<PAGE> 1
Registration No. 2-10156
ICA No. 811-00560
AS FILED ON DECEMBER 26, 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. 74 /x/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
Amendment No. 26 /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 January 1, 1996 pursuant to paragraph (b)
- ---
60 days after filing pursuant to paragraph (a)
- ---
on [date] pursuant to paragraph (a) of rule 485
- ---
<TABLE>
Calculation of Registration Fees Under the Securities Act of 1933
<CAPTION>
Proposed Maximum Proposed Aggregate
Title of Securities Amount of Shares Offering Price Maximum Amount of
Being Registered Being Registered Per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
Shares of Beneficial Interest Indefinite* N/A N/A N/A
Shares of Beneficial Interest 2,312,782 $15.15 $290,000 $100
<FN>
* Registrant continues its election to register an indefinite number of shares of beneficial interest pursuant to Rule 24f-2 under
the Investment Company Act of 1940, as amended.
**Registrant electsto calculate the maximum aggregate offering price pursuant to Rule 24e-2. 6,183,986 shares were redeemed during
the fiscal year ended August 31, 1995. 3,890,346 shares were used for reductions pursuant to Paragraph (c) of Rule 24f-2 during the
current fiscal year. 2,312,782 shares is the amount of redeemed shares used for reduction in this Amendment. Pursuant to Rule
457(c) under the Securities Act of 1933, the maximum public offering price of $15.15 per share on December 15, 1995 is the price
used as the basis for calculating the registration fee. While no fee is rquired for the 2,293,640 shares, the Registrant has
elected to register, for $100, an additional $290,000 of shares (approximately 19,142 shares at $15.15 per share).
</TABLE>
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 23, 1995.
<PAGE> 2
JOHN HANCOCK INVESTMENT TRUST
CROSS REFERENCE SHEET
<TABLE>
Cross Reference Sheet
---------------------
Pursuant to Rule 495(b) 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
13 * Investment Objectives
and Policies; Certain
Investment Practices;
Investment Restrictions
14 * Those Responsible for
Management
15 * Those Responsible for
Management
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
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
(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.)
</TABLE>
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.
PROGRAM 2. The amount you elect to invest will be automatically withdrawn
(MAAP) from your bank or credit union account.
- ------------------------------------------------------------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B SHARES.
- ------------------------------------------------------------------------------------------------------------------------------------
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.
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.
- ------------------------------------------------------------------------------------------------------------------------------------
BUYING ADDITIONAL
CLASS A AND CLASS B
SHARES. (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
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.
<TABLE>
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:
<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:
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CERTAIN CLASS A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
- - 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.
- - 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.
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<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
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
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
PRINCIPAL DISTRIBUTOR PROSPECTUS
John Hancock Funds, Inc. MAY 15, 1995
101 Huntington Avenue
Boston, Massachusetts 02199-7603 A MUTUAL FUND SEEKING TO
OBTAIN THE HIGHEST TOTAL
CUSTODIAN RETURN, A COMBINATION
Investors Bank & Trust Company OF CAPITAL APPRECIATION
24 Federal Street AND CURRENT INCOME,
Boston, Massachusetts 02110 CONSISTENT WITH REASONABLE
SAFETY OF PRINCIPAL.
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
JANUARY 1, 1996
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 January 1, 1996.
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>
TABLE OF CONTENTS
<CAPTION>
Statement of Cross-
Additional Referenced to
Information Prospectus
Page Page
---- ----
<S> <C> <C>
Organization of the Trust 2 7
Certain Investment Practices 2 26
Investment Restrictions 10 7
Those Responsible for Management 12 7
Investment Advisory and Other Services 20 10
Distribution Contract 22 10
Net Asset Value 25 14
Initial Sales Charge on Class A Shares 26 15
Deferred Sales Charge on Class B Shares 27 8
Special Redemptions 28 20
Additional Services and Programs 28 22
Description of the Fund's Shares 29 7
Tax Status 31 10
Calculation of Performance 35 12
Brokerage Allocation 37 7
Transfer Agent Services 39 Back Cover
</TABLE>
<PAGE> 37
<TABLE>
<S> <C> <C>
Custody of Portfolio 39 Back Cover
Independent Auditors 39 Back Cover
Appendix A A-1 N/A
Financial Statements F-1 3
</TABLE>
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 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.
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<PAGE> 38
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
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.
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<PAGE> 39
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
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.
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<PAGE> 40
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 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 adopted a policy of
monitoring
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<PAGE> 41
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 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.
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<PAGE> 42
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.
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
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<PAGE> 43
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 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.
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<PAGE> 44
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. 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.
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
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<PAGE> 45
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 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).
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<PAGE> 46
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 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
-11-
<PAGE> 47
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.
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 will not invest more than 15% of its total assets in
the aggregate in securities of issuers which, together with any
predecessors, have a record of less than three years continuous
operation, and in securities of issuers which are restricted as
to disposition, including securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933.
The Fund will not, with respect to 75% of its total assets,
acquire more than 10% of the outstanding voting securities of
any issuer.
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.
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.
Set forth below is the principal occupation or employment of
the Trustees and principal officers of the Fund during the past
five years.
-12-
<PAGE> 48
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE TRUST DURING PAST FIVE YEARS
- ---------------- -------------- -----------------------
<S> <C> <C>
Edward J. Boudreau, Jr.* Trustee, Chairman Chairman and Chief Executive
101 Huntington Avenue and Chief Officer, the Adviser and
Boston, MA 02199 Executive The Berkeley Financial
Officer(1)(2) 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,
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); and Chairman, John
Hancock Distributors, Inc.
(until April, 1994).
<FN>
- ---------------------------
* An "interested person" of the Portfolio, 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 Administration Committee.
</TABLE>
-13-
<PAGE> 49
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE TRUST DURING PAST FIVE YEARS
- ---------------- -------------- -----------------------
<S> <C> <C>
James F. Carlin Trustee(3) Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc. (insurance);
Natick, MA 01760 Chairman, Massachusetts Higher
Education Coordinating Council;
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).
William H. Cunningham Trustee(3) Chancellor, University of Texas System
601 Colorado Street and former President of the University
O'Henry Hall of Texas, Austin, Texas; Regents Chair for
Austin, TX 78701 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, 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 F. Fretz Trustee (3) Consultant, self employed; Vice President and Director,
RD #5, Box 300B Towers, Perrin, Forster & Crosby, Inc. (international
Clothier Springs Road management consultants) (until 1985).
Malvern, PA 19355
<FN>
- --------------------------------
* An "interested person" of the Portfolio, 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 Administration Committee.
</TABLE>
-14-
<PAGE> 50
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE TRUST DURING PAST FIVE YEARS
- ---------------- -------------- -----------------------
<S> <C> <C>
Harold R. Hiser, Jr. Trustee(3) Executive Vice President, Schering-Plough
Schering-Plough Corporation Corporation (pharmaceuticals); Director,
One Giralda Farms ReCapital Corporation (reinsurance).
Madison, NJ 07940-1000
Charles L. Ladner Trustee(3) Director, Energy North, Inc. (public
UGI Corporation utility holding company); Senior Vice
460 North Gulph Road President, Finance UGI Corp. (public
King of Prussia, PA 19406 utility holding company) (until 1992).
Leo E. Linbeck, Jr. Trustee(3) Chairman, President, Chief Executive Officer
3810 W. Alabama and Director, Linbeck Corporation (a holding
Houston, TX 77027 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 International, Inc. (a geophysical
consulting firm); and Director, Greater Houston Partnership.
Patricia P. McCarter Trustee(3) Director and Secretary, the McCarter Corp. (machine manufacturer).
Swedesford Road
RD #3, Box 121
Malvern, PA 19355
<FN>
- --------------------------------
* An "interested person" of the Portfolio, 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 Administration Committee.
</TABLE>
-15-
<PAGE> 51
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE TRUST DURING PAST FIVE YEARS
- ---------------- -------------- -----------------------
<S> <C> <C>
Steven R. Pruchansky Trustee(1)(3) Director and Treasurer, Mast Holdings, Inc.;
360 Horse Creek Drive, #208 Director, First Signature Bank & Trust Company
Naples, FL 33942 (until August 1991); General Partner, Mast Realty
Trust; President, Maxwell Building Corp. (until 1991).
Norman H. Smith Trustee(3) Lieutenant General, USMC, Deputy Chief of Staff for Manpower
Rt. 1, Box 249 E and Reserve Affairs, Headquarters Marine Corps; Commanding
Linden, VA 22642 General III Marine Expeditionary Force/3rd Marine Division (retired 1991).
John P. Toolan Trustee(3) Director, The Smith Barney Muni Bond Funds, The Smith Barney
13 Chadwell Place Tax-Free Money Fund, Inc., Vantage Money Market Funds (mutual
Morristown, NJ 07960 funds), The Inefficient-Market Fund, Inc. (closed-end investment
company) and Smith Barney Trust Company of Florida; Chairman, 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).
<FN>
- ------------------------------
* An "interested person" of the Portfolio, 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 Administration Committee.
</TABLE>
-16-
<PAGE> 52
<TABLE>
<CAPTION>
POSITION HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE TRUST DURING PAST FIVE YEARS
- ---------------- -------------- -----------------------
<S> <C> <C>
Robert G. Freedman* Vice Chairman and Chief President and Chief Investment
101 Huntington Avenue Investment Officer(2) Officer, the Adviser
Boston, MA 02199
Anne C. Hodsdon* President(2) Executive Vice President, the
101 Huntington Avenue Adviser.
Boston, MA 02199
James B. Little* Senior Vice President Senior Vice President, the Adviser.
101 Huntington Avenue and Chief Financial
Boston, MA 02199 Officer
Thomas H. Drohan* Senior Vice President Senior Vice President and Secretary, the Adviser.
101 Huntington Avenue and Secretary
Boston, MA 02199
James J. Stokowski* Vice President and Treasurer Vice President, the Adviser.
101 Huntington Avenue
Boston, MA 02199
Susan S. Newton* Vice President and
101 Huntington Avenue Compliance Officer Vice President, the Adviser.
Boston, MA 02199
John A. Morin* Vice President, the Adviser Vice President, the Adviser
101 Huntington Avenue
Boston, MA 02199
<FN>
- ---------------------------
* An "interested person" of the Portfolio, 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.
</TABLE>
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 December 1, 1995, there were 9,047,910 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.
-17-
<PAGE> 53
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 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.
-18-
<PAGE> 54
<TABLE>
<CAPTION>
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**
- -------- ------------- ---------------- -----------------
<S> <C> <C> <C>
James F. Carlin $ 1,718 $ 0 $ 60,700
William H. Cunningham $ 2,868 $ 0 $ 30,280
Charles F. Fretz $ 0 $ 0 $ 56,200
Harold R. Hiser, Jr. $ 0 $ 0 $ 60,200
Charles L. Ladner $ 2,045 $ 0 $ 60,700
Leo E. Linbeck, Jr. $ 3,518 $ 0 $ 72,700
Patricia P. McCarter $ 2,045 $ 0 $ 60,700
Steven R. Pruchansky $ 2,122 $ 0 $ 62,700
Norman H. Smith $ 2,122 $ 0 $ 62,700
John P. Toolan $ 2,045 $ 0 $ 60,700
----------- ------------
Total $ 18,483 $ 0 $ 587,580
<FN>
* Compensation made pursuant to different compensation arrangements then in effect for the
fiscal year ended August 31,1995.
** The total compensation paid by the John Hancock Fund Complex to the Independent Trustees is
$587,580 as of the calendar year ended December 31, 1994. All Trustees/Directors except Messrs.
Cunningham and Linbeck are Trustees/Directors of 32 funds in the John Hancock Fund Complex. Messrs.
Cunningham and Linbeck are Trustees/Directors of 30 funds
</TABLE>
<TABLE>
<CAPTION>
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 Advisory Board***
- -------- ------------- ---------------- -----------------
<S> <C> <C> <C>
R. Trent Campbell $ 3,714 $ 0 $ 54,000
Mrs. Lloyd Bentsen $ 3,714 $ 0 $ 54,000
Thomas R. Powers $ 3,714 $ 0 $ 54,000
Thomas B. McDade $ 3,714 $ 0 $ 54,000
TOTAL $ 14,856 $ 0 $ 216,000
<FN>
*** As of December 31, 1995
</TABLE>
-19-
<PAGE> 55
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 or TFMC (the Fund's prior
investment adviser).
