U.S. corporations
that receive at least 75% of their annual gross income from
passive sources (such as interest, dividends, rents, royalties or
capital gain) or hold at least 50% of their assets in investments
producing such passive income ("passive foreign investment
companies"), the Fund could be subject to Federal income tax and
additional interest charges on "excess distributions" received
from such companies or gain from the sale of stock in such
companies, even if all income or gain actually received by the
Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or
deduction for such a tax. Certain elections may, if available,
ameliorate these adverse tax consequences, but any such election
would require the Fund to recognize taxable income or gain without
the concurrent receipt of cash. The Fund may limit and/or manage
its holdings in passive foreign investment companies to minimize
its tax liability or maximize its return from these investments.
Foreign exchange gains and losses realized by the Fund in
connection with certain transactions involving foreign currency-
denominated debt securities, certain foreign currency options,
foreign currency forward contracts, foreign currencies, or
payables or receivables denominated in a foreign currency are
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subject to Section 988 of the Code, which generally causes such
gains and losses to be treated as ordinary income and losses and
may affect the amount, timing and character of distributions to
shareholders. Any such transactions that are not directly related
to the Fund's investment in stock or securities, possibly
including speculative currency positions or currency derivatives
not used for hedging purposes, may increase the amount of gain it
is deemed to recognize from the sale of certain investments held
for less than three months, which gain is limited under the Code
to less than 30% of its annual gross income, and could under
future Treasury regulations produce income not among the types of
"qualifying income" from which the Fund must derive at least 90%
of its annual gross income. If the net foreign exchange loss for
a year treated as ordinary loss under Section 988 were to exceed
the Fund's investment company taxable income computed without
regard to such loss after consideration of certain regulations on
the treatment of "post-October losses" (i.e., all of the Fund's
net income other than any excess of net long-term capital gain
over net short-term capital loss) the resulting overall ordinary
loss for such year would not be deductible by the Fund or its
shareholders in future years.
The Fund may be subject to withholding and other taxes
imposed by foreign countries with respect to its investments in
foreign securities. Tax conventions between certain countries and
the U.S. may reduce or eliminate such taxes. The Fund does not
expect to qualify to pass such taxes through to its shareholders,
who consequently will generally not take such taxes into account
on their own tax returns. However, the Fund generally may deduct
such taxes in computing its taxable income.
The amount of the Fund's net short-term and long-term capital
gains, if any, in any given year will vary depending upon the
Adviser's current investment strategy and whether the Adviser
believes it to be in the best interest of the Fund to dispose of
portfolio securities or enter into options transactions that will
generate capital gains. At the time of an investor's purchase of
Fund shares, a portion of the purchase price is often attributable
to realized or unrealized appreciation in the Fund's portfolio.
Consequently, subsequent distributions from such appreciation may
be taxable to such investor even if the net asset value of the
investor's shares is, as a result of the distributions, reduced
below the investor's cost for such shares, and the distributions
in reality represent a return of a portion of the purchase price.
Upon a redemption of shares of the Fund (including by
exercise of the exchange privilege) a shareholder may realize a
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taxable gain or loss depending upon his basis in his shares. Such
gain or loss will be treated as capital gain or loss if the shares
are capital assets in the shareholder's hands and will be long-
term or short-term, depending upon the shareholder's tax holding
period for the shares. A sales charge paid in purchasing Class A
shares of the Fund cannot be taken into account for purposes of
determining gain or loss on the redemption or exchange of such
shares within 90 days after their purchase to the extent shares of
the Fund or another John Hancock Fund are subsequently acquired
without payment of a sales charge pursuant to the reinvestment or
exchange privilege. Such disregarded load will result in an
increase in the shareholder's tax basis in the shares subsequently
acquired. Also, any loss realized on a redemption or exchange may
be disallowed to the extent the shares disposed of are replaced
with other shares of the Fund within a period of 61 days beginning
30 days before and ending 30 days after the shares are disposed
of, such as pursuant to an election to reinvest dividends in
additional shares. In such a case, the basis of the shares
acquired will be adjusted to reflect the disallowed loss. Any
loss realized upon the redemption of shares with a tax holding
period of six months or less will be treated as a long-term
capital loss to the extent of any amounts treated as distributions
of long-term capital gain with respect to such shares.
Although its present intention is to distribute all net
short-term and long-term capital gains, if any, the Fund reserves
the right to retain and reinvest all or any portion of its "net
capital gain," which is the excess, as computed for Federal income
tax purposes, of net long-term capital gain over net short-term
capital loss in any year. The Fund will not in any event
distribute net capital gain realized in any year to the extent
that a capital loss is carried forward from prior years against
such gain. To the extent such excess was retained and not
exhausted by the carryforward of prior years' capital losses, it
would be subject to Federal income tax in the hands of the Fund.
Each shareholder would be treated for Federal income tax purposes
as if the Fund had distributed to him on the last day of its
taxable year his pro rata share of such excess, and he had paid
his pro rata share of the taxes paid by the Fund and reinvested
the remainder in the Fund. Accordingly, each shareholder would
(a) include his pro rata share of such excess as long-term capital
gain income in his return for his taxable year in which the last
day of the Fund's taxable year falls, (b) be entitled either to a
tax credit on his return for, or to a refund of, his pro rata
share of the taxes paid by the Fund, and (c) be entitled to
increase the adjusted tax basis for his shares in the Fund by the
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difference between his pro rata share of such excess and his pro
rata share of such taxes.
For Federal income tax purposes, the Fund is permitted to
carry forward a net capital loss in any year to offset its net
capital gains, if any, during the eight years following the year
of the loss. To the extent subsequent net capital gains are
offset by such losses, they would not result in Federal income tax
liability to the Fund and, as noted above, would not be
distributed as such to shareholders. At August 31, 1994, the Fund
has a realized capital loss carryforward of $1,383,057 which will
expire as follows: $568,953 in 1995; $762,661 in 1996; and
$51,423 in 1998.
For purposes of the dividends received deduction available to
corporations, dividends received by the Fund, if any, from U.S.
domestic corporations in respect of the stock of such corporations
held by the Fund, for U.S. Federal income tax purposes, for at
least 46 days (91 days in the case of certain preferred stock) and
distributed and designated by the Fund may be treated as
qualifying dividends. Corporate shareholders must meet the
minimum holding period requirement stated above (46 or 91 days)
with respect to their shares of the Fund in order to qualify for
the deduction and, if they borrow to acquire such shares, may be
denied a portion of the dividends received deduction. The entire
qualifying dividend, including the otherwise deductible amount,
will be included in determining the excess (if any) of a corporate
shareholder's adjusted current earnings over its alternative
minimum taxable income, which may increase its alternative minimum
tax liability. Additionally, any corporate shareholder should
consult its tax adviser regarding the possibility that its basis
in its shares may be reduced, for Federal income tax purposes, by
reason of "extraordinary dividends" received with respect to the
shares, for the purpose of computing its gain or loss on
redemption or other disposition of the shares.
If the Fund invests in zero coupon securities or, in general,
any other securities with original issue discount (or with market
discount if the Fund elects to include accrued market discount in
income currently), the Fund must accrue income on such investments
prior to the receipt of the corresponding cash payments. However,
the Fund must distribute, at least annually, all or substantially
all of its net income, including such accrued income, to
shareholders to qualify as a regulated investment company under
the Code and avoid Federal income and excise taxes. Therefore,
the Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to
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<PAGE> 79
leverage itself by borrowing the cash, to satisfy distribution
requirements.
Different tax treatment, including penalties on certain
excess contributions and deferrals, certain pre-retirement and
post-retirement distributions and certain prohibited transactions,
is accorded to accounts maintained as qualified retirement plans.
Shareholders should consult their tax advisers for more
information.
Limitations imposed by the Code on regulated investment
companies like the Fund may restrict the Fund's ability to enter
into options and forward transactions.
Certain options and forward foreign currency transactions
undertaken by the Fund may cause the Fund to recognize gains or
losses from marking to market even though its positions have not
been sold or terminated and affect the character as long-term or
short-term (or, in the case of certain currency-related forward
contracts or options, as ordinary income or loss) and timing of
some capital gains and losses realized by the Fund. Also, certain
of the Fund's losses on its transactions involving options or
forward contracts and/or offsetting portfolio positions may be
deferred rather than being taken into account currently in
calculating the Fund's taxable income or gains. These
transactions may therefore affect the amount, timing and character
of the Fund's distributions to shareholders. Certain of the
applicable tax rules may be modified if the Fund is eligible and
chooses to make one or more of certain tax elections that may be
available. The Fund will take into account the special tax rules
(including consideration of available elections) applicable to
options and forward contracts in order to minimize any potential
adverse tax consequences.
The foregoing discussion relates solely to U.S. Federal
income tax law as applicable to U.S. persons (i.e., U.S. citizens
or residents and U.S. domestic corporations, partnerships, trusts
or estates) subject to tax under such law. The discussion does
not address special tax rules applicable to certain classes of
investors, such as tax-exempt entities, insurance companies, and
financial institutions. Dividends, capital gain distributions,
and ownership of or gains realized on the redemption (including an
exchange) of Fund shares may also be subject to state and local
taxes. Shareholders should consult their own tax advisers as to
the Federal, state or local tax consequences of ownership of
shares of, and receipt of distributions from, the Fund in their
particular circumstances.
-44-
<PAGE> 80
Non-U.S. investors not engaged in a U.S. trade or business
with which their investment in the Fund is effectively connected
will be subject to U.S. Federal income tax treatment that is
different from that described above. These investors may be
subject to nonresident alien withholding tax at the rate of 30%
(or a lower rate under an applicable tax treaty) on amounts
treated as ordinary dividends from the Fund and, unless an
effective IRS Form W-8 or authorized substitute is on file, to 31%
backup withholding on certain other payments from the Fund. Non-
U.S. investors should consult their tax advisers regarding such
treatment and the application of foreign taxes to an investment in
the Fund.
The Fund is not subject to Massachusetts corporate excise or
franchise taxes. Provided that the Fund qualifies as a regulated
investment company under the Code, it will also not be required to
pay any Massachusetts income tax.
CALCULATION OF PERFORMANCE
For the 30-day period ended February 28, 1995, the annualized
yields of the Fund's Class A shares and Class B shares were 1.89%
and 1.27%, respectively. As of February 28, 1995, the average
annual total returns of the Class A shares of the Fund for the
one, five and ten year periods were (6.83)%, 2.08% and 9.75%,
respectively. As of February 28, 1995, the average annual returns
for the Fund's Class B shares for the one year period and since
inception on August 22, 1991 were (6.90)% and 5.27%, respectively.
The Fund's yield is computed by dividing net investment
income per share determined for a 30-day period by the maximum
offering price per share (which includes the full sales charge) on
the last day of the period, according to the following standard
formula:
Yield = 2 [ (a-b + 1 )6 -1]
---
cd
Where:
a= dividends and interest earned during the period.
b= net expenses accrued during the period.
c= the average daily number of fund shares outstanding
during the period that would be entitled to receive
dividends.
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<PAGE> 81
d= the maximum offering price per share on the last day of
the period (NAV where applicable).
The Fund's total return is computed by finding the average
annual compounded rate of return over the 1-year, 5-year, and 10-
year periods that would equate the initial amount invested to the
ending redeemable value according to the following formula:
P(1+T)n = ERV
Where:
P= a hypothetical initial investment of $1,000.
T= average annual total return
n= number of years
ERV= ending redeemable value of a hypothetical $1,000
investment made at the beginning of the designated
periods or fraction thereof.
In the case of Class A shares or Class B shares, this
calculation assumes the maximum sales charge is included in the
initial investment or the CDSC is applied at the end of the
period. This calculation also assumes that all dividends and
distributions are reinvested at net asset value on the
reinvestment dates during the period. The "distribution rate" is
determined by annualizing the result of dividing the declared
dividends of the Fund during the period stated by the maximum
offering price or net asset value at the end of the period.
In addition to average annual total returns, the Fund may
quote unaveraged or cumulative total returns reflecting the simple
change in value of an investment over a stated period. Cumulative
total returns may be quoted as a percentage or as a dollar amount,
and may be calculated for a single investment, a series of
investments, and/or a series of redemptions, over any time period.
Total returns may be quoted with or without taking the Fund's
maximum sales charge on Class A shares or the CDSC on Class B
shares into account. Excluding the Fund's sales charge on Class A
shares and the CDSC on Class B shares from a total return
calculation produces a higher total return figure.
From time to time, in reports and promotional literature, the
Fund's yield and total return will be compared to indices of
mutual funds and bank deposit vehicles such as Lipper Analytical
-46-
<PAGE> 82
Services, Inc.'s "Lipper -- Fixed Income Fund Performance
Analysis," a monthly publication which tracks net assets, total
return, and yield on approximately 1,700 fixed income mutual funds
in the United States. Ibottson and Associates, CDA Weisenberger
and F.C. Towers are also used for comparison purposes, as well a
the Russell and Wilshire Indices.
Performance rankings and ratings reported periodically in
national financial publications such as MONEY Magazine, FORBES,
BUSINESS WEEK, THE WALL STREET JOURNAL, MICROPAL, INC.,
MORNINGSTAR, STANGER'S and BARRON'S, etc. will also be utilized.
The Fund's promotional and sales literature may make reference to
the Fund's "beta." Beta is a reflection of the market-related
risk of the Fund by showing how responsive the Fund is to the
market.
The performance of the Fund is not fixed or guaranteed.
Performance quotations should not be considered to be
representations of performance of the Fund for any period in the
future. The performance of the Fund is a function of many factors
including its earnings, expenses and number of outstanding shares.
Fluctuating market conditions; purchases, sales and maturities of
portfolio securities; sales and redemptions of shares of
beneficial interest; and changes in operating expenses are all
examples of items that can increase or decrease the Fund's
performance.
Additional Performance Information. The Fund may use
comparative performance information from certain industry research
materials and/or published in various periodicals. The
characteristics of the investments in such comparisons may be
different from those investments of the Fund's portfolio. In
addition, the formula used to calculate the performance statistics
of such investments may not be identical to the formula used by
the Fund to calculate its performance figures. From time to time,
advertisements or information for the Fund may include a
discussion of certain attributes or benefits to be derived by an
investment in the Fund. Such advertisements or information may
include symbols, headlines or other material which highlight or
summarize the information discussed in more detail in the
communication.
The following publications, indexes, averages and investments
which may be used in advertisements or information concerning the
Fund for dissemination to investors or shareholders, include, but
are not limited, to:
-47-
<PAGE> 83
a) Dow Jones Composite Average or its component averages -
an unmanaged index composed of 30 blue-chip industrial
corporation stocks (Dow Jones Industrial Average), 15
utilities company stocks (Dow Jones Utilities Average), and
20 transportation company stocks. Comparisons of performance
assume reinvestment of dividends.
b) Standard & Poor's 500 Stock Index or its component
indices - an unmanaged index composed of 400 industrial
stocks, 40 financial stocks, 40 utilities stocks, and 20
transportation stocks. Comparisons of performance assume
reinvestment of dividends.
c) The New York Stock Exchange composite or component
indices - unmanaged indices of all industrial, utilities,
transportation, and finance stocks listed on the New York
Stock Exchange.
d) Wilshire 5000 Equity Index - represents the return on
the market value of all common equity securities of which
daily pricing is available. Comparisons of performance
assume reinvestment of dividends.
e) Lipper - Mutual Fund Performance Analysis, Lipper -
Fixed Income Analysis, and Lipper Mutual Fund indices -
measure total return and average current yield for the mutual
fund industry. Ranks individual mutual fund performance over
specified time periods assuming reinvestment of all
distributions, exclusive of any applicable sales charges.
f) CDA Mutual Fund Report, published by CDA Investment
Technologies, Inc. - analyzes price, current yield, risk,
total return, and average rate of return (average annual
compounded growth rate) over specified time periods for the
mutual fund industry.
g) Mutual Fund Source Book and other similar rating
publications by Morningstar, Inc. - independent performance
monitor of equity and fixed income mutual funds. Morningstar
ratings (ranging from one star for lowest and five stars for
highest) are based on analysis of a fund's ratio, i.e., price
yield, risk (volatility) and total return, including all
loads and fees, compared with similar funds for three-, five-
and ten-year periods.
h) Financial publications: Barrons, Business Week,
Personal Finance, Financial World, Forbes, Fortune, "The Wall
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<PAGE> 84
Street Journal", "New York Times", Weisenberger Investment
Companies Service, Institutional Investor, and Money - rate
fund performance over specified time periods and provide
other relative performance or industry information.
i) Consumer Price Index (or Cost of Living Index),
published by the U. S. Bureau of Labor Statistics - a
statistical measure of change, over time, in the price of
goods and services in major expenditure groups.
j) Stocks, Bonds, Bills, and Inflation, published by
Ibbotson Associates - historical measure of yield, price, and
total return for common and small company stock, long-term
government bonds, Treasury bills, and inflation.
k) Savings and Loan Historical Interest Rates - as
published in the U. S. Savings & Loan League Fact Book.
l) Salomon Brothers Broad Bond Index or its component
indices - The Broad Index measures yield, price and total
return for Treasury, Agency, Corporate, and Mortgage bonds.
m) Salomon Brothers Composite High Yield Index or its
component indices - The High Yield Index measures yield,
price and total return for Long-Term High-Yield Index,
Intermediate-Term High-Yield Index and Long-Term Utility
High-Yield Index.
n) Shearson Lehman Brothers Aggregate Bond index or its
component indices (including Municipal Bond Index) - The
Aggregate Bond Index measures yield, price and total return
for Treasury, Agency, Corporate, Mortgage, and Yankee bonds.
o) Standard & Poor's Bond Indices - measure yield and price
of Corporate, Municipal, and government bonds.
p) Other taxable investments, including certificates of
deposit (CDs), money market deposit accounts (MMDAs),
checking accounts, savings accounts, money market mutual
funds, and repurchase agreements.
q) Historical data supplied by the research departments of
Shearson Lehman Hutton, First Boston Corporation, Morgan
Stanley, Salomon Brothers, Merrill Lynch, and Donaldson
Lufkin and Jenrette.
-49-
<PAGE> 85
r) Donoghues's Money Fund Report - industry averages for
7-day annualized and compounded yields of taxable, tax-free
and government money funds.
s) Russell 2000 (small capitalization stock index), Bond
Buyer 25 Revenue Bond Index and other indices as may from
time to time become available.
t) The Value Line Mutual Fund Survey, published by Value
Line, assigns rankings of 1 (best) to 5 (worst) in terms of
risk adjusted performance covering more than 2,000 equity and
fixed income mutual funds.
From time to time, in reports and promotional literature, the
Fund's performance will be compared to other mutual funds and
investment vehicles such as F.C. Towers.
In addition, advertisements and sales materials may, from
time to time, contain hypothetical performance examples for
purposes of illustrating reinvestment (or "compounding") of
dividends at fixed rates of return or tax advantages to be derived
from deferring payment of federal (and state) income taxes (at
maximum rates) as compared to taxable investments assuming fixed
rates of return. Illustrations may also include (1) hypothetical
investments in various retirement plans, such as IRAs, made by
investors of various ages or (2) comparisons to retirement plans
funded by annuity or bank products.
In assessing such comparisons, an investor should consider
the following factors:
a) It is generally either not possible or not practicable
to invest in an average or index of certain investments.
b) Certificates of deposit issued by banks and other
depository institutions represent an alternative income
producing product. Certificates of deposit may offer fixed
or variable interest rates and principal is guaranteed and
may be insured. Withdrawal of deposits prior to maturity
will normally be subject to a penalty. Rates offered by
banks and other depository institutions are subject to change
at any time specified by the issuing institution.
The Fund may from time to time advertise its comparative
performance as measured or refer to results published by various
periodicals including, but not limited to, Lipper Analytical
Services, Inc. Barron's, "The Wall Street Journal", "New York
-50-
<PAGE> 86
Times", Weisenberger Investment Companies Service, Donoghue's
Money Fund Report, Stanger's Investment Advisor, Financial
Planning, Money, Fortune, Personal Finance, Muni Week,
Institutional Investor, Business Week, Financial World and Forbes.
In addition, the Fund may from time to time advertise its
performance relative to certain indexes and benchmark investments,
including: (a) the Shearson Lehman Municipal Bond Index, (b) Bond
Buyer 25 Review Bond Index, (c) the Consumer Price Index, and
(d) taxable investments such as certificates of deposit, money
market deposit accounts, checking accounts, savings accounts, and
money market mutual funds.
The composition of the investments in such indexes and the
characteristics of such benchmark investments are not identical
to, and in some cases are very different from, those of the Fund's
portfolio. These indexes and averages are generally unmanaged and
the items included in the calculations of such indexes and
averages may not be identical to the formulas used by the Fund to
calculate its performance figures.
BROKERAGE ALLOCATION
Decisions concerning the purchase and sale of portfolio
securities and the allocation of brokerage commissions are made by
the Adviser and officers of the Fund pursuant to recommendations
made by its investment committee, which consists of officers and
directors of the Adviser and affiliates and officers and Trustees
who are interested persons of the Fund. Orders for purchases and
sales of securities are placed in a manner which, in the opinion
of the Adviser, will offer the best price and market for the
execution of each such transaction. Purchases from underwriters
of portfolio securities may include a commission or commissions
paid by the issuer and transactions with dealers serving as market
makers reflect a "spread." Investments in debt securities are
generally traded on a net basis through dealers acting for their
own account as principals and not as brokers; no brokerage
commissions are payable on such transactions.
The Fund's primary policy is to execute all purchases and
sales of portfolio instruments at the most favorable prices
consistent with best execution, considering all of the costs of
the transaction including brokerage commissions. This policy
governs the selection of brokers and dealers and the market in
which a transaction is executed. Consistent with the foregoing
primary policy, the Rules of Fair Practice of the NASD and other
policies that the Trustees may determine, the Adviser may consider
-51-
<PAGE> 87
sales of shares of the Fund as a factor in the selection of
broker-dealers to execute the Fund's portfolio transactions.
To the extent consistent with the foregoing, the Fund will be
governed in the selection of brokers and dealers, and the
negotiation of brokerage commission rates and dealer spreads, by
the reliability and quality of the services, including primarily
the availability and value of research information and to a lesser
extent statistical assistance furnished to the Adviser of the
Fund, and their value and expected contribution to the performance
of the Fund. It is not possible to place a dollar value on
information and services to be received from brokers and dealers,
since it is only supplementary to the research efforts of the
Adviser. The receipt of research information is not expected to
reduce significantly the expenses of the Adviser. The research
information and statistical assistance furnished by brokers and
dealers may benefit the Life Company or other advisory clients of
the Adviser, and conversely, brokerage commissions and spreads
paid by other advisory clients of the Adviser may result in
research information and statistical assistance beneficial to the
Fund. The Fund will make no commitments to allocate portfolio
transactions upon any prescribed basis. While the Fund's officers
will be primarily responsible for the allocation of the Fund's
brokerage business, their policies and practices in this regard
must be consistent with the foregoing and will at all times be
subject to review by the Trustees. For the fiscal years ended
August 31, 1994, 1993 and 1992, the aggregate dollar amount of
brokerage commissions paid were $373,133, $369,686 and $1,409,315,
respectively.
As permitted by Section 28(e) of the Securities Exchange Act
of 1934, the Fund may pay to a broker which provides brokerage and
research services to the Fund an amount of disclosed commission in
excess of the commission which another broker would have charged
for effecting that transaction. This practice is subject to a
good faith determination by the Trustees that the price is
reasonable in light of the services provided and to policies that
the Trustees may adopt from time to time. During the fiscal year
ended August 31, 1994, the Fund did not pay commissions as
compensation to any brokers for research services such as
industry, economic and company reviews and evaluations of
securities.
The Adviser's indirect parent, the Life Company, is the
indirect sole shareholder of John Hancock Freedom Securities
Corporation and its subsidiaries, three of which, Tucker Anthony
Incorporated ("Tucker Anthony") John Hancock Distributors, Inc.
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<PAGE> 88
("John Hancock Distributors") and Sutro & Company, Inc. ("Sutro"),
are broker-dealers ("Affiliated Brokers"). Pursuant to procedures
determined by the Trustees and consistent with the above policy of
obtaining best net results, the Fund may execute portfolio
transactions with or through Tucker Anthony, Sutro or John Hancock
Distributors. During the year ended August 31, 1994, the Fund did
not execute any portfolio transactions with then affiliated
brokers.
Any of the Affiliated Brokers may act as broker for the Fund
on exchange transactions, subject, however, to the general policy
of the Fund set forth above and the procedures adopted by the
Trustees pursuant to the 1940 Act. Commissions paid to an
Affiliated Broker must be at least as favorable as those which the
Trustees believe to be contemporaneously charged by other brokers
in connection with comparable transactions involving similar
securities being purchased or sold. A transaction would not be
placed with an Affiliated Broker if the Fund would have to pay a
commission rate less favorable than the Affiliated Broker's
contemporaneous charges for comparable transactions for its other
most favored, but unaffiliated, customers, except for accounts for
which the Affiliated Broker acts as a clearing broker for another
brokerage firm, and any customers of the Affiliated Broker not
comparable to the Fund as determined by a majority of the Trustees
who are not interested persons (as defined in the 1940 Act) of the
Fund, the Adviser or the Affiliated Brokers. Because the Adviser,
which is affiliated with the Affiliated Brokers, has, as an
investment adviser to the Fund, the obligation to provide
investment management services, which includes elements of
research and related investment skills, such research and related
skills will not be used by the Affiliated Brokers as a basis for
negotiating commissions at a rate higher than that determined in
accordance with the above criteria. The Fund will not effect
principal transactions with Affiliated Brokers. The Fund may,
however, purchase securities from other members of underwriting
syndicates of which Tucker Anthony, Sutro and John Hancock
Distributors are members, but only in accordance with the policy
set forth above and procedures adopted and reviewed periodically
by the Trustees.
The Fund's portfolio turnover rates for the fiscal years
ended August 31, 1993 and 1994 were 107% and 195%, respectively.
The Fund's relatively high portfolio turnover rate was due to
changes in asset allocation between U.S. Treasury securities cash
equivalents and GNMA certificates. These changes reflected the
portfolio managers' changing assessment of market conditions and
expectations in interest rate movements.
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<PAGE> 89
TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation, P.O. Box 9116,
Boston, MA 02205-9116, a wholly owned indirect subsidiary of the
Life Company, is the transfer and dividend paying agent for the
Fund. The Fund pays Investor Services an annual fee of $16.00 per
account for the Class A Shares and $18.50 per account for the
Class B Shares, plus out-of-pocket expenses.
CUSTODY OF PORTFOLIO
Portfolio securities of the Fund are held pursuant to a
custodian agreement between the Fund and Investors Bank & Trust
Company ("IBT"), 24 Federal Street, Boston, Massachusetts. Under
the custodian agreement, IBT performs custody, portfolio and fund
accounting services.
INDEPENDENT AUDITORS
Ernst & Young LLP, 200 Clarendon Street, Boston,
Massachusetts 02116, has been selected as the independent auditors
of the Fund. The financial statements of the Fund included in the
Prospectus and this Statement of Additional Information have been
audited by Ernst & Young LLP for the periods indicated in their
report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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<PAGE> 90
APPENDIX A
Description of Bond Ratings
The ratings of Moody's Investors Service, Inc. and Standard &
Poor's Ratings Group represent their opinions as to the quality of
various debt instruments they undertake to rate. It should be
emphasized that ratings are not absolute standards of quality.
Consequently, debt instruments with the same maturity, coupon and
rating may have different yields while debt instruments of the
same maturity and coupon with different ratings may have the same
yield.