The Adviser, located at 101 Huntington Avenue, Boston,
Massachusetts 02199-7603, was organized in 1968 and currently
has more than $16 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 more than $80 billion, the
Life Company is one of the ten largest life insurance companies
in the United States and carries high ratings from Standard &
Poor's and A.M. Best's. 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
-20-
<PAGE> 56
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
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 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.
-21-
<PAGE> 57
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, 1993 and 1994 advisory
fees by the Fund to TFMC, the Fund's former investment adviser,
amounted to $905,355 and $1,322,162, respectively. For the
fiscal year ended August 31, 1995, advisory fees paid by the
Fund to TFMC, the Fund's former investment adviser and the
Adviser amounted to $468,939 and $972,142 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 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
fiscal year 1995.
For the fiscal years ended August 31, 1993, 1994 and 1995, the
Fund paid to TFMC (pursuant to the Services Agreement) $111,174,
$153,060 and $31,385, respectively, of which $92,522, $132,005
and $20,130, respectively, was paid to TFMC and $18,652, $21,055
and $11,255, 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.
-22-
<PAGE> 58
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, 1993, 1994 and
1995, respectively, were $762,955, $883,435 and $899,731,
respectively. Of such amounts $56,633, $56,079 and $69,597,
respectively, were retained by the Fund's former distributor,
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
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<PAGE> 59
of the Distributor related to the distribution of Fund shares; (v)
distribution expenses that were incurred by the Fund's former
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, 1995, the Funds paid
John Hancock Funds the following amounts of expenses with
respect to the Class A and Class B shares of the Fund:
<TABLE>
<CAPTION>
Interest,
Printing and Mailing Carrying or
of Prospectuses to Compensation to Other Finance
Growth and Income Advertising New Shareholders Selling Brokers Charges Other
- ----------------- ----------- ---------------- --------------- -------------
<S> <C> <C> <C> <C>
Class A shares $23,907 $ 887 $166,264 $ 0
Class B shares $19,812 $ 804 $652,464 $321,811
</TABLE>
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 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.
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<PAGE> 60
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.
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.
-25-
<PAGE> 61
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.
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 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
-26-
<PAGE> 62
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
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.
-27-
<PAGE> 63
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
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
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.
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<PAGE> 64
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 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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<PAGE> 65
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 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.
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<PAGE> 66
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 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
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<PAGE> 67
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
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 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
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<PAGE> 68
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 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, 1995, the
Fund has a realized capital loss carryforward of $203,000 which
will expire as follows: $152,000 in 1996; and $51,000 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
-33-
<PAGE> 69
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 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
-34-
<PAGE> 70
consequences of ownership of shares of, and receipt of distributions
from, the Fund in their particular circumstances.
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 August 31, 1995, the annualized
yields of the Fund's Class A shares and Class B shares were
(3.53%) and (3.49%), respectively. As of August 31, 1995, the
average annual total returns of the Class A shares of the Fund
for the one, five and ten year periods were (13.27%), 11.43% and
10.90%, respectively. As of August 31, 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 13.41% and 9.24%,
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.
d= the maximum offering price per share on the last
day of the period (NAV where applicable).
-35-
<PAGE> 71
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:
T = n [SQUARE ROOT] (ERV/P) - 1
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 1 year, 5 year
and life-of-fund periods.
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
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.
-36-
<PAGE> 72
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.
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 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
-37-
<PAGE> 73
fiscal years ended August 31, 1995, 1994 and 1993, the aggregate
dollar amount of brokerage commissions paid were $1,135,806, $373,133
and $369,686, 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, 1995, 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 Distributors, Inc.
("Distributors"), a broker-dealer and John Hancock Freedom
Securities Corporation and its two subsidiaries, Tucker Anthony
Incorporated ("Tucker Anthony") and Sutro & Company, Inc.
("Sutro"), (each are "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,
1995, 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, 1994 and 1995 were 195% and 99%, 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
-38-
<PAGE> 74
certificates. These changes reflected the portfolio managers' changing
assessment of market conditions and expectations in interest rate
movements.
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 an annual fee of $16.00 for each Class A
shareholder and $18.50 for each Class B shareholder plus certain
out-of-pocket expenses. These expenses are aggregated and
charged to the Fund and allocated to each class on the basis of
the relative net asset values.
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.
-39-
<PAGE> 75
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
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.
A-1
<PAGE> 76
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> 77
FINANCIAL STATEMENTS
F-1
<PAGE> 78
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
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 AUGUST 31, 1995. YOU'LL ALSO
FIND THE NET ASSET VALUE PER SHARE AS OF THAT DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $182,642,006)........................... $230,021,750
Convertible preferred stocks (cost - $12,034,749)............. 11,582,875
Short term investments (cost - $1,150,000).................... 1,150,000
Corporate savings account..................................... 55,000
------------
242,809,625
Dividends receivable........................................... 733,975
Receivable for investments sold................................ 2,421,252
Receivable for shares sold..................................... 51,770
Miscellaneous assets........................................... 23,709
------------
Total Assets................................. 246,040,331
------------------------------------------------------------
LIABILITIES:
Payable for investments purchased.............................. 818,580
Payable for shares repurchased................................. 35,228
Payable to John Hancock Advisers, Inc. and
affiliates - Note B........................................... 196,211
Accounts payable and accrued expenses.......................... 84,844
------------
Total Liabilities............................ 1,134,863
------------------------------------------------------------
NET ASSETS:
Capital paid-in................................................ 196,913,679
Accumulated net realized gain on investments................... 560,287
Net unrealized appreciation of investments..................... 46,927,870
Undistributed net investment income............................ 503,632
------------
Net Assets................................... $244,905,468
============================================================
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 - $130,182,682/9,726,172............................... $ 13.38
==============================================================================
Class B - $114,722,786/8,554,156............................... $ 13.41
==============================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($13.38 x 105.26%)................................... $ 14.08
==============================================================================
<FN>
* 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.
</TABLE>
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.
<TABLE>
STATEMENT OF OPERATIONS
Year ended August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends...................................................... $ 7,063,204
Interest....................................................... 129,942
-----------
7,193,146
-----------
Expenses:
Investment management fee - Note B............................ 1,441,081
Distribution/service fee - Note B
Class A..................................................... 301,206
Class B..................................................... 1,081,229
Transfer agent fee............................................ 528,510
Custodian fee................................................. 118,058
Registration and filing fees.................................. 85,895
Auditing fee.................................................. 75,520
Legal fees.................................................... 38,603
Printing...................................................... 37,563
Trustees' fees................................................ 35,634
Administration fee............................................ 30,818
Advisory Board Fee............................................ 19,569
Miscellaneous................................................. 11,144
-----------
Total Expenses............................... 3,804,830
------------------------------------------------------------
Net Investment Income........................ 3,388,316
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments sold.......................... 6,147,562
Change in net unrealized appreciation/depreciation
of investments................................................ 30,850,499
-----------
Net Realized and Unrealized
Gain on Investments.......................... 36,998,061
------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations.................... $40,386,377
============================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 79
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.............................................................................. $ 3,388,316 $ 5,248,852
Net realized gain (loss) on investments sold....................................................... 6,147,562 (4,108,702)
Change in net unrealized appreciation/depreciation of investments.................................. 30,850,499 (6,227,126)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations................................... 40,386,377 (5,086,976)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A - ($0.2026 and $0.3723 per share, respectively)........................................... (2,080,993) (3,841,209)
Class B - ($0.1178 and $0.2857 per share, respectively)........................................... (1,113,907) (2,125,768)
------------ ------------
Total Distributions to Shareholders............................................................. (3,194,900) (5,966,977)
------------ ------------
FROM FUND SHARE TRANSACTIONS -- NET*................................................................. (27,471,362) 65,449,506
------------ ------------
NET ASSETS:
Beginning of period................................................................................ 235,185,353 180,789,800
------------ ------------
End of period (including undistributed net investment income of $503,632 and $310,216,
respectively).................................................................................... $244,905,468 $235,185,353
============ ============
<FN>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------
1995 1994
-----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold..................................................... 1,688,091 $19,652,565 2,589,934 $30,320,622
Shares issued to shareholders in reinvestment of distributions.. 149,026 1,724,908 268,525 3,107,249
--------- ----------- ---------- -----------
1,837,117 21,377,473 2,858,459 33,427,871
Less shares repurchased......................................... (2,719,043) (31,913,858) (1,838,450) (21,316,096)
--------- ----------- ---------- -----------
Net increase (decrease)......................................... (881,926) ($10,536,385) 1,020,009 $12,111,775
========= =========== ========== ===========
CLASS B
Shares sold..................................................... 1,972,798 $23,053,675 4,698,506 $55,098,942
Shares issued to shareholders in reinvestment of distributions.. 80,431 936,397 152,463 1,763,746
Fund shares issued for the net assets of Transamerica
Special Blue Chip Fund - Note D................................. -- -- 2,382,863 26,592,756
--------- ----------- ---------- -----------
2,053,229 23,990,072 7,233,832 83,455,444
Less shares repurchased......................................... (3,464,943) (40,925,049) (2,642,211) (30,117,713)
--------- ----------- ---------- -----------
Net increase (decrease)......................................... (1,411,714) ($16,934,977) 4,591,621 $53,337,731
========= =========== ========== ===========
</TABLE>
THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET
ASSETS HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD. THE DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, ANY INVESTMENT GAINS AND LOSSES, DISTRIBUTIONS PAID TO
SHAREHOLDERS, AND ANY INCREASE OR DECREASE IN MONEY SHAREHOLDERS INVESTED IN THE
FUND. THE FOOTNOTE ILLUSTRATES THE NUMBER OF FUND SHARES SOLD, REINVESTED AND
REDEEMED DURING THE LAST TWO PERIODS, ALONG WITH THE CORRESPONDING DOLLAR
VALUES.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 80
FINANCIAL STATEMENTS
John Hancock Funds - Growth and 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>
YEAR ENDED AUGUST 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period............................ $ 11.42 $ 12.08 $ 12.43 $ 11.77 $ 9.87
-------- -------- -------- ------- -------
Net Investment Income........................................... 0.21(a) 0.32(a) 0.40(a) 0.32(a) 0.20
Net Realized and Unrealized Gain (Loss) on Investments.......... 1.95 (0.61) 1.12 0.89 2.07
-------- -------- -------- ------- -------
Total from Investment Operations............................... 2.16 (0.29) 1.52 1.21 2.27
-------- -------- -------- ------- -------
Less Distributions:
Dividends from Net Investment Income........................... (0.20) (0.37) (0.42) (0.25) (0.19)
Distributions from Net Realized Gain on Investments Sold....... -- -- (1.45) (0.30) (0.18)
-------- -------- -------- ------- -------
Total Distributions.......................................... (0.20) (0.37) (1.87) (0.55) (0.37)
-------- -------- -------- ------- -------
Net Asset Value, End of Period.................................. $ 13.38 $ 11.42 $ 12.08 $ 12.43 $ 11.77
======== ======== ======== ======= =======
Total Investment Return at Net Asset Value..................... . 19.22% (2.39)% 13.64% 10.47% 23.80%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)....................... $130,183 $121,160 $115,780 $89,682 $77,461
Ratio of Expenses to Average Net Assets......................... 1.30% 1.31% 1.29% 1.34% 1.38%
Ratio of Net Investment Income to Average Net Assets ........... 1.82% 2.82% 3.43% 2.75% 1.90%
Portfolio Turnover Rate ........................................ 99% 195% 107% 119% 70%
</TABLE>
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT INCOME, GAINS (LOSSES),
DIVIDENDS 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> 81
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 22, 1991
--------------------------------------------- TO AUGUST 31,
1995 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....................................... 0.13(a) 0.24(a) 0.30(a) 0.23(a) --
Net Realized and Unrealized Gain (Loss) on Investments...... 1.96 (0.61) 1.12 0.89 0.25
-------- -------- ------- ------- -------
Total from Investment Operations........................... 2.09 (0.37) 1.42 1.12 0.25
-------- -------- ------- ------- -------
Less Distributions
Dividends from Net Investment Income....................... (0.12) (0.29) (0.31) (0.15) --
Distributions from Net Realized Gain on Investments Sold... -- -- (1.45) (0.30) --
-------- -------- ------- ------- -------
Total Distributions...................................... (0.12) (0.29) (1.76) (0.45) --
-------- -------- ------- ------- -------
Net Asset Value, End of Period.............................. $ 13.41 $ 11.44 $ 12.10 $ 12.44 $ 11.77
======== ======== ======= ======= =======
Total Investment Return at Net Asset Value.................. 18.41% (3.11)% 12.64% 9.67% 2.17%(b)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................... $114,723 $114,025 $65,010 $29,826 $ 7,690
Ratio of Expenses to Average Net Assets..................... 2.03% 2.06% 2.19% 2.07% 2.19%*
Ratio of Net Investment Income to Average Net Assets ....... 1.09% 2.07% 2.53% 2.02% 1.46%*
Portfolio Turnover Rate..................................... 99% 195% 107% 119% 70%
<FN>
* On an annualized basis.
(a) On average month end shares outstanding.
(b) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 82
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
GROWTH AND INCOME FUND ON AUGUST 31, 1995. IT'S DIVIDED INTO TWO MAIN
CATEGORIES: COMMON STOCKS AND CONVERTIBLE PREFERRED STOCKS. THE INVESTMENTS ARE
FURTHER BROKEN DOWN BY INDUSTRY GROUPS. SHORT-TERM INVESTMENTS, WHICH REPRESENT
THE FUND'S "CASH" POSITION, ARE LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
August 31, 1995
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----------
<S> <C> <C>
COMMON STOCKS
AEROSPACE (20.75%)
Gencorp, Inc. ............................. 325,000* $ 3,859,375
General Dynamics Corp. .................... 100,000* 5,262,500
McDonnell Douglas Corp. ................... 168,000* 13,482,000
Northrop Grumman Corp. .................... 250,000 15,218,750
Rohr Industries, Inc.** ................... 175,000 2,712,500
Thiokol Corp. ............................. 80,000* 2,790,000
United Technologies Corp. ................. 90,000 7,503,750
-----------
50,828,875
-----------
BANKS (14.33%)
AmSouth Bancorporation .................... 100,000* 3,737,500
Bankers Trust New York Corp. .............. 100,000* 6,887,500
Hibernia Corp. (Class A) .................. 1,050,000 10,500,000
J.P. Morgan & Co., Inc. ................... 145,000 10,566,875
Signet Banking Corp. ...................... 130,000* 3,396,250
-----------
35,088,125
-----------
BEVERAGES (2.10%)
Coca-Cola Co. ............................. 80,000 5,140,000
-----------
CHEMICALS (1.66%)
Monsanto Co. .............................. 43,000* 4,079,625
-----------
DIVERSIFIED OPERATIONS (5.92%)
AlliedSignal, Inc. ........................ 100,000 4,437,500
TRW, Inc. ................................. 77,000 5,996,375
Warner-Lambert Co. ........................ 45,000* 4,066,875
-----------
14,500,750
-----------
DRUGS (4.95%)
Pfizer, Inc. .............................. 132,000 6,517,500
Schering-Plough Corp. ..................... 120,000 5,595,000
-----------
12,112,500
-----------
ELECTRONICS (1.71%)
Aerovox, Inc.** ........................... 75,000* 571,875
Westinghouse Electric Corp. ............... 265,000* 3,610,625
-----------
4,182,500
-----------
FINANCE (3.59%)
Great Western Financial Corp. ............. 145,000* 3,389,375
Student Loan Marketing Association ........ 100,000 5,412,500
-----------
8,801,875
-----------
FOODS (6.74%)
CPC International, Inc. ................... 70,000 $ 4,401,250
Fleming Cos., Inc. ........................ 115,000* 3,349,375
Heinz (H.J.) Co. .......................... 100,000 4,237,500
Quaker Oats Co. ........................... 130,000* 4,517,500
-----------
16,505,625
-----------
INSURANCE (1.81%)
Aetna Life & Casualty Co. ................. 65,000* 4,436,250
-----------
LEISURE & RECREATION (2.29%)
Walt Disney Co. ........................... 100,000 5,612,500
-----------
MACHINERY (1.41%)
NACCO Industries, Inc. (Class A) .......... 60,000* 3,450,000
-----------
MEDICAL/DENTAL (3.53%)
Bausch & Lomb, Inc. ....................... 100,000* 3,975,000
Baxter International, Inc. ................ 120,000* 4,680,000
-----------
8,655,000
-----------
OIL & GAS (5.53%)
Gulf Canada Resources, Ltd.** ............. 1,000,000* 4,687,500
Occidental Petroleum Corp. ................ 185,000* 4,023,750
Seagull Energy Corp.** .................... 240,000* 4,830,000
-----------
13,541,250
-----------
PAPER (2.09%)
Kimberly-Clark Corp. ...................... 80,000* 5,110,000
-----------
PHOTO EQUIPMENT (4.71%)
Eastman Kodak Co. ......................... 200,000 11,525,000
-----------
PUBLISHING (5.07%)
Readers Digest Association, Inc. ..........
(Class B) ................................ 60,000* 2,520,000
Time Warner, Inc. ......................... 235,000 9,899,375
-----------
12,419,375
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 83
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
RETAIL (0.88%)
Federated Department Stores, Inc.** ...... 80,000 $ 2,160,000
------------
TEXTILES (1.07%)
Shaw Industries, Inc. .................... 175,000* 2,625,000
------------
TOBACCO (3.78%)
Philip Morris Cos., Inc. ................. 80,000 5,970,000
RJR Nabisco Holdings Corp. ............... 115,000* 3,277,500
------------
9,247,500
------------
TOTAL COMMON STOCKS
(Cost $182,642,006) ............ (93.92)% 230,021,750
---------- ------------
CONVERTIBLE PREFERRED STOCKS
COMPUTERS (0.95%)
Unisys Corp., $3.75, Ser A ............... 59,000* 2,337,875
------------
INSURANCE (1.19%)
American General Corp., $3.00, Ser A ..... 55,000* 2,915,000
------------
TOBACCO (2.59%)
RJR Nabisco Holdings, $0.6012,
Depositary Shares, Ser C ................ 1,055,000 6,330,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $12,034,749) (4.73)% 11,582,875
---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- -------- --------------- ------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Joint Repurchase Agreement (0.47%)
Investment in a joint repurchase
agreement transaction with UBS
Securities, Inc. - Dated 08-31-95,
Due 09-01-95 (secured by U.S.
Treasury Bonds 14.00% due 11-15-11,
12.75% due 11-15-10, 12.50%
due 08-15-14, U.S. Treasury Notes
7.25% due 11-30-96, 6.25%
due 08-31-96, 5.125%
due 12-31-98, 4.375%
due 08-15-96, and U.S. Treasury
Bill due 05-30-96) - Note A ........ 5.800% $1,150 $ 1,150,000
------------
Corporate Savings Account (0.02%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00%.................. 55,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,205,000) (0.49)% 1,205,000
------ ------------
TOTAL INVESTMENTS (99.14)% $242,809,625
====== ============
</TABLE>
* Securities, other than short-term investments, newly added to the
portfolio during the year ended August 31, 1995.
** Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of net assets of the fund.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 84
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
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 (see Note B), the Trust and Fund changed names by
replacing the word Transamerica with John Hancock.
The Trustees have authorized the issuance of two classes of the Fund,
designated as Class A and Class B shares. 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 terms of a distribution plan,
have exclusive voting rights regarding such distribution plan. Class A shares
are subject to an initial sales charge of up to 5.00% and a 12b-1 distribution
plan. Prior to May 15, 1995, the maximum sales charge was 5.75%. Class B shares
are subject to a contingent deferred sales charge and a separate 12b-1
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. 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 TAXES 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 $203,000 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 distribution will be made. The carryforwards expire as follows:
August 31, 1996 -- $152,000, and August 31, 1998 -- $51,000.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date. 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, and at the same time and will be
in the same amount, except for the effect of expenses that may be applied
differently to each class as explained previously.
EXPENSES The majority of the expenses of the Trust are directly identifiable to
an individual Fund. Expenses which are not readily identifiable to a specific
Fund are allocated in such manner as deemed
14
<PAGE> 85
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
equitable, taking into consideration, among other things, the nature and type of
expense and the relative sizes of the Funds.
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 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 adviser
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 assets. This fee structure is consistent
with the former agreement with TFMC. For the period ended August 31, 1995, the
advisory fee earned by the Adviser and TFMC amounted to $972,142 and $468,939,
respectively, resulting in a total fee of $1,441,081.
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 former
principal distributor of the Fund, and acted as sales agent pursuant to an
underwriting agreement. For the period ended August 31, 1995, JH Funds and TFD
received net sales charges of $899,731 with regard to sales of Class A shares.
Out of this amount, $69,597 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $828,359 was paid as sales
commissions to unrelated broker-dealers and $1,775 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, all of
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
August 31, 1995, contingent deferred sales charges amounted to $444,031.
In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted Distribution Plans 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 to JH Funds for
distribution and service expenses at an annual rate not to exceed 0.25% of Class
A average daily net assets and 1.00% of Class B average daily net assets to
reimburse JH Funds for its distribution and service costs. Up to a maximum of
0.25% of these
15
<PAGE> 86
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
payments may be service fees as defined by the amended Rules of Fair Practice of
the National Association of Securities Dealers. 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 Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on transaction volume and
number of shareholder accounts.
A partner with Baker & Botts was an officer of the Trust until December 22,
1994. During the period ended August 31, 1995, legal fees paid to Baker & Botts
amounted to $5,000.
Mr. Edward J. Boudreau is a director and officer of the Adviser and its
affiliates as well as a 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 with regard 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 obligations of the
U.S. government and its agencies and short-term securities, during the period
ended August 31, 1995, aggregated $228,131,644 and $258,817,017, respectively.
There were no purchases or sales of long-term obligations of the U.S. government
and its agencies during the period ended August 31, 1995.
The cost of investments owned at August 31, 1995 for federal income tax
purposes was $195,826,755. Gross unrealized appreciation and depreciation of
investments aggregated $48,319,029 and $1,391,159, respectively, resulting in
net unrealized appreciation of $46,927,870.
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.
16
<PAGE> 87
John Hancock Funds - Growth and Income Fund
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders of
John Hancock Investment Trust --
John Hancock Growth and Income Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock Growth and Income Fund
(formerly the Transamerica Growth and Income Fund) (the "Fund"), a series of
John Hancock Investment Trust (formerly the Transamerica Investment Trust) (the
"Trust"), as of August 31, 1995, 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
five years in the period then ended. 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, 1995, by correspondence with the custodian and brokers, or other
appropriate auditing procedures where replies from brokers were not received. 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 the
John Hancock Growth and Income Fund, a series of John Hancock Investment Trust,
at August 31, 1995, 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 five years in the period then
ended, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG L.L.P.
Boston, Massachusetts
October 16, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is furnished with
respect to the distributions of the Fund during its fiscal year ended August 31,
1995.
Shareholders will receive a 1995 U.S. Treasury Department Form 1099-DIV in
January of 1996. This will reflect the total of all distributions which are
taxable for the calendar year 1995.
For the fiscal year ending August 31, 1995, 100% of the ordinary income
distributions qualify for the dividends received deduction.
17
<PAGE> 88
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 August 31, 1995.
Statement of Operations of the year ended August 31, 1995.
Statement of Changes in Net Asset for each of the two years in the
period ended August 31.
Notes to Financial Statements.
Financial Highlights for each of the 10 years in the period ended August
31, 1995.
Report of Independent Auditors Schedule of Investments as of August 31,
1995.
(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.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of December 1, 1995, the number of record holders of shares of the
Registrant was as follows:
<TABLE>
<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
<S> <C>
Class A Shares - 9,072
Class B Shares - 9,020
</TABLE>
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.
C-1
<PAGE> 89
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 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
C-2
<PAGE> 90
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 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 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> 91
<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 Chairman, 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>
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<PAGE> 92
<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> 93
<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
William C. Fletcher Director None
53 State Street
Boston, Massachusetts
James V. Bowhers Executive Vice President None
101 Huntington Avenue
Boston, Massachusetts
Michael T. Carpenter Senior Vice President None
1000 Louisiana Street
Houston, Texas
</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> 94
(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> 95
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
21st day of December, 1995.
JOHN HANCOCK INVESTMENT TRUST
By: *
------------------------------------
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
- ----------------------- Chairman and Chief Executive
Edward J. Boudreau, Jr. Officer (Principal Executive Officer)
/s/James B. Little
- -----------------------
James B. Little Senior Vice President and Chief December 21 , 1995
Financial Officer (Principal
Financial and Accounting Officer)
* Trustee
- -----------------------
James F. Carlin
* Trustee
- -----------------------
William H. Cunningham
* Trustee
- -----------------------
Charles F. Fretz
* Trustee
- -----------------------
Harold R. Hiser, Jr.