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa: Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as large
as in Aaa securities or fluctuations of protective elements may be
of greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present which suggest
a susceptibility to impairment at some time in the future.
Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate
for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of
time. Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be
A-1
<PAGE> 91
very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack the characteristics of
desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any
long period of time may be small.
STANDARD & POOR'S RATINGS GROUP
AAA: Debt rated AAA has the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely
strong.
AA: Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in
small degree.
A: Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
debt in higher rated categories.
BBB: Debt rated BBB is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
BB, B: Debt rated BB, and B is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the
obligation. BB indicates the lowest degree of speculation and CC
the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.
A-2
<PAGE> 92
FINANCIAL STATEMENTS
F-1
<PAGE> 93
STATEMENT OF NET ASSETS
August 31, 1994
<TABLE>
<CAPTION>
COMPANY / ISSUER SHARES VALUE
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 95.80%
- ----------------------
CONSUMER CYCLICALS - 6.34%
Daimler-Benz Aktieng ADS .......... 70,000 $ 3,710,000
Federated Department
Stores Inc.* .................... 150,000 3,168,750
Louisiana-Pacific Corp. ........... 100,000 3,550,000
Penney (J.C.) Co., Inc. ........... 85,000 4,473,125
-----------
14,901,875
CONSUMER GOODS &
SERVICES - 18.82%
Avery Dennison Corp. .............. 75,000 2,587,500
CPC International Inc. ............ 70,000 3,745,000
Clorox Co. ........................ 75,000 3,909,375
Coca-Cola Co. ..................... 97,300 4,475,800
Colgate-Palmolive Co. ............. 62,500 3,578,125
Eastman Kodak Co. ................. 130,000 6,467,500
Heinz (H.J.) Co. .................. 100,000 3,662,500
McDonald's Corp. .................. 153,000 4,322,250
Pet Inc. .......................... 100,000 2,025,000
Philip Morris Cos., Inc. .......... 55,000 3,355,000
Strum Ruger & Co., Inc. ........... 90,800 2,383,500
WMX Technologies, Inc. ............ 125,000 3,750,000
-----------
44,261,550
ENERGY - 14.88%
Atlantic Richfield Co. ............ 25,000 2,678,125
DuPont (E.I.) de Nemours
& Co. ........................... 77,000 4,658,500
Energy Services Inc.* ............. 111,500 1,700,375
Exxon Corp. ....................... 50,000 2,975,000
Murphy Oil Corp. .................. 25,000 1,184,375
Oryx Energy Co. ................... 150,000 2,156,250
Pennzoil Co. ...................... 60,000 3,075,000
Schlumberger Ltd .................. 50,000 2,850,000
Sonat, Inc. ....................... 146,000 4,453,000
Transco Energy Co. ................ 300,000 4,575,000
Williams Cos., Inc. (The) ......... 150,900 4,696,762
-----------
35,002,387
FINANCIAL SERVICES - 12.70% .......
Alexander & Alexander
Services, Inc. .................. 140,000 2,870,000
Banc One Corp. .................... 130,000 4,517,500
Hibernia Corp. Class A ............ 550,000 4,537,500
Midlantic Corp. ................... 150,000 4,518,750
Morgan (J.P.) & Co., Inc. ......... 80,000 5,270,000
Riggs National Corp.* ............. 130,000 1,397,500
Student Loan
Marketing Assoc ................. 60,000 2,310,000
Travelers Inc. .................... 120,000 4,440,000
-----------
29,861,250
HEALTH CARE - 4.10%
Pfizer Inc. ....................... 80,000 5,460,000
Schering-Plough Corp. ............. 60,000 4,192,500
-----------
9,652,500
INDUSTRIALS - 18.17% ..............
AK Steel Holding Corp.* ........... 100,000 3,150,000
AlliedSignal Inc. ................. 118,000 4,410,250
American President
Cos., Ltd ....................... 100,000 2,637,500
Cooper Industries, Inc. ........... 100,000 3,962,500
Eastman Chemical Co. .............. 50,000 2,637,500
Federal Paper Board
Co., Inc. ....................... 150,000 4,556,250
TRW Inc. .......................... 79,400 5,955,000
Temple-Inland Inc. ................ 50,000 2,818,750
Union Carbide Corp. ............... 200,000 6,875,000
United Technologies Corp. ......... 90,000 5,726,250
-----------
42,729,000
MEDIA & LEISURE - 5.93% ...........
Blockbuster
Entertainment Corp. ............. 50,000 1,293,750
CBS Inc. .......................... 10,000 3,213,750
Disney (Walt) Co. ................. 100,000 4,112,500
Time Warner Inc. .................. 140,000 5,337,500
===========
13,957,500
</TABLE>
8
<PAGE> 94
STATEMENT OF NET ASSETS
Continued
<TABLE>
<CAPTION>
COMPANY / ISSUER SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY-RELATED - 13.11%
Alliant Techsystems, Inc.* ................ 50,000 1,593,750
American Telephone &
Telegraph Co. ........................... 78,000 4,270,500
Compaq Computer Corp.* .................... 141,000 5,269,875
Hewlett-Packard Co. ....................... 56,000 5,033,000
Northrop Grumman Corp. .................... 195,000 8,775,000
Rohr, Inc.* ............................... 150,000 1,556,250
Unisys Corp.* ............................. 440,000 4,345,000
------------
30,843,375
TRANSPORTATION - 1.75%
Southwest Airlines Co. .................... 155,000 4,107,500
------------
TOTAL COMMON STOCKS
(Cost $209,974,915) ....................... 225,316,937
CONVERTIBLE PREFERRED
STOCK - 2.98%
CONSUMER GOODS &
SERVICES - 2.98%
RJR Nabisco Holdings
Corp. (A)
(Cost $6,575,356) ......................... 1,000,000 7,000,000
</TABLE>
<TABLE>
<CAPTION>
FACE
ISSUER AMOUNT VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE
DEBT - 1.27%
CONSUMER CYCLICALS - 1.27%
Home Depot Inc.
4.500% due 02/15/97
(Cost $2,664,295) ......................... $2,500,000 2,975,000
------------
TOTAL INVESTMENTS - 100.05%
(Cost $219,214,566) ....................... 235,291,937
CASH AND OTHER ASSETS,
LESS LIABILITIES - (0.05)% (106,584)
------------
NET ASSETS, at value,
equivalent to $11.42 per
share for 10,608,098 Class
A Shares ($.01 par value)
outstanding and $11.44 per
share for 9,965,870 Class
B Shares ($.01 par value)
outstanding - 100.00% ................... $235,185,353
============
</TABLE>
(A) RJR Nabisco Holdings Corp. convertible preferred shares are depository
shares representing 1/10 share of RJR Nabisco Holdings Corp. common stock
Class C.
* Non-income producing.
See Notes to Financial Statements.
9
<PAGE> 95
STATEMENT OF OPERATIONS/STATEMENTS OF CHANGES IN NET ASSETS
STATEMENT OF OPERATIONS
Year Ended August 31, 1994
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C>
Dividends (net of foreign
withholding taxes
of $77,810) .................... $ 7,486,676
Interest ......................... 1,242,012
-----------
8,728,688
EXPENSES
Management fees .................. $1,322,162
Distribution expenses
(see Note D) ................... 1,211,146
Transfer agent fees .............. 492,904
Administrative service fees ...... 153,060
Registration fees ................ 70,301
Custodian fees ................... 68,056
Audit and legal fees ............. 61,634
Shareholder reports .............. 34,597
Trustees' fees and expenses ...... 24,575
Miscellaneous .................... 41,401 3,479,836
---------- -----------
NET INVESTMENT INCOME .......... 5,248,852
REALIZED AND UNREALIZED
LOSS ON INVESTMENTS
Net realized loss on
investments .................... (4,108,702)
Net change in unrealized
appreciation of
investments .................... (6,227,126)
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS ............. (10,335,828)
------------
DECREASE IN NET ASSETS
resulting from
operations ..................... $ (5,086,976)
============
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-------------------------------
1994 1993
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income .................... $ 5,248,852 $ 4,577,315
Net realized gain (loss) on
investments ............................ (4,108,702) 341,208
Net change in unrealized
appreciation of
investments ............................ (6,227,126) 13,787,579
------------ ------------
Increase (decrease) in net
assets resulting from
operations ............................. (5,086,976) 18,706,102
DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income -
Class A ................................ (3,841,209) (3,426,101)
Class B ................................ (2,125,768) (1,053,981)
Net realized gain
on investments -
Class A ................................ -- (11,169,539)
Class B ................................ -- (4,323,297)
------------ ------------
Total distributions to
shareholders ........................... (5,966,977) (19,972,918)
SHARE TRANSACTIONS
Increase in shares
outstanding ............................ 38,856,750 62,548,141
Issuance of Fund shares
for net assets of
Transamerica Special
Blue Chip Fund (see
Note E) ................................ 26,592,756 --
------------ ------------
Total share transactions ................. 65,449,506 62,548,141
------------ ------------
Increase in net assets ................... 54,395,553 61,281,325
NET ASSETS
Beginning of year ........................ 180,789,800 119,508,475
------------ ------------
End of year .............................. $235,185,353 $180,789,800
============ ============
Undistributed Net
Investment Income ...................... $ 310,216 $ 894,920
============ ============
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 96
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
-------------------------------------------------- ---------------------------------------------
PERIOD FROM
YEAR ENDED AUGUST 31, YEAR ENDED AUGUST 31, AUGUST 22, 1991
-------------------------------------------------- ---------------------------- TO AUGUST 31,
1994(2) 1993(2) 1992(2) 1991 1990 1994(2) 1993(2) 1992(2) 1991(1)(2)
-------- --------- -------- ------ ------- -------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share income and
capital changes for a
share outstanding
during each period:
Net asset value,
beginning of period .... $ 12.08 $ 12.43 $ 11.77 $ 9.87 $ 10.19 $ 12.10 $ 12.44 $ 11.77 $11.52
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .... 0.32 0.40 0.32 0.20 0.20 0.24 0.30 0.23 0.00
Net realized and
unrealized gain (loss)
on investments ......... (0.61) 1.12 0.89 2.07 (0.18) (0.61) 1.12 0.89 0.25
-------- -------- ------- ------ ------- -------- ------- ------- ------
Total from Investment
Operations ........... (0.29) 1.52 1.21 2.27 0.02 (0.37) 1.42 1.12 0.25
LESS DISTRIBUTIONS
Dividends from net
investment income ...... (0.37) (0.42) (0.25) (0.19) (0.27) (0.29) (0.31) (0.15) --
Distributions from
realized gains ......... -- (1.45) (0.30) (0.18) (0.07) -- (1.45) (0.30) --
-------- -------- ------- ------ ------- -------- ------- ------- ------
Total Distributions .... (0.37) (1.87) (0.55) (0.37) (0.34) (0.29) (1.76) (0.45) 0.00
-------- -------- ------- ------ ------- -------- ------- ------- ------
Net asset value, end
of period .............. $ 11.42 12.08 12.43 11.77 9.87 11.44 12.10 12.44 11.77
======== ======== ======= ====== ======= ======== ======= ======= ======
TOTAL RETURN(3) .......... (2.39)% 13.64% 10.47% 23.80% 0.18% (3.11)% 12.64% 9.67% 2.17%
======== ======== ======= ====== ======= ======== ======= ======= ======
RATIOS AND
SUPPLEMENTAL DATA
Ratio of expenses to
average net assets ..... 1.31% 1.29% 1.34% 1.38% 1.29% 2.06% 2.19% 2.07% 0.06%
Ratio of net investment
income to average
net assets ............. 2.82% 3.43% 2.75% 1.90% 1.96% 2.07% 2.53% 2.02% 0.04%
Portfolio turnover ....... 195% 107% 119% 70% 69% 195% 107% 119% 70%
Net Assets, end of
period (in thousands)... $121,160 $115,780 $89,682 $77,461 $63,150 $114,025 $65,010 $29,826 $7,690
</TABLE>
(1) Financial highlights, including total return, have not been annualized.
Portfolio turnover is for the year ended August 31, 1991.
(2) Per share information has been calculated using the average number of shares
outstanding.
(3) Total return does not include the effect of the initial sales charge for
Class A Shares nor the contingent deferred sales charge for Class B Shares.
See Notes to Financial Statements.
11
<PAGE> 97
NOTES TO FINANCIAL STATEMENTS
August 31, 1994
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
Transamerica Investment Trust (the "Trust") is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. Transamerica Growth and Income Fund (the "Fund") is the only
series of the Trust presently issuing shares. The Fund offers two classes of
shares to the public. Class A Shares are subject to an initial sales charge of
up to 5.75% and a 12b-1 distribution plan. Class B Shares are subject to a
contingent deferred sales charge and a separate 12b-1 distribution plan. The
following is a summary of significant accounting policies consistently followed
by the Fund.
(1) Securities traded on stock exchanges or in the over-the-counter market are
valued at the last sale price on the primary exchange or market on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the mean between the most recent closing
bid and asked prices. The Fund values its debt securities at quotations provided
by market makers. Securities for which market quotations are not readily
available are valued at a fair value as determined in good faith by the Trust's
Board of Trustees. Short-term investments are valued at amortized cost (original
cost plus amortized discount or accrued interest).
(2) Security transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income on investments is accrued
daily. For financial reporting purposes, the debt discounts or premiums
resulting from the purchase of debt securities by the Fund are amortized using
the straight-line method. Realized gains and losses from security transactions
are determined on the basis of identified cost for both financial reporting and
federal income tax purposes.
(3) Dividends and other distributions are recorded by the Fund on the
ex-dividend date and may be reinvested at net asset value.
Effective September 1, 1993, the Fund adopted Statement of Position 93-2,
"Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gains and Return of Capital Distributions by Investment Companies." As a
result of this statement, the Fund changed the classification of distributions
to shareholders to better disclose the differences between financial statement
amounts and distributions determined and reported in accordance with income tax
regulations. Accordingly, the Fund reclassified $133,421 and $144,700 to
undistributed net investment income and undistributed net realized losses,
respectively, from additional paid-in capital. Net investment income, net
realized losses and net assets were not affected by this change.
(4) On a daily basis, income, unrealized and realized gains and losses, and
expenses which are not class specific are allocated to each class based on their
respective relative net assets. Class specific expenses, such as distribution
expenses, are applied to the class to which they are attributed.
(5) No provision for federal income taxes has been made since it is the Fund's
intention to distribute all of its taxable income and profits to its
shareholders and to comply with the requirements applicable to regulated
investment companies and the minimum distribution requirements of the Internal
Revenue Code. At August 31, 1994, the Fund had a realized capital loss
carryforward of approximately $1,383,000 which will expire as follows: $569,000
- - 1995, $763,000 - 1996 and $51,000 - 1998. The amount of capital loss
carryforward utilized in any one year may be limited.
(6) The Fund reports custodian fees net of credits and charges resulting from
cash positions in the custodial accounts greater than or less than the amounts
required to settle portfolio transactions. For the year ended August 31, 1994,
these amounts were $5,977 and $6,637, respectively.
NOTE B - MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund's management fee is payable monthly to Transamerica Fund Management
Company (the "Investment Adviser"). The management fee is calculated on the
average daily net assets of the Fund at an annual rate of 0.625%. At August 31,
1994, the management fee payable to the Investment Adviser was $122,403.
The Investment Adviser provides administrative services to the Fund pursuant
to an administrative service agreement. During the year ended August 31, 1994,
the Fund paid or accrued $132,005 to the Investment Adviser for these services,
of which $22,436 was payable at August 31, 1994.
During the year ended August 31, 1994, Transamerica Fund Distributors, Inc.
(the "Distributor"), an affiliate of the Investment Adviser, as principal
underwriter, retained $56,079 as its portion of the commissions charged on sales
of Class A Shares of the Fund. At August 31, 1994, receivables from and payables
to the Distributor for Fund share transactions were $203,916 and $165,814,
respectively.
12
<PAGE> 98
NOTES TO FINANCIAL STATEMENTS
Continued
NOTE B (Continued)
The Fund paid no compensation directly to any officer. Certain officers and
a trustee of the Trust are affiliated with the Investment Adviser.
During the year ended August 31, 1994, the Fund paid legal fees of $12,010 to
Baker & Botts. A partner with Baker & Botts is an officer of the Trust.
NOTE C - COST, PURCHASES AND SALES OF INVESTMENT SECURITIES
During the year ended August 31, 1994, purchases and sales of securities,
other than short-term obligations, aggregated $463,404,900 and $382,498,613,
respectively. At August 31, 1994, receivables from and payables to brokers for
securities sold and purchased were $4,321,848 and $4,856,590,
respectively.
At August 31, 1994, the identified cost of total investments owned is the same
for both financial reporting and federal income tax purposes. At August 31,
1994, the gross unrealized appreciation and gross unrealized depreciation of
investments for federal income tax purposes were $18,406,279 and $2,328,908,
respectively.
NOTE D - PLAN OF DISTRIBUTION
Pursuant to Rule 12b-1 of the Investment Company Act of 1940, the Fund is
authorized under separate distribution plans to finance activities related to
the distribution of its Class A and Class B Shares (the "Class A Plan" and the
"Class B Plan," respectively). The distribution plans, together with the initial
sales charge on Class A Shares and the contingent deferred sales charge on Class
B Shares, comply with the regulations covering maximum sales charges assessed by
mutual funds distributed through securities dealers that are NASD members.
The Class A Plan and the Class B Plan permit each class to make payments to
the Distributor up to 0.25% annually of average daily net assets for certain
distribution costs such as service fees paid to dealers, production and
distribution of prospectuses to prospective investors, services provided to new
and existing shareholders and other distribution related activities. During the
year ended August 31, 1994, Class A and Class B made payments to the Distributor
of $301,437 or 0.25% and $227,427 or 0.25%, respectively, related to the above
activities.
The Class B Plan also permits Class B to reimburse the Distributor up to
0.75% annually of average daily net assets for costs related to compensation
paid to securities dealers, in place of an initial sales charge to investors, on
the sale of Class B Shares. These costs are based upon a commission payment
charge of 5% of the value of Class B Shares sold (excluding shares acquired
through reinvestment), reduced by the amount of contingent deferred sales
charges (CDSC) that have been received by the Distributor on redemptions of
Class B Shares. These costs also include a charge of interest (carrying charge)
at an annual rate of 1% over the prevailing prime rate to the extent cumulative
commission payment charges, plus any previous carrying charges, less CDSC
received by the Distributor, have not been paid in full by the Fund. For the
year ended August 31, 1994, Class B reimbursed the Distributor $682,282 or 0.75%
for such costs. For the year ended August 31, 1994, the Distributor received
$183,054 in CDSC. At August 31, 1994, the balance of unrecovered costs was
$4,187,781.
At August 31, 1994, Class A had $146,915 and Class B had $180,394 payable to
the Distributor pursuant to the above distribution plans.
NOTE E - ACQUISITION OF TRANSAMERICA SPECIAL BLUE CHIP FUND
On May 27, 1994, Transamerica Growth and Income Fund acquired all the net
assets of Transamerica Special Blue Chip Fund pursuant to a plan of
reorganization approved by Transamerica Special Blue Chip Fund shareholders on
May 20, 1994. This tax-free reorganization was accomplished by the issuance of
2,382,863 Class B Shares of Transamerica Growth and Income Fund (valued at
$26,592,756) for the 2,645,385 shares of Transamerica Special Blue Chip Fund
outstanding at May 27, 1994. Transamerica Special Blue Chip Fund's net assets at
that date of $26,592,756, including $2,005,978 of unrealized appreciation, were
combined with those of Transamerica Growth and Income Fund. The aggregate net
assets of Transamerica Growth and Income Fund and Transamerica Special Blue Chip
Fund immediately before the acquisition were $202,440,558 and $26,592,756,
respectively. The combined net assets immediately after the acquisition were
$229,033,314.
13
<PAGE> 99
NOTES TO FINANCIAL STATEMENTS
Continued
NOTE F - SHARE AND RELATED TRANSACTIONS
A summary of share transactions follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------------
1994(1) 1993
--------------------------- ---------------------------
SHARES DOLLARS SHARES DOLLARS
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold - Class A ............................................ 2,589,934 $30,320,622 2,180,684 $25,791,439
Shares sold - Class B ............................................ 4,698,506 55,098,942 3,731,171 44,199,544
Shares issued in reinvestment of distributions - Class A ......... 268,525 3,107,249 1,067,526 12,066,576
Shares issued in reinvestment of distributions - Class B ......... 152,463 1,763,746 439,526 4,976,190
Shares redeemed - Class A ........................................ (1,838,450) (21,316,096) (875,449) (10,256,415)
Shares redeemed - Class B ........................................ (2,642,211) (30,117,713) (1,194,145) (14,229,193)
---------- ----------- ---------- -----------
Net increase in shares outstanding ............................... 3,228,767 $38,856,750 5,349,313 $62,548,141
========== =========== ========== ===========
</TABLE>
(1) Share transactions for this period exclude the exchange of shares by the
shareholders of Transamerica Special Blue Chip Fund (see Note E).
The components of net assets at August 31, 1994, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Capital paid-in (unlimited number of shares authorized) ......................................................... $224,385,041
Undistributed net investment income ............................................................................. 310,216
Accumulated net realized loss on investments .................................................................... (5,587,275)
Unrealized appreciation of investments .......................................................................... 16,077,371
------------
NET ASSETS ...................................................................................................... $235,185,353
============
</TABLE>
14
<PAGE> 100
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
Transamerica Growth and Income Fund,
a series of Transamerica Investment Trust
We have audited the accompanying statement of net assets of Transamerica
Growth and Income Fund, a series of Transamerica Investment Trust, as of August
31, 1994, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1994, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Transamerica Growth and Income Fund, a series of Transamerica Investment Trust,
at August 31, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Houston, Texas
September 23, 1994
15
<PAGE> 101
[LOGO] ERNST & YOUNG LLP
- One Houston Center - Phone: 713 750 1500
Suite 2400 Fax: 713 750 1501
1221 McKinney Street
Houston, Texas 77010-2007
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Trustees
John Hancock Growth and Income Fund,
a series of John Hancock Investment Trust
We have audited the accompanying statement of net assets of John
Hancock Growth and Income Fund, formerly Transamerica Growth and Income
Fund, a series of John Hancock Investment Trust, formerly Transamerica
Investment Trust, as of August 31, 1994, and the related statement of
operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended, and the
financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 1994, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of John Hancock Growth and Income Fund, a series of
John Hancock Investment Trust at August 31, 1994, the results of its
operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial
highlights for each of the indicated periods, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
September 23, 1994
<PAGE> 102
Financial Statements
John Hancock Funds - Growth & Income Fund
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $198,261,831) ..................... $ 218,071,425
Convertible debt (cost - $3,226,875) .................... 3,062,500
Convertible preferred stocks (cost - $9,811,106) ........ 8,826,250
--------------
229,960,175
Dividends receivable .................................... 910,625
Receivable for investments sold ......................... 3,497,283
Receivable for shares sold .............................. 58,219
Miscellaneous assets .................................... 63,419
--------------
Total Assets ........................... 234,489,721
-----------------------------------------------------------
LIABILITIES:
Payable for investments purchased ......................... 3,367,385
Payable for shares repurchased ............................ 196,306
Overdraft of cash ......................................... 755,801
Dividend payable .......................................... 322
Payable to John Hancock Advisers, Inc. and
affiliates - Note B ..................................... 388,297
Accounts payable and accrued expenses ..................... 51,221
--------------
Total Liabilities ...................... 4,759,332
-----------------------------------------------------------
NET ASSETS:
Capital paid-in ........................................... 219,073,427
Accumulated net realized loss on investments .............. (8,892,965)
Net unrealized appreciation of investments ................ 18,660,363
Undistributed net investment income ....................... 889,564
--------------
Net Assets ............................. $ 229,730,389
===========================================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - unlimited number of shares
authorized with $0.01 per share par value, respectively)
Class A - $120,515,470/10,542,878 ......................... $ 11.43
===============================================================================
Class B - $109,214,919/9,534,999 .......................... $ 11.45
===============================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($11.43 x 106.10%) .............................. $ 12.13
===============================================================================
</TABLE>
*On single retail sales of less than $50,000. On sales of $50,000 or more and on
group sales the offering price is reduced.
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON FEBRUARY 28, 1995. YOU'LL
ALSO FIND THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER SHARE AS OF
THAT DATE.