</TABLE>
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<PAGE> 96
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Trustee
- --------------------
Charles L. Ladner
* 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 December 21, 1995
-------------------
Thomas H. Drohan,
Attorney-in-Fact
</TABLE>
C-9
<PAGE> 97
POWER OF ATTORNEY
The undersigned Trustee/Director of John Hancock California Tax-Free
Income Fund, John Hancock Capital Growth Fund, John Hancock Cash Reserve, Inc.,
John Hancock Tax-Free Bond Fund, John Hancock Current Interest, John Hancock
Investment Trust, John Hancock Bond Fund, and John Hancock Series, Inc. 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 Trusts/Corporations 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 shares 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
Trusts/Corporations 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 as
of the 11th day of September, 1995.
/s/ Charles F. Fretz
----------------------------------
Charles F. Fretz, Trustee/Director
<PAGE> 98
POWER OF ATTORNEY
The undersigned Trustee/Director of John Hancock California Tax-Free
Income Fund, John Hancock Capital Growth Fund, John Hancock Cash Reserve, Inc.,
John Hancock Tax-Free Bond Fund, John Hancock Current Interest, John Hancock
Investment Trust, John Hancock Bond Fund, and John Hancock Series, Inc. 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 Trusts/Corporations 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 shares 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
Trusts/Corporations 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 as
of the 11th day of September, 1995.
/s/ Harold R. Hiser, Jr
--------------------------------------
Harold R. Hiser, Jr., Trustee/Director
<PAGE> 99
John Hancock Investment Trust
(File Nos. 2-10156; 811-00560)
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description Page Number
<S> <C> <C>
1 Declaration of Trust dated December 12, 1984.+
1a Amendment to Declaraton of Trust dated September 16, 1986.+
1b Amendment to Declaration of Trust dated June 14, 1989.+
1c Amendment to Declaration of Trust dated June 5, 1991.+
1d Amendment to Declaration of Trust dated December 16, 1994.+
1e Amendment to Declaration of Trust dated September 11, 1995.+
2 By-Laws*
3 Not Applicable.
4 Form of Class A Share and Class B Share Certificates for Growth and Income Fund.+
5 Investment Advisory Agreement between John Hancock Advisers, Inc. and
the Registrant on behalf of Growth and Income Fund.*
5a Amended and Restated Administrative Service Agreement among
Transamerica Fund Management Company, Transamerica Funds Distributor,
Inc., and the Registrant on behalf of Growth and Income Fund.*
6 Distribution Agreement between the Registrant and John Hancock Broker
Distribution Services, Inc.*
6a Form of Soliciting Dealer Agreement between John Hancock Funds, Inc.
and the John Hancock funds.*
6b Form of Financial Distribution Sales and Services Agreement between
John Hancock Funds, Inc. and the John Hancock funds.*
</TABLE>
C-10
<PAGE> 100
<TABLE>
<CAPTION>
Exhibit No. Description Page Number
<S> <C> <C>
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 24e2 Opinion+
11 Consent of Independent Auditors.+
12 Financial Statement of the John Hancock Growth and Income Fund for the
fiscal year ended August 31, 1995 included in Part B.+
13 Not Applicable.
14 Not Applicable.
15 Rule 12b-1 Plan (Class A Shares).
(i) Growth and Income Fund *
15a 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.+
27 Class A+
27 Class B+
</TABLE>
+ Filed herewith
* Incorproated by reference to post-effective amendement #73.
C-11
<PAGE> 1
EXHIBIT 1
DECLARATION OF TRUST
OF
COMMERCE INCOME SHARES
THE DECLARATION OF TRUST of Commerce Income Shares is made the 12th
day of December, 1984 by the parties signatory hereto, as trustee (such
persons, so long as they shall continue in office in accordance with the terms
of this Declaration of Trust, and all other persons who at the time in question
have been duly elected or appointed as trustees in accordance with the
provisions of this Declaration of Trust and are then in office, being
hereinafter called the "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a trust fund under the laws of
Massachusetts for the investment and reinvestment of funds contributed thereto;
and
WHEREAS, it is proposed that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest as
hereinafter provided;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust all money and property contributed to the trust fund to manage and
dispose of the same for the benefit of the holders from time to time of the
shares of beneficial interest issued hereunder and subject to the provisions
hereof, to wit:
<PAGE> 2
ARTICLE I
Name and Definitions
1.1. Name. The name of the trust created hereby (the "Trust")
shall be "Commerce Income Shares," and so far as may be practicable the
Trustees shall conduct the Trust's activities, execute all documents and sue or
be sued under that name, which name (and the word "Trust" wherever hereinafter
used) shall refer to the Trustees as Trustees, and not individually, and shall
not refer to the officers, agents, employees or shareholders of the Trust.
However, should the Trustees determine that the use of such name is not
advisable, they may select such other name for the Trust as they deem proper
and the Trust may hold its property and conduct its activities under such other
name. Any name change shall become effective upon the execution by a majority
of the then Trustees of an instrument setting forth the new name. Any such
instrument shall have the status of an amendment to this Declaration.
1.2. Definitions. As used in this Declaration, the following terms
shall have the following meanings:
The terms "Affiliated Person," "Assignment," "Commission," "Interested
Person" and "Principal Underwriter" shall have the meanings given them in the
1940 Act, as amended from time to time.
"Declaration" shall mean this Declaration of Trust as amended from
time to time. References in this Declaration to "Declaration," "hereof,"
"herein" and "hereunder" shall be deemed to refer to the Declaration rather
than the article or section in which such words appear.
"Fundamental Policies" shall mean the investment objectives, policies
and restrictions set forth in the Prospectus or Statement of Additional
Information of the Trust and designated therein as policies or restrictions
which may be changed only upon a vote of Shareholders of the Trust.
"Majority Shareholder Vote" means the vote of the holders of: (i) a
majority of Shares represented in person or by proxy and entitled to vote at a
meeting of Shareholders at which a quorum, as determined in accordance with the
By-Laws, is present and (ii) a majority of Shares issued and outstanding and
entitled to vote when action is taken by written consent of Shareholders. For
these purposes, however, the term "majority" shall mean a "majority of the
outstanding voting securities," as the phrase is defined in the 1940 Act, when
any action is required by the 1940 Act by such majority as so defined.
2
<PAGE> 3
"Person" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
"Prospectus" and "Statement of Additional Information" shall mean the
currently effective Prospectus and Statement of Additional Information of the
Trust under the Securities Act of 1933, as amended.
"Series" means one of the separately managed components of the Trust
as set forth in Section 6.1 hereof or as may be established and designated from
time to time by the Trustees pursuant to that section.
"Shares" shall mean the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided from
time to time and includes fractions of Shares as well as whole shares.
"Shareholders" shall mean as of any particular time all holders of
record of outstanding Shares at such time.
"Trustees" shall mean the signatories to this Declaration of Trust, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who at the time in question have been duly elected or
appointed and have qualified as trustees in accordance with the provisions
hereof and are then in office, and reference in this Declaration of Trust to a
Trustee or Trustees shall refer to such person or persons in their capacity as
trustees hereunder.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust or the Trustees.
The "1940 Act" refers to the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, as amended from time to time.
3
<PAGE> 4
ARTICLE II
Trustees
2.1. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than three nor more than fifteen.
2.2. Election, Term. Each Trustee named herein, or elected or
appointed hereafter, shall (except in the event of resignation, removal or
vacancy) hold office until a successor has been elected or appointed and has
qualified to serve as Trustee. Trustees shall have terms of unlimited
duration, subject to the resignation and removal provisions of Section 2.3
hereof. Except as herein provided and subject to Section 16(a) of the 1940
Act, Trustees need not be elected by Shareholders, and the Trustees may elect
and appoint their own successors and may, pursuant to Section 2.4 hereof,
appoint Trustees to fill vacancies. The Trustees may adopt By-Laws not
inconsistent with this Declaration or any provision of law to provide for
election of Trustees by Shareholders at such time or times as the Trustees
shall determine to be necessary or advisable. Except for the Trustees named
herein, an individual may not commence to serve as Trustee except if appointed
pursuant to a written instrument signed by a majority of the Trustees then in
office or unless elected by Shareholders, and any such election or appointment
shall not become effective until the individual appointed or elected shall have
accepted such election or appointment and agreed in writing to be bound by the
terms of this Declaration of Trust. A Trustee shall be an individual at least
21 years of age who is not under a legal disability.
2.3. Resignation and Removal. Any Trustee may resign his trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any of the Trustees may be removed (provided the aggregate number
of Trustees after such removal shall not be less than the number required by
Section 2.1 hereof) with cause, by action of two-thirds of the remaining
Trustees or by the action of the Shareholders of record of not less than
two-thirds of the Shares outstanding. For purposes of determining the
circumstances and procedures under which such removal by the Shareholders may
take place, the provisions of Section 16(c) of the 1940 Act shall be applicable
to the same extent as if the Trust were subject to the provisions of that
Section. Upon the resignation or removal of a Trustee, or his otherwise
ceasing to be a Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of conveying to the Trust or
the remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the incapacity or death of any Trustee, his legal
representative shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding sentence.
4
<PAGE> 5
2.4. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of the death, resignation, bankruptcy,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal, of a Trustee. No such vacancy shall operate to annul this
Declaration of Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust. In the case of a vacancy caused by reason
of an increase in the number of Trustees, subject to the provisions of Section
16(a) of the 1940 Act, the remaining Trustees shall fill such vacancy by the
appointment of such other person as they, in their discretion, shall see fit.
An appointment of a Trustee may be made in anticipation of a vacancy to occur
at a later date by reason of retirement, resignation or increase in the number
of Trustees. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in this Section 2.4, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the
Declaration. A written instrument certifying the existence of such vacancy
signed by a majority of the Trustees shall be conclusive evidence of the
existence of such vacancy.
2.5. Meetings. Meetings of the Trustees shall be held from time to
time upon the call of the Chairman, if any, the President, the Secretary or any
two Trustees of the Trust. Regular meetings of the Trustees may be held
without call or notice at a time and place fixed by the By-Laws or by
resolution of the Trustees. Notice of any other meeting shall be mailed or
otherwise given not less than 48 hours before the meeting but may be waived in
writing by any Trustee either before or after such meeting. The attendance of
a Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Trustee attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting has not been
lawfully called or convened. The Trustees may act with or without a meeting.
A quorum for all meetings of the Trustees shall be a majority of the Trustees.
Unless provided otherwise in this Declaration of Trust or by applicable law,
any action of the Trustees may be taken at a meeting by vote of a majority of
the Trustees present (a quorum being present) or without a meeting by written
consents of all of the Trustees.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided
otherwise in this Declaration, any action of any such committee may be taken at
a meeting by vote of a majority of the members present (a quorum being present)
or without a meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust within the meaning
of Section 1.2 hereof or otherwise interested in any action to be taken may be
counted for quorum purposes under this Section and shall be entitled to vote to
the extent permitted by the 1940 Act.
5
<PAGE> 6
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to such
communications systems shall constitute presence in person at such meeting.
2.6. Officers. The Trustees shall annually elect a President, a
Secretary and a Treasurer and may elect a Chairman. The Trustees may elect or
appoint or authorize the Chairman, if any, or President to appoint such other
officers or agents with such powers as the Trustees may deem to be advisable.
The Chairman and President shall be and the Secretary and Treasurer may, but
need not, be a Trustee.
2.7. By-Laws. The Trustees may adopt and from time to time amend
or repeal the By-Laws for the conduct of the business of the Trust.
2.8. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six months at
any one time to any other Trustee or Trustees; provided that in no case shall
less than two Trustees personally exercise the powers granted to the Trustees
under the Declaration except as herein otherwise expressly provided.
6
<PAGE> 7
ARTICLE III
Powers of Trustees
3.1. General. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees may perform such acts as in their
sole discretion are proper for conducting the business of the Trust. The
enumeration of any specific power herein shall not be construed as limiting the
aforesaid power. Such powers of the Trustees may be exercised without order of
or resort to any court.
3.2. Investments. The Trustees shall have power, subject to the
Fundamental Policies, to:
(a) conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of securities and other
investments and assets of whatever kind, or retain Trust assets in
cash and from time to time change the investments of the assets of the
Trust, and exercise any and all rights, powers and privileges of
ownership or interest in respect of any and all such investments and
assets of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with
power to designate one or more persons, firms, associations or
corporations to exercise any of said rights, powers and privileges in
respect of any of said investments and assets.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
3.3. Legal Title. Legal title to all Trust Property shall be
vested in the Trustees as joint tenants, except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name
of one or more of the Trustees, or in the name of the Trust, or in the name of
any other Person as nominee, on such terms as the Trustees may determine,
provided that the interest of the Trust therein is appropriately protected.