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
STATEMENT OF OPERATIONS
Six months ended February 28, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends ................................................. $ 3,668,878
Interest .................................................. 113,436
------------
3,782,314
------------
Expenses:
Investment management fee - Note B ...................... 693,010
Distribution/service fee - Note B
Class A ................................................ 141,426
Class B ................................................ 505,225
Transfer agent fee ...................................... 293,672
Custodian fee ........................................... 63,078
Registration and filing fees ............................ 53,183
Administration fee ...................................... 49,105
Auditing fee ............................................ 45,145
Trustees' fees .......................................... 16,652
Legal fees .............................................. 10,568
Miscellaneous ........................................... 8,090
Printing ................................................ 5,182
Advisory board fee ...................................... 3,210
------------
Total Expenses ......................... 1,887,546
-----------------------------------------------------------
Net Investment Income .................. 1,894,768
-----------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized loss on investments sold ..................... (3,305,690)
Change in net unrealized appreciation/depreciation
of investments .......................................... 2,582,992
------------
Net Realized and Unrealized
Loss on Investments .................... (722,698)
-----------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations .............. $ 1,172,070
============================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 103
Financial Statements
John Hancock Funds - Growth & Income Fund
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1995 AUGUST 31,
(UNAUDITED) 1994
---------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ........................................... $ 1,894,768 $ 5,248,852
Net realized loss on investments sold ........................... (3,305,690) (4,108,702)
Change in net unrealized appreciation/depreciation of investments 2,582,992 (6,227,126)
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations 1,172,070 (5,086,976)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A - ($0.0842 and $0.3723 per share, respectively) ....... (889,784) (3,841,209)
Class B - ($0.0432 and $0.2857 per share, respectively) ....... (425,636) (2,125,768)
------------- -------------
Total Distributions to Shareholders .......................... (1,315,420) (5,966,977)
------------- -------------
FROM FUND SHARE TRANSACTIONS-- NET* .............................. (5,311,614) 65,449,506
------------- -------------
NET ASSETS:
Beginning of period ............................................. 235,185,353 180,789,800
------------- -------------
End of period (including undistributed net investment income of
$889,564 and $310,216, respectively) .......................... $ 229,730,389 $ 235,185,353
============= =============
</TABLE>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28, 1995 YEAR ENDED AUGUST 31,
(UNAUDITED) 1994
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold .................................................. 987,172 $ 10,927,632 2,589,934 $ 30,320,622
Shares issued to shareholders in reinvestment of distributions 67,621 736,393 268,525 3,107,249
----------- ------------- ----------- -------------
1,054,793 11,664,025 2,858,459 33,427,871
Less shares repurchased ...................................... (1,120,013) (12,282,484) (1,838,450) (21,316,096)
----------- ------------- ----------- -------------
Net increase (decrease) ...................................... (65,220) ($ 618,459) 1,020,009 $ 12,111,775
=========== ============= =========== =============
CLASS B
Shares sold .................................................. 989,824 $ 10,896,941 4,698,506 $ 55,098,942
Shares issued to shareholders in reinvestment of distributions 32,793 358,651 152,463 1,763,746
Fund shares issued for the net assets of Transamerica
Special Blue Chip Fund - Note D .............................. -- -- 2,382,863 26,592,756
----------- ------------- ----------- -------------
1,022,617 11,255,592 7,233,832 83,455,444
Less shares repurchased ...................................... (1,453,488) (15,948,747) (2,642,211) (30,117,713)
----------- ------------- ----------- -------------
Net increase (decrease) ...................................... (430,871) ($ 4,693,155) 4,591,621 $ 53,337,731
=========== ============= =========== =============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 104
Financial Statements
John Hancock Funds - Growth & Income Fund
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated: investment returns, key ratios and supplemental data are as
follows:
- --------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1995 -----------------------
(UNAUDITED) 1994 1993
-------------- -------- --------
<S> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 11.42 $ 12.08 $ 12.43
------- ------- -------
Net Investment Income .................................... 0.11 0.32(a) 0.40(a)
Net Realized and Unrealized Gain (Loss) on Investments ... (0.02) (0.61) 1.12
------- ------- -------
Total from Investment Operations ....................... 0.09 (0.29) 1.52
------- ------- -------
Less Distributions:
Dividends from Net Investment Income ................... (0.08) (0.37) (0.42)
Distributions from Net Realized Gain on Investments Sold -- -- (1.45)
------- ------- -------
Total Distributions ................................... (0.08) (0.37) (1.87)
------- ------- -------
Net Asset Value, End of Period ........................... $ 11.43 $ 11.42 $ 12.08
======= ======= =======
Total Investment Return at Net Asset Value ............... 0.86%(b) (2.39%) 13.64%
======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................ $120,515 $121,160 $115,780
Ratio of Expenses to Average Net Assets .................. 1.34%* 1.31% 1.29%
Ratio of Net Investment Income to Average Net Assets ..... 2.06%* 2.82% 3.43%
Portfolio Turnover Rate .................................. 53% 195% 107%
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-------------------------------------
1992 1991 1990
------- ------- ----------
<S> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ..................... $ 11.77 $ 9.87 $ 10.19
------- ------- --------
Net Investment Income .................................... 0.32(a) 0.20 0.20
Net Realized and Unrealized Gain (Loss) on Investments ... 0.89 2.07 (0.18)
------- ------- --------
Total from Investment Operations ....................... 1.21 2.27 0.02
------- ------- --------
Less Distributions:
Dividends from Net Investment Income ................... (0.25) (0.19) (0.27)
Distributions from Net Realized Gain on Investments Sold (0.30) (0.18) (0.07)
------- ------- --------
Total Distributions ................................... (0.55) (0.37) (0.34)
------- ------- --------
Net Asset Value, End of Period ........................... $ 12.43 $ 11.77 $ 9.87
======= ======= ========
Total Investment Return at Net Asset Value ............... 10.47% 23.80% O.18%
======= ======= ========
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................ $89,682 $77,461 $ 63,150
Ratio of Expenses to Average Net Assets .................. 1.34% 1.38% 1.29%
Ratio of Net Investment Income to Average Net Assets ..... 2.75% 1.90% 1.96%
Portfolio Turnover Rate .................................. 119% 70% 69%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 105
Financial Statements
John Hancock Funds - Growth & Income Fund
FINANCIAL HIGHLIGHTS (continued)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS ENDED AUGUST 22, 1991
FEBRUARY 28, 1995 YEAR ENDED AUGUST 31, TO AUGUST 31,
---------------------------
(UNAUDITED) 1994 1993 1992 1991
----------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period.................... $ 11.44 $ 12.10 $ 12.44 $ 11.77 $ 11.52
------- ------- ------- ------- -------
Net Investment Income................................... 0.07 0.24(a) 0.30(a) 0.23(a) ...
Net Realized and Unrealized Gain (Loss) on Investments.. ( 0.02) ( 0.61) 1.12 0.89 0.25
------- ------- ------- ------- -------
Total from Investment Operations...................... 0.05 ( 0.37) 1.42 1.12 0.25
------- ------- ------- ------- -------
Less Distributions
Dividends from Net Investment Income.................. ( 0.04) ( 0.29) (0.31) ( 0.15) ...
Distributions from Net Realized Gain
on Investments Sold................................. ... ... (1.45) ( 0.30) ...
------- ------- ------- ------- -------
Total Distributions.................................. ( 0.04) ( 0.29) (1.76) ( 0.45) ...
------- ------- ------- ------- -------
Net Asset Value, End of Period.......................... $ 11.45 $ 11.44 $ 12.10 $ 12.44 $ 11.77
======= ======= ======= ======= =======
Total Investment Return at Net Asset Value.............. 0.48%(b) (3.11%) 12.64% 9.67% 2.17%(b)
======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)............... $109,215 $114,025 $65,010 $29,826 $ 7,690
Ratio of Expenses to Average Net Assets................. 2.09%* 2.06% 2.19% 2.07% 2.19%*
Ratio of Net Investment Income to Average Net Assets ... 1.31%* 2.07% 2.53% 2.02% 1.46%*
Portfolio Turnover Rate................................. 53% 195% 107% 119% 70%
</TABLE>
* On an annualized basis.
(a) On average month end shares outstanding.
(b) Not annualized.
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: THE NET INVESTMENT INCOME, GAINS
(LOSSES), DISTRIBUTIONS AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW
THE FUND'S NET ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE END OF THE PREVIOUS
PERIOD. ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN
THE FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 106
Financial Statements
John Hancock Funds - Growth & Income Fund
SCHEDULE OF INVESTMENTS
February 28, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
COMMON STOCKS
AEROSPACE (14.75%)
Gencorp, Inc.................. 200,000* $ 2,700,000
General Dynamics Corp......... 100,000* 4,712,500
McDonnell Douglas Corp........ 168,000* 9,408,000
Northrop Grumman Corp......... 250,000 11,093,750
United Technologies Corp...... 90,000 5,973,750
-----------
33,888,000
-----------
AUTOMOBILE/TRUCK (1.86%)
General Motors Corp........... 100,000* 4,262,500
-----------
BANKS (10.08%)
Banc One Corp................. 150,000 4,406,250
Hibernia Corp. (Class A)...... 700,000 5,425,000
J.P. Morgan & Co., Inc........ 135,000 8,707,500
Midlantic Corp., Inc.......... 150,000 4,612,500
-----------
23,151,250
-----------
BEVERAGES (2.15%)
Coca-Cola Co.................. 90,000 4,950,000
-----------
BROADCASTING (1.68%)
CBS, Inc...................... 60,000 3,870,000
-----------
CHEMICALS (3.39%)
Eastman Chemical Co........... 80,000 4,380,000
Monsanto Co................... 43,000* 3,407,750
-----------
7,787,750
-----------
COMPUTERS (4.67%)
Hewlett-Packard Co............ 50,000 5,750,000
Unisys Corp.**................ 560,000 4,970,000
-----------
10,720,000
-----------
DIVERSIFIED OPERATIONS (5.72%)
AlliedSignal, Inc............. 118,000 4,484,000
TRW, Inc...................... 79,400 5,220,550
Warner-Lambert Co............. 45,000* 3,436,875
-----------
13,141,425
-----------
DRUGS (4.78%)
Pfizer, Inc................... 76,000 6,289,000
Schering-Plough Corp.......... 60,000 4,702,500
-----------
10,991,500
-----------
FINANCE (3.92%)
Edwards (A.G.), Inc........... 110,000* 2,475,000
Household International, Inc. 65,000* 2,843,750
Student Loan Marketing Association 100,000 3,687,500
-----------
9,006,250
----------
</TABLE>
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
GROWTH AND INCOME FUND ON FEBRUARY 28, 1995. IT'S DIVIDED INTO THREE MAIN
CATEGORIES: COMMON STOCKS, CONVERTIBLE DEBT AND CONVERTIBLE PREFERRED STOCKS.
THE INVESTMENTS ARE FURTHER BROKEN DOWN BY INDUSTRY GROUPS.
<TABLE>
<S> <C> <C>
FOODS (3.34%)
CPC International, Inc........ 70,000 $ 3,745,000
Heinz (H.J.) Co............... 100,000 3,937,500
-----------
7,682,500
-----------
HOTELS & MOTELS (1.99%)
Hilton Hotels Corp............ 65,000* 4,566,250
-----------
INSURANCE (2.85%)
Aetna Life & Casualty Co...... 65,000* 3,493,750
Alexander & Alexander Services, Inc. 140,000 3,045,000
-----------
6,538,750
-----------
LEISURE & RECREATION (2.32%)
Walt Disney Co................ 100,000 5,337,500
-----------
MEDICAL/DENTAL (2.57%)
Bausch & Lomb, Inc............ 65,000* 2,161,250
Baxter International, Inc..... 120,000* 3,735,000
-----------
5,896,250
-----------
OFFICE EQUIP & SUPPLIES (1.63%)
Avery Dennison Corp........... 100,000 3,750,000
-----------
OIL & GAS (3.03%)
Atlantic Richfield Co......... 30,000 3,288,750
Occidental Petroleum Corp..... 185,000* 3,676,875
-----------
6,965,625
-----------
PAPER (2.73%)
Federal Paper Board Co........ 150,000 4,462,500
Kimberly-Clark Corp........... 35,000* 1,820,000
-----------
6,282,500
-----------
PHOTO EQUIPMENT (4.11%)
Eastman Kodak Co.............. 185,000 9,435,000
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 107
Financial Statements
John Hancock Funds - Growth & Income Fund
<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
PUBLISHING (3.61%)
Time Warner, Inc..................... 215,000 $ 8,304,375
-----------
RETAIL (5.05%)
Federated Department Stores, Inc.**.. 170,000 3,740,000
J.C. Penney Co., Inc................. 85,000 3,644,375
Kmart Corp........................... 330,000* 4,207,500
-----------
11,591,875
------------
SOAP & CLEANING PREPARATIONS (1.45%)
Clorox Co............................ 55,000 3,320,625
-----------
TELECOMMUNICATIONS (1.76%)
AT & T Corp.......................... 78,000 4,036,500
-----------
TOBACCO (3.34%)
Philip Morris Cos., Inc.............. 80,000 4,860,000
RJR Nabisco Holdings Corp............ 500,000* 2,812,500
-----------
7,672,500
-----------
UTILITIES (2.14%)
Entergy Corp......................... 220,000 4,922,500
-----------
TOTAL COMMON STOCKS
(Cost $198,261,831) (94.92%) 218,071,425
------- -----------
</TABLE>
<TABLE>
<CAPTION>
ISSUER, DESCRIPTION UNITS MARKET VALUE
- ------------------- ----- ------------
<S> <C> <C>
CONVERTIBLE DEBT
OIL & GAS (1.33%)
Atlantic Richfield Co., 9.00%... 125,000* $3,062,500
----------
TOTAL CONVERTIBLE DEBT
(Cost $3,226,875) (1.33%) 3,062,500
------- ----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
----------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS
STEEL (1.21%)
AK Steel Holding Corp., 7.00%, SAILS... 100,000* 2,775,000
------------
TOBACCO (2.64%)
RJR Nabisco Holdings, $0.6012,
Depositary Shares, Ser C............... 1,030,000 6,051,250
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $9,811,106) (3.85%) 8,826,250
--------- ------------
TOTAL INVESTMENTS (100.10%) $229,960,175
========= ============
</TABLE>
* Securities, other than short-term investments, newly added to the portfolio
during the period ended February 28, 1995.
** Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 108
Notes to Financial Statements
John Hancock Funds - Growth & Income Fund
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Investment Trust, (the "Trust") is a diversified, open-end
management investment company, registered under the Investment Company Act of
1940. John Hancock Growth and Income Fund (the "Fund") is the only series of the
Trust presently issuing shares. The Trustees may authorize the creation of
additional Funds from time to time to satisfy various investment objectives.
Effective December 22, 1994, the Trust and the Fund changed names from
Transamerica Investment Trust and Transamerica Growth and Income Fund,
respectively.
The Trustees have authorized the issuance of two classes of the Fund,
designated as Class A and Class B. The shares of each class represent an
interest in the same portfolio of investments of the Fund and have equal rights
to voting, redemptions, dividends, and liquidation, except that certain
expenses, subject to the approval of the Trustees, may be applied differently to
each class of shares in accordance with current regulations of the Securities
and Exchange Commission and the Internal Revenue Service. Shareholders of a
class, which bears distribution/service expenses under the terms of a
distribution plan, have exclusive voting rights regarding such distribution
plan.
Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's 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 maturing within 60 days
are valued at amortized cost which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more repurchase agreements, whose underlying
securities are obligations of the U.S. government and/or its agencies. The
Fund's custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for ensuring that
the agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAX The Fund's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investment, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, the Fund has $1,383,000 of capital
loss carryforwards available, to the extent provided by regulations, to offset
future net realized capital gains. If such carryforwards are used by the Fund,
no capital gain distributions will be made. The carryforwards expire as follows:
August 31, 1995 - $569,000, August 31, 1996 - $763,000, and August 31, 1998 -
$51,000. Additionally, net capital losses of $4,204,218 attributable to security
transactions occurring after October 31, 1993 are treated as arising on the
first day (September 1, 1994) of the Fund's next taxable year.
DIVIDENDS, DISTRIBUTIONS AND INTEREST 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 is made aware of the dividend. Interest
income on investment securities is recorded on the accrual basis. Foreign income
may be subject to foreign withholding taxes which are accrued as applicable.
The Fund records all distributions to shareholders from net investment income
and realized gains on the ex-dividend date. Such distributions are determined in
conformity with income tax regulations, which may differ from generally accepted
accounting principles. Dividends paid by the Fund with respect to each class of
shares will be calculated in the same manner, at the same time and will be in
the
13
<PAGE> 109
Notes to Financial Statements
John Hancock Funds - Growth & Income Fund
same amount, except for the effect of expenses that may be applied differently
to each class as explained previously.
CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined at the Fund level and allocated daily to each class of
shares based on the appropriate net assets of the respective classes.
Distribution/service fees if any, are calculated daily at the class level based
on the appropriate net assets of each class and the specific expense rate(s)
applicable to each class.
NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH AFFILIATES AND
OTHERS
On December 22, 1994, John Hancock Advisers, Inc. (the "Adviser"), a wholly
owned subsidiary of The Berkeley Financial Group, became the investment manager
for the Fund with approval of the Trustees and shareholders of the
Fund. The Fund's former investment manager was Transamerica Fund Management
Company ("TFMC").
Under the present investment management contract, the Fund pays a monthly
management fee to the Adviser for a continuous investment program equivalent, to
0.625% of the Fund's average daily net asset value. This fee structure is
consistent with the former agreement with TFMC. For the period ended February
28, 1995, the advisory fee earned by the Adviser and TFMC amounted to $231,003
and $462,007, respectively, resulting in a total fee of $693,010.
The Adviser and TFMC, for their respective periods, provided administrative
services to the Fund pursuant to an administrative service agreement through
January 16, 1995 on which day the agreement was terminated.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of the most restrictive state
limit where the Fund is registered to sell shares of beneficial interest, the
fee payable to the Adviser will be reduced to the extent of such excess and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses. The current limits are 2.5% of the first $30,000,000 of the
Fund's average daily net asset value, 2.0% of the next $70,000,000 and 1.5% of
the remaining average daily net asset value.
On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned
subsidiary of the Adviser, became the principal underwriter of the Fund. Prior
to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the
principal underwriter and distributor of the Fund. For the period ended February
28, 1995, JH Funds and TFD received net sales charges of $793,191 with regard to
sales of Class A shares. Out of this amount, $59,556 was retained and used for
printing prospectuses, advertising, sales literature and other purposes,
$733,635 was paid as sales commissions to unrelated broker-dealers and nothing
was paid as sales commissions to sales personnel of John Hancock Distributors,
Inc. ("Distributors"), Tucker Anthony, Incorporated ("Tucker Anthony") and Sutro
& Co., Inc. ("Sutro"). The Adviser's indirect parent, John Hancock Mutual Life
Insurance Company, is the indirect sole shareholder of Distributors and John
Hancock Freedom Securities Corporation and its subsidiaries, which include
Tucker Anthony and Sutro, which are broker-dealers.
Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 5.0% of the lesser of the current market value at the time of
redemption or the original purchase cost of the shares being redeemed. Proceeds
from the CDSC are paid to JH Funds, formerly TFD, and are used in whole or in
part to defray its expenses related to providing distribution related services
to the Fund in connection with the sale of Class B shares. For the period ended
February 28, 1995, contingent deferred sales charges amounted to $242,975.
In addition, to compensate JH Funds, for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution Plan with
respect to Class A and Class B pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Accordingly, the Fund will make payments for distribution
and service expenses which in total will not exceed on an annual basis 0.25% of
the Fund's average daily net assets attributable to Class A shares and 1.00%
14
<PAGE> 110
Notes to Financial Statements
John Hancock Funds - Growth & Income Fund
of the Fund's average daily net assets attributable to Class B shares, to
reimburse for its distribution/service costs. Up to a maximum of 0.25% of such
payments may be service fees as defined by the amended Rules of Fair Practice of
the National Association of Securities Dealers which became effective July 7,
1993. Under the amended Rules of Fair Practice, curtailment of a portion of the
Fund's 12b-1 payments could occur under certain circumstances. This fee
structure and plan is similar to the former arrangement with TFD.
The Board of Trustees approved a shareholder servicing agreement between the
Fund and John Hancock Investors Corporation ("Investor Services") for the period
between December 22, 1994 and May 12, 1995, inclusive. Investor Services
provides transfer agency services (processing telephone transactions) on behalf
of the Fund.
A partner of Baker & Botts was an officer of the Trust, until December 22,
1994. During the period ended February 28, 1995, legal fees paid to Baker &
Botts amounted to $5,000.
Mr. Edward J. Boudreau, Jr. is a director and officer of the Adviser, and its
affiliates as well as Trustee of the Fund. The compensation of unaffiliated
Trustees is borne by the Fund. Effective with the fees paid for 1995, the
unaffiliated Trustees may elect to defer for tax purposes their receipt of this
compensation under the John Hancock Group of Funds Deferred Compensation Plan.
The Fund will make investments into other John Hancock Funds, as applicable, to
cover its liability as regards to the deferred compensation. Investments to
cover the Fund's deferred compensation liability will be recorded on the Fund's
books as an other asset. The deferred compensation liability will be marked to
market on a periodic basis and income earned by the investment will be recorded
on the Fund's books.
The Fund has an independent advisory board composed of certain members of the
former Transamerica Board of Trustees who provide advice to the current Trustees
in order to facilitate a smooth management transition for which the Fund pays
the advisory board and its counsel a fee.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
obligations, during the period ended February 28, 1995 aggregated $120,525,764
and $125,134,828, respectively.
The cost of investments owned at February 28, 1995 for Federal income tax
purposes was $211,299,812. Gross unrealized appreciation and depreciation of
investments aggregated $22,711,884, and $4,051,521, respectively, resulting in
net unrealized appreciation of $18,660,363.
NOTE D --
ACQUISITION OF TRANSAMERICA SPECIAL BLUE CHIP FUND
On May 27, 1994, John Hancock Growth and Income Fund acquired all the net assets
of Transamerica Special Blue Chip Fund pursuant to a plan of reorganization
approved by Transamerica Special Blue Chip Fund shareholders on May 20, 1994.
This tax-free reorganization was accomplished by the issuance of 2,382,863 Class
B Shares of John Hancock Growth and Income Fund (valued at $26,592,756) for the
2,645,385 shares of Transamerica Special Blue Chip Fund outstanding at May 27,
1994. Transamerica Special Blue Chip Fund's net assets at that date of
$26,592,756, including $2,005,978 of unrealized appreciation, were combined with
those of John Hancock Growth and Income Fund. The aggregate net assets of John
Hancock Growth and Income Fund and Transamerica Special Blue Chip Fund
immediately after the acquisition were $229,033,314.
15
<PAGE> 111
Additional Information
John Hancock Funds - Growth & Income Fund
On December 16, 1994, a special meeting of John Hancock (formerly
Transamerica) Investment Trust (the "Trust") in respect of John Hancock
(formerly Transamerica) Growth and Income Fund (the "Fund") was held involving
the election of trustees and certain other matters concerning the Fund.
Specifically, shareholders first approved a new investment management
agreement between the Trust on behalf of the Fund and John Hancock Advisers,
Inc. on substantially similar terms to the prior investment management
agreement, to take effect on December 22, 1994, the date of the consummation of
the acquisition of Transamerica Fund Management Company by The Berkeley
Financial Group. The shareholder votes tallied were 9,768,389 FOR, 206,169
AGAINST and 414,288 ABSTAINING.
The shareholders next approved new Plans of Distribution for each Class A and
Class B Shares of the Fund, also effective on December 22, 1994 and also upon
substantially the same terms as the prior Plans of Distribution. The Class A
Shareholder votes tallied were 5,669,928 FOR, 185,398 AGAINST, 302,148
ABSTAINING and the Class B Shareholder votes tallied were 3,950,260 FOR, 66,048
AGAINST and 215,065 ABSTAINING.
The shareholders also voted to ratify the selection of Ernst & Young LLP as
independent auditors for the Fund for the fiscal year ending August 31, 1995,
and the votes were tallied as follows: 10,148,779 FOR, 65,216 AGAINST and 65,216
ABSTAINING.
Lastly, the following trustees of the Fund were elected to serve until their
respective successors shall become duly elected and qualified, with the votes
tabulated as indicated:
<TABLE>
<CAPTION>
NAME OF TRUSTEE FOR WITHHOLD
--------------- --- --------
<S> <C> <C>
Edward J. Boudreau, Jr. ......... 8,806,833 1,734,030
James F. Carlin ................. 8,811,848 1,729,014
William H. Cunningham ........... 8,815,857 1,725,005
Charles L. Ladner ............... 8,815,544 1,725,319
Leo E. Linbeck, Jr............... 8,818,554 1,722,309
Patricia P. McCarter ............ 8,813,806 1,727,057
Steven R. Pruchansky............. 8,806,874 1,733,989
Norman H. Smith.................. 8,802,016 1,738,846
John P. Toolan................... 8,811,073 1,729,790
</TABLE>
16
<PAGE> 112
JOHN HANCOCK INVESTMENT TRUST
PART C.
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements included in the Registration Statement:
John Hancock Growth and Income Fund
-----------------------------------
Statement of Assets and Liabilities as of February 28, 1995.(unaudited)
Statement of Operations of the year ended February 28, 1995 (unaudited).
Statement of changes in Net Asset for each of the two years ended
February 28, 1995 (unaudited).
Notes to Financial Statements.
Financial Highlights for each of the 10 years ended February 28, 1995
(unaudited).
Schedule of Investments as of February 28, 1995 (unaudited).
Statement of Assets and Liabilities as of August 31, 1994.
Statement of Operations of the year ended August 31, 1994.
Statement of changes in Net Asset for each of the two years ended August 31.
Notes to Financial Statements.
Financial Highlights for each of the 10 years ended August 31, 1994.
Auditor's Report Schedule of Investments as of August 31, 1994.
(b) Exhibits:
The exhibits to this Registration Statement are listed in the Exhibit
Index hereto and are incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
No person is directly or indirectly controlled by or under common
control with Registrant.
<TABLE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of April 6, 1995, the number of record holders of shares of the
Registrant was as follows:
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
<S> <C>
Class A Shares - 11,686
Class B Shares - 12,251
</TABLE>
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<PAGE> 113
ITEM 27. INDEMNIFICATION
(a) Indemnification provisions relating to the Registrant's Trustees,
officers, employees and agents is set forth in Article VII of the
Registrant's By Laws included as Exhibit 2 herein.
(b) Under Section 12 of the Distribution Agreement, John Hancock
Funds, Inc. ("John Hancock Funds" ) has agreed to indemnify the Registrant
and its Trustees, officers and controlling persons against claims arising
out of certain acts and statements of John Hancock Funds.
Section 9(a) of the By-Laws of John Hancock Mutual Life Insurance
Company "Insurance Company" provides, in effect, that the Insurance Company
will, subject to limitations of law, indemnify each present and former
director, officer and employee of the of the Insurance Company who serves
as a Trustee or officer of the Registrant at the direction or request of
the Insurance Company against litigation expenses and liabilities incurred
while acting as such, except that such indemnification does not cover any
expense or liability incurred or imposed in connection with any matter as
to which such person shall be finally adjudicated not to have acted in good
faith in the reasonable belief that his action was in the best interests of
the Insurance Company. In addition, no such person will be indemnified by
the Insurance Company in respect of any liability or expense incurred in
connection with any matter settled without final adjudication unless such
settlement shall have been approved as in the best interests of the
Insurance Company either by vote of the Board of Directors at a meeting
composed of directors who have no interest in the outcome of such vote, or
by vote of the policyholders. The Insurance Company may pay expenses
incurred in defending an action or claim in advance of its final
disposition, but only upon receipt of an undertaking by the person
indemnified to repay such payment if he should be determined not to be
entitled to indemnification.
Article IX of the respective By-Laws of John Hancock Funds and John
Hancock Advisers, Inc.("the Adviser") provide as follows:
"Section 9.01. Indemnity: Any person made or threatened to be made a
party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was at
any time since the inception of the Corporation a director, officer,
employee or agent of the corporation, or is or was at any time since the
inception of the Corporation serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall be indemnified by the
Corporation against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and the liability was not incurred by reason of gross negligence or
reckless disregard of the duties involved in the conduct of his office, and
expenses in connection therewith may be advanced by the Corporation, all to
the full extent authorized by the law."
"Section 9.02. Not Exclusive; Survival of Rights: The indemnification
provided by Section 9.01 shall not be deemed exclusive of any other right
to which those indemnified may be entitled, and
C-2
<PAGE> 114
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person."
Insofar as indemnification for liabilities under the Securities Act of 1933
(the "Act") may be permitted to Trustees, officers and controlling persons
of the Registrant pursuant to the Registrant's Declaration of Trust and By-
Laws, the Distribution Agreement, the By-Laws of John Hancock Funds, the
Adviser, or the Insurance Company or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
-----------------------------------------------------
For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and Directors of the
Investment Adviser, reference is made to Forms ADV (801-8124) filed under
the Investment Advisers Act of 1940, which is incorporated herein by
reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) John Hancock Funds acts as principal underwriter for the Registrant
and also serves as principal underwriter or distributor of shares for John
Hancock Cash Reserve, Inc., John Hancock Bond Fund, John Hancock Capital
Growth Fund, John Hancock Current Interest, John Hancock Series, Inc., John
Hancock Tax-Free Bond Fund, John Hancock California Tax-Free Income Fund,
John Hancock Capital Series, John Hancock Limited Term Government Fund,
John Hancock Tax-Exempt Income Fund, John Hancock Sovereign Investors Fund,
Inc., John Hancock Cash Management Fund, John Hancock Special Equities
Fund, John Hancock Sovereign Bond Fund, John Hancock Tax-Exempt Series,
John Hancock Strategic Series, John Hancock Technology Series, Inc., John
Hancock World Fund, John Hancock Investment Trust, John Hancock
Institutional Series Trust, Freedom Investment Trust, Freedom Investment
Trust II and Freedom Investment Trust III.
(b) The following table lists, for each director and officer of John
Hancock Funds, the information indicated.