The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each person who may hereafter become a Trustee.
Upon the resignation, removal or death of a Trustee he shall automatically
cease to have any right, title or interest in any of the Trust Property, and
the right, title and interest of such Trustee in the
7
<PAGE> 8
Trust Property shall vest automatically in the remaining Trustees. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
3.4. Issuance and Repurchase of Securities. The Trustees shall
have the power to issue, sell, repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, transfer, and otherwise deal in, Shares,
including shares in fractional denominations, and, subject to the more detailed
provisions set forth in Articles VIII and IX, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust whether capital or surplus or otherwise, to the full
extent now or hereafter permitted by the laws of the Commonwealth of
Massachusetts governing business corporations.
3.5. Borrow Money; Lend Assets. Subject to the Fundamental
Policies, the Trustees shall have power to borrow money or otherwise obtain
credit and to secure the same by mortgaging, pledging or otherwise subjecting
as security the assets of the trust, including the lending of portfolio
securities, and to endorse, guarantee or undertake the performance of any
obligations, contract or engagement of any other Person and to lend Trust
assets.
3.6. Delegation; Committees. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
names of the Trustees or otherwise as the Trustees may deem expedient, to the
same extent as such delegation is permitted to directors of a to Massachusetts
business corporation and is permitted by the 1940 Act.
3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; and to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
3.8. Expenses. The Trustees shall have power to incur and pay any
expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration of Trust, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and
Trustees. The Trustees may pay themselves such compensation for special
services, including legal, underwriting, syndicating and brokerage services, as
they in good faith may deem reasonable and reimbursement for expenses
reasonably incurred by themselves on behalf of the Trust.
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3.9. Miscellaneous Powers. The Trustees shall have the power to:
(a) employ or contract with such Persons as the Trustees may deem desirable for
the transaction of the business of the Trust and terminate such employees or
contractual relationships as they consider appropriate; (b) enter into joint
ventures, partnerships and any other combinations or associations; (c) remove
Trustees or fill vacancies in or add to their number, elect and remove such
officers and appoint and terminate such agents or employees as they consider
appropriate, and appoint from their own number, and terminate, any one or more
committees which may exercise some or all of the power and authority of the
Trustees as the Trustees may determine; (d) purchase, and pay for out of Trust
Property, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, distributors, selected dealers or
independent contractors of the Trust against all claims arising by reason of
holding any such position or by reason of any action taken or omitted by any
such Person in such capacity, whether or not constituting negligence, or
whether or not the Trust would have the power to indemnify such Person against
such liability; (e) establish pension, profit- sharing, share purchase and
other retirement, incentive and benefit plans for any Trustees, officers,
employees and agents of the Trust; (f) make donations, irrespective of benefit
to the Trust, for charitable, religious, educational, scientific, civic or
similar purposes; (g) to the extent permitted by law, indemnify any Person with
whom the Trust has dealings, including the investment adviser, distributor,
transfer agent and selected dealers, to such extent as the Trustees shall
determine; (h) guarantee indebtedness or contractual obligations of others;
(i) determine and change the fiscal year of the Trust and the method in which
its accounts shall be kept; (j) adopt a seal for the Trust, but the absence of
such seal shall not impair the validity of any instrument executed on behalf of
the Trust; and (k) call for meetings of Shareholders as may be necessary or
appropriate.
3.10. Further Powers. The Trustees shall have power to conduct the
business of the trust and carry on its operations in any and all of its
branches and maintain offices both within and without the Commonwealth of
Massachusetts, in any and all states of the United States of America, in the
District of Columbia, and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities of the
United States of America and of foreign governments, and to do all such other
things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees. The Trustees will not be required
to obtain any court order to deal with the Trust Property.
3.11. Principal Transactions. Except in transactions permitted by
the 1940 Act or any rule or regulation thereunder, or any order of exemption
issued by the Commission, or effected to implement the provisions of any
agreement to which the Trust is a party, the Trustees shall not knowingly, on
behalf of the Trust, buy any securities (other than Shares) from or sell any
securities (other than Shares) to, or lend any assets of the Trust to, any
Trustee or officer of the Trust or any firm of which any such Trustee or
officer is a
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member acting as principal, or have any such dealings with any investment
adviser, distributor or transfer agent or with any Affiliated Person or such
Person; but the Trust may employ any such Person, or firm or company in which
such Person is an Interested Person, as broker, legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian upon customary terms.
3.12. Litigation. The Trustees shall have the power to engage in
and to prosecute, defend, compromise, abandon, or adjust, by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims and demands
relating to the Trust, and out of the assets of the Trust to pay or to satisfy
any debts, claims, or expenses incurred in connection therewith, including
those of litigation, and such power shall include without limitation the power
of the Trustees or any appropriate committee thereof, in the exercise of their
or its good faith business judgment, to dismiss any action, suit, proceeding,
dispute, claim or demand, derivative or otherwise, brought by any person,
including a Shareholder in its own name or the name of the Trust, whether or
not the Trust or any of the Trustees may be named individually therein or the
subject matter arises by reason of business for or on behalf of the Trust.
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ARTICLE IV
Management and Distribution Arrangements
4.1. Management Arrangements. Subject to approval by a Majority
Shareholder Vote, the Trustees may in their discretion from time to time enter
into advisory, administration or management contracts whereby the other party
to such contract shall undertake to furnish such advisory, administrative,
management, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable
and all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration of Trust, the
Trustees may authorize any adviser, administrator or manager (subject to such
general or specific instructions as the Trustees may from time to time adopt)
to effect purchases, sales, loans or exchanges of portfolio securities of the
Trust on behalf of the Trustees or may authorize any officer, employee or
Trustee to effect such purchases, sales, loans or exchanges pursuant to
recommendations of any such adviser, administrator or manager (all without
further action by the Trustees). Any such purchases, sales, loans and
exchanges shall be deemed to have been authorized by all of the Trustees. The
Trustees may, in their sole discretion, call a meeting of Shareholders in order
to submit to a vote of Shareholders at such meeting the approval or continuance
of any such investment advisory, management or other contract.
4.2. Administrative Services. The Trustees may in their discretion
from time to time contract for administrative personnel and services whereby
the other party shall agree to provide to the Trustees or the Trust
administrative personnel and services to operate the Trust on a daily or other
basis on such terms and conditions as the Trustees may in their discretion
determine. Such services may be provided by one or more persons or entities.
4.3. Distribution Arrangements. The Trustees may in their
discretion from time to time enter into a contract, providing for the sale of
the Shares of the Trust to net the Trust not less than the par value per share,
whereby the Trust may either agree to sell the Shares to the other party to the
contract or appoint such other party its sales agent for such Shares. In
either case, the contract shall be on such terms and conditions as the Trustees
may in their discretion determine not inconsistent with the provisions of this
Article IV or the By-Laws; and such contract may also provide for the
repurchase or sale of Shares by such other party as principal or as agent of
the Trust and may provide that such other party may enter into selected dealer
agreements with registered securities dealers to further the purpose of the
distribution or repurchase of the Shares.
4.4. Parties to Contract. Any contract of the character described
in Sections 4.1, 4.2 or 4.3 of this Article IV or in Article VI or VII hereof
may be entered into with
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any corporation, firm, trust or association, although one or more of the
Trustees or officers of the Trust may be an officer, director, Trustee,
shareholder, employee or member of such other party to the contract, and no such
contract shall be invalidated or rendered voidable by reason of the existence of
any such relationship, nor shall any person holding such relationship be liable
merely be reason of such relationship for any loss or expense to the Trust under
or by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV
or the By-Laws. The same person (including a firm, corporation, trust or
association) may be the other party to contracts entered into pursuant to
Sections 4.1, 4.2 or 4.3 above or Article VI or VII, and any individual may be
financially interested or otherwise affiliated with Persons who are parties to
any or all of the contracts mentioned in this Section 4.4.
4.5. Provisions and Amendments. Any contract entered into pursuant
to Sections 4.1, 4.2 or 4.3 of this Article IV shall be consistent with and
subject to all applicable requirements of the 1940 Act with respect to its
adoption, continuance, termination and the method of authorization and approval
of such contract or renewal thereof, and no amendment to any contract entered
into pursuant to such sections shall be effective unless entered into in
accordance with applicable provisions of the 1940 Act.
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ARTICLE V
Limitations of Liability of Shareholders, Trustees and Others
5.1. No Personal Liability of Shareholders, Trustees, etc. No
Shareholder, as such, 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. No Trustee, officer, employee or agent of the Trust
shall be subject to any personal liability whatsoever to any Person, other than
the Trust or its Shareholders, in connection with Trust Property or the affairs
of the Trust, and all such Persons shall look solely to the Trust Property 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, is made a party to any suit or proceeding to enforce any such
liability, 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 for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The rights accruing to a
Shareholder under this Section 5.1 shall not exclude any other right to which
such Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
5.2. Non-Liability of Trustees, etc. No Trustee, officer, employee
or agent of the Trust 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 his
duties.
5.3. Indemnification. The Trustees shall provide for
indemnification by the Trust of any person who is, or has been a Trustee,
officer, employee or agent of the Trust 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, officer, employee or agent and
against amounts paid or incurred by him in the settlement thereof, in such
manner as the Trustees may provide from time to time in the By-Laws.
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.
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5.4. No Bond Required of Trustees. No Trustee, as such, shall be
obligated to give any bond or surety or other security for the performance of
any of his duties hereunder.
5.5. 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 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 undertaking, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively taken to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration of Trust or in their
capacity as officers, employees or agents of the Trust. Every written
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking made or issued by the Trustees or by any officers,
employees or agents of the Trust, in their capacity as such, shall contain an
appropriate recital to the effect that the Shareholders, Trustees, officers,
employees and agents of the Trust shall not personally be bound by or liable
thereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim thereunder, and appropriate references
shall be made therein to the Declaration of Trust, and may contain any further
recital which they may deem appropriate, but the omission of such recital shall
not operate to impose personal liability on any of the Trustees, Shareholders,
officers, employees or agents of the Trust. The Trustees may maintain
insurance for the protection of the Trust Property, 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.
5.6. Reliance on Experts, etc. Each Trustee and officer or
employee of the Trust 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, upon an opinion of counsel, or upon reports made to the
Trust by any of its officers or employees or by any investment adviser,
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.
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ARTICLE VI
Shares of Beneficial Interest
6.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest,
with par value $.01 per share. The number of such shares of beneficial
interest authorized hereunder is unlimited. The Trustees may initially issue
whole and fractional shares of a single class, each of which shall represent an
equal proportionate share in the Trust with each other Share. As provided by
the provisions of Section 6.9 hereof, the Trustees may authorize the creation
of series of shares (the proceeds of which may be invested in separate,
independently managed portfolios) and additional classes of shares within any
series. All Shares issued hereunder including, without limitation, Shares
issued in connection with a dividend in Shares or a split of Shares, shall be
fully paid and nonassessable.
6.2. Rights of Shareholders. The ownership of the Trust Property
of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to share or assume any losses of the Trust or suffer an assessment of any
kind by virtue of their ownership of Shares. The Shares shall be personal
property giving only the rights in this Declaration specifically set forth.
The Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights (except for rights of appraisal specified in
Section 11.4 and as the Trustees may determine with respect to any series or
class of Shares).
6.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to
create a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
6.4. Issuance of Shares. The Trustees, in their discretion, may
from time to time without a vote of the Shareholders issue Shares, in addition
to the then issued and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount not less than par value and type of
consideration, including cash or property, at such time or times, and on such
terms as the Trustees may deem best, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with
the assumption of, liabilities) and businesses. In connection with any
issuance of Shares, the Trustees may issue fractional Shares. The Trustees may
from time
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to time divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
6.5. Register of Shares. A register shall be kept at the Trust or
a transfer agent duly appointed by the Trustees under the direction of the
Trustees which shall contain the names and addresses of the Shareholders and
the number of Shares held by them respectively and a record of all transfers
thereof. Such register shall be conclusive as to who are the holders of the
Shares and who shall be entitled to receive dividends or distributions or
otherwise to exercise or enjoy the rights of Shareholders. No Shareholder
shall be entitled to receive payment of any dividend or distribution, nor to
have notice given to him as herein provided, until he has given his address to
a transfer agent or such other officer or agent of the Trustees as shall keep
the said register for entry thereon. It is not required that certificates be
issued for the Shares; however, the Trustees, in their discretion, may
authorize the issuance of share certificates and promulgate appropriate rules
and regulations as to their use.
6.6. Transfer Agent and Registrar. The Trustee shall have power to
employ a transfer agent or transfer agents, and a registrar or registrars. The
transfer agent or transfer agents may keep the said register and record therein
the original issues and transfers, if any, of the said Shares. Any such
transfer agent and registrars shall perform the duties usually performed by
transfer agents and registrars of certificates of stock in a corporation,
except as modified by the Trustees.
6.7. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereto
duly authorized in writing, upon delivery to the Trustees or a transfer agent
of the Trust of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be the holder of such Shares for all
purposes hereof and neither the Trustees nor any transfer agent or registrar
nor any officer, employee or agent of the Trust shall be affected by any notice
of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the
death, bankruptcy, or incompetence of any Shareholder, or otherwise by
operation of law, shall be recorded on the register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
record shall be deemed to be the holder of such Shares for all purposes hereof
and neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.
6.8. Treasury Shares. Shares held in the treasury shall, until
reissued, not confer any voting rights on the Trustees, nor shall such Shares
be entitled to any dividends or other distributions declared with respect to
the Shares.
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6.9. Series Designation. The Trustees, in their discretion, may
authorize the division of Shares into two or more series of two or more
classes, and the different series or classes shall be established and
designated, and the variations in the relative rights and preferences as
between the different series or classes shall be fixed and determined, by the
Trustees; provided, that all Shares shall be identical except that there may be
variations so fixed and determined between different series or classes as to
investment objective, purchase price, right of redemption, special and relative
rights as to dividends an on liquidation and conversion rights, and the several
series or classes shall have separate voting rights, as set forth in Section
10.1 of this Declaration. All references to Shares in this Declaration shall
be deemed to be shares of any or all series and classes as the context may
require.
If the Trustees shall divide the Shares of the Trust into two or more
series or two or more classes, the following provisions shall be applicable:
(a) The number of authorized Shares and the number of Shares of
each series or of each class that may be issued shall be unlimited. The
Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any series or class into one or more series
or one or more classes that may be established and designated from time to
time. The Trustees may hold as treasury shares (of the same or some other
series or class), reissue for such consideration and on such terms as they may
determine, or cancel any Shares of any series or any class reacquired by the
Trust at their discretion from time to time.
(b) The power of the Trustees to invest and reinvest the Trust
Property shall be governed by Section 3.2 of this Declaration with respect to
any one or more series which represents the interests in the assets of the
Trust immediately prior to the establishment of two or more series and the
power of the Trustees to invest and reinvest assets applicable to any other
series shall be the same, except as otherwise set forth in the instrument of
the Trustees establishing such series which is hereinafter described.
(c) All considerations received by the Trust for the issue or sale
of Shares of a particular series or class, together with all assets in which
such consideration is invested or reinvested, all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series or class for all purposes, subject only to
the rights of creditors and except as may otherwise be required by applicable
tax laws, and shall be so recorded upon the books of account of the Trust. In
the event that there are any assets, income, earnings, profits and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular series or class, the Trustees shall allocate them among any one
or more of the series or classes established and designated from time to time
in such manner and on such basis as they, in their sole discretion, deem fair
and
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equitable. Each such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all series or classes for all purposes.
(d) The assets belonging to each particular series shall be
charged with the liabilities of the Trust in respect of that series and all
expenses, costs, charges and reserves attributable to that series, and any
general liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as belonging to any particular series shall be
allocated and charged by the Trustees to and among any one or more of the
series established and designated and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the holders of
all series for all purposes. The Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine which items are
capital; and each such determination and allocation shall be conclusive and
binding upon the Shareholders.
(e) The power of the Trustees to pay dividends and make
distributions shall be governed by Section 9.2 of this Declaration with respect
to any one or more series or classes which represents the interests in the
assets of the Trust immediately prior to the establishment of two or more
series or classes. With respect to any other series or class, dividends and
distributions on Shares of a particular series or class may be paid with such
frequency as the Trustees may determine, which may be daily or otherwise,
pursuant to a standing resolution or resolutions adopted only once or with such
frequently as the Trustees may determine, to the holders of Shares of that
series or class, from such of the income and capital gains, accrued or
realized, from the assets belonging to that series or class, as the Trustees
may determine, after providing for actual and accrued liabilities belonging to
that series or class. All dividends and distributions on Shares of a
particular series or class shall be distributed pro rata to the holders of that
series or class in proportion to the number of Shares of that series or class
held by such holders at the date and time of record established for the payment
of such dividends or distributions.
(f) Subject to the requirements of the 1940 Act, particularly
Section 18(f) and Rule 18f-2, the Trustees shall have the power to determine
the designations, preferences, privileges, limitations and rights of each class
and series of Shares.
(g) The establishment and designation of any series or class of
Shares shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such series or class, or as otherwise
provided in such instrument. At any time that there are no Shares outstanding
of any particular series or class previously established and designated, the
Trustees may by an instrument executed by a majority of their number abolish
that series or class and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
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6.10. Notices. Any and all notices to which any Shareholder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Shareholder of
record at his last known address as recorded on the register of the Trust.
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ARTICLE VII
Custodian
7.1. Appointment and Duties. The Trustees shall at all times
employ a custodian or custodians, meeting the qualifications for custodians
contained in the 1940 Act, as custodian with authority as its agent, but
subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-Laws of the Trust and the 1940 Act, for purposes of
maintaining custody of the Trust's securities and similar investments.
7.2. Central Certificate System. Subject to applicable rules,
regulations and orders, the Trustees may direct the custodian to deposit all or
any part of the securities and similar investments owned by the Trust in a
system for the central handling of securities pursuant to which all securities
of any particular class or series of any issuer deposited within the system are
treated as fungible and may be transferred or pledged by bookkeeping entry
without physical delivery of such securities.
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ARTICLE VIII
Redemption
8.1. Redemptions. All outstanding Shares may be redeemed at the
option of the holders thereof, upon and subject to the terms and conditions
provided in this Article VIII. The Trust shall, upon application of any
Shareholder or pursuant to authorization from any Shareholder, redeem or
repurchase from such Shareholder for cash or in kind outstanding Shares for an
amount per share determined by the application of a formula adopted for such
purpose by resolution of the Trustees (which formula shall be consistent with
applicable provisions of the 1940 Act); provided that (a) such amount per Share
shall not exceed the cash equivalent of the proportionate interest of each
Share in the assets of the Trust at the time of the purchase or redemption and
(b) if so authorized by the Trustees, the Trust may, at any time and from time
to time, charge fees for effecting such redemption, at such rates as the
Trustees may establish, as and to the extent permitted under the 1940 Act, and
may, at any time and from time to time, pursuant to such Act or an order
thereunder, suspend such right of redemption. The procedures for effecting
redemption shall be as set forth in the Prospectus and the Statement of
Additional Information, as amended from time to time.
8.2. Redemption of Shares; Disclosure of Holding. If the Trustees
shall, at any time and in good faith, be of the opinion that direct or indirect
ownership of Shares or other securities of the Trust has or may become
concentrated in any person to an extent which would disqualify the Trust as a
regulated investment company under the Internal Revenue Code, then the Trustees
shall have the power by lot or other means deemed equitable by them (i) to call
for redemption a number, or principal amount, of Shares or other securities of
the Trust sufficient, in the opinion of the Trustees, to maintain or bring the
direct or indirect ownership of Shares or other securities of the Trust into
conformity with the requirements of such qualification and (ii) to refuse to
transfer or issue Shares or other securities of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust in question would in
the opinion of the Trustees result in such disqualification. The redemption
shall be effected at a redemption price determined in accordance with Section
8.1.
The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of any other taxing authority.
8.3. Redemptions of Account of Less than $500. The Trustees shall
have the power to redeem shares at a redemption price determined in accordance
with Section 8.1
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if at any time the total investment in a Shareholder account does not have a
value of at least $500 (or such lesser amount as the Trustees may determine);
provided, that the Trustees may not exercise such power with respect to Shares
if the Prospectus does not describe such power (and applicable amount). In the
event the Trustees determine to exercise their power to redeem Shares provided
in this Section 8.3., shareholders shall be notified that the value of their
account is less than $500 (or such lesser amount as determined above) and
allowed a reasonable period of time to make an additional investment before the
redemption is effected.
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ARTICLE IX
Determination of Net Asset Value, Net Income and Distributions
9.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust shall be determined in such manner and at such time or times
on such days as the Trustees may determine, in accordance with applicable
provisions of the 1940 Act, as described from time to time in the Trust's
currently effective Prospectus and Statement of Additional Information. The
power and duty to make the daily calculations may be delegated by the Trustees
to the adviser, administrator, manager, custodian, transfer agent or such other
person as the Trustees may determine. The Trustees may suspend the daily
determination of net asset value to the extent permitted by the 1940 Act.
9.2. Distributions to Shareholders. The Trustees shall from time
to time distribute ratably among the Shareholders such proportion of the net
profits, including net income, surplus (including paid-in surplus), capital or
assets held by the Trustees as they may deem proper. Such distribution shall
be made in cash or Shares, and the Trustees may distribute ratably among the
Shareholders additional Shares issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem proper. Such distributions
may be among the Shareholders of record at the time of declaring a distribution
or among the Shareholders of record at such later date as the Trustees shall
determine. The Trustees may always retain from the net profits such amount as
they may deem necessary to pay the debts or expenses of the Trust or to meet
obligations of the Trust, or as they may deem desirable to use in the conduct
of its affairs or to retain for future requirements or extensions of the
business. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plan, cash dividend payout plans or related plans as the Trustees
shall deem appropriate.
Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of the Trust,
the above provisions shall be interpreted to give the Trustees the power in
their discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
23
<PAGE> 24
ARTICLE X
Shareholders Voting and Reports
10.1. Voting. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Article II hereof, (ii) with
respect to any investment advisory, management or other contract as provided in
Section 4.1, (iii) with respect to termination of the Trust as provided in
Section 11.2, (iv) with respect to any amendment of the Declaration to the
extent and as provided in Section 11.3, (v) with respect to any merger,
consolidation or sale of assets as provided in Section 11.4, (vi) with respect
to incorporation of the Trust to the extent and as provided in Section 11.5,
(vii) to the same extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or Shareholders, and (viii) with respect to such additional
matters relating to the Trust as may be required by law, the Declaration, the
By-Laws or any registration statement of the Trust filed with any federal or
state regulatory authority, or as and when the Trustees may consider necessary
or desirable. Each whole Share shall be entitled to one vote as to any matter
on which it is entitled to vote and each fractional Share shall be entitled to
a proportionate fractional vote, except that Shares held in the treasury of the
Trust as of the record date, as determined in accordance with the By-Laws,
shall not be voted. A Majority Shareholder Vote shall be sufficient to take or
authorize action upon any matter except as otherwise provided herein. There
shall be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, the Declaration or the By-Laws to be taken by
Shareholders.
In the event of the establishment of series or classes as contemplated
by Section 6.9, Shareholders of each such series or class shall, with respect
to those matters upon which Shareholders are entitled to vote, be entitled to
vote only on matters affecting such series or class, and voting shall be by
series or class and require a Majority Shareholder Vote of each series or class
that would be affected by such matter, except that all Shares (regardless of
series or class) shall be voted as a single voting class, or a Majority
Shareholder Vote of each series or class shall be necessary, where required by
applicable law. Except as otherwise required by law, any action required or
permitted to be taken at any meeting of Shareholders may be taken without a
meeting if Shareholders constituting a Majority Shareholder Vote consent to the
action in writing and such consents are filed with the records of the Trust.
Such consents shall be treated for all purposes as votes taken at a meeting of
Shareholders. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters not inconsistent with the Declaration.
24
<PAGE> 25
10.2. Reports. The Trustees shall transmit to Shareholders such
written financial reports of the operations of the Trust, including financial
statements certified by independent public accountants, as may be required
under applicable law.
25
<PAGE> 26
ARTICLE XI
Duration; Termination of Trust; Amendment; Mergers, Etc.
11.1. Duration. Subject to possible termination in accordance with
the provisions of Section 11.2 hereof, the Trust created hereby shall continue
without limitation of time.
11.2. Termination of Trust.
(a) The Trust may be terminated (i) by a Majority
Shareholder Vote at any meeting of Shareholders, (ii) by an instrument in
writing, without a meeting, signed by a majority of the Trustees and consented
to by holders constituting a Majority Shareholder Vote or (iii) by the Trustees
by written notice to the Shareholders. Upon the termination of the Trust,
(i) The Trust shall carry on no business except for the
purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of
the Trust and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound
up, including the power to fulfill or discharge the contracts of the
Trust, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property
to one or more persons at public or private sale for consideration
which may consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities, and do all
other acts appropriate to liquidate its business; provided that any
sale, conveyance, assignment, exchange, transfer or other disposition
of all or substantially all the Trust Property shall require approval
as set forth in Section 11.4.