C-3
<PAGE> 115
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Edward J. Boudreau, Jr. Chairman Chairman
101 Huntington Avenue
Boston, Massachusetts
Robert H. Watts Director and Senior None
John Hancock Place Vice President
P.O. Box 111
Boston, Massachusetts
C. Troy Shaver, Jr. President, Chief None
101 Huntington Avenue Executive Officer and
Boston, Massachusetts Director
Robert G. Freedman Director Vice President, Chief
101 Huntington Avenue Investment Officer
Boston, Massachusetts
Stephen M. Blair Executive Vice President- None
101 Huntington Avenue Sales
Boston, Massachusetts
Thomas H. Drohan Senior Vice President Senior Vice President and
101 Huntington Avenue Secretary
Boston, Massachusetts
James W. McLaughlin Senior Vice President None
101 Huntington Avenue and
Boston, Massachusetts Chief Financial Officer
David A. King Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
James B. Little Senior Vice President Senior Vice President and
101 Huntington Avenue Chief Financial Officer
Boston, Massachusetts
</TABLE>
C-4
<PAGE> 116
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
John A. Morin Vice President Vice President
101 Huntington Avenue
Boston, Massachusetts
Susan S. Newton Vice President and Vice President,
101 Huntington Avenue Secretary Assistant Secretary
Boston, Massachusetts and Compliance Officer
Christopher M. Meyer Treasurer None
101 Huntington Avenue
Boston, Massachusetts
Stephen L. Brown Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Thomas E. Moloney Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Jeanne M. Livermore Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Richard S. Scipione Director Trustee
John Hancock Place
P.O. Box 111
Boston, Massachusetts
John Goldsmith Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
</TABLE>
C-5
<PAGE> 117
<TABLE>
<S> <C> <C>
Richard O. Hansen Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
John M. DeCiccio Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Foster Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Hugh A. Dunlap, Jr. Director None
101 Huntington Avenue
Boston, Massachusetts
William C. Fletcher Director None
53 State Street
Boston, Massachusetts
James V. Bowhers Executive Vice President None
101 Huntington Avenue
Boston, Massachusetts
</TABLE>
(c) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------
Registrant maintains the records required to be maintained by it under
Rules 31a-1 (a), 31a-1(b), and 31a-2(a) under the Investment Company
Act of 1940 at its principal executive offices at 101 Huntington
Avenue, Boston Massachusetts 02199-7603. Certain records, including
records relating to the Registrant's shareholders and the physical
possession of its securities, may be maintained pursuant to Rule 31a-3
at the main offices of the Registrant's Transfer Agent and Custodian.
ITEM 31. MANAGEMENT SERVICES
-------------------
Not applicable.
ITEM 32. UNDERTAKINGS
------------
(a) Not Applicable
C-6
<PAGE> 118
(b) Not Applicable
(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus with respect to a series of the Registrant is delivered
with a copy of the latest annual report to shareholders with respect
to that series upon request and without charge.
(d) The Registrant undertakes to comply with Section 16(c) of the
Investment Company Act of 1940, as amended which relates to the
assistance to be rendered to shareholders by the Trustees of the
Registrant in calling a meeting of shareholders for the purpose of
voting upon the question of the removal of a trustee.
C-7
<PAGE> 119
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston and The Commonwealth of Massachusetts on the
8th day of May, 1995.
JOHN HANCOCK INVESTMENT TRUST
By: *
--------------------------
Edward J.Boudreau, Jr.
Chairman and Chief Executive Officer
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman and Chief Executive
- ------------------------ Officer (Principal Executive
Edward J. Boudreau, Jr. Officer)
/s/James B. Little
- ------------------------
James B. Little Senior Vice President and Chief May 8, 1995
Financial Officer (Principal
Financial and Accounting Officer)
* Trustee
- ------------------------
James F. Carlin
* Trustee
- ------------------------
William H. Cunningham
* Trustee
- ------------------------
Charles L. Ladner
</TABLE>
C-8
<PAGE> 120
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Trustee
- ------------------------
Leo E. Linbeck, Jr.
* Trustee
- ------------------------
Patricia P. McCarter
* Trustee
- ------------------------
Steven R. Pruchansky
* Trustee
- ------------------------
Norman H. Smith
* Trustee
- ------------------------
John P. Toolan
*By: /s/Thomas H. Drohan May 8, 1995
-------------------
Thomas H. Drohan,
Attorney-in-Fact
</TABLE>
C-9
<PAGE> 121
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 13th day of December, 1994.
/s/William H. Cunningham
___________________________________
William H. Cunningham
<PAGE> 122
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/Norman H. Smith
_____________________________
Norman H. Smith
<PAGE> 123
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/James F. Carlin
________________________________
James F. Carlin
<PAGE> 124
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/Charles L. Ladner
_________________________________
Charles L. Ladner
<PAGE> 125
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/John P. Toolan
________________________________
John P. Toolan
<PAGE> 126
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/ Steven R. Pruchansky
________________________________
Steven R. Pruchansky
<PAGE> 127
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/ Leo E. Linbeck, Jr.
________________________________
Leo E. Linbeck, Jr.
<PAGE> 128
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/ Patricia P. McCarter
________________________________
Patricia P. McCarter
<PAGE> 129
POWER OF ATTORNEY
The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 22nd day of December, 1994.
/s/ Edward J. Boudreau, Jr.
____________________________________
Edward J. Boudreau, Jr.
<PAGE> 130
JOHN HANCOCK INVESTMENT TRUST
(File Nos. 2-10156; 811-00560)
INDEX TO EXHIBITS
(1) (a) Declaration of Trust.*
(b) Amendment to Declaration of Trust.**
(c) Amendment to Declaration of Trust.***
(d) Amendment to Declaration of Trust.****
(2) Amended By-laws.+
(3) Not Applicable.
(4) Form of Class A Share and Class B Share Certificates for
Growth and Income Fund.****
(5) (a) Investment Advisory Agreement between John Hancock
Advisers, Inc. and the Registrant on behalf of Growth
and Income Fund.+
(b) Amended and Restated Administrative Services Agreement
among Transamerica Fund Management Company,
Transamerica Funds Distributor, Inc., and the
Registrant on behalf of Growth and Income Fund.+
(6) (a) Distribution Agreement between the Registrant and John
Hancock Broker Distribution Services, Inc.+
(b) Form of Soliciting Dealer Agreement between John
Hancock Funds, Inc. and the John Hancock funds.+
(c) Form of Financial Distribution Sales and Service
Agreement between John Hancock Funds, Inc. and the John
Hancock funds.+
(7) Not Applicable.
(8) Master Custodian Agreement between the John Hancock funds
and Investors Bank & Trust Company.+
(9) Transfer Agency Agreement between John Hancock Investor
Services Corporation and the John Hancock funds.+
(10) Opinion and consent of counsel.******
(11) Consent of Independent Auditors.+
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
<PAGE> 131
(15) (a) Rule 12b-1 Plan (Class A Shares).
(i) Growth and Income Fund+
(b) Rule 12b-1 Plan (Class B Shares.)
(i) Growth and Income Fund+
(16) Schedule for computation of each performance quotation
provided in the Registration Statement in response to
Item 22.******
(27) Financial Data Schedule+
* Incorporated by reference to post-effective amendment #56
filed June 27, 1985.
** Incorporated by reference to post-effective amendment #64
filed August 21, 1989.
*** Incorporated by reference to post-effective amendment #68
filed October 15, 1991.
**** To be filed by post-effective amendment.
****** Filed with the Securities and Exchange Commission on
October 28, 1994, pursuant to Rule 24f-2 and incorporated
herein by reference.
****** Previously filed in the registration statement or post-
effective amendments.
+ Filed herewith.
<PAGE> 1
Exhibit 99.B2
BY-LAWS
OF
JOHN HANCOCK INVESTMENT TRUST
ARTICLE I
DEFINITIONS
All capitalized terms have the respective meanings given them in the
Declaration of Trust of John Hancock Investment Trust, as amended or restated
from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees, the
principal office of the Trust shall be in Boston, Massachusetts.
Section 2. Other Offices. The Trust may have offices in such other
places without as well as within The Commonwealth of Massachusetts as the
Trustees may from time to time determine.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings. Meetings of the Shareholders of the Trust or a
Series or Class thereof shall be held as provided in the Declaration of Trust at
such place within or without The Commonwealth of Massachusetts as the Trustees
shall designate. The holders of a majority the Outstanding Shares of the Trust
or a Series or Class thereof present in person or by proxy and entitled to vote
shall constitute a quorum at any meeting of the Shareholders of the Trust or a
Series or Class thereof.
Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail or telegraphic means to each Shareholder at his
address as recorded on the register of the Trust mailed at least (10) days and
not more than sixty (60) days before the meeting, provided, however, that notice
of a meeting need not be given to a Shareholder to whom such
<PAGE> 2
notice need not be given under the proxy rules of the Commission under the 1940
Act and the Securities Exchange Act of 1934, as amended. Only the business
stated in the notice of the meeting shall be considered at such meeting. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given to any Shareholder who shall have failed to inform the Trust of
his current address or if a written waiver of notice, executed before or after
the meeting by the Shareholder or his attorney thereunto authorized, is filed
with the records of the meeting.
Section 3. Record Date for Meetings and Other Purposes. For the
purpose of determining the Shareholders who are entitled to notice of and to
vote at any meeting, or to participate in any distribution, or for the purpose
of any other action, the Trustees may from time to time close the transfer books
for such period, not exceeding thirty (30) days, as the Trustees may determine;
or without closing the transfer books the Trustees may fix a date not more than
sixty (60) days prior to the date of any meeting of Shareholders or distribution
or other action as a record date for the determination of the persons to be
treated as Shareholders of record for such purposes.
Section 4. Proxies. At any meeting of Shareholders, any holder of
Shares entitled to vote thereat may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken. A
proxy shall be deemed signed if the shareholder's name is placed on the proxy
(whether by manual signature, typewriting or telegraphic transmission) by the
shareholder or the shareholder's attorney-in-fact. Proxies may be solicited in
the name of one or more Trustees or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote. When any Share is held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Share, but if more than one of them shall be present
at such meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest on the challenger. If the
holder of any such Share is a minor or a person of unsound mind, and subject to
guardianship or the legal control of any other person as regards the charge or
management of such Share, he may vote by his guardian or such other person
appointed or having such control, and such vote may be given in person or by
proxy.
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<PAGE> 3
Section 5. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation.
Section 6. Action without Meeting. Any action which may be taken by
Shareholders may be taken without a meeting if a majority of Outstanding Shares
entitled to vote on the matter (or such larger proportion thereof as shall be
required by law) consent to the action in writing and the written consents are
filed with the records of the meetings of Shareholders. Such consents shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or stated meetings of the Trustees. Notice of
regular or stated meetings need not be given. Meetings of the Trustees other
than regular or stated meetings shall be held whenever called by the President,
the Chairman or by any one of the Trustees, at the time being in office. Notice
of the time and place of each meeting other than regular or stated meetings
shall be given by the Secretary or an Assistant Secretary or by the officer or
Trustee calling the meeting and shall be mailed to each Trustee at least two
days before the meeting, or shall be given by telephone, cable or wireless to
each Trustee at his business address, or personally delivered to him at least
one day before the meeting. Such notice may, however, be waived by any Trustee.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him before or after the meeting, is filed with the records
of the meeting, or to any Trustee who attends the meeting without protesting
prior thereto or at its commencement the lack of notice to him. A notice or
waiver of notice need not specify the purpose of any meeting. The Trustees may
meet by means of a telephone conference circuit or similar communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time and participation by such means shall be deemed to
have been held at a place designated by the Trustees at the meeting.
Participation in a telephone conference meeting shall constitute presence in
person at such meeting. Any action required or permitted to be taken at any
meeting of the Trustees may be taken by the Trustees without a meeting if a
majority of the Trustees consent to the action in writing and the written
consents are filed with the records of the Trustees' meetings. Such consents
shall be treated as a vote for all purposes.
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<PAGE> 4
Section 2. Quorum and Manner of Acting. A majority of the Trustees
shall be present in person at any regular or special meeting of the Trustees in
order to constitute a quorum for the transaction of business at such meeting and
(except as otherwise required by law, the Declaration of Trust or these By-laws)
the act of a majority of the Trustees present at any such meeting, at which a
quorum is present, shall be the act of the Trustees. In the absence of a
quorum, a majority of the Trustees present may adjourn the meeting from time to
time until a quorum shall be present. Notice of an adjourned meeting need not
be given.
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by vote of a
majority of all the Trustees may elect from their own number an Executive
Committee to consist of not less than two (2) members to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities and the designation of securities to be
delivered upon redemption of Shares of the Trust or a Series thereof, and such
other powers of the Trustees as the Trustees may, from time to time, delegate to
them except those powers which by law, the Declaration of Trust or these By-laws
they are prohibited from delegating. The Trustees may also elect from their own
number other Committees from time to time; the number composing such Committees,
the powers conferred upon the same (subject to the same limitations as with
respect to the Executive Committee) and the term of membership on such
Committees to be determined by the Trustees. The Trustees may designate a
chairman of any such Committee. In the absence of such designation the
Committee may elect its own Chairman.
Section 2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in any
other capacity and which shall have advisory functions with respect to the
investments of the Trust but which shall have no power to determine that any
security or other investments shall be purchased, sold or otherwise disposed of
by the Trust. The number of persons constituting any such advisory committee
may receive compensation for their services and may be allowed such fees and
expenses for the attendance at such meeting as the Trustees may from time to
time determine to be appropriate.
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<PAGE> 5
Section 3. Meetings, Quorum and Manner of Acting. The Trustees may
(1) provide for stated meetings of any Committee, (2) specify the manner of
calling and notice required for special meetings of any Committee, (3) specify
the number of members of a Committee required to constitute a quorum and the
number of members of a Committee required to exercise specified powers delegated
to such Committee, (4) authorize the making of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, and (5) authorize the members of a Committee to meet by means
of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its meetings and
records of decisions taken without a meeting and cause them to be recorded in a
book designated for that purpose and kept in the office of the Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall be
Chairman, a President, a Treasurer and a Secretary, who shall be elected by the
Trustees. The Trustees may elect or appoint such other officers or agents as
the business of the Trust may require, including one or more Vice Presidents,
one or more Assistant Secretaries, and one or more Assistant Treasurers. The
Trustees may delegate to any officer or committee the power to appoint any
subordinate officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise
provided by law, the Declaration of Trust or these By- laws, the President, the
Treasurer, the Secretary and any other officer shall each hold office at the
pleasure of the Board of Trustees or until his successor shall have been duly
elected and qualified. The Secretary and the Treasurer may be the same person.
A Vice President and the Treasurer or a Vice President and the Secretary may be
the same person, but the offices of Vice President, Secretary and Treasurer
shall not be held by the same person. The President shall hold no other office.
Except as above provided, any two offices may be held by the same person. Any
officer may be but none need be a Trustee or Shareholder.
Section 3. Removal. The Trustees, at any regular or special meeting
of the Trustees, may remove any officer with or without cause, by a vote of a
majority of the Trustees then in office. Any officer or agent appointed by an
officer or committee may be removed with or without cause by such appointing
officer or committee.
-5-
<PAGE> 6
Section 4. Powers and Duties of the Chairman. The Trustees may, but
need not, appoint from among their number a Chairman and chief executive
officer. When present he shall preside at the meetings of the Shareholders and
of the Trustees. He may call meetings of the Trustees and of any committee
thereof whenever he deems it necessary. He shall be an executive officer of the
Trust and shall have, with the President, general supervision over the business
and policies of the Trust, subject to the limitations imposed upon the
President, as provided in Section 5 of this Article VI. The Chairman shall have
the authority to appoint officers of the Trust.
Section 5. Powers and Duties of the Vice Chairman. The Trustees may,
but need not, appoint a Vice Chairman of the Trust. The Vice Chairman may, but
need not, be a Trustee. The Vice Chairman shall have such powers and duties as
the Trustees shall determine from time to time. In the absence of any such
determination, the Vice Chairman shall have the same powers as a vice president.
Section 6. Powers and Duties of the President. The President may call
meetings of the Trustees and of any Committee thereof when he deems it necessary
and shall preside at all meetings of the Shareholders. Subject to the control
of the Trustees and to the control of any Committees of the Trustees, within
their respective spheres, as provided by the Trustees, he shall at all times
exercise a general supervision and direction over the affairs of the Trust. He
shall have the power to employ attorneys and counsel for the Trust or any Series
or Class thereof and to employ such subordinate officers, agents, clerks and
employees as he may find necessary to transact the business of the Trust or any
Series or Class thereof. He shall also have the power to grant, issue, execute
or sign such powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the Trust or any
Series thereof. The President shall have such other powers and duties, as from
time to time may be conferred upon or assigned to him by the Trustees.
Section 7. Powers and Duties of Vice Presidents. In the absence or
disability of the President, the Vice President or, if there be more than one
Vice President, any Vice President designated by the Trustees, shall perform all
the duties and may exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such other duties as
may be assigned to him from time to time by the Trustees and the President.
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<PAGE> 7
Section 8. Powers and Duties of the Treasurer. The Treasurer shall be
the principal financial and accounting officer of the Trust. He shall deliver
all funds of the Trust or any Series or Class thereof which may come into his
hands to such Custodian as the Trustees may employ. He shall render a statement
of condition of the finances of the Trust or any Series or Class thereof to the
Trustees as often as they shall require the same and he shall in general perform
all the duties incident to the office of a Treasurer and such other duties as
from time to time may be assigned to him by the Trustees. The Treasurer shall
give a bond for the faithful discharge of his duties, if required so to do by
the Trustees, in such sum and with such surety or sureties as the Trustees shall
require.
Section 9. Powers and Duties of the Secretary. The Secretary shall
keep the minutes of all meetings of the Trustees and of the Shareholders in
proper books provided for that purpose; he shall have custody of the seal of the
Trust; he shall have charge of the Share transfer books, lists and records
unless the same are in the charge of a transfer agent. He shall attend to the
giving and serving of all notices by the Trust in accordance with the provisions
of these By-laws and as required by law; and subject to these By-laws, he shall
in general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Trustees.
Section 10. Powers and Duties of Assistant Officers. In the absence
or disability of the Treasurer, any officer designated by the Trustees shall
perform all the duties, and may exercise any of the powers, of the Treasurer.
Each officer shall perform such other duties as from time to time may be
assigned to him by the Trustees. Each officer performing the duties and
exercising the powers of the Treasurer, if any, and any Assistant Treasurer,
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.
Section 11. Powers and Duties of Assistant Secretaries. In the
absence or disability of the Secretary, any Assistant Secretary designated by
the Trustees shall perform all the duties, and may exercise any of the powers,
of the Secretary. Each Assistant Secretary shall perform such other duties as
from time to time may be assigned to him by the Trustees.
Section 12. Compensation of Officers and Trustees and Members of the
Advisory Board. Subject to any applicable provisions of the Declaration of
Trust, the compensation of the officers and Trustees and members of an advisory
board shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be
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<PAGE> 8
conferred by the Trustees. No officer shall be prevented from receiving such
compensation as such officer by reason of the fact that he is also a Trustee.
ARTICLE VII
INDEMNIFICATIONS
Section 1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
with respect to such Person; and all such Persons shall look solely to the Trust
Property, or to the Property of one or more specific Series of the Trust if the
claim arises from the conduct of such Trustee, officer, employee or agent with
respect to only such Series, for satisfaction of claims of any nature arising in
connection with the affairs of the Trust. If any Shareholder, Trustee, officer,
employee, or agent, as such, of the Trust or any Series thereof, is made a party
to any suit or proceeding to enforce any such liability of the Trust or any
Series thereof, he shall not, on account thereof, be held to any personal
liability. The Trust shall indemnify and hold each Shareholder harmless from
and against all claims and liabilities, to which such Shareholder may become
subject by reason of his being or having been a Shareholder, and shall reimburse
such Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) out of the Trust
Property for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of
assets of the one or more Series whose Shares were held by said Shareholder at
the time the act or event occurred which gave rise to the claim against or
liability of said Shareholder. The rights accruing to a Shareholder under this
Section 1 of Article VII shall not impair any other right to which such
shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust or any Series thereof to indemnify or reimburse
a shareholder in any appropriate situation even though not specifically provided
herein.
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<PAGE> 9
Section 2. Non-Liability of Trustees, Etc. No Trustee, officer,
employee or agent of the Trust or any Series thereof shall be liable to the
Trust, its Shareholders, or to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 3. Mandatory Indemnification. (a) Subject to the exceptions
and limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee, officer,
employee or agent of the Trust (including any individual who serves at
its request as director, officer, partner, trustee or the like of
another organization in which it has any interest as a shareholder,
creditor or otherwise) shall be indemnified by the Trust, or by one or
more Series thereof if the claim arises from his or her conduct with
respect to only such Series, to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal,
or other, including appeals), actual or threatened; and the words
"liability" and "expenses " shall include, without limitation,
attorneys fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or
officer:
(i) against any liability to the Trust, a Series thereof or
the Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust or a
Series thereof;
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<PAGE> 10
(iii) in the event of a settlement or other disposition
not involving a final adjudication as provided in paragraph
(b)(ii) resulting in a payment by a Trustee or officer,
unless there has been a determination that such Trustee or
officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved
in the conduct of his office:
(A) by the court or other body approving the
settlement or other disposition;
(B) based upon a review of readily available facts
(as opposed to a full trial-type inquiry) by (x) vote of
a majority of the Non-interested Trustees acting on the
matter (provided that a majority of the Non-interested
Trustees then in office act on the matter) or
(y) written opinion of independent legal counsel; or
(C) a vote of a majority of the Shares outstanding
and entitled to vote (excluding shares owned of record
or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors, administrators
and assigns of such a person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust or any Series thereof other
than Trustees and officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any
claim, action, suit or proceeding of the character described in paragraph (a) of
this Section 3 of Article VII may be advanced by the Trust or a Series thereof
prior to final disposition thereof upon receipt of an undertaking by or on
behalf of the recipient to repay such amount if it is ultimately determined that
he is not entitled to indemnification under this Section 3, provided that
either:
(i) such undertaking is secured by a surety bond or
some other appropriate security provided by the recipient, or
the Trust or Series thereof shall be insured against losses
arising out of any such advances; or
(ii) a majority of the Non-interested Trustees acting on
the matter (provided that a majority of the Non-interested
Trustees act on the matter) or an independent legal counsel
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<PAGE> 11
in a written opinion shall determine, based upon a review of
readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 3 of Article VII, a "Non-interested
Trustee" is one who (i) is not an "Interested Person" of the Trust (including
anyone who has been exempted from being an "Interested Person" by any rule,
regulation or order of the Commission), and (ii) is not involved in the claim,
action, suit or proceeding.
Section 4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
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<PAGE> 12
Section 6. Reliance on Experts, Etc. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the books of
account or other records of the Trust or a Series thereof, upon an opinion of
counsel, or upon reports made to the Trust or a Series thereof by any of its
officers or employees or by the Investment Adviser, the Administrator, the
Distributor, Transfer Agent, selected dealers, accountants, appraisers or other
experts or consultants selected with reasonable care by the Trustees, officers
or employees of the Trust, regardless of whether such counsel or expert may also
be a Trustee.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first day of September
in each year and shall end on the last day of August in each year, provided,
however, that the Trustees may from time to time change the fiscal year. The
taxable year of each Series of the Trust shall be as determined by the Trustees
from time to time.
ARTICLE IX
SEAL
The Trustees may adopt a seal which shall be in such form and shall
have such inscription thereon as the Trustees may from time to time prescribe
but the absence of a seal shall not impair the validity or execution of any
document.
ARTICLE X
SUFFICIENCY AND WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law, the
Declaration of Trust or these By-laws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. A notice shall be deemed to
have been sent by mail, telegraph, cable or wireless for the purposes of these
By- laws when it has been delivered to a representative of any company holding
itself out as capable of sending notice by such means with instructions that it
be so sent.
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ARTICLE XI
AMENDMENTS
These By-laws may be amended, altered or repealed or new By-laws may be
adopted (a) by a Majority Shareholder Vote (as defined in the Declaration of
Trust), or by the Trustees; provided, however, that no By-Law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law, the Declaration of Trust or the By-Laws, a vote of
the Shareholders. The Trustees shall in no event adopt By-Laws which are in
conflict with the Declaration of Trust, and any apparent inconsistency shall be
construed in favor of the related provisions of the Declaration of Trust.
END OF BY-LAWS
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<PAGE> 1
Exhibit 99.B5A
JOHN HANCOCK GROWTH AND INCOME FUND, a series of
John Hancock Investment Trust
Investment Management Contract
Dated: December 22, 1994
<PAGE> 2
JOHN HANCOCK GROWTH AND INCOME FUND, a series of
John Hancock Investment Trust
Boston, Massachusetts
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
------------------------------
Ladies and Gentlemen:
John Hancock Investment 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 are classified
into series, and this agreement relates only to the series of
shares representing the entire undivided interest in John Hancock
Growth and Income Fund (the "Fund").
The Trustees of the Trust (the "Trustees") have selected John
Hancock Advisers, Inc. (the "Adviser") to provide overall
investment advice and management for the Fund, and to provide
certain other services, as more fully set forth below, and you are
willing to provide such advice, management and services under the
terms and conditions hereinafter set forth. Accordingly, the
Trust agrees with you as follows:
1. DELIVERY OF DOCUMENTS. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of
the following:
(a) Declaration of Trust, dated December 21, 1984, 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 selecting the Adviser as
investment adviser for the Trust and the Fund and
approving the form of this Agreement; and
(d) Commitments, limitations and undertakings made by the
Trust to state securities or "blue sky" authorities for
the purpose of qualifying shares of the Fund for sale in
such states. The Trust will furnish you from time to
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time with copies, properly certified or otherwise
authenticated, of all amendments of or supplements to
the foregoing, if any.
2. INVESTMENT AND MANAGEMENT SERVICES. You will use your best
efforts to provide to the Fund continuing and suitable investment
programs with respect to investments, consistent with the
investment policies, objectives and restrictions of the Fund. In
the performance of the Adviser's duties hereunder, subject always
(x) to the provisions contained in the documents delivered to the
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 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
Adviser will, at its own expense:
(a) furnish the Fund with advice and recommendations,
consistent with the investment policies, objectives and
restrictions of the Fund, with respect to the purchase,
holding and disposition of portfolio securities;
(b) advise the Fund in connection with policy decisions to
be made by the Trustees or any committee thereof with
respect to the Fund's investments and, as requested,
furnish the Fund with research, economic and statistical
data in connection with the Fund's investments and
investment policies;
(c) provide administration of the day-to-day investment
operations of the Fund;
(d) submit such reports relating to the valuation of the
Fund's securities as the Trustees may reasonably
request;
(e) assist 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;
(f) consistent with the provisions of Section 6 of this
Agreement, place orders for the purchase, sale or
exchange of portfolio securities with brokers or dealers
selected by you, PROVIDED that in connection with the
placing of such orders and the selection of such brokers
or dealers you 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 from
time to time;
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(g) provide office space and equipment and supplies, the use
of accounting equipment when required, and necessary
executive, clerical and secretarial personnel for the
administration of the affairs of the Fund;
(h) from time to time or at any time requested by the
Trustees, make reports to the Trust of your performance
of the foregoing services and furnish advice and
recommendations with respect to other aspects of the
business and affairs of the Fund;
(i) maintain and preserve the records required by the
Investment Company Act of 1940, as amended (the "1940
Act"), to be maintained and preserved by the Trust on
behalf of the Fund (you agree that such records are the
property of the Trust and will be surrendered to the
Trust promptly upon request therefor);
(j) obtain and evaluate such information relating to
economies, industries, businesses, securities markets
and securities as you may deem necessary or useful in
the discharge of your duties hereunder;
(k) oversee, and use your best efforts to assure the
performance of the activities and services of the
custodian, transfer agent or other similar agents
retained by the Trust; and
(l) 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.
The Adviser may engage one or more investment advisers which
are either registered as such or specifically exempt from
registration under the Investment Advisers Act of 1940, as
amended, to act as subadvisers to provide with respect to the Fund
certain services set forth in Section 2 of this Agreement, all as
shall be set forth in a written contract, which contract shall be
subject to approval by the vote of a majority of the Trustees of
the Trust who are not interested persons of the Adviser, the
subadviser or the Fund, cast in person at a meeting called for the
purpose of voting on such approval and by the vote of a majority
of the outstanding voting securities of the Fund and otherwise
consistent with the terms of the 1940 Act. Any fee, compensation
or expense to be paid to any subadviser shall be paid by the
Adviser, and no obligation to the subadviser shall be incurred on
the Fund's or Trust's behalf, except as agreed upon by the
Trustees of the Trust and otherwise consistent with the terms of
the 1940 Act.
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3. EXPENSES OF THE FUND. You will pay:
(a) the compensation and expenses of all officers and
employees of the Fund;
(b) the expenses of office rent, telephone and other
utilities, office furniture, equipment, supplies and
other office expenses of the Fund;
(c) any other expenses incurred by you in connection with
the performance of your duties hereunder; and
(d) premiums for such insurance as may be agreed upon by you
and the Trustees.
4. EXPENSES OF THE TRUST OR THE FUND NOT PAID BY YOU. You will
not be required to pay any expenses which this Agreement does not
expressly make payable by you. In particular, and without
limiting the generality of the foregoing but subject to the
provisions of Section 3, you will not be required to pay:
(a) any and all expenses, taxes and governmental fees
incurred by the Trust or the Fund prior to the effective
date of this Agreement;
(b) without limiting the generality of the foregoing clause
(a), the expenses of organizing the Fund (including
without limitation, legal, accounting and auditing fees
and expenses incurred in connection with the matters
referred to in this clause (b)), of initially
registering the shares of the Fund under the Securities
Act of 1933, as amended, and of qualifying the shares
for sale under state securities laws for the initial
offering and sale of shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement, such term
shall have the meaning specified in the 1940 Act) of
you, and of independent advisers, independent
contractors, consultants, managers and other
unaffiliated agents employed by the Trust or the Fund
other than through you;
(d) legal, accounting and auditing fees and expenses of the
Trust or the Fund;
(e) the fees or disbursements of custodians and depositories
of the Fund's assets, transfer agents, disbursing
agents, plan agents and registrars;
(f) taxes and governmental fees assessed against the Trust's
or the Fund's assets and payable by the Trust;
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<PAGE> 6
(g) the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to
shareholders of the Fund;
(h) brokers' commissions and underwriting fees; and
(i) the expense of periodic calculations of the net asset
value of the shares of the Fund.
5. COMPENSATION OF THE ADVISER. For all services to be
rendered, facilities furnished and expenses paid or assumed by you
as herein provided, the Fund will pay you monthly, a fee at the
annual rate of 0.625% of the Fund's average daily net assets.
In the event that normal operating expenses of the Fund,
exclusive of certain expenses prescribed by state law, are in
excess of any limitation imposed by a state where the Fund is
registered to sell shares of common stock, the fee payable to the
Adviser will be reduced to the extent of such excess and the
Adviser will make any arrangements necessary to eliminate any
remaining excess expenses.
6. AVOIDANCE OF INCONSISTENT POSITION. In connection with
purchases or sales of portfolio securities for the account of the
Fund, neither your nor any investment management subsidiary of
yours, nor any of your or their directors, officers or employees
will act as principal or agent or receive any commission. If any
occasion shall arise in which you advise persons concerning the
shares of the Trust, you will act solely on your own behalf and
not in any way on behalf of the Trust or the Fund.
7. NO PARTNERSHIP OR JOINT VENTURE. The Trust, the Fund and you
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.
8. NAME OF THE TRUST AND FUND. The Trust and the Fund may use
the name "John Hancock" or any name derived from or similar to the
name "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 they lawfully
can) cease to use such a name or any other name indicating that
the Fund is advised by or otherwise connected with you. The Trust
acknowledges that it has adopted the name "John Hancock Investment
Trust" and the Fund has adopted the name "John Hancock Growth and
Income 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 non-
exclusive right to use the name "John Hancock" or any similar name
to any other corporation or entity, including but not limited to
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any investment company of which John Hancock Mutual Life Insurance
Company or any subsidiary or affiliate thereof shall be the
investment adviser.
9. LIMITATION OF LIABILITY OF THE ADVISER. You shall not be
liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Fund in connection with the matters
to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on your part in
the performance of your duties or from reckless disregard by you
of your obligations and duties under this Agreement. Any person,
even though also employed by you, 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 your employee or agent.
10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement
shall remain in force until the second anniversary of the date
upon which this Agreement was executed by the parties hereto, 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 you or (other than
as trustees) of 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 or by you. Termination of
this Agreement with respect to the Fund shall not be deemed to
terminate or otherwise invalidate any provisions of any contract
between you and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 10, the definitions
contained in Section 2(a) of the 1940 Act (particularly the
definitions of "assignment," "interested person" and "voting
security") shall be applied.
11. 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 you or (other than as Trustees)
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.
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<PAGE> 8
12. MISCELLANEOUS. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit
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 names John Hancock Investment Trust
and John Hancock Growth and Income Fund are the designations of
the Trustees under the Declaration of Trust, dated December 21,
1984, as amended from time to time. The Declaration of Trust and
all amendments thereto have been filed with the Secretary of State
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 Trust or the
Fund, but only the Fund's property shall be bound. The Fund shall
not be liable for the obligations of any other series of the
Trust.
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Very truly yours,
JOHN HANCOCK INVESTMENT TRUST
on behalf of
John Hancock Growth and Income Fund
By:/s/ Thomas M. Simmons
----------------------------
Thomas M. Simmons
President
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By:/s/ Anne C. Hodsdon
-----------------------
Anne C. Hodsdon
Executive Vice President
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<PAGE> 1
Exhibit 99.B5B
AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
------------------------------------------------------
AMENDED AND RESTATED AGREEMENT made as of the 22nd day of
December, 1994 by and between John Hancock Investment Trust, a
Massachusetts business trust (the "Trust"), in respect of John
Hancock Growth and Income Fund (the "Fund"), and Transamerica Fund
Management Company, a Delaware corporation (the "Investment
Adviser"), and Transamerica Fund Distributors, Inc., a Maryland
corporation (the "Distributor"):
WHEREAS, the Trust is engaged in business as an open-end
management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, each of the Investment Adviser and the Distributor
are registered as an investment adviser under the Investment
Advisers Act of 1940, and engages in the business of acting as
Investment Adviser or Distributor and providing certain other
services to certain investment companies, including the Fund; and
WHEREAS, each of the Investment Adviser and the Distributor
are registered as broker dealers under the Securities Exchange Act
of 1934, as amended, and serves as the principal underwriter of
the shares of each of the investment companies for which the
Investment Adviser and the Distributor serve as investment
advisers; and
WHEREAS, the Trust desires to retain the Investment Adviser
and the Distributor to render certain additional services to the
Fund regarding certain bookkeeping, accounting and administrative
services (the "Services") in the manner and on the terms and
conditions hereinafter set forth; and
WHEREAS, each of the Investment Adviser and the Distributor
desires to be retained to perform such services on said terms and
conditions;
Now, Therefore, this agreement
W I T N E S S E T H:
that in consideration of the premises and the mutual covenants
hereinafter contained, the Trust and each of the Investment
Adviser and the Distributor agree as follows:
1. The Trust hereby retains each of the Investment Adviser
and the Distributor, as the case may be, to provide to the Trust:
<PAGE> 2
A) such accounting and bookkeeping services and
functions as are reasonably necessary for the operation of
the Fund. Such services shall include, but shall not be
limited to, preparation and maintenance of the following
books, records and other documents: (1) journals containing
daily itemized records of all purchases and sales, and
receipts and deliveries of securities and all receipts and
disbursements of cash and all other debits and credits, in
the form required by Rule 31a-1(b)(1) under the Act;
(2) general and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts, in
the form required by Rules 31a-1(b)(2)(i)-(iii) under the
Act; (3) a securities record or ledger reflecting separately
for each portfolio security as of trade date all "long" and
"short" positions carried by the Trust for the account of the
Fund, if any, and showing the location of all securities long
and the off-setting position to all securities short, in the
form required by Rule 31a-1(b)(3) under the Act; (4) a record
of all portfolio purchases or sales, in the form required by
Rule 31a-1(b)(6) under the Act; (5) a record of all puts,
calls, spreads, straddles and all other options, if any, in
which the Fund has any direct or indirect interest or which
the Fund has granted or guaranteed, in the form required by
Rule 31a-1(b)(7) under the Act; (6) a record of the proof of
money balances in all ledger accounts maintained pursuant to
this Agreement, in the form required by Rule 31a-1(b)(8)
under the Act; and (7) price make-up sheets and such records
as are necessary to reflect the determination of the Fund's
net asset value. The foregoing books and records shall be
maintained by the Investment Adviser in accordance with and
for the time periods specified by applicable rules and
regulations, including Rule 31a-2 under the Act. All such
books and records shall be the property of the Fund and upon
request therefor, the Investment Adviser shall surrender to
the Trust such of the books and records so requested; and
B) certain administrative services including, but not limited
to, administrative services to shareholders of the Fund to
respond to inquiries related to shareholder accounts,
processing confirmed purchase and redemption transactions,
processing certain shareholder transactions, and maintaining
dealer information related to shareholder accounts and
typesetting and other financial printing services for the
Trust.
2. Each of the Investment Adviser and the Distributor
shall, at its own expense, maintain such staff and employ or
retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the
performance of its obligations under this Agreement. Without
limiting the generality of the foregoing, such staff and personnel
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<PAGE> 3
shall be deemed to include officers of the Investment Adviser, the
Distributor and persons employed or otherwise retained by the
Investment Adviser and the Distributor to provide or assist in
providing of the services to the Fund.
3. Each of the Investment Adviser and the Distributor, as
the case may be, shall provide such office space, facilities and
equipment (including, but not limited to, telecommunication
equipment and general office supplies) and such clerical help and
other services as shall be necessary to provide the services to
the Fun. In addition, each of the Investment Adviser and the
Distributor, as the case may be, may arrange on behalf of the
Trust and the Fund to obtain: (1) data processing or other
services, subject to approval by a majority of the Trust's Board
of Trustees, as necessary to assist it in providing the Services
to the Fund, (2) pricing information regarding the Fund's
investment securities from such company or companies as are
approved by a majority of the Trust's Board of Trustees and
(3) computer and telecommunication lines and equipment used to
provide the aforementioned services to the Fund, subject to
approval by a majority of the Trust's Board of Trustees and the
Trust shall be financially responsible to such company or
companies as aforesaid, for the reasonable cost of such services.
4. The Trust will, from time to time, furnish or otherwise
make available to each of the Investment Adviser and the
Distributor, as the case may be, such information relating to the
business and affairs of the Fund as the Investment Adviser and the
Distributor, as the case may be, may each reasonably require in
order to discharge its duties and obligations hereunder.
5. The Trust shall reimburse the Investment Adviser and the
Distributor, as the case may be, for: (1) a portion of the
compensation, including all benefits, of officers and employees of
the Investment Adviser and the Distributor, as the case may be,
based upon the amount of time that such persons actually spend in
providing or assisting in providing the Services to the Fund
(including necessary supervision and review); and (2) such other
direct expenses, including, but not limited to, those listed in
paragraph 3 above, incurred on behalf of the Fund that are
associated with the providing of the Services. In addition the
Trust will pay the Investment Adviser and the Distributor a per
account Administrative Fee based on the shareholder service and
recordkeeping duties performed. Such fees will be approved by a
majority of the Trust's Board of Trustees (See Schedule A). In no
event, however, shall such reimbursement exceed levels that are
fair and reasonable in light of the usual and customary charges
made by others for services of the same nature and quality.
Compensation under this Agreement shall be calculated and paid
monthly.
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6. The Investment Adviser and the Distributor will each
permit representatives of the Trust, including the Trust's
independent auditors, to have reasonable access to the personnel
and records of the Investment Adviser and the Distributor in order
to enable such representatives to monitor the quality of services
being provided and the determination of reimbursements due the
Investment Adviser and the Distributor pursuant to this Agreement.
In addition, the Investment Adviser and the Distributor shall
promptly deliver to the Board of Trustees of the Trust such
information as may reasonably be requested from time to time to
permit the Board of Trustees to make an informed determination
regarding continuation of this Agreement and the payments
contemplated to be made hereunder.
7. The Investment Adviser and the Distributor each will use
its best efforts in providing the Services, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations hereunder, neither the Investment
Adviser nor the Distributor shall be liable to the Trust or the
Fund or any of the Fund investors for any error or judgment or
mistake of law or any act of omission either by the Investment
Adviser or the Distributor or for any losses sustained by the
Trust, the Fund or the Fund investors.
8. The Investment Adviser and the Distributor each may
assign all or any part of their respective obligations under this
Agreement, and any such assignment will not cause this Agreement
to terminate. Notwithstanding any such assignment, the Investment
Adviser and the Distributor shall remain responsible for the
performance of their respective obligations hereunder.
9. This Agreement shall remain in effect until no later
than December 20, 1996 and from year to year thereafter provided
such continuance is approved at least annually by the vote of a
majority of the Trustees of the Trust who are not parties to this
Agreement or "interested persons" (as defined in the Act) of any
such party, which vote must be cast in person at a meeting called
for the purpose of voting on such approval; and further provided,
however, that (a) the Trust may, at any time and without the
payment of any penalty, terminate this Agreement upon thirty days
written notice to the Investment Adviser or the Distributor and
(b) either the Investment Adviser or the Distributor may terminate
this Agreement without payment of penalty on sixty days' written
notice to the Trust. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed post-paid, to
the other party at the principal office of such party.
10. This Agreement shall be construed in accordance with the
laws of The Commonwealth of Massachusetts and the applicable
provisions of the Act. To the extent the applicable law of The
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<PAGE> 5
Commonwealth of Massachusetts or any of the provisions herein
conflict with the applicable provisions of the Act, the latter
shall control.
11. The Trustees have authorized the execution of this
Agreement in their capacity as Trustees and not individually and
the Investment Adviser and the Distributor agree that neither the
shareholders of the Fund nor the Trustees nor any officer,
employee, representative or agent of the Trust shall be personally
liable upon, nor shall resort be had to their private property for
the satisfaction of, obligations given, executed or delivered on
behalf of or by the Fund; that the shareholders of the Fund, the
Trustees, officers, employees, representatives and agents of the
Trust shall not be personally liable hereunder; and that they
shall look solely to the property of the Trust for the
satisfaction of any claim hereunder.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the day and year first above written.
TRANSAMERICA FUND MANAGEMENT JOHN HANCOCK INVESTMENT TRUST
COMPANY on behalf of
John Hancock Growth and Income
Fund
By:/s/ Anne C. Hodsdon By:/s/ Thomas M. Simmons
------------------------- ---------------------------
Anne C. Hodsdon Thomas M. Simmons
President President
TRANSAMERICA FUND DISTRIBUTORS, INC.
By: /s/ Thomas H. Drohan
------------------------
Name: Thomas H. Drohan
----------------------
Title: Secretary
----------------------
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<TABLE>
Schedule A
----------
Reimbursement for shareholder and other activities under
Section 1.B of the Administrative Services Agreements.
<CAPTION>
Reimbursement
Amount per
Fund Account per Year
---- ----------------
<S> <C>
John Hancock Capital Growth Fund $4
John Hancock California Tax-Free Income Fund,
Class A & Class B $4
John Hancock Cash Reserve, Inc. $3
John Hancock Tax-Free Bond Fund, Class A &
Class B $4
John Hancock Bond Fund
----------------------
John Hancock Investment Quality Bond Fund $4
John Hancock Government Securities Trust $4
John Hancock U.S. Government Trust $4
John Hancock Intermediate Government Trust $4
John Hancock Adjustable U.S. Government Fund $4
John Hancock Adjustable U.S. Government Trust,
Class A & Class B $4
John Hancock Investment Trust
-----------------------------
John Hancock Growth and Income Fund,
Class A & Class B $4
John Hancock Series. Inc.
-------------------------
John Hancock Money Market Fund B $4
John Hancock Government Income Fund $4
John Hancock High Yield Tax-Free Fund $4
John Hancock High Yield Bond Fund $4
John Hancock Emerging Growth Fund,
Class A & Class B $4
John Hancock Global Resources Fund $4
John Hancock Current Interest
-----------------------------
John Hancock U.S. Government Cash Reserve $3
</TABLE>
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Additional Duties to be Performed Under Section 1.B of the
Administrative Services Agreement:
In addition to responding to inquiries related to shareholder
accounts, Transamerica Fund Management Co. ("TFMC") or
Transamerica Fund Distributors, Inc. ("TFD"), as the case may be,
will also process shareholder telephone requests for exchanges,
Fed wire purchases and telephone redemptions. TFMC and TFD, as
the case may be, will also process shareholder wire order
purchases and redemption requests placed through dealers. In
addition, TFMC and TFD, as the case may be, will maintain dealer,
branch, and representative data on the transfer agency system for
all shareholder accounts.
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Exhibit 99.B6
December 22, 1994
John Hancock Broker Distribution Services, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Distribution Agreement
Dear Sir:
JOHN HANCOCK INVESTMENT 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 Board of Trustees has selected
you to act as principal underwriter (as such term is defined in Section 2(a)(29)
of the Investment Company Act of 1940, as amended) of the shares of beneficial
interest ("shares") of each series of the Trust (collectively, the "Funds") and
you are willing, as agent for the Trust, to sell the shares to the public, to
broker-dealers or to both, in the manner and on the conditions hereinafter set
forth. Accordingly, the Trust hereby agrees with you as follows:
1. Delivery of Documents. The Trust will furnish you promptly with copies,
properly certified or otherwise authenticated, of any registration statements
filed by it with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, or the Investment Company Act of 1940, as amended, together
with any financial statements and exhibits included therein, and all amendments
or supplements thereto hereafter filed.
2. Registration and Sale of Additional Shares. The Trust will from time to
time use its best efforts to register under the Securities Act of 1933, as
amended, such shares not already so registered as you may reasonably be expected
to sell as agent on behalf of the Trust. This Agreement relates to the issue
and sale of shares that are duly authorized and registered and available for
sale by the Trust if, but only if, the Trust sees fit to sell them. You and the
Trust will cooperate in taking such action as may be necessary from time to time
to qualify shares for sale in Massachusetts and in any other states mutually
agreeable to you and the Trust, and to maintain such qualification if and so
long as such shares are duly registered under the Securities Act of 1933, as
amended.
3. Solicitation of Orders. You will use your best efforts (but only in states
in which you may lawfully do so) to obtain from investors unconditional orders
for shares authorized for issue by the Trust and registered under the Securities
Act of 1933, as
<PAGE> 2
amended, provided that you may in your discretion refuse to accept orders for
such shares from any particular applicant.
4. Sale of Shares. Subject to the provisions of Sections 5 and 6 hereof and
to such minimum purchase requirements as may from time to time be currently
indicated in a Fund's prospectus, you are authorized to sell as agent on behalf
of the Trust authorized and issued shares registered under the Securities Act of
1933, as amended. Such sales may be made by you on behalf of the Trust by
accepting unconditional orders to purchase such shares placed with your
investors. The sales price to the public of such shares shall be the public
offering price as defined in Section 6 hereof.
5. Sale of Shares to Investors by the Trust. Any right granted to you to
accept orders for shares or make sales on behalf of the Trust will not apply to
shares issued in connection with the merger or consolidation of any other
investment company with the Trust or any Fund or the Trust's or a Fund's
acquisition, by purchase or otherwise, of all or substantially all the assets of
any investment company or substantially all the outstanding shares of any such
company, and such right shall not apply to shares that may be offered or
otherwise issued by the Trust to shareholders by virtue of their being
shareholders of the Trust.
6. Public Offering Price. All shares sold by you as agent for the Trust will
be sold at the public offering price, which will be determined in the manner
provided in the applicable Fund's prospectus or statement of additional
information, as now in effect or as it may be amended.
7. No Sales Discount. The Trust shall receive the applicable net asset value
on all sales of shares by you as agent of the Trust.
8. Delivery of Payments. You will deliver to the Trust's transfer agent all
payments made pursuant to orders accepted by you, and accompanied by proper
applications for the purchase of shares, no later than the first business day
following the receipt by you in your home office of such payments and
applications.
9. Suspension of Sales. If and whenever a suspension of the right of
redemption or a postponement of the date of payment or redemption has been
declared pursuant to the Trust's Declaration of Trust and has become effective,
then, until such suspension or postponement is terminated, no further orders for
shares shall be accepted by you except such unconditional orders placed with you
before you have knowledge of the suspension. The Trust reserves the right to
suspend the sale of shares and your authority to accept orders for shares on
behalf of the Trust if in the judgment of a majority of the Trust's Board of
Trustees, it is in the best
-2-
<PAGE> 3
interests of the Trust to do so, such suspension to continue for such period as
may be determined by such majority; and in that event, no shares will be sold by
the Trust or by you on behalf of the Trust while such suspension remains in
effect except for shares necessary to cover unconditional orders accepted by you
before you had knowledge of the suspension.
10. Expenses. The Trust will pay (or will enter into arrangements providing
that persons other than you will pay) all fees and expenses in connection with
the preparation and filing of any registration statement and prospectus or
amendments thereto under the Securities Act of 1933, as amended, covering the
issue and sale of shares and in connection with the qualification of shares for
sale in the various states in which the Trust shall determine it advisable to
qualify such shares for sale. It will also pay the issue taxes or (in the case
of shares redeemed) any initial transfer taxes thereon. You will pay all
expenses of printing prospectuses and other sales literature, all fees and
expenses in connection with your qualification as a dealer in various states,
and all other expenses in connection with the sale and offering for sale of the
shares of the Trust which have not been herein specifically allocated to the
Trust.
11. Conformity with Law. You agree that in selling the shares you will duly
conform in all respects with the laws of the United States and any state in
which such shares may be offered for sale by you pursuant to this Agreement.
12. Indemnification. You agree to indemnify and hold harmless the Trust and
each of its Trustees and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the Securities Act of 1933, as
amended, against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which the Trust or such Trustees,
officers or controlling person may become subject under such Act, under any
other statute, at common law or otherwise, arising out of the acquisition of any
shares by any person which (a) may be based upon any wrongful act by you or any
of your employees or representatives or (b) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus or statement of additional information
covering shares of a Fund or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon information furnished or
confirmed in writing to the Trust by you, or (c) may be incurred or arise by
reason of your acting as the Trust's agent instead of purchasing and reselling
shares as principal in distributing shares to the public, provided that in no
case is your indemnity
-3-
<PAGE> 4
in favor of a Trustee or officer of the Trust or any other person deemed to
protect such Trustee or officer of the Trust or other person against any
liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligations and duties under
this Agreement.
You are not authorized to give any information or to make any
representations on behalf of the Trust or in connection with the sale of shares
other than the information and representations contained in a registration
statement, prospectus, or statement of additional information covering shares,
as such registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time. No person other
than you is authorized to act as principal underwriter for the Trust.
13. Duration and Termination of this Agreement. With respect to each Fund,
this Agreement shall remain in force until two years from the date hereof 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 Board of
Trustees of the Trust who are not interested persons of you (other than as
Trustees) or of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, and (b) either (i) the Board of Trustees of the Trust,
or (ii) a majority of the outstanding voting securities of the Fund. This
Agreement may, on 60 days' written notice, be terminated as to one or more Funds
at any time, without the payment of any penalty, by the Board of Trustees of the
Trust, by a vote of a majority of the outstanding voting securities of each
affected Fund, or by you. This Agreement will automatically terminate in the
event of its assignment by you. In interpreting the provisions of this Section
13, the definitions contained in Section 2(a) of the Investment Company Act of
1940, as amended (particularly the definitions of "interested person,"
"assignment" and "voting security"), shall be applied.
14. 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. If the Trust should at any time deem it
necessary or advisable in the best interests of the Trust that any amendment of
this agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under state or federal tax laws and should
notify you of the form of such amendment, and the reasons therefor, and if you
should decline to assent to such amendment, the Trust may terminate this
Agreement
-4-
<PAGE> 5
forthwith. If you should at any time request that a change be made in the
Trust's Declaration of Trust or By-Laws, or in its methods of doing business, in
order to comply with any requirements of federal law or regulations of the
Securities and Exchange Commission or of a national securities association of
which you are or may be a member, relating to the sale of shares, and the Trust
should not make such necessary change within a reasonable time, you may
terminate this Agreement forthwith.
15. Miscellaneous. 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 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 Trust or the Fund,
but only the Fund's property shall be bound. The Fund shall not be liable for
the obligations of any other series of the Trust.
-5-
<PAGE> 6
Very truly yours,
JOHN HANCOCK INVESTMENT TRUST
on behalf of
John Hancock Growth and Income Fund
By:/s/ Thomas M. Simmons
---------------------------------------
Thomas M. Simmons
President
The foregoing Agreement is hereby
accepted as of the date hereof
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By:/s/ C. Troy Shaver, Jr.
--------------------------------------------
C. Troy Shaver, Jr.
President and Chief Executive Officer
-6-
<PAGE> 1
EXHIBIT 99.B6.b
[Form of]
SOLICITING DEALER AGREEMENT
[LOGO]
JOHN HANCOCK FUNDS, INC.
BOSTON -- MASSACHUSETTS -- 02199-7603
<PAGE> 2
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603
[Form of]
SOLICITING DEALER AGREEMENT
Date
------------------------------
John Hancock Funds, Inc. ("the Distributor" or "Distributor") is the
principal distributor of the shares of beneficial interest (the "securities")
of each of the John Hancock Funds, ("We" or "us"), (the "Funds"). Such Funds
are those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You represent that you are a member
of the National Association of Securities Dealers, Inc., (the "NASD") and,
accordingly, we invite you to become a non-exclusive soliciting dealer to
distribute the securities of the Funds and you agree to solicit orders for the
purchase of the securities on the following terms. Securities are offered
pursuant to each Fund's prospectus and statement of additional information, as
such prospectus and statement of additional information may be amended from
time to time. To the extent that the prospectus or statement of additional
information contains provisions that are inconsistent with the terms of this
Agreement, the terms of the prospectus or statement of additional information
shall be controlling.
OFFERINGS
1. You agree to abide by the Rules of Fair Practice of the NASD and to all
other rules and regulations that are now or may become applicable to
transactions hereunder.
2. As principal distributor of the Funds, we shall have full authority to
take such action as we deem advisable in respect of all matters pertaining to
the distribution. This offer of shares of the Funds to you is made only in
such jurisdictions in which we may lawfully sell such shares of the Funds.
3. You shall not make any representation concerning the Funds or their
securities except those contained in the then- current prospectus or
statement of additional information for each Fund.
4. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by the Distributor or the
Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.
5. You are not authorized to act as our agent. Nothing shall constitute you
as a syndicate, association, joint venture, partnership, unincorporated
business, or other separate entity or otherwise partners with us, but you shall
be liable for your proportionate share of any tax, liability or expense based
on any claim arising from the sale of shares of the Funds under this Agreement.
We shall not be under any liability to you, except for obligations expressly
assumed by us in this Agreement and liabilities under Section 11(f) of the
Securities Act of 1933, and no obligations on our part shall be implied or
inferred herefrom.