(iii) After paying or adequately providing for the payment
of all liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property, in cash or in
kind or partly each, among Shareholders according to their respective
rights.
(b) After termination of the Trust and distribution to
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests of
all Shareholders shall thereupon cease.
26
<PAGE> 27
11.3. Amendment Procedure.
(a) This Declaration may be amended by vote of the
Shareholders. The Trustees may also amend this Declaration without the vote or
consent of Shareholders to change the name of the Trust, to supply any
omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, or if they deem it necessary or desirable to
conform this Declaration to the requirements of applicable federal or state
laws or regulations or the requirements of the regulated investment company
provisions of the Internal Revenue Code, but the Trustees shall not be liable
for failing so to do.
(b) No amendment may be made, under Section 11.3(a)
above, which would change any rights with respect to any Shares of the Trust by
reducing the amount payable thereon upon liquidation of the Trust or by
diminishing or eliminating any voting rights pertaining thereto, except with
the vote or consent of affected Shareholders. Nothing contained in this
Declaration shall permit the amendment of this Declaration to impair the
exemption from personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments upon Shareholders.
(c) A certification in recordable form signed by a
majority of the Trustees or by the Secretary or any Assistant Secretary of the
Trust, setting forth an amendment and reciting that it was duly adopted by the
Shareholders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when lodged among the records of the
Trust.
11.4. Merger, Consolidation and Sale of Assets. The Trust may merge
or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, including its good will, upon such terms and conditions and for
such consideration when and as authorized by a Majority Shareholder Vote, and
any such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. In respect of any such merger, consolidation,
sale or exchange of assets, any Shareholder shall be entitled to rights of
appraisal of his Shares to the same extent as a shareholder of a Massachusetts
business corporation in respect of a merger, consolidation, sale or exchange of
assets of a Massachusetts business corporation, and such rights shall be his
exclusive remedy in respect of his dissent from any such action.
11.5. Incorporation. Upon a Majority Shareholder Vote, the Trustees
may cause to be organized or assist in organizing a corporation or corporations
under the laws of any jurisdiction or any other trust, partnership, association
or other organization to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any interest, and
to sell, convey and transfer the Trust Property to any such corporation, trust,
association or organization in exchange for shares or securities thereof or
otherwise, and to lend money to, subscribe for shares or securities of, and
enter into
27
<PAGE> 28
any contracts with any such corporation, trust, partnership, association or
organization, or any corporation, partnership, trust, association or
organization in which the Trust holds or is about to acquire shares or any other
interest. The Trustees may also cause a merger or consolidation between the
Trust or any successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted by law. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling, conveying
or transferring a portion of the Trust Property to such organizations or
entities.
28
<PAGE> 29
ARTICLE XII
Miscellaneous
12.1. Filing. This Declaration and all amendments hereto shall be
filed in the office of the Secretary of the Commonwealth of Massachusetts and
in such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem
appropriate. Each amendment so filed shall be accompanied by a certificate
signed and acknowledged by a Trustee stating that such action was duly taken in
a manner provided herein, and unless such amendment or such certificate sets
forth some later time for the effectiveness of such amendment, such amendment
shall be effective upon its filing. A restated Declaration, containing the
original Declaration and all amendments theretofore made, may be executed from
time to time by a majority of the Trustees and shall, upon filing with the
Secretary of the Commonwealth of Massachusetts, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration and the various amendments thereto.
12.2. Resident Agent. The Trust hereby appoints CT Corporation
System as its resident agent in the Commonwealth of Massachusetts, whose post
office address is 2 Oliver Street, Boston, Massachusetts 02109.
12.3. Governing Law. This Declaration is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
laws thereof, and the rights of all parties and the validity and construction
of every provision hereof shall be subject to and construed according to the
laws of said State and reference shall be specifically made to the business
corporation law of the Commonwealth of Massachusetts as to the construction of
matters not specifically covered herein or as to which an ambiguity exists.
12.4. Counterparts. This Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument,
which shall be sufficiently evidenced by any such original counterpart.
12.5. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust, or of any recording
office in which this Declaration may be recorded, appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements
of this Declaration, (e) the form of any By-Laws adopted by or the identity of
any officers elected by the
29
<PAGE> 30
Trustees, or (f) the existence of any fact or facts which in any manner
relate to the affairs of the Trust, shall be conclusive evidence as to the
matters so certified in favor of any person dealing with the Trustees and their
successors.
12.6. Provisions in Conflict With Law or Regulations.
(a) The provisions of this Declaration are severable, and
if the Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of this Declaration in any jurisdiction.
30
<PAGE> 31
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
/s/ Thomas J. Press
----------------------------
Thomas J. Press, as Trustee
/s/ Richard A. Nunn
----------------------------
Richard A. Nunn, as Trustee
/s/ Pamela A. Vlatas
----------------------------
Pamela A. Vlatas, as Trustee
STATE OF TEXAS ) City of Houston
) ss.: December 12, 1984
COUNTY OF HARRIS )
Then personally appeared before me, Thomas J. Press, who resides at
339 Wilchester Blvd., Houston, Texas 77079, Richard A. Nunn, who resides at
9203 Langdon, Houston, Texas 77036, and Pamela A. Vlatas, who resides at 12435
North Garden, Houston, Texas 77071, who acknowledge the foregoing instrument to
be their free act and deed and the free act and deed of the Trustees of
Commerce Income Shares.
/s/ Jo Ann Anderson
---------------------------
Notary Public
JO ANN ANDERSON
Notary Public, In and for Harris County, Texas
My Commission Expires:
4-13-88
- ----------------------
<PAGE> 1
EXHIBIT 1a
COMMERCE INCOME SHARES
AMENDMENT TO DECLARATION OF TRUST to: (1) change the name of the
Trust; (2) to designate the existing Shares of the Trust as a series of Shares
to be named "Commerce Income Shares" and (3) to establish and designate the
second and third series of shares of the same class.
I.
Pursuant to Article XI, Section 11.3, each of the undersigned hereby
executes this certificate in connection with the change in name of the Trust
and for that purpose adopts the following resolution:
RESOLVED, that pursuant to Article XI, Section 11.3 the name
of the Trust is hereby changed to "Criterion Income Trust".
II.
Pursuant to Article VI, Section 6.1 and 6.9(g) of the Declaration of
Trust, each of the undersigned hereby executes this instrument, setting forth
the designation of series and fixing and determining the relative rights and
preferences of said series, and for that purpose adopts the following
resolutions:
RESOLVED, that the existing shares and an unlimited number of
additional full and fractional shares, all of the same class, be, and
they hereby are, designated as the first series of the Trust, which
series shall individually represent interests of the shareholders of
such series in a particular portfolio of assets of the Trust to be
known as "Commerce Income Shares"; and it is
RESOLVED, that an unlimited number of full and fractional
shares of beneficial interest, all of the same class be, and they
hereby are, designated as the second series of said class, which
series shall individually represent interests of the shareholders of
such series in a particular portfolio of assets of the Trust to be
known as the Criterion Convertible Securities Fund; and it is
RESOLVED, that an unlimited number of full and fractional
shares of beneficial interest, all of the same class be, and they
hereby are, designated as the third series of said class, which series
shall individually represent interests of the shareholders of such
series in a particular portfolio of assets of the Trust to be known as
the Criterion Balanced Fund; and it is
FURTHER RESOLVED, that the shares of beneficial interest of
each series shall be issued to such persons and at such prices as the
Board of Trustees
<PAGE> 2
may from time to time determine and upon issuance said shares shall be
fully paid and non- assessable shares of beneficial interest of the
same class; and it is
FURTHER RESOLVED, that the registered owner of each share of
each series of beneficial interest shall be entitled to one vote for
each full share, and a fractional vote for each fractional share then
standing in his name on the books of the Trust. On any matter
submitted to a vote of shareholders, all shares of beneficial interest
then issued and outstanding and entitled to vote, irrespective of
series, shall be voted in the aggregate and not by series, except: (i)
when otherwise required by the Declaration of Trust; (ii) when
otherwise required by the Investment Company Act of 1940 or the rules
adopted thereunder in which case shares shall be voted by individual
series; and (iii) when the matter does not affect the interest of a
particular series, in which case only shareholders of the series
affected shall be entitled to vote thereon and shall vote by
individual series; and it is
FURTHER RESOLVED, that all consideration received by the Trust
for the issue or sale of each share of each series together with all
assets, income, earnings, profits, and proceeds derived therefrom
(including all proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be) shall irrevocably
belong to the shares of each series for all purposes, subject only to
the rights of creditors and except as otherwise may be required by
applicable tax laws, and shall be so recorded upon the books of
account of the Trust. Such assets, income, earnings, profits and
proceeds derived from the sale, exchange or liquidation thereof and,
if applicable, any assets derived from any reinvestment of such
proceeds in whatever form the same may be) are herein referred to as
"assets belonging to" a series and shall be allocated by the Trustees
in proportion the respective net assets belonging to each series.
Such determination and allocation by the Trustees shall be conclusive
and binding upon the shareholders of each series for all purposes; and
it is
FURTHER RESOLVED, that the assets belonging to each series
shall be charged with the liabilities of the Trust in respect of such
series and all expenses, costs, charges and reserves attributable to
said series, and any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging
to said series and shall be allocated by the Trustees in proportion to
the respective net assets belonging to each series. Such
determination and allocation by the Trustees shall be conclusive and
binding upon the shareholders of each series for all purposes; and it
is
FURTHER RESOLVED, that the Board be, and hereby is authorized
to the extent permitted by the Declaration of Trust, and in the manner
provided herein, to declare and pay dividends or distributions in
stock or cash on the shares
<PAGE> 3
of each series of beneficial interest, the amount of such dividends and
the payment of them being wholly in the discretion of the Board of
Trustees:
(i) Dividends or distributions on shares of each series
of shares of beneficial interest shall be paid only out of the
earnings, surplus, or other lawfully available assets belonging to
that series.
(ii) So long as the Trust intends to qualify as a
"regulated investment company" under the Internal Revenue Code of
1954, as amended, or any successor or comparable statute thereto, and
the regulations promulgated thereunder, and inasmuch as the
computation of net income and gains for federal income tax purposes
may vary from the computation thereof on the books of the Trust, the
Board of Trustees shall have the power in its discretion to distribute
in any fiscal year as dividends, including dividends designated in
whole or in part as capital gains distributions, amounts sufficient,
in the opinion of the Board of Trustees, to enable the Trust to
qualify as a regulated investment company and to avoid liability for
the Trust for federal income tax in respect of that year. In
furtherance and not in limitation of the foregoing, in the event that
a particular series of shares of beneficial interest has a net capital
loss for a fiscal year, and to the extent that the net capital loss
offsets net capital gains from one or more of any other series, if so
established, the amount to be deemed available for distribution to
each affected series shall be determined by the Board of Trustees in
order to effect an equitable adjustment among each series; and it is
FURTHER RESOLVED, that in the event of the liquidation or
dissolution of the Trust, shareholders of any one series shall have
priority over holders of any and all other series of shares of
beneficial interest, if so established, with respect to, and shall be
entitled to receive, as a series, out of the assets of the Corporation
available for distribution to holders of thereof, the assets belonging
to such series and the assets so distributable to the holders of such
series shall be distributed among such series held by them and
recorded on the books of the Trust.
III.
The aforesaid resolutions are hereby duly adopted by a majority of the
Board of Trustees of the Trust on September 16, 1986.
<TABLE>
<S> <C>
/s/ Clive Runnells /s/ Leo E. Linbeck, Jr.
- ------------------------------ ----------------------------
Clive Runnells, Trustee Leo E. Linbeck, Jr., Trustee
3900 Essex Lane, Ste. 1100 P.O. Box 22500
Houston, TX 77027 Houston, TX 77027
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
/s/ Thomas B. McDade
- ------------------------------- ---------------------------
Mr. Lloyd Bentsen, Jr., Trustee Thomas B. McDade, Trustee
1810 Kalorama Sq., N.W. 5276 Cedar Creek
Washington, D.C. 20008 Houston, Texas 77056
/s/ R. Trent Campbell
- ------------------------------ ---------------------------
R. Trent Campbell, Trustee Robert C. Thompson, Trustee
777 S. Post Oak, Ste. 910 P.O. Box 3490
Houston, TX 77056 Conroe, TX 77305
</TABLE>
<PAGE> 1
EXHIBIT 1b
CRITERION INCOME TRUST
(Commerce Income Shares)
AMENDMENT TO DECLARATION OF TRUST TO: (1) Change the name of the
Trust; (2) change the name of Commerce Income Shares, the only presently
outstanding Series of Shares of the Trust; and (3) permit Shares of each Series
of the Trust to be issued in two or more classes.
I.
Pursuant to Article XI, Section 11.3 of the Declaration of Trust, each
of the undersigned hereby executes this certificate in connection with the
change of name of the Trust and for that purpose adopts the following
resolution:
RESOLVED, that, pursuant to Article XI, Section 11.3 of the
Declaration of Trust, the name of the Trust is hereby changed to "Transamerica
Investment Trust."
II.
Pursuant to Article VI, Section 6.9 and Article XI, Section 11.3 of
the Declaration of Trust, each of the undersigned hereby executes this
certificate in connection with the change of name of Commerce Income Shares,
the only presently outstanding Series of Shares of the Trust, and for that
purpose adopts the following resolution:
RESOLVED, that, pursuant to Article VI, Section 6.9 and Article XI,
Section 11.3 of the Declaration of Trust, the name of Commerce Income Shares,
the only presently outstanding Series of Shares of the Trust, is hereby changed
to "Transamerica Growth and Income Fund."
III.
Pursuant to Article XI, Section 11.3 of the Declaration of Trust, each
of the undersigned hereby executes this certificate in connection with the
amendment to the Declaration of Trust permitting Shares of any Series of Shares
of the Trust to be issued in two or more classes and for that purpose adopts
the following resolution:
RESOLVED, that, pursuant to Article XI, Section 11.3 of the
Declaration of Trust, and pursuant to action taken by the Shareholders of
Commerce Income Shares, the only presently outstanding Series of Shares of the
Trust, at a special meeting of such
<PAGE> 2
Shareholders held on June 14, 1989, approving an amendment to the Declaration
of Trust permitting the Trustees, without further action by Shareholders, to
issue two or more classes of Shares within each Series or Shares having such
preferences, or special or relative rights and privileges as the Trustees may
determine, the Declaration of Trust be and it hereby is amended to read as
hereinafter set forth:
I. The present definition of "Shares" in Section 1.2 shall be
deleted and the following language substituted therefor:
"Shares" shall mean the equal proportionate transferable units
of interest into which the beneficial interest in the Trust shall be divided
from time to time and includes fractions of Shares as well as whole Shares. As
provided in Article VI hereof, the Trust may issue separate classes of Shares;
all references to Shares shall be deemed to be Shares of a single class or all
classes as the context may require.
II. Present Section 6.1 of Article VI shall be deleted in its
entirety and the following provision substituted therefor:
6.1. Beneficial Interest. (a) The interest of the
beneficiaries hereunder shall be divided into transferable shares of beneficial
interest, par value $0.01 per share. The number of such shares of beneficial
interest authorized hereunder is unlimited. The Trustees may initially issue
whole and fractional shares of a single class, each of which shall represent an
equal proportionate share in the Trust with each other Share. As provided by
the provisions of Section 6.9 hereof, the Trustees may authorize the creation
of series of shares (the proceeds of which may be invested in separate,
independently managed portfolios) and additional classes of shares within any
series. All Shares issued hereunder including, without limitation, Shares
issued in connection with a dividend in Shares or a split of Shares, shall be
fully paid and nonassessable.
(b) In the event the Trustees create more than one class
of shares, each class shall represent interests in the Trust property and have
identical voting, dividend, liquidation and other rights and the same terms and
conditions except that expenses related directly or indirectly to the
distribution of the shares of a class may be borne solely by such class (as
shall be determined by the Trustees) and, as provided in Section 10.1, a class
may have exclusive voting rights with respect to matters relating to the
expenses being borne solely by such class. The bearing of such expenses solely
by a class of shares shall be appropriately reflected (in the manner determined
by the Trustees) in the net asset value, dividend and liquidation rights of the
Shares of such class. The division of the Shares into classes and the terms
and conditions pursuant to which the Shares of each class will be issued and
governed is subject to compliance with the requirements of the 1940 Act or any
applicable exemption therefrom available either in the 1940 Act, any rule or
regulation thereunder or any order promulgated by the Securities and Exchange
Commission. No division of Shares into classes shall result in the creation of
a class of Shares having a preference as to dividends or distributions or a
preference in the event of any liquidation, termination or winding up of the
Trust.
2
<PAGE> 3
III. Present Sections 9.1, 9.2 and 9.3 of Article IX shall be
deleted in their entirely and the following provisions
substituted therefor.
9.1. Net Asset Value. The net asset value of each
outstanding Share of the Trust shall be determined in such manner and at such
time or times on such days as the Trustees may determine, in accordance with
applicable provisions of the 1940 Act, as described from time to time in the
Trust's currently effective Prospectus and Statement of Additional Information.
The methods of determination of the net asset value of Shares of each class
shall be determined by the Trustees and shall be as set forth in the Prospectus
with any expenses being borne solely by a class of Shares being reflected in
the net asset value of such Shares. The power and duty to make the daily
calculations may be delegated by the Trustees to the adviser, administrator,
manager, custodian, transfer agent or such other person as the Trustees may
determine. The Trustees may suspend the daily determination of net asset value
to the extent permitted by the 1940 Act.
9.2. Distribution to Shareholders. The Trustees shall
from time to time distribute ratably among the Shareholders such proportion of
the net profits, surplus (including paid-in-surplus), capital, or assets held
by the Trustees as they deem proper, with any expenses being borne solely by a
class of Shares being reflected in the net profits or other assets being
distributed to such class. Such distribution shall be made in cash or Shares,
and the Trustees may, distribute ratably among the Shareholders additional
Shares issuable hereunder in such manner, at such times, and on such terms as
the Trustees may deem proper. Such distributions may be among the Shareholders
of record at the time of declaring a distribution or among the Shareholders of
record at such later date as the Trustees shall determine. The Trustees may
always retain from the net profits such amount as they may deem necessary to
pay the debts or expenses of the Trust or to meet obligations of the Trust, or
as they may deem necessary to pay the debts or expenses of the Trust or to meet
obligations of the Trust, or as they may deem desirable to use in the conduct
of its affairs or to retain for future requirements or extensions of the
business. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plan, cash dividend payout plans or related plans as the Trustees
shall deem appropriate.
Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of the Trust,
the above provisions shall be interpreted to give the Trustees the power in
their discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
9.3. Power to Modify Foregoing Procedures.
Notwithstanding any of the foregoing provisions of this Article IX, the
Trustees may prescribe, in their absolute discretion, such other bases and
times for determining the net asset value per share of the Trust's Shares or
net income, or the declaration and payment of dividends and distributions as
they deem necessary or desirable or to enable the Trust to comply with any
3
<PAGE> 4
provision of the 1940 Act, including any rule or regulation adopted pursuant to
Section 22 of the 1940 Act by the Commission or any securities association
registered under the Securities Exchange Act of 1934, all as in effect now or
hereafter amended or modified.
IV. Present Section 10.1 of Article X shall be deleted in its
entirety and the following provision substituted therefor.
10.1. Voting Powers. The Shareholders shall have the power
to vote only (a) for the election of Trustees as provided in Article II hereof,
(b) with respect to any investment advisory, management or other contract as
provided in Section 4.1, (c) with respect to termination of the Trust as
provided in Section 11.2, (d) with respect to any amendment of the Declaration
to the extent and as provided in Section 11.3, (e) with respect to any merger,
consolidation or sale of assets as provided in Section 11.4, (f) with respect
to incorporation of the Trust to the extent and as provided in Section 11.5,
(g) to the same extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or the Shareholders, and (h) with respect to such additional
matters relating to the Trust as may be required by law, the Declaration, the
By-laws or any registration statement of the Trust filed with any federal or
state regulatory authority, or as and when the Trustees may consider necessary
or desirable. If the Shares shall be divided into classes as provided in
Article VI hereof, the Shares of each class shall have identical voting rights
except that the Trustees, in their discretion, may provide a class with
exclusive voting rights with respect to matters related to expenses being borne
solely by such class.
Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote, except that Shares held in the
treasury of the trust as of the record date, as determined in accordance with
the By-Laws, shall not be voted. A Majority Shareholder Vote shall be
sufficient to take or authorize action upon any matter except as otherwise
provided herein. There shall be no cumulative voting in the election of
Trustees. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, the Declaration or the
By-Laws to be taken by Shareholders.
In the event of the establishment of series or classes as
contemplated by Section 6.9, Shareholders of each such series or class shall,
with respect to those matters upon which Shareholders are entitled to vote, be
entitled to vote only on matters affecting such series or class, and voting
shall be by series or class and require an Majority Shareholder Vote of each
series or class that would be affected by such matter, except that all Shares
(regardless of series or class) shall be voted as a single voting class, or a
Majority Shareholder Vote of each series or class shall be necessary, where
required by applicable law. Except as otherwise required by law, any action
required or permitted to be taken at any meeting of Shareholders may be taken
without a meeting if Shareholders constituting a Majority Shareholder Vote
consent to the action in writing and such consents are filed with the records
of the Trust. Such consents shall be treated for all
4
<PAGE> 5
purposes as votes taken at a meeting of Shareholders. The By-Laws may include
further provisions for Shareholders' votes and meetings and related matters not
inconsistent with the Declaration.
V. Present Section 11.2 of Article XI shall be deleted in its
entirety and the following provision substituted therefor.
Termination of Trust.
(a) The Trust may be terminated (i) by a Majority
Shareholder Vote at any meeting of Shareholders, (ii) by an instrument in
writing, without a meeting, signed by a majority of the Trustees and consented
to by holders constituting a Majority Shareholder Vote or (iii) by the Trustees
by written notice to the Shareholders. Upon the termination of the Trust,
(i) The Trust shall carry on no business except
for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the
affairs of the Trust and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust shall have
been wound up, including the power to fulfill or discharge the
contracts of the Trust, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part the
remaining Trust. Property to one or more persons at public or private
sale for consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property shall require approval as set forth in Section 11.4.
(iii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases,
indemnities, and refunding agreements, as they may deem necessary for
their protection, the Trustees may distribute the remaining Trust
Property, in cash or in kind or partly each, among the Shareholders of
each class of series according to their respective rights, taking into
account the proper allocation of expenses being borne solely by any
class of Shares.
(b) After termination of the Trust and distribution to
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests of
all Shareholders shall thereupon cease.
5
<PAGE> 6
IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Amendment to be executed this 14th day of June, 1989.
<TABLE>
<S> <C>
/s/ Clive Runnells /s/ Robert C. Thompson
- ----------------------------- ---------------------------------
Clive Runnells, as Trustee Robert C. Thompson, as Trustee
3900 Essex Lane, Suite 1100 P.O. Box 3490
Houston, Texas 77027 Conroe, Texas 77305
/s/ Thomas B. McDade /s/ Leo E. Linbeck, Jr.
- ----------------------------- ---------------------------------
Thomas B. McDade, as Trustee Leo E. Linbeck, Jr., as Trustee
5276 Cedar Creek P.O. Box 22500
Houston, Texas 77056 Houston, Texas 77027
/s/ R. Trent Campbell /s/ William H. Cunningham
- ----------------------------- ---------------------------------
R. Trent Campbell, as Trustee William H. Cunningham, as Trustee
777 Post Oak Blvd, #510 P.O. Box T
Austin, Texas 78746 Austin, Texas 78713
</TABLE>
6
<PAGE> 1
EXHIBIT 1c
TRANSAMERICA INVESTMENT TRUST
AMENDMENT TO THE DECLARATION OF TRUST
AMENDMENT TO DECLARATION OF TRUST TO: (1) change the name of the
Trust; and (2) change the name of Transamerica Growth and Income Fund, the only
presently outstanding series of shares of the Trust.
I.
Pursuant to Article XI, Section 11.3(a) of the Declaration of Trust,
each of the undersigned hereby executes this instrument in connection with a
change in the name of the Trust and for that purpose adopts the following
resolution:
RESOLVED, that pursuant to Article XI, Section 11.3 of the Declaration
of Trust, the name of the Trust is hereby changed to "John Hancock Investment
Trust".
II.
Pursuant to Article VI, Section 6.9 and Article XI, Section 11.3 of
the Declaration of Trust, each of the undersigned hereby executes this
certificate in connection with the change of name of Transamerica