-2-
<PAGE> 3
6. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All dealers offering shares of
the Funds and their associated persons agree to comply with these general
suitability and compliance standards.
SUITABILITY
With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your registered representatives in light of all the facts and circumstances, to
ascertain that the class of shares to be purchased by each investor is
appropriate and suitable. These recommendations should be based on several
factors, including but not limited to:
(A) the amount of money to be invested initially and over a period of
time;
(B) the current level of front-end sales load or back-end sales load
imposed by the Fund;
(C) the period of time over which the client expects to retain the
investment;
(D) the anticipated level of yield from fixed income funds' Class A and
Class B shares;
(E) any other relevant circumstances such as the availability of
reduced sales charges under letters of intent and/or rights of
accumulation.
There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.
COMPLIANCE
Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Soliciting Dealer Agreement for compliance with the foregoing standards.
In certain instances, it may be appropriate to discuss the purchase with the
registered representatives involved or to review the advantages and
disadvantages of selecting one class of shares over another with the client.
The Distributor will not accept orders for Class B Shares in any Fund from you
for accounts maintained in street name. Trades for Class B Shares will only be
accepted in the name of the shareholder.
7. CLASS C SHARES - Certain mutual funds distributed by the Distributor may be
offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.
SALES
8. Orders for securities received by you from investors will be for the sale
of the securities at the public offering price, which will be the net asset
value per share as determined in the manner provided in the relevant Fund's
prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then- current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.
-3-
<PAGE> 4
In addition to the foregoing, you acknowledge and agree to the initial
and subsequent investment minimums, which may vary from year to year, as
described in the then-current prospectus for each Fund.
9. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.
10. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.
If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then-current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.
11. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by a registered representative in your employ and remitted to us
promptly by you, (b) where a subsequent investment is made to an account
established by a registered representative in your employ or (c) where a
subsequent investment is made to an account established by a broker/dealer
other than you and is accompanied by a signed request from the account
shareholder that your registered representative receive the Reallowance for
that investment and/or for subsequent investments made in such account. If for
any reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.
12. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the the prospectus). To the
extent you provide distribution and marketing services in the promotion of the
sale of shares of these Funds, including furnishing services and assistance to
your customers who invest in and own shares of such Funds and including, but
not limited to, answering routine inquiries regarding such Funds and assisting
in changing distribution options, account designations and addresses, you may
be entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.
13. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.
14. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265
SETTLEMENT
15. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.
-4-
<PAGE> 5
INDEMNIFICATION
16. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
17. NSCC INDEMNITY - SHAREHOLDER AND HOUSE ACCOUNTS - In consideration of the
Distributor and John Hancock Investor Services Corporation ("Investor
Services") liquidating, exchanging, and/or transferring unissued shares of the
Funds for your customers without the use of original or underlying
documentation supporting such instructions (e.g., a signed stock power or
signature guarantee), you hereby agree to indemnify the Distributor, Investor
Services and each respective Fund against any losses, including reasonable
attorney's fees, that may arise from such liquidation exchange, and/or
transfer of unissued shares upon your direction. This indemnification shall
apply only to the liquidation, exchange and/or transfer of unissued shares in
shareholder and house accounts executed as wire orders transmitted via NSCC's
Fund/SERVsystem. You represent and warrant to the Funds, the Distributor and
Investor Services that all such transactions shall be properly authorized by
your customers.
The indemnification in this Section 16 shall not apply to any losses
(including attorney's fees) caused by a failure of the Distributor, Investor
Services or a Fund to comply with any of your instructions governing any of the
above transactions, or any negligent act or omission of the Distributor,
Investor Services or a Fund, or any of their directors, officers, employees or
agents. All transactions shall be settled upon your confirmation through NSCC
transmission to Investor Services.
The Distributor, Investor Services or you may revoke the indemnity
contained in this Section 16 upon prior written notice to each of the other
parties hereto, and in the case of such revocation, this indemnity agreement
shall remain effective as to trades made prior to such revocation.
MISCELLANEOUS
18. We will supply to you at our expense additional copies of the prospectus
and statement of additional information for each of the Funds and any printed
information supplemental to such material in reasonable quantities upon
request.
19. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as registered from time to time with the NASD.
20. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.
21. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.
-5-
<PAGE> 6
SOLICITING DEALER
-------------------------------------------------
Name of Organization
By:-------------------------------------------------
Authorized Signature of Soliciting Dealer
-------------------------------------------------
Please Print or Type Name
-------------------------------------------------
Title
-------------------------------------------------
Print or Type Address
-------------------------------------------------
Telephone Number
Date:
-------------------------------------------------
In order to service you efficiently, please provide the following
information on your Mutual Funds Operations Department:
OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------
---------------------------------------------
TELEPHONE: FAX:
-------------------------------- ------------------------------
<TABLE>
<S> <C>
TO BE COMPLETED BY: TO BE COMPLETED BY:
JOHN HANCOCK FUNDS, INC. JOHN HANCOCK INVESTOR
SERVICES CORPORATION
BY: BY:
------------------------------------------- -------------------------------------------
- ---------------------------------------------- ----------------------------------------------
TITLE TITLE
</TABLE>
DEALER NUMBER:
------------------------------------
-6-
<PAGE> 7
JOHNHANCOCK
MUTUAL FUNDS
John Hancock Broker Distrubution Services, Inc.
101 Huntington Avenue Boston, MA 02199-7608 1-800-225-5291
/s/ John Hancock
<PAGE> 8
JOHN HANCOCK FUNDS, INC.
SCHEDULE A
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Resources Fund
John Hancock Limited-Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government Securities Fund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Government Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>
From time to time John Hancock Funds, Inc., as principal distributor of the
John Hancock funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
*Closed to new investors as of 9/30/94
<PAGE> 9
JOHN HANCOCK FUNDS, INC.
SCHEDULE B
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
I. REALLOWANCE
The Reallowance paid to the selling Brokers for sales of John Hancock
Funds is set forth in each Fund's then- current prospectus. No Commission will
be paid on sales of John Hancock Cash Management Fund or any John Hancock Fund
that is without a sales charge. Purchases of Class A shares of $1 million or
more, or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no initial
sales charge. On purchases of this type, John Hancock Funds, Inc. will pay a
commission as set forth in each Fund's then-current prospectus. John Hancock
Funds, Inc. will pay Brokers for sales of Class B shares of the Funds a
marketing fee as set forth in each Fund's then-current prospectus.
<PAGE> 10
JOHN HANCOCK FUNDS, INC.
SCHEDULE C
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
FIRST YEAR SERVICE FEES
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, John Hancock Funds, Inc. will advance to you a First Year
Service Fee related to the purchase of Class A shares (only if subject to sales
charge) or Class B shares of any of the Funds, as the case may be, sold by your
firm. This Service Fee will be compensation for your personal service and/or
the maintenance of shareholder accounts ("Customer Servicing") during the
twelve-month period immediately following the purchase of such shares, in the
amount not to exceed .25 of 1% of net assets invested in Class A shares or
Class B shares of the Fund, as the case may be, purchased by your customers.
SERVICE FEE SUBSEQUENT TO THE FIRST YEAR
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your firm has under management
with the Funds combined average daily net assets for the preceding quarter of
no less than $1 million, or an individual representative of your firm has under
management with the Funds combined average daily net assets for the preceding
quarter of no less than $250,000 (an "Eligible Firm").
<PAGE> 11
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
SCHEDULE D
DATED JULY 1, 1992 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK MUTUAL FUNDS
No broker/dealer shall represent the FUnds or Distribution Services in any
written communications without prior receipt of written approval from John
Hancock Broker Distribution Services, Inc. This includes but is not limited to
all advertising, public relations, marketing and sales literature, and media
contacts.
Further, subsequent to the creation of such materialsbefore written
approval from JHBDS will be given, a copy of the NASD review document
applicable to such materials must be furnished to John Hancock Broker
Distribution Services, Inc. for its review and files.
FOR PURPOSES OF THIS SCHEDULE D, THE FOLLOWING TERMS ARE DEFINED:
Advertising:
materials designed for the mass market, e.g. print ads, radio and tv
commercials, billboards, etc.
Sales literature:
materials designed for a directed market, e.g. prospecting letters,
brochures, mailers, stuffers, etc.
Coop Advertising:
advertising materials (as defined above) used by selling group members
for which John Hancock pays some or all of the costs of publication
whether the materials were developed by JHBDS Marketing or not.
John Hancock Broker Distribution Services, Inc. Approval of Advertising:
Approval has four meanings:approval of the material itself from a
marketing perspective (JHBDS product managers), proactive compliance
officer), parent company corporate advertising approval (John Hancock
Mutual Life Insurance Company Advertising Dept. personnel) and
approval for use and related cost-sharing arrangements (national sales
coordinators).
NASD Filing:
Materials created by JHBDS will be filed with the NASD by the JHBDS
Compliance Department. Materials not created by JHBDS but to be
included in the coop program will be filed with the NASD by the
broker-dealer creating the materials. However, prior to use of the
materials in our coop program, we will need a copy of the final
version of the material as well as the NASDcomment letter. When this
is received, the above approvals can be obtained.
<PAGE> 1
EXHIBIT 99.B6.c
FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT
[LOGO]
JOHN HANCOCK FUNDS, INC.
Boston - Massachusetts - 02199-7603
<PAGE> 2
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603
FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT
Date
--------------------------------
John Hancock Funds, Inc. ("The Distributor", or "Distributor"), ("We" or
"us"), is the principal distributor of the shares of beneficial interest (the
"securities") of each of the John Hancock Funds (the "Funds"). Such Funds are
those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You hereby represent that you are a
"bank" as defined in Section 3(a)(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and at the time of each transaction in shares of
the Funds, are not required to register as a broker/dealer under the Exchange
Act or regulations thereunder. We invite you to become a non-exclusive
soliciting financial institution ("Financial Institution") to distribute the
securities of the Funds and you agree to solicit orders for the purchase of the
securities on the following terms. Securities are offered pursuant to each
Fund's prospectus and statement of additional information, as such prospectus
and statement of additional information may be amended from time to time. To
the extent that the prospectus or statement of additional information contains
provisions that are inconsistent with the terms of this Agreement, the terms of
the prospectus or statement of additional information shall be controlling.
OFFERINGS
1. You represent and warrant that you will use your best efforts to ensure
that any purchase of shares of the Funds by your customers constitutes a
suitable investment for such customers. You acknowledge that you will base
such a decision of suitability on all the facts you have gathered about your
customer's financial situation, investment objectives, risk tolerance and
sophistication.
2. You represent and warrant that a copy of the then-current prospectus of a
Fund will be delivered to your customer before any purchase of shares of that
Fund are effected for that customer. You shall not effect any transaction in,
or induce any purchase or sale of, any shares of the Funds by means of any
manipulative, deceptive or other fraudulent device or contrivance, and shall
otherwise deal equitably and fairly with your customers with respect to
transactions in shares of a Fund.
3. You represent and warrant that you will not make shares of any Fund
available to your customers, including your fiduciary customers, except in
compliance with all Federal and state laws and rules and regulations of
regulatory agencies or authorities applicable to you, or any of your affiliates
engaging in such activity, which may affect your business practices. You
confirm that you are not in violation of any banking law or regulations as to
which you are subject. You agree that you will comply with the requirements of
Banking Circular 274 issued by the Office of the Comptroller of the Currency in
offering shares of the Funds to your customers. We agree that we will comply
with all Federal and state laws and rules and regulations of regulatory
agencies or authorities applicable to us. We and you acknowledge and agree
that the offering of shares of the Funds pursuant to this agreement is subject
to the oversight of your management and the regulatory authorities by which you
are subject to review, and that appropriate records and materials relating to
any activity by you or us undertaken pursuant to this agreement may be accessed
by bank examiners in the due course of any regulatory review to which you may
be subject.
4. As principal distributor of the Funds, we shall have full authority to take
such action as we deem advisable in respect of all matters pertaining to the
distribution. This offer of shares of the Funds to you is made only in such
jurisdictions in which we may lawfully sell such shares of the Funds.
-2-
<PAGE> 3
5. You shall not make any representation concerning the Funds or their
securities except those contained in the then-current prospectus or statement
of additional information for each Fund.
6. We will supply to you at our expense additional copies of the then-current
prospectus and statement of additional information for each of the Funds and
any printed information supplemental to such material in reasonable quantities
upon request. It shall be your obligation to ensure that all such information
and materials are distributed to your customers who own or seek to own shares
of the Funds in accordance with securities and/or banking law and regulations
and any other applicable regulations.
7. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by us the Distributor or
the Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.
8. You are not authorized to act as our agent. In making available shares of
the Funds under this Financial Institution Sales and Service Agreement, nothing
herein shall be construed to constitute you or any of your agents, employees or
representatives as our agent or employee, or as an agent or employee of the
Funds, and you shall not make any representations to the contrary. Nothing
shall constitute you as a syndicate, association, unincorporated business, or
other separate entity or partners with us, but you shall be liable for your
proportionate share of any tax, liability or expense based on any claim arising
from the sale of shares of the Funds under this Agreement. We shall not be
under any liability to you, except for obligations expressly assumed by us in
this Agreement and liabilities under Section 11(f) of the Securities Act of
1933, and no obligations on our part shall be implied or inferred herefrom.
9. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All soliciting financial
institutions offering shares of the Funds and their agents, employees and
representatives agree to comply with these general suitability and compliance
standards.
SUITABILITY
With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your agents, employees and representatives in light of all the facts and
circumstances, to ascertain that the class of shares to be purchased by each
investor is appropriate and suitable. These recommendations should be based on
several factors, including but not limited to:
(A) the amount of money to be invested initially and over
a period of time;
(B) the current level of front-end sales load or back-end
sales load imposed by the Fund;
(C) the period of time over which the customer expects to
retain the investment;
(D) the anticipated level of yield from fixed income
funds' Class A and Class B shares;
(E) any other relevant circumstances such as the
availability of reduced sales charges under letters
of intent and/or rights of accumulation.
There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.
-3-
<PAGE> 4
COMPLIANCE
Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Financial Institution Sales and Service Agreement for compliance with the
foregoing standards. In certain instances, it may be appropriate to discuss
the purchase with the agents, employees and representatives involved or to
review the advantages and disadvantages of selecting one class of shares over
another with the client. The Distributor will not accept orders for Class B
Shares in any Fund from you for accounts maintained in your name or in the name
of your nominee for the benefit of certain of your customers. Trades for Class
B Shares will only be accepted in the name of the shareholder.
10. CLASS C SHARES - Certain mutual funds distributed by the Distributor may
be offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.
SALES
11. With respect to any and all transactions in the shares of any Fund
pursuant to this Financial Institution Sales and Service Agreement it is
understood and agreed in each case that: (a) you shall be acting solely as
agent for the account of your customer; (b) each transaction shall be initiated
solely upon the order of your customer; (c) we shall execute transactions only
upon receiving instructions from you acting as agent for your customer or upon
receiving instructions directly from your customer; (d) as between you and your
customer, your customer will have full beneficial ownership of all shares; (c)
each transaction shall be for the account of your customer and not for your
account; and (f) unless otherwise agreed in writing we will serve as a clearing
broker for you on a fully disclosed basis, and you shall serve as the
introducing agent for your customers' accounts. Subject to the foregoing,
however, and except for Class B shares, as described in Section 8 above, you
may maintain record ownership of such customers' shares in an account
registered in your name or the name of your nominee, for the benefit of such
customers. Each transaction shall be without recourse to you provided that you
act in accordance with the terms of this Financial Institution Sales and
Service Agreement. You represent and warrant to us that you will have full
right, power and authority to effect transactions (including, without
limitation, any purchases and redemptions) in shares of the Funds on behalf of
all customer accounts provided by you.
12. Orders for securities received by you from your customers will be for the
sale of the securities at the public offering price, which will be the net
asset value per share as determined in the manner provided in the relevant
Fund's prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then-current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.
In addition to the foregoing, you acknowledge and agree to the initial and
subsequent investment minimums, which may vary from year to year, as described
in the then-current prospectus for each Fund.
13. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.
14. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.
If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then- current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.
15. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by you and remitted to us promptly by you, (b) where a subsequent
investment is made to an account established by you or (c) where a subsequent
investment is made to an account established by a financial institution or
-4-
<PAGE> 5
registered broker/dealer other than you and is accompanied by a signed request
from the account shareholder that you receive the Reallowance for that
investment and/or for subsequent investments made in such account. If for any
reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.
16. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the prospectus). To the extent
you provide distribution and marketing services in the promotion of the sale of
shares of these Funds, including furnishing services and assistance to your
customers who invest in and own shares of such Funds and including, but not
limited to, answering routine inquiries regarding such Funds and assisting in
changing distribution options, account designations and addresses, you may be
entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.
17. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.
18. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265
SETTLEMENT
19. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.
INDEMNIFICATION
20. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
MISCELLANEOUS
21. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as most recently furnished to us by you.
22. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.
23. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.
-5-
<PAGE> 6
FINANCIAL INSTITUTION
-------------------------------------------------
Financial Institution
By:
-------------------------------------------------
Authorized Signature of Financial Institution
-------------------------------------------------
Please Print or Type Name
-------------------------------------------------
Title
-------------------------------------------------
Print or Type Address
-------------------------------------------------
Telephone Number
Date:
-------------------------------------------------
In order to service you efficiently, please provide the
following information on your Mutual Funds Operations Department:
OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------
---------------------------------------------
TELEPHONE: FAX:
--------------------- ----------------------------
TO BE COMPLETED BY: JOHN HANCOCK INVESTOR
JOHN HANCOCK FUNDS, INC. SERVICES CORPORATION
By: By:
--------------------------------- ------------------------------------
- ------------------------------------ ------------------------------------
Title Title
TO BE COMPLETED BY:
FINANCIAL INSTITUTION NUMBER:
----------------------------------------------
-6-
<PAGE> 7
JOHN HANCOCK FUNDS, INC.
SCHEDULE A
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Rescources Fund
John Hancock Limited Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government SecurritiesFund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Governtment Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>
From time to time John Hancock Funds, as principal distributor of the
John Hancock Funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
* Closed to new invstors as of 9/30/94.
<PAGE> 8
JOHN HANCOCK FUNDS, INC.
SCHEDULE B
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
I. REALLOWANCE
The Reallowance paid to Financial Institutions for sales of John Hancock
Funds is the same as that paid to Selling Brokers described and set forth
in each Fund's then-current prospectus. No Commission will be paid on
sales of John Hancock Cash Management Fund or any John Hancock Fund that is
without a sales charge. Purchases of Class A shares of $1 million or more,
or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no
initial sales charge. On purchases of this type, the Distributor will pay a
commission as set forth in each Fund's then-current prospectus. John
Hancock Funds, Inc. will pay Financial Institutions for sales of Class B
shares of the Funds a marketing fee as set forth in each Fund's then-
current prospectus for Selling Brokers.
<PAGE> 9
JOHN HANCOCK FUNDS, INC.
SCHEDULE C
DISTRIBUTION PLAN SCHEDULE OF COMPENSATION
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
FIRST YEAR SERVICE FEE
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will advance to you a First Year Service
Fee related to the purchase of Class A shares (only if subject to sales charge)
or Class B shares of any of the Funds, as the case maybe, sold by your firm on
or after July 1, 1993. This Service Fee will be compensation for your personal
service and/or the maintenance of shareholder accounts ("Customer Servicing")
during the twelve-month period immediately following the purchase of such
shares, in an amount not to exceed .25 of 1% of the average daily net assets
attributable to Class A shares or Class B shares of the Fund, as the case may
be, purchased by your customers.
SERVICE FEE SUBSEQUENT TO THE FIRST YEAR
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve-month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your Financial Institution has
under management with the Funds combined average daily net assets for the
preceding quarter of no less than $1 million, or an individual representative
of your Financial Institution has under management with the Funds combined
average daily net assets for the preceding quarter of no less than $250,000 (an
"Eligible Financial Institution").
<PAGE> 1
EXHIBIT 99.B8
MASTER CUSTODIAN AGREEMENT
between
JOHN HANCOCK MUTUAL FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
-----------------
<S> <C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
2. Employment of Custodian and Property to be held by it . . . . . . . . . . . . . . . 3-4
3. Duties of the Custodian with Respect toProperty of the Fund . . . . . . . . . . . . 4
A. Safekeeping and Holding of Property . . . . . . . . . . . . . . . . . . . . . 4
B. Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
C. Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
E. Payments for Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . . 9
F. Investment and Availability of Federal Funds . . . . . . . . . . . . . . . . . 9
G. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10
H. Payment of Fund Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-12
I. Liability for Payment in Advance of Receipt of Securities Purchased . . . . . 12-13
J. Payments for Repurchases of Redemptions of Shares of the Fund . . . . . . . . 13
K. Appointment of Agents by the Custodian . . . . . . . . . . . . . . . . . . . . 13
L. Deposit of Fund Portfolio Securities in Securities Systems . . . . . . . . . . 13-16
M. Deposit of Fund Commercial Paper in an Approved
Book-Entry System for Commercial Paper . . . . . . . . . . . . . . . . . . 16-18
N. Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19
O. Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . . . . . . 19
P. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Q. Communications Relating to Fund Portfolio Securities . . . . . . . . . . . . . 19-20
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
R. Exercise of Rights; Tender Offers . . . . . . . . . . . . . . . . . . . . . . 20
S. Depository Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21
T. Interest Bearing Call or Time Deposits . . . . . . . . . . . . . . . . . . . . 21
U. Options, Futures Contracts and Foreign Currency Transactions . . . . . . . . . 21-23
V. Actions Permitted Without Express Authority . . . . . . . . . . . . . . . . . 23-24
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5. Records and Miscellaneous Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 24-25
6. Opinion of Fund`s Independent Public Accountants . . . . . . . . . . . . . . . . . . 25
7. Compensation and Expenses of Bank . . . . . . . . . . . . . . . . . . . . . . . . . 25-26
8. Responsibility of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27
9. Persons Having Access to Assets of the Fund . . . . . . . . . . . . . . . . . . . . 27
10. Effective Period, Termination and Amendment; Successor Custodian . . . . . . . . . . 27-28
11. Interpretive and Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . 28-29
12. Certification as to Authorized Officers . . . . . . . . . . . . . . . . . . . . . . 29
13. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
14. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
15. Adoption of the Agreement by the Fund . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
<PAGE> 4
MASTER CUSTODIAN AGREEMENT
This Agreement is made as of December 15, 1992 between each investment
company advised by John Hancock Advisers, Inc. which has adopted this Agreement
in the manner provided herein and Investors Bank & Trust Company (hereinafter
called "Bank", "Custodian" and "Agent"), a trust company established under the
laws of Massachusetts with a principal place of business in Boston,
Massachusetts.
Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
-----------
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement and is listed on Appendix A hereto. If the Fund is a Massachusetts
business trust or Maryland corporation, it may in the future establish and
designate other separate and distinct series of shares, each of which may be
called a "portfolio"; in such case, the term "Fund" shall also refer to each
such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Authorized Officer", shall mean any of the following officers of
the Trust: The Chairman of the Board of Trustees, the President, a Vice
President, the Secretary, the Treasurer or Assistant Secretary or Assistant
Treasurer, or any other officer of the Trust duly authorized to sign by
appropriate resolution of the Board of Trustees of the Trust.
(e) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
<PAGE> 5
(f) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository
but only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(g) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for
United States and federal agency securities (i.e., as provided in Subpart O of
Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the
book-entry regulations of federal agencies substantially in the form of Subpart
O).
(h) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(i) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but
only if the Custodian has received a certified copy of a vote of the Board
approving the participation by the Fund in such system.
(j) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by John Hancock
Advisers, Inc. to the Custodian through the John Hancock equity trading system
and the John Hancock fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for
different purposes. A certified copy of a vote of the Board may be received
and accepted by the Custodian as conclusive evidence of the authority of any
such person to act and may be considered as in full force and effect until
receipt of written notice to the contrary. Such instructions may be general or
specific in terms and, where appropriate, may be standing instructions. Unless
the vote delegating authority to any person or persons to give a particular
class of instructions specifically requires that the approval of any person,
persons or committee shall first have been obtained before the Custodian may
act on instructions of that class, the Custodian shall be under no obligation
to question the right of the person or persons giving such instructions in so
doing. Oral instructions will be considered proper instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund
shall cause all oral
<PAGE> 6
instructions to be confirmed in writing. The Fund authorizes the Custodian to
tape record any and all telephonic or other oral instructions given to the
Custodian. Upon receipt of a certificate signed by two officers of the Fund as
to the authorization by the President and the Treasurer of the Fund accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Fund, "proper instructions" may also include
communications effected directly between electromechanical or electronic
devices provided that the President and Treasurer of the Fund and the Custodian
are satisfied that such procedures afford adequate safeguards for the Fund's
assets. In performing its duties generally, and more particularly in
connection with the purchase, sale and exchange of securities made by or for
the Fund, the Custodian may take cognizance of the provisions of the governing
documents and registration statement of the Fund as the same may from time to
time be in effect (and votes, resolutions or proceedings of the shareholders or
the Board), but, nevertheless, except as otherwise expressly provided herein,
the Custodian may assume unless and until notified in writing to the
contrary that so-called proper instructions received by it are not in conflict
with or in any way contrary to any provisions of such governing documents and
registration statement, or votes, resolutions or proceedings of the
shareholders or the Board.
2. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby appoints and employs the Bank as its Custodian and Agent
in accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of
its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Fund held by such subcustodian.
Any foreign subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the foreign custody arrangements shall be approved by the
Board and shall be in accordance with and subject to the provisions of said
Rule. For
<PAGE> 7
the purposes of this Agreement, any property of the Fund held by any such
subcustodian (domestic or foreign) shall be deemed to be held by the Custodian
under the terms of this Agreement.
3. Duties of the Custodian with Respect to Property of the Fund
------------------------------------------------------------
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep
safely all property of the Fund and on behalf of the Fund shall
from time to time receive delivery of Fund property for
safekeeping. The Custodian shall hold, earmark and segregate on
its books and records for the account of the Fund all property of
the Fund, including all securities, participation interests and
other assets of the Fund (1) physically held by the Custodian, (2)
held by any subcustodian referred to in Section 2 hereof or by any
agent referred to in Paragraph K hereof, (3) held by or maintained
in The Depository Trust Company or in Participants Trust Company
or in an Approved Clearing Agency or in the Federal Book- Entry
System or in an Approved Foreign Securities Depository, each of
which from time to time is referred to herein as a "Securities
System", and (4) held by the Custodian or by any subcustodian
referred to in Section 2 hereof and maintained in any Approved
Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties,
and only in the following cases:
1) Upon sale of such securities or participation interests
for the account of the Fund, BUT ONLY against receipt of
payment therefor; if delivery is made in Boston or New
York City, payment therefor shall be made in accordance
with generally accepted clearing house procedures or by
use of Federal Reserve Wire System procedures; if delivery
is made elsewhere payment therefor shall be in accordance
with the then current "street delivery" custom or in
accordance with such procedures agreed to in writing from
time to time by the parties hereto; if the sale is
effected through a Securities System, delivery and payment
therefor shall be made in accordance with the provisions
of Paragraph L hereof; if the sale of commercial paper is
to be effected through an Approved Book-Entry System for
Commercial Paper, delivery and payment therefor shall be
made in accordance with the provisions of Paragraph M
hereof; if the securities are to be sold outside the
United States, delivery may be made in accordance with
procedures agreed to in writing from time to time by the
parties hereto; for the purposes of this subparagraph, the
term "sale" shall include the disposition of a portfolio
<PAGE> 8
security (i) upon the exercise of an option written by the
Fund and (ii) upon the failure by the Fund to make a
successful bid with respect to a portfolio security, the
continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any
repurchase agreement or reverse repurchase agreement
relating to such securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;
5) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or into the name
or nominee name of any subcustodian employed pursuant to
Section 2 hereof; or for exchange for a different number
of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; provided
that, in any such case, the new securities or
participation interests are to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;
6) To the broker selling the same for examination in
accordance with the "street delivery" custom; provided
that the Custodian shall adopt such procedures as the Fund
from time to time shall approve to ensure their prompt
return to the Custodian by the broker in the event the
broker elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion of
such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
<PAGE> 9
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender
of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;
9) For delivery in connection with any loans of securities
made by the Fund (such loans to be made pursuant to the
terms of the Fund's current registration statement), but
only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund, which may
be in the form of cash or obligations issued by the United
States government, its agencies or instrumentalities.
10) For delivery as security in connection with any borrowings
by the Fund requiring a pledge or hypothecation of assets
by the Fund (if then permitted under circumstances
described in the current registration statement of the
Fund), provided, that the securities shall be released
only upon payment to the Custodian of the monies borrowed,
except that in cases where additional collateral is
required to secure a borrowing already made, further
securities may be released for that purpose; upon receipt
of proper instructions, the Custodian may pay any such
loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or
notes evidencing the loan;
11) When required for delivery in connection with any
redemption or repurchase of Shares of the Fund in
accordance with the provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian
employed pursuant to Section 2 hereof) and a broker-dealer
registered under the Securities Exchange Act of 1934 and,
if necessary, the Fund, relating to compliance with the
rules of The Options Clearing Corporation or of any
registered national securities exchange, or of any similar
organization or organizations, regarding deposit or escrow
or other arrangements in connection with options
transactions by the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian (or a subcustodian
employed pursuant to Section 2 hereof),
and a futures commission merchant, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or of any
<PAGE> 10
contract market or commodities exchange or similar
organization, regarding futures margin account deposits or
payments in connection with futures transactions by
the Fund;
14) For any other proper corporate purpose, but only upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose
to be proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.
C. REGISTRATION OF SECURITIES Securities held by the Custodian
(other than bearer securities) for the account of the Fund shall
be registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian, or in the
name or nominee name of any agent appointed pursuant to Paragraph
K hereof, or in the name or nominee name of any subcustodian
employed pursuant to Section 2 hereof, or in the name or nominee
name of The Depository Trust Company or Participants Trust Company
or Approved Clearing Agency or Federal Book-Entry System or
Approved Book-Entry System for Commercial Paper; provided, that
securities are held in an account of the Custodian or of such
agent or of such subcustodian containing only assets of the Fund
or only assets held by the Custodian or such agent or such
subcustodian as a custodian or subcustodian or in a fiduciary
capacity for customers. All certificates for securities accepted
by the Custodian or any such agent or subcustodian on behalf of
the Fund shall be in "street" or other good delivery form or shall
be returned to the selling broker or dealer who shall be advised
of the reason thereof.
D. BANK ACCOUNTS The Custodian shall open and maintain a separate
bank account or accounts in the name of the Fund, subject only to
draft or order by the Custodian acting in pursuant to the terms of
this Agreement, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or
for the account of the Fund other than cash maintained by the Fund
in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as the Custodian may in its
discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each
such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved in writing by two
officers of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to
withdrawal only by the Custodian in that capacity.
<PAGE> 11
E. PAYMENT FOR SHARES OF THE FUND The Custodian shall make
appropriate arrangements with the Transfer Agent and the principal
underwriter of the Fund to enable the Custodian to make certain it
promptly receives the cash or other consideration due to the Fund
for such new or treasury Shares as may be issued or sold from time
to time by the Fund, in accordance with the governing documents
and offering prospectus and statement of additional information of
the Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement
between the Fund and the Custodian, the Custodian shall, upon the
receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties, invest in
such securities and instruments as may be set forth in such
instructions on the same day as received all federal funds
received after a time agreed upon between the Custodian and the
Fund.
G. COLLECTIONS The Custodian shall promptly collect all income and
other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall promptly
collect all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such
securities are held by the Custodian or agent thereof and shall
credit such income, as collected, to the Fund's custodian account.
The Custodian shall do all things necessary and proper in connection with such
prompt collections and, without limiting the generality of the foregoing, the
Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the
Fund, checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities
System or in an Approved Book-Entry System for Commercial
Paper at the time funds become available to the Custodian;
in the case of securities maintained in The Depository
Trust Company funds shall be deemed available to the Fund
not later than the opening of business on the first
business day after receipt of such funds by the Custodian.
<PAGE> 12
The Custodian shall notify the Fund as soon as reasonably practicable whenever
income due on any security is not promptly collected. In any case in which the
Custodian does not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in writing, enclosing
copies of any demand letter, any written response thereto, and memoranda of all
oral responses thereto and to telephonic demands, and await instructions from
the Fund; the Custodian shall in no case have any liability for any nonpayment
of such income provided the Custodian meets the standard of care set forth in
Section 8 hereof. The Custodian shall not be obligated to take legal action
for collection unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights and
other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions, which
may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of the Fund in the
following cases only:
1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options
on futures contracts purchased for the account of the Fund
but only (a) against the receipt of
(i) such securities registered as provided in
Paragraph C hereof or in proper form for
transfer or
(ii) detailed instructions signed by an officer of the
Fund regarding the participation interests to be
purchased or
(iii) written confirmation of the purchase by the Fund
of the options, futures contracts, forward
contracts or options on futures contracts
by the Custodian (or by a subcustodian employed pursuant
to Section 2 hereof or by a clearing corporation of a
national securities exchange of which the Custodian is a
member or by any bank, banking institution or trust
company doing business in the United States or abroad
which is qualified under the Investment Company Act of
1940 to act as a custodian and which has been designated
by the Custodian as its agent for this purpose or by the
agent specifically designated in such instructions as
representing the purchasers of a new issue of privately
placed securities); (b) in the case of a purchase effected
through a Securities System, upon receipt of the
securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the
case of a purchase of commercial paper effected through an
Approved Book-Entry System for Commercial Paper, upon
<PAGE> 13
receipt of the paper by the Custodian or subcustodian in
accordance with the conditions set forth in Paragraph M
hereof; (d) in the case of repurchase agreements entered
into between the Fund and another bank or a broker-
dealer, against receipt by the Custodian of the securities
underlying the repurchase agreement either in certificate
form or through an entry crediting the Custodian's
segregated, non-proprietary account at the Federal Reserve
Bank of Boston with such securities along with written
evidence of the agreement by the bank or broker-dealer to
repurchase such securities from the Fund; or (e) with
respect to securities purchased outside of the United
States, in accordance with written procedures agreed to
from time to time in writing by the parties hereto;
2) When required in connection with the conversion, exchange
or surrender of securities owned by the Fund as set forth
in Paragraph B hereof;
3) When required for the redemption or repurchase of Shares
of the Fund in accordance with the provisions of Paragraph
J hereof;
4) For the payment of any expense or liability incurred by
the Fund, including but not limited to the following
payments for the account of the Fund: advisory fees,
distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent and
legal fees, and other operating expenses of the Fund
whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions to
holders of Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, but only upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board, specifying the
amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose
to be a proper corporate purpose, and naming the person or
persons to whom such payment is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED In any and every case where payment for purchase of
securities for the account of the Fund is made by the Custodian in
advance of receipt of the securities purchased in the absence of
specific written instructions signed by two officers of the Fund
to so pay in advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if the
securities had been received by the Custodian; EXCEPT that in the
case of a repurchase agreement
<PAGE> 14
entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to the
account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii)
written evidence that the securities subject to such repurchase
agreement have been transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with the
Federal Reserve Bank of Boston or (iii) the safekeeping receipt,
PROVIDED that such securities have in fact been so transferred by
book-entry and the written repurchase agreement is received by the
Custodian in due course; AND EXCEPT that if the securities are to
be purchased outside the United States, payment may be made in
accordance with procedures agreed to from time to time by the
parties hereto.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
From such funds as may be available for the purpose, but subject
to any applicable votes of the Board and the current redemption
and repurchase procedures of the Fund, the Custodian shall, upon
receipt of written instructions from the Fund or from the Fund's
transfer agent or from the principal underwriter, make funds
and/or portfolio securities available for payment to holders of
Shares who have caused their Shares to be redeemed or repurchased
by the Fund or for the Fund's account by its transfer agent or
principal underwriter.
The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding
Shares for which certificates have not been issued. Such checking
account and such special checks shall be subject to such rules and
regulations as the Custodian and the Fund may from time to time
adopt. The Custodian or the Fund may suspend or terminate use of
such checking account or such special checks (either generally or
for one or more shareholders) at any time. The Custodian and the
Fund shall notify the other immediately of any such suspension or
termination.
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at any
time or times in its discretion appoint (and may at any time
remove) any other bank or trust company (provided such bank or
trust company is itself qualified under the Investment Company Act
of 1940 to act as a custodian or is itself an eligible foreign
custodian within the meaning of Rule 17f-5 under said Act) as the
agent of the Custodian to carry out such of the duties and
functions of the Custodian described in this Section 3 as the
Custodian may from time to time direct; provided, however, that
the appointment of any such agent shall not relieve the Custodian
of any of its responsibilities or liabilities hereunder, and as
between the Fund and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent. For the
purposes of this Agreement, any property of the Fund held by any
such agent shall be deemed to be held by the Custodian hereunder.
<PAGE> 15
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep securities of
the Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the
Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such subcustodian
or any other person other than assets held by the Custodian or
such subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund, and the
Custodian shall be fully and completely responsible for
maintaining a recordkeeping system capable of accurately and
currently stating the Fund's holdings maintained in each such
Securities System.
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice
or advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of any entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund.
Copies of all notices or advises from the Securities System of
transfers of securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request.
<PAGE> 16
The Custodian shall promptly send to the Fund confirmation
of each transfer to or from the account of the Fund in the form
of a written advice or notice of each such transaction, and shall
furnish to the Fund copies of daily transaction sheets reflecting
each day's transactions in the Securities System for the account
of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities
deposited in the Securities System; the Custodian shall promptly
send to the Fund any report or other communication relating to the
Custodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System; and
the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any Securities
System. The Custodian's books and records relating to the Fund's
participation in each Securities System will at all times during
regular business hours be open to the inspection of the Fund's
authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board has annually reviewed and
approved the continued use by the Fund of each Securities System,
so long as such review and approval is required by Rule 17f-4
under the Investment Company Act of 1940, and the Fund shall
promptly notify the Custodian if the use of a Securities System is
to be discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or subcustodians or of any of its or their employees
or from any failure of the Custodian or any such agent or
subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the election
of the Fund, it shall be entitled to be
<PAGE> 17
subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for any
such loss or damage.
M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
COMMERCIAL PAPER Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry
System for Commercial Paper, provided that such paper is
issued in book entry form by the Custodian or subcustodian
on behalf of an issuer with which the Custodian or
subcustodian has entered into a book-entry agreement and
provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or
such subcustodian in an Approved Book-Entry System for
Commercial Paper which shall not include any assets of the
Custodian or such subcustodian or any other person other
than assets held by the Custodian or such subcustodian as
a fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial
paper of the Fund which is maintained in an Approved
Book-Entry System for Commercial Paper shall identify by
book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open
for inspection by authorized officers, employees or agents
of the Fund. The Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable
of accurately and currently stating the Fund's holdings of
commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice
from the issuer that such paper has been issued, sold and
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
purchase, payment and transfer for the account of the
Fund. The Custodian shall transfer such commercial
<PAGE> 18
paper which is sold or cancel such commercial paper which
is redeemed for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and
payment for the account of the Fund. Copies of all notices,
advises and confirmations of transfers of commercial paper
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund confirmation of
each transfer to or from the account of the Fund in the
form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in
the System for the account of the Fund on the next business
day.
(d) The Custodian shall promptly send to the Fund any report
or other communication received or obtained by the
Custodian relating to each System's accounting system,
system of internal accounting controls or procedures for
safeguarding commercial paper deposited in the System; the
Custodian shall promptly send to the Fund any report or
other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding
commercial paper deposited in any Approved Book-Entry
System for Commercial Paper; and the Custodian shall
ensure that any agent appointed pursuant to Paragraph K
hereof or any subcustodian employed pursuant to Section 2
hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to
such agent's or subcustodian's internal accounting
controls and procedures for safeguarding securities
deposited in any Approved Book-Entry System for Commercial
Paper.
(e) The Custodian shall not act under this Paragraph M in the
absence of receipt of a certificate of an officer of the
Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the
Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board
has annually reviewed and approved the continued use by
the Fund of each Approved Book-Entry System for Commercial
Paper, so long as such review and approval is required by
Rule 17f-4 under the Investment Company Act of 1940, and
the Fund shall promptly notify the Custodian if the use of
an Approved Book-Entry System for Commercial Paper is to
be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such System as promptly as
practicable.
<PAGE> 19
(f) The Custodian (or subcustodian, if the Approved Book-Entry
System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund
or in the event of an electronic system failure which
impedes issuance, transfer or custody of direct issue
commercial paper by book-entry.
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund
for any loss or damage to the Fund resulting from use of
any Approved Book-Entry System for Commercial Paper by
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or subcustodians or of any
of its or their employees or from any failure of the
Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the System,
the issuer of the commercial paper or any other person; at
the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to
any claim against the System, the issuer of the commercial
paper or any other person which the Custodian may have as
a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such
loss or damage.
N. SEGREGATED ACCOUNT The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Paragraph L hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and any registered
broker-dealer (or any futures commission merchant), relating to
compliance with the rules of the Options Clearing Corporation and
of any registered national securities exchange (or of the
Commodity Futures Trading Commission or of any contract market or
commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the Fund,
(ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or written
by the Fund or futures contracts or options thereon purchased or
sold by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv) for other
proper purposes, but only, in the case of clause (iv), upon
receipt of, in addition to proper instructions, a certificate
signed by two officers of the Fund, setting forth the purpose such
segregated account and declaring such purpose to be a proper
purpose.
<PAGE> 20
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of the Fund
held by it and in connection with transfers of securities.
P. PROXIES The Custodian shall, with respect to the securities held
by it hereunder, cause to be promptly delivered to the Fund all
forms of proxies and all notices of meetings and any other notices
or announcements or other written information affecting or
relating to the securities, and upon receipt of proper
instructions shall execute and deliver or cause its nominee to
execute and deliver such proxies or other authorizations as may be
required. Neither the Custodian nor its nominee shall vote upon
any of the securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except
as otherwise herein provided) unless ordered to do so by proper
instructions.
Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers and other persons relating
to the securities and participation interests being held for the
Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information
received by the Custodian from issuers and other persons relating
to the securities and participation interests whose tender or
exchange is sought and from the party (or his agents) making the
tender or exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities
and participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for promptly
notifying the Fund of all such offers in accordance with the
standard of reasonable care set forth in Section 8 hereof. For
all such offers for which the Custodian is responsible as provided
in this Paragraph R, the Fund shall have responsibility for
providing the Custodian with all necessary instructions in timely
fashion. Upon receipt of proper instructions, the Custodian shall
timely deliver to the issuer or trustee thereof, or to the agent
of either, warrants, puts, calls, rights or similar
<PAGE> 21
securities for the purpose of being exercised or sold upon proper
receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon
receipt of proper instructions, the Custodian shall timely deposit
securities upon invitations for tenders of securities upon proper
receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the consideration to be paid or delivered or
the tendered securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the contrary,
the Custodian shall take all necessary action, unless otherwise
directed to the contrary by proper instructions, to comply with
the terms of all mandatory or compulsory exchanges, calls,
tenders, redemptions, or similar rights of security ownership, and
shall thereafter promptly notify the Fund in writing of such
action.
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign
securities to the depository used by an issuer of American
Depository Receipts, European Depository Receipts or International
Depository Receipts (hereinafter collectively referred to as
"ADRs") for such securities, against a written receipt therefor
adequately describing such securities and written evidence
satisfactory to the Custodian that the depository has acknowledged
receipt of instructions to issue with respect to such securities
ADRs in the name of a nominee of the Custodian or in the name or
nominee name of any subcustodian employed pursuant to Section 2
hereof, for delivery to the Custodian or such subcustodian at such
place as the Custodian or such subcustodian may from time to time
designate. The Custodian shall, upon receipt of proper
instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian
that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian or to a subcustodian
employed pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term
and call deposits with the banking department of such banking
institution (other than the Custodian) and in such amounts as the
Fund may designate. Deposits may be denominated in U.S. Dollars
or other currencies. The Custodian shall include in its records
with respect to the assets of the Fund appropriate notation as to
the amount and currency of each such deposit, the accepting
banking institution and other appropriate details and shall retain
such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Custodian by the banking
<PAGE> 22
institution. Such deposits shall be deemed portfolio securities
of the applicable Fund for the purposes of this Agreement, and the
Custodian shall be responsible for the collection of income from
such accounts and the transmission of cash to and from such
accounts.
U. Options, Futures Contracts and Foreign Currency Transactions
------------------------------------------------------------
1. OPTIONS. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any
agreement between the Custodian, any registered
broker-dealer and, if necessary, the Fund, relating to
compliance with the rules of the Options Clearing
Corporation or of any registered national securities
exchange or similar organization or organizations, receive
and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a
security, securities index, currency or other financial
instrument or index by the Fund;
deposit and maintain in a segregated account for each Fund
separately, either physically or by book-entry in a
Securities System, securities subject to a covered call
option written by the Fund; and release and/or transfer
such securities or other assets only in accordance with a
notice or other communication evidencing the expiration,
termination or exercise of such covered option furnished
by the Options Clearing Corporation, the securities or
options exchange on which such covered option is traded or
such other organization as may be responsible for handling
such options transactions. The Custodian and the
broker-dealer shall be responsible for the sufficiency of
assets held in each Fund's segregated account in
compliance with applicable margin maintenance
requirements.
2. FUTURES CONTRACTS The Custodian shall, upon receipt of
proper instructions, receive and retain confirmations and
other documents, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract
by the Fund; deposit and maintain in a segregated account,
for the benefit of any futures commission merchant, assets
designated by the Fund as initial, maintenance or
variation "margin" deposits (including mark- to-market
payments) intended to secure the Fund's performance of its
obligations under any futures contracts purchased or sold
or any options on futures contracts written by Fund, in
accordance with the provisions of any agreement or
agreements among the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of
the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization regarding such margin deposits or payments;
and release and/or transfer assets in such margin accounts
only in
<PAGE> 23
accordance with any such agreements or rules. The
Custodian and the futures commission merchant shall be
responsible for the sufficiency of assets held in the
segregated account in compliance with the applicable
margin maintenance and mark-to-market payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall,
pursuant to proper instructions, enter into or cause a
subcustodian to enter into foreign exchange contracts,
currency swaps or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for
the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts, swaps and options shall be deemed to
be portfolio securities of the Fund; and accordingly, the
responsibility of the Custodian therefor shall be the same
as and no greater than the Custodian's responsibility in
respect of other portfolio securities of the Fund. The
Custodian shall be responsible for the transmittal to and
receipt of cash from the currency broker or banking or
financial institution with which the contract or option is
made, the maintenance of proper records with respect to
the transaction and the maintenance of any segregated
account required in connection with the transaction. The
Custodian shall have no duty with respect to the selection
of the currency brokers or banking or financial
institutions with which the Fund deals or for their
failure to comply with the terms of any contract or
option. Without limiting the foregoing, it is agreed that
upon receipt of proper instructions and insofar as funds
are made available to the Custodian for the purpose, the
Custodian may (if determined necessary by the Custodian to
consummate a particular transaction on behalf and for the
account of the Fund) make free outgoing payments of cash
in the form of U.S. dollars or foreign currency before
receiving confirmation of a foreign exchange contract or
swap or confirmation that the countervalue currency
completing the foreign exchange contract or swap has been
delivered or received. The Custodian shall not be
responsible for any costs and interest charges which may
be incurred by the Fund or the Custodian as a result of
the failure or delay of third parties to deliver foreign
exchange; provided that the Custodian shall nevertheless
be held to the standard of care set forth in, and shall be
liable to the Fund in accordance with, the provisions of
Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian may in its
discretion, without express authority from the Fund:
<PAGE> 24
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, PROVIDED, that all such
payments shall be accounted for by the Custodian to the
Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of the Fund except as otherwise directed by
the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
-----------------------------------------------------------------------
The Bank shall as Agent (or as Custodian, as the case may be) keep such books
of account and render as at the close of business on each day a detailed
statement of the amounts received or paid out and of securities received or
delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any authorized officer
of the Fund; and shall compute and determine, as of the close of regular
trading on the New York Stock Exchange, or at such other time or times as the
Board may determine, the net asset value of a Share in the Fund, such
computation and determination to be made in accordance with the governing
documents of the Fund and the votes and instructions of the Board at the time
in force and applicable, and promptly notify the Fund and its investment
adviser and such other persons as the Fund may request of the result of such
computation and determination. In computing the net asset value the Custodian
may rely upon security quotations received by telephone or otherwise from
sources or pricing services designated by the Fund by proper instructions, and
may further rely upon information furnished to it by any authorized officer of
the Fund relative (a) to liabilities of the Fund not appearing on its books of
account, (b) to the existence, status and proper treatment of any reserve or
reserves, (c) to any procedures established by the Board regarding the
valuation of portfolio securities, and (d) to the value to be assigned to any
bond, note, debenture, Treasury bill, repurchase agreement, subscription right,
security, participation interest or other asset or property for which market
quotations are not readily available.
5. Records and Miscellaneous Duties
--------------------------------
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund
<PAGE> 25
under the Investment Company Act of 1940, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal and state
tax laws and any other law or administrative rules or procedures which may be
applicable to the Fund. All books of account and records maintained by the Bank
in connection with the performance of its duties under this Agreement shall be
the property of the Fund, shall at all times during the regular business hours
of the Bank be open for inspection by authorized officers, employees or agents
of the Fund, and in the event of termination of this Agreement shall be
delivered to the Fund or to such other person or persons as shall be designated
by the Fund. Disposition of any account or record after any required period of
preservation shall be only in accordance with specific instructions received
from the Fund. The Bank shall assist generally in the preparation of
reports to shareholders, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
------------------------------------------------
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to enable the Fund to obtain from year to year favorable opinions
from the Fund's independent public accountants with respect to its activities
hereunder in connection with the preparation of the Fund's registration
statement and Form N-SAR or other periodic reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
7. Compensation and Expenses of Bank
---------------------------------
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall entitled to receive from the Fund on demand reimbursement
for its cash disbursements, expenses and charges, including counsel fees, in
connection with its duties as Custodian and Agent hereunder, but excluding
salaries and usual overhead expenses.
8. Responsibility of Bank
----------------------
<PAGE> 26
So long as and to the extent that it is in the exercise of reasonable care, the
Bank as Custodian and Agent shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding
the foregoing, nothing contained in this paragraph is intended to nor shall it
be construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to subcustodians
generally in Section 2 hereof, provided that, regardless of whether assets are
maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank, the Custodian shall not be
liable for any loss, damage, cost, expense, liability or claim resulting from,
or caused by, the direction of or authorization by the Fund to maintain custody
of any securities or cash of the Fund in a foreign county including, but not
limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with respect
to securities, which action involves the payment of money or which action may,
in the opinion of the Bank, result in the Bank or its nominee assigned to the
Fund being liable for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
9. Persons Having Access to Assets of the Fund
-------------------------------------------
(i) No trustee, director, general partner, officer, employee
or agent of the Fund shall have physical access to the
assets of the Fund held by the Custodian or be authorized
or permitted to withdraw any investments of the Fund, nor
shall the Custodian deliver any assets of the Fund to any
such person. No officer or director, employee or agent of
the Custodian who holds any similar position with the Fund
or the
<PAGE> 27
investment adviser of the Fund shall have access to the
assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees,
representatives or agents of the Custodian or other
persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to
the Fund's independent public accountants in connection
with their auditing duties performed on behalf of the
Fund.
(iii) Nothing in this Section 9 shall prohibit any officer,
employee or agent of the Fund or of the investment adviser
of the Fund from giving instructions to the Custodian or
executing a certificate so long as it does not result in
delivery of or access to assets of the Fund prohibited by
paragraph (i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
----------------------------------------------------------------
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid
to the other party, such termination to take effect not sooner than sixty (60)
days after the date of such delivery or mailing; provided, that the Fund may at
any time by action of its Board, (i) substitute another bank or trust company
for the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Federal Deposit Insurance
Corporation or by the Banking Commissioner of The Commonwealth of Massachusetts
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction. Upon termination of the
Agreement, the Fund shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding Shares of the Fund vote to
have the securities, funds and other properties held hereunder delivered and
paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits,
as shown by its last published report, and meeting such other qualifications
for custodians set forth in the Investment Company Act of 1940, the Board
shall, forthwith, upon giving or receiving notice of termination of this
Agreement, appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been
<PAGE> 28
adopted by the shareholders and that no written order designating a successor
custodian shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative
thereto. Thereafter such bank or trust company shall be the successor of the
Custodian under this Agreement.
11. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Agreement, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition
to the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment
of this Agreement.
12. Certification as to Authorized Officers
---------------------------------------
The Secretary of the Fund shall at all times maintain on file with the Bank his
certification to the Bank, in such form as may be acceptable to the Bank, of
the names and signatures of the authorized officers of each fund, it being
understood that upon the occurence of any change in the information set forth
in the most recent certification on file (including without limitation any
person named in the most recent certification who has ceased to hold the office
designated therein), the Secretary of the Fund shall sign a new or amended
certification setting forth the change and the new, additional or ommitted
names or signatures. The Bank shall be entitled to rely and act upon any
officers named in the most recent certification.
13. Notices
-------
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to Thomas H. Drohan, John Hancock Advisers, Inc., 101 Huntington
Avenue, Boston, Massachusetts 02199, or to such other address as the Fund may
have designated to the Bank, in writing, or to Investors Bank & Trust Company,
24 Federal Street, Boston, Massachusetts 02110, shall be deemed to have been
properly delivered or given hereunder to the respective addressees.
<PAGE> 29
14. Massachusetts Law to Apply; Limitations on Liability
----------------------------------------------------
This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with the laws of The Commonwealth of Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
Each Fund, and each series or portfolio of a Fund, shall be liable only for its
own obligations to the Custodian under this Agreement and shall not be jointly
or severally liable for the obligations of any other Fund, series or portfolio
hereunder.
<PAGE> 30
15. Adoption of the Agreement by the Fund
-------------------------------------
The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement. This Agreement shall be deemed to
supersede and terminate, as of the date first written above, all prior
agreements between the Fund and the Bank relating to the custody of the Fund's
assets.
* * * *
<PAGE> 31
In Witness Whereof, the parties hereto have caused this agreement to be
executed in duplicate as of the date first written above by their respective
officers thereunto duly authorized.
John Hancock Mutual Funds
by: /s/ Robert G. Freedman
----------------------
Attest:
/s/Avery P. Maher
- -----------------
Investors Bank & Trust Company
by: /s/ Henry M. Joyce
------------------
Attest:
/s/ JM Keenan
- -------------
<PAGE> 32
Page 1 of 2
INVESTORS BANK & TRUST COMPANY
APPENDIX A
[EFFECTIVE JANUARY 30, 1995]
John Hancock Limited Term Government Fund
John Hancock Capital Series
John Hancock Special Value Fund
John Hancock Growth Fund
John Hancock Income Securities Trust
John Hancock Investors Trust
John Hancock Sovereign Bond Fund
John Hancock Sovereign Investors Fund, Inc.
John Hancock Sovereign Investors Fund
John Hancock Sovereign Balanced Fund
John Hancock Special Equities Fund
John Hancock Strategic Series
John Hancock Independence Diversified Core Equity Fund
John Hancock Strategic Income Fund
John Hancock Utilities Fund
John Hancock Tax-Exempt Income Fund
John Hancock Tax-Exempt Series Fund
California Portfolio
Massachusetts Portfolio
New York Portfolio
John Hancock Technology Series, Inc.
John Hancock National Aviation & Technology Fund
John Hancock Global Technology Fund
Freedom Investment Trust
John Hancock Gold & Government Fund
John Hancock Regional Bank Fund
John Hancock Sovereign U.S. Government Income Fund
John Hancock Managed Tax-Exempt Fund
John Hancock Sovereign Achievers Fund
Freedom Investment Trust II
John Hancock Special Opportunities Fund
Freedom Investment Trust III
John Hancock Discovery Fund
<PAGE> 33
Page 2 of 2
INVESTORS BANK & TRUST COMPANY
APPENDIX A
[EFFECTIVE JANUARY 30, 1995]
John Hancock Series, Inc.
John Hancock Emerging Growth Fund
John Hancock Global Resources Fund
John Hancock Government Income Fund
John Hancock High Yield Bond Fund
John Hancock High Yield Tax-Free Fund
John Hancock Money Market Fund B
John Hancock Cash Reserve, Inc.
John Hancock Current Interest
John Hancock U.S. Government Cash Reserve
John Hancock Capital Growth Fund
John Hancock Investment Trust
John Hancock Growth and Income Fund
John Hancock California Tax-Free Income Fund
John Hancock Tax-Free Bond Fund
John Hancock Bond Fund
John Hancock Investment Quality Bond Fund
John Hancock Government Securities Trust
John Hancock U.S. Government Trust
John Hancock Adjustable U.S. Government Trust
John Hancock Adjustable U.S. Government Fund
John Hancock Intermediate Government Trust
John Hancock Institutional Series Trust
John Hancock Berkeley Dividend Performers Fund
John Hancock Berkeley Bond Fund
John Hancock Berkeley Fundamental Value Fund
John Hancock Berkeley Sector Opportunity Fund
John Hancock Independence Diversified Core Equity Fund II
John Hancock Independence Value Fund
John Hancock Independence Growth Fund
John Hancock Independence Medium Capitalization Fund
John Hancock Independence Balanced Fund
<PAGE> 1
Exhibit 99.B9
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of May, 1995 by and between JOHN
HANCOCK BOND FUND, JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND, JOHN HANCOCK
CAPITAL GROWTH FUND, JOHN HANCOCK CASH RESERVE, INC., JOHN HANCOCK CURRENT
INTEREST, JOHN HANCOCK INVESTMENT TRUST, JOHN HANCOCK SERIES, INC., JOHN
HANCOCK TAX-FREE BOND FUND (each a "Fund") and JOHN HANCOCK INVESTOR SERVICES
CORPORATION ("INVESTOR SERVICES"), each having their principal office and place
of business at 101 Huntington Avenue, Boston, Massachusetts 02199.
WITNESSETH:
WHEREAS, the Fund desires to appoint INVESTOR SERVICES as its transfer
agent, dividend disbursing agent and agent in connection with certain other
activities, and INVESTOR SERVICES desires to accept such appointment;
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 Terms of Appointment: Duties of INVESTOR SERVICES
1.01 Subject to the terms and conditions set forth in this
Agreement, the Fund hereby, employs and appoints INVESTOR SERVICES to act as,
and INVESTOR SERVICES agrees to act as transfer agent for the Fund's authorized
and issued shares of beneficial interest or common stock, as the case may be
("Shares"), with any accumulation, open-account or similar plans provided to
the shareholders of the Fund ("Shareholders") and set out in the currently
effective prospectus of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program.
1.02 INVESTOR SERVICES agrees that it will perform the following
services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and INVESTOR SERVICES, INVESTOR SERVICES shall:
(i) Receive for acceptance orders for the purchase of
Shares, and promptly deliver payment and appropriate documentation therefor to
the custodian of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the appropriate Shareholder account;
(iii) Receive for acceptance, redemption requests and
redemption directions and deliver the appropriate documentation therefor to the
Custodian;
1
<PAGE> 2
(iv) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as instructed by
the redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(vii) Maintain records of account for and advise the Fund
and their Shareholders as to the foregoing; and
(viii) Record the issuance of Shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of the total number of Shares
of the Fund which are authorized, based upon data provided to it by the Fund,
and issued and outstanding. INVESTOR SERVICES shall also provide the Fund on a
regular basis with the total number of Shares which are authorized and issued
and outstanding and shall have no obligation, when recording the issuance of
Shares, to monitor the issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares, which functions shall be the
sole responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in
the above paragraph (a), INVESTOR SERVICES shall: (i) perform all of the
customary services of a transfer agent, dividend disbursing agent and, as
relevant, agent in connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or periodic
withdrawal program); including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident alien
accounts, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and mailing confirmations
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in Shareholder
accounts, preparing and mailing activity statements for Shareholders, and
providing Shareholder account information and (ii) provide a system which will
enable the Funds to monitor the total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to INVESTOR SERVICES
in writing those transactions and assets to be treated as exempt from the blue
sky reporting for each State and (ii) verify the establishment of transactions
for each State on the system prior to activation and thereafter monitor the
daily activity for each State. The responsibility of INVESTOR SERVICES for the
Fund's blue sky State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by the Fund and
the reporting of such transactions to the Fund as provided above.
(d) Additionally, INVESTOR SERVICES shall:
(i) Utilize a system to identify all share transactions which
involve purchase and redemption orders that are processed at a time other than
the time of the computation of net asset
2
<PAGE> 3
value per share next computed after receipt of such orders, and shall compute
the net effect upon the Fund of such transactions so identified on a daily and
cumulative basis.
(ii) If upon any day the cumulative net effect of such transactions
upon a Fund is negative and exceed a dollar amount equivalent to 1/2 of 1 cent
per share, INVESTOR SERVICES shall promptly make a payment to the Fund in cash
or through the use of a credit, in the manner described in paragraph (iv)
below, in such amount as may be necessary to reduce the negative cumulative net
effect to less than 1/2 of 1 cent per share.
(iii) If on the last business day of any month the cumulative net
effect upon a Fund (adjusted by the amount of all prior payments and credits by
INVESTOR SERVICES and the Fund) is negative, the Fund shall be entitled to a
reduction in the fee next payable under the Agreement by an equivalent amount,
except as provided in paragraph (iv) below. If on the last business day in any
month the cumulative net effect upon a Fund (adjusted by the amount of all
prior payments and credits by INVESTOR SERVICES and the Fund) is positive,
INVESTOR SERVICES shall be entitled to recover certain past payments and
reductions in fees, and to credit against all future payments and fee
reductions that may be required under the Agreement as herein described in
paragraph (iv) below.
(iv) At the end of each month, any positive cumulative net effect
upon a Fund shall be deemed to be a credit to INVESTOR SERVICES which shall
first be applied to permit INVESTOR SERVICES to recover any prior cash payments
and fee reductions made by it to the Fund under paragraphs (ii) and (iii) above
during the calendar year, by increasing the amount of the monthly fee under the
Agreement next payable in an amount equal to prior payments and fee reductions
made by INVESTOR SERVICES during such calendar year, but not exceeding the sum
of that month's credit and credits arising in prior months during such calendar
year to the extent such prior credits have not previously been utilized as
contemplated by this paragraph. Any portion of a credit to INVESTOR SERVICES
not so used by it shall remain as a credit to be used as payment against the
amount of any future negative cumulative net effects that would otherwise
require a cash payment or fee reduction to be made to the Fund pursuant to
paragraphs (ii) or (iii) above (regardless of whether or not the credit or any
portion thereof arose in the same calendar year as that in which the negative
cumulative net effects or any portion thereof arose).
(v) INVESTOR SERVICES shall supply to the Funds from time to time,
as mutually agreed upon, reports summarizing the transactions identified
pursuant to paragraph (i) above, and the daily and cumulative net effects of
such transactions, and shall advise the Funds at the end of each month of the
net cumulative effect at such time. INVESTOR SERVICES shall promptly advise
the Funds if at any time the cumulative net effect exceeds a dollar amount
equivalent to 1/2 of 1 cent per share.
(vi) In the event that this Agreement is terminated for whatever
cause, the Funds shall promptly pay to INVESTOR SERVICES an amount in cash
equal to the amount by which the cumulative net effect upon the Funds is
positive or, if the cumulative net effect upon the Funds is negative, INVESTOR
SERVICES shall promptly pay to the Funds an amount in cash equal to the amount
of such cumulative net effect.
Procedures applicable to certain of these services may be established
from time to time by agreement between the Fund and INVESTOR SERVICES but the
failure of the Funds to establish
3
<PAGE> 4
such procedures with respect to any service shall not in any way diminish the
duty and obligation of INVESTOR SERVICES to perform such services hereunder.
Article 2 Fees and Expenses
2.01 For performance by INVESTOR SERVICES pursuant to this
Agreement, the Funds agree to pay INVESTOR SERVICES an annual maintenance fee
for each Shareholder account as set forth in the initial fee schedule attached
hereto. Such fees and out-of-pocket expenses and advances identified under
Section 2.02 below may be changed from time to time subject to mutual written
agreement between the Fund and INVESTOR SERVICES.
2.02 In addition to the fee paid under Section 2.01 above the Funds
agree to reimburse INVESTOR SERVICES for out-of- pocket expenses or advances
incurred by INVESTOR SERVICES for the items set out in the fee schedule
attached hereto. In addition, any other expenses incurred by INVESTOR SERVICES
at the request or with the consent of the Funds, will be reimbursed by the
Funds.
2.03 The Funds agree to pay all fees and reimbursable expenses
promptly following the mailing of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to INVESTOR SERVICES by the Funds at
least seven (7) days prior to the mailing date of such materials.
Article 3 Indemnification
3.01 INVESTOR SERVICES shall not be responsible for, and the Funds
shall indemnify and hold INVESTOR SERVICES harmless from and against, any and
all losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(a) All actions of INVESTOR SERVICES or its agent or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct.
(b) The Funds' refusal or failure to comply with the terms of this
Agreement, or which arise out of the Funds' lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state unless such violation results from any action or omission by INVESTOR
SERVICES or any of its agents or sub-contractors which fails to comply with
written instructions of the Fund or any officer of the Fund that no offers or
sales be made in general or to the residents of a particular state.
3.02 INVESTOR SERVICES shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liabilities arising out of or attributed to any action
or failure or omission to act by INVESTOR SERVICES as a result of INVESTOR
SERVICES's lack of good faith, negligence or willful misconduct.
4
<PAGE> 5
3.03 At any time INVESTOR SERVICES may apply to any officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by INVESTOR
SERVICES under this Agreement, and INVESTOR SERVICES and its agents or
subcontractors shall not be liable and shall be indemnified by the Fund for any
action taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel. INVESTOR SERVICES, its agents and subcontractors shall
be protected and indemnified in acting upon any paper or document furnished by
or on behalf of the Fund, reasonably believed to be genuine and to have been
signed by the proper person or persons, or upon any instruction, information,
data, records or documents provided INVESTOR SERVICES or its agents or
subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. INVESTOR SERVICES, its agents and subcontractors shall also be
protected and indemnified in recognizing share certificates which are
reasonably believed to bear the proper manual or facsimile signatures of the
officer of the Fund, and the proper countersignature of any former transfer
agent or registrar, or of a co-transfer agent or co- registrar.
3.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to
the other for any damages resulting from such failure to perform or otherwise
from such causes.
3.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for
any act or failure to act hereunder.
3.06 In order that the indemnification provisions contained in this
Article 4 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option to participate
with the party seeking indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or make any
compromise in any case in which the other party may be required to indemnify it
except with the other party's prior written consent.
Article 4 Covenants of the Fund and INVESTOR SERVICES
4.01 INVESTOR SERVICES hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for safekeeping of
share certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
4.02 INVESTOR SERVICES shall keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, INVESTOR SERVICES agrees that all such
records prepared or maintained by INVESTOR SERVICES relating to the services to
be performed by INVESTOR SERVICES hereunder are the
5
<PAGE> 6
property of the Fund and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered to the Fund on
and in accordance with its request.
4.03 INVESTOR SERVICES and the Fund agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law.
4.04 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, INVESTOR SERVICES will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund as to
such instruction. INVESTOR SERVICES reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 5 Termination of Agreement
5.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days' written notice to the other.
5.02 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material
will be borne by the Fund. Additionally, INVESTOR SERVICES reserves the right
to charge for any other reasonable expenses associated with such termination.
Article 6 Assignment
6.01 Except as provided in Section 6.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
6.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
6.03 INVESTOR SERVICES may, without further consent on the part of
the Fund, subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly registered
as a transfer agent pursuant to Section 17A (c)(1) of the Securities Exchange
Act of 1934 ("Section 17A (c)(1)"), (ii) or any other entity INVESTOR SERVICES
deems appropriate in order to comply with the terms and conditions of this
Agreement, provided, however, that INVESTOR SERVICES shall be as fully
responsible to the Fund for the acts and omissions of any subcontractor as it
is for its own acts and omissions.
Article 7 Amendment
7.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution
of the Board of Directors or Trustees, as the case may be, of the Fund.
6
<PAGE> 7
Article 8 Massachusetts Law to Apply
8.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 9 Merger of Agreement
9.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
JOHN HANCOCK BOND FUND
JOHN HANCOCK CALIFORNIA TAX-FREE INCOME FUND
JOHN HANCOCK CAPITAL GROWTH FUND
JOHN HANCOCK CASH RESERVE, INC.
JOHN HANCOCK CURRENT INTEREST
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK SERIES, INC.
JOHN HANCOCK TAX-FREE BOND FUND
ATTEST:
______________ BY: Anne C. Hodsdon
---------------
Anne C. Hodsdon
President
ATTEST JOHN HANCOCK INVESTOR SERVICES CORPORATION
______________ BY: David A. King
-------------
David A. King
President
7
<PAGE> 8
FEE SCHEDULE
<TABLE>
<CAPTION>
Fund Name Annual Per Account
- --------- ------------------
<S> <C>
John Hancock Cash Reserve $25.00
John Hancock U.S. Government Cash Reserve $25.00
Money Market Fund B $25.00
John Hancock Government Securities Trust - Class A $20.00
John Hancock Government Securities Trust - Class B $22.50
John Hancock Investment Quality Bond Fund - Class A $20.00
John Hancock Investment Quality Bond Fund - Class B $22.50
John Hancock Capital Growth Fund - Class A $16.00
John Hancock Capital Growth Fund - Class B $18.50
John Hancock Growth and Income Fund - Class A $16.00
John Hancock Growth and Income Fund - Class B $18.50
John Hancock Intermediate Government Trust - Class A $16.00
John Hancock Intermediate Government Trust - Class B $18.50
John Hancock Tax-Free Bond Fund - Class A $19.00
John Hancock Tax-Free Bond Fund - Class B $22.50
John Hancock California Tax-Free Income Fund - Class A $19.00
John Hancock California Tax-Free Income Fund - Class B $21.50
John Hancock U.S. Government Cash Reserve - Class A $20.00
John Hancock U.S. Government Cash Reserve - Class B $22.50
John Hancock Adjustable U.S. Government Trust - Class A $20.00
John Hancock Adjustable U.S. Government Trust - Class B $22.50
John Hancock Government Income Fund - Class A $20.00
John Hancock Government Income Fund - Class B $22.50
John Hancock High Yield Bond Fund - Class A $20.00
John Hancock High Yield Bond Fund - Class B $22.50
John Hancock High Yield Tax-Free Fund - Class A $19.00
John Hancock High Yield Tax-Free Fund - Class B $21.50
John Hancock Emerging Growth Fund - Class A $16.00
John Hancock Emerging Growth Fund - Class B $18.50
John Hancock Global Resources Fund - Class A $16.00
John Hancock Global Resources Fund - Class B $18.50
</TABLE>
8
<PAGE> 1
[LOGO] ERNST & YOUNG LLP
- One Houston Center - Phone: 713 750 1500
Suite 2400 Fax: 713 750 1501
1221 McKinney Street
Houston, Texas 77010-2007
CONSENT OF INDEPENDENT AUDITORS
We consent to the references made to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the use of our report dated
September 23, 1994, related to the financial statements of John Hancock Growth
and Income Fund, formerly Transamerica Growth and Income Fund, in
Post-Effective Amendment No. 73 to the Registration Statement (Form N-1A No.
2-10156) of Transamerica Investment Trust.
ERNST & YOUNG LLP
May 3, 1995
<PAGE> 1
Exhibit 99.15A
JOHN HANCOCK GROWTH AND INCOME FUND
a series of John Hancock Investment Trust
Distribution Plan
Class A Shares
December 22, 1994
ARTICLE I. THIS PLAN
This Distribution Plan (the "Plan") sets forth the terms and conditions on
which John Hancock Investment Trust (the "Trust"), on behalf of John Hancock
Growth and Income Fund (the "Fund"), will, after the effective date hereof, pay
certain amounts to John Hancock Broker Distribution Services, Inc. ("Broker
Services") in connection with the provision by Broker Services of certain
services to the Fund and its Class A shareholders, as set forth herein. Certain
of such payments by the Trust may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes
all material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Trust, on behalf of the Fund, and Broker Services
have entered into a Distribution Agreement of even date herewith, as amended
from time to time (the "Agreement"), the terms of which, as heretofore and from
time to time continued, are incorporated herein by reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Trust, on behalf of the Fund, shall pay to Broker Services a fee in the
amount specified in Article III hereof. Such fee may be spent by Broker Services
on any activities or expenses primarily intended to result in the sale of Class
A shares of the Fund, including, but not limited to the payment of Distribution
Expenses (as defined below) and Service Expenses (as defined below).
Distribution Expenses include, but are not limited to, (a) initial and ongoing
sales compensation payable out of such fee as it is received by Broker Services
or other broker- dealers ("Selling Brokers") that have entered into an agreement
with Broker Services for the sale of Class A shares of the Fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of Class A
shares of the Fund, including expenses related to printing of prospectuses and
reports to other than existing Class A shareholders of the Fund, and
preparation, printing and distribution of sales literature and advertising
materials, (c) an allocation of overhead and other branch office expenses of
Broker Services related to the distribution of Class A
<PAGE> 2
shares of the Fund, (d) distribution expenses incurred by Transamerica Fund
Distributors, Inc. in connection with the Class A shares of the Fund, and (e)
distribution expenses incurred in connection with the distribution of a
corresponding class of any open-end, registered investment company which sells
all or substantially all of its assets to the Fund or which merges or otherwise
combines with the Fund.
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class A shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Trust, on behalf of the Fund, pursuant
to this Plan, and the basis upon which such expenditures will be made, shall be
determined by the Fund, and in no event shall such expenditures exceed an annual
rate of 0.25% of the average daily net asset value of the Class A shares of the
Fund (determined in accordance with the Fund's prospectus as from time to time
in effect) to cover Distribution Expenses and Service Expenses, provided that
the portion of such fee used to cover Service Expenses may only constitute up to
an annual rate of 0.25% of the average daily net asset value of the Class A
shares of the Fund payable annually pursuant to the Plan. Such expenditures
shall be calculated and accrued daily and paid monthly or at such other
intervals as the Trustees shall determine. In the event Broker Services is not
fully reimbursed for payments made or other expenses incurred by it under this
Plan, such expenses will not be carried beyond one year from the date such
expenses were incurred. Any fees paid to Broker Services under this Plan during
any fiscal year of the Fund and not expended or allocated by Broker Services for
actual or budgeted Distribution Expenses and Service Expenses during such fiscal
year will be promptly returned to the Fund.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Fund and its
investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear the
respective expenses to be borne by them under the Investment Management Contract
dated December 22, 1994, as from time to time continued and amended (the
"Management Contract"), and under the Fund's current prospectus as it is from
time to time in effect. Except as otherwise contemplated by this Plan, the
Trust and the Fund shall not, directly or indirectly, engage in financing any
activity which is primarily intended to or should reasonably result in the sale
of shares of the Fund.
<PAGE> 3
ARTICLE V. APPROVAL BY TRUSTEES
This Plan shall not take effect until it has been approved, together with
any related agreements, by votes, cast in person at a meeting called for the
purpose of voting on this Plan or such agreements, of a majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
Act or the rules and regulations thereunder) of (a) all of the Trustees of the
Trust and (b) those Trustees of the Trust who are not "interested persons" of
the Fund, as such term may be from time to time defined under the Act, and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Independent Trustees").
ARTICLE VI. CONTINUANCE
This Plan and any related agreements shall continue in effect for so long
as such continuance is specifically approved at least annually in advance in the
manner provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or at
such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of the
Trustees, a majority of the Independent Trustees, or a majority of the Fund's
outstanding voting Class A shares, or (b) by Broker Services on 60 days' notice
in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at
any time, without payment of any penalty, by vote of a majority of the
Independent Trustees or by vote of a majority of the Fund's then
outstanding voting Class A shares.
(b) That such agreement shall terminate automatically in the event of
its assignment.
<PAGE> 4
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.
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 Trust or the Fund, but only
the Fund's property shall be bound. The Fund shall not be liable for the
obligations of any other series of the Trust.
<PAGE> 5
IN WITNESS WHEREOF, the Trust, on behalf of the Fund, has executed this
Distribution Plan effective as of the __ day of December, 1994 in Boston,
Massachusetts.
JOHN HANCOCK INVESTMENT TRUST
on behalf of
JOHN HANCOCK GROWTH AND INCOME FUND
By:/s/ Thomas M. Simmons
------------------------------------
Thomas M. Simmons
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By:/s/ C. Troy Shaver, Jr.
------------------------------------
C. Troy Shaver, Jr.
President and Chief Executive Officer
<PAGE> 1
Exhibit 99.15B
JOHN HANCOCK GROWTH AND INCOME FUND
a series of John Hancock Investment Trust
Distribution Plan
Class B Shares
December 22, 1994
ARTICLE I. THIS PLAN
This Distribution Plan (the "Plan") sets forth the terms and conditions on
which John Hancock Investment Trust (the "Trust"), on behalf of John Hancock
Growth and Income Fund (the "Fund"), on behalf of its Class B shares, will,
after the effective date hereof, pay certain amounts to John Hancock Broker
Distribution Services, Inc. ("Broker Services") in connection with the provision
by Broker Services of certain services to the Fund and its Class B shareholders,
as set forth herein. Certain of such payments by the Fund may, under Rule 12b-1
of the Securities and Exchange Commission, as from time to time amended (the
"Rule"), under the Investment Company Act of 1940, as amended (the "Act"), be
deemed to constitute the financing of distribution by the Fund of its shares.
This Plan describes all material aspects of such financing as contemplated by
the Rule and shall be administered and interpreted, and implemented and
continued, in a manner consistent with the Rule. The Trust, on behalf of the
Fund, and Broker Services have entered into a Distribution Agreement of even
date herewith, as amended from time to time (the "Agreement"), the terms of
which, as heretofore and from time to time continued, are incorporated herein by
reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services for
the sale of Class B shares of the Fund, (b) direct out-of-pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other than
existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation of
overhead and other branch office expenses of Broker Services
<PAGE> 2
related to the distribution of Class B shares of the Fund, (d) distribution
expenses incurred by Transamerica Fund Distributors, Inc. in connection with the
Class B shares of the Fund, (e) distribution expenses incurred in connection
with the distribution of a corresponding class of any open-end, registered
investment company which sells all or substantially all of its assets to the
Fund or which merges or otherwise combines with the Fund and (f) interest
expenses on unreimbursed distribution expenses related to Class B shares as
described in Article III hereof.
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed an annual rate of 1.00% of
the average daily net asset value of the Class B shares of the Fund (determined
in accordance with the Fund's prospectus as from time to time in effect) to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up to
0.25% of the average daily net asset value of the Class B shares of the Fund.
Such expenditures shall be calculated and accrued daily and paid monthly or at
such other intervals as the Trustees shall determine. In the event Broker
Services is not fully reimbursed for payments made or other expenses incurred by
it under this Plan, Broker Services shall be entitled to carry forward such
expenses to subsequent fiscal years for submission to the Class B shares of the
Fund for payment, subject always to the annual maximum expenditures set forth in
this Article III; provided, however, that nothing herein shall prohibit or limit
the Trustees from terminating this Plan and all payments hereunder at any time
pursuant to Article VIII hereof.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund and
its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear
the respective expenses to be borne by them under the Investment Management
Contract dated December 22, 1994, as from time to time continued and amended
(the "Management Contract"), and under the Fund's current prospectus as it is
from time to time in effect. Except as otherwise contemplated by this Plan, the
Trust and the Fund shall not, directly or indirectly, engage in financing any
activity which is primarily intended to or
<PAGE> 3
should reasonably result in the sale of Class B shares of the Fund.
ARTICLE V. APPROVAL BY TRUSTEES
This Plan shall not take effect until it has been approved, together with
any related agreements, by votes, cast in person at a meeting called for the
purpose of voting on this Plan or such agreements, of a majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
Act or the rules and regulations thereunder) of (a) all of the Trustees of the
Trust and (b) those Trustees of the Trust who are not "interested persons" of
the Fund, as such term may be from time to time defined under the Act, and have
no direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Independent Trustees").
ARTICLE VI. CONTINUANCE
This Plan and any related agreements shall continue in effect for so long
as such continuance is specifically approved at least annually in advance in the
manner provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or at
such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of the
Trustees, a majority of the Independent Trustees, or a majority of the Fund's
outstanding voting Class B shares, or (b) by Broker Services on 60 days' notice
in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at
any time, without payment of any penalty, by vote of a majority of
the Independent Trustees or by vote of a majority of the Fund's then
outstanding voting Class B shares.
<PAGE> 4
(b) That such agreement shall terminate automatically in the event of
its assignment.
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.
ARTICLE XI. LIMITATION OF LIABILITY
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 Trust or the Fund, but only
the Fund's property shall be bound. The Fund shall not be liable for the
obligations of any other series of the Trust.
<PAGE> 5
IN WITNESS WHEREOF, the Trust, on behalf of the Fund, has executed this
Distribution Plan effective as of the 22 day of December, 1994 in Boston,
Massachusetts.
JOHN HANCOCK INVESTMENT TRUST
on behalf of
JOHN HANCOCK GROWTH AND INCOME FUND
By:/s/ Thomas M. Simmons
--------------------------------------------
Thomas M. Simmons
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By:/s/ C. Troy Shaver, Jr.
--------------------------------------------
C. Troy Shaver, Jr.
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 000022370
<NAME> JOHN HANCOCK GROWTH AND INCOME FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1994
<PERIOD-START> SEP-01-1993
<PERIOD-END> AUG-31-1994
<INVESTMENTS-AT-COST> 219,215
<INVESTMENTS-AT-VALUE> 235,292
<RECEIVABLES> 5,296
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<OTHER-ITEMS-LIABILITIES> 798
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<PAID-IN-CAPITAL-COMMON> 224,385
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<NET-CHANGE-FROM-OPS> (5,087)
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<DISTRIBUTIONS-OF-INCOME> 5,967
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<NUMBER-OF-SHARES-SOLD> 85,420
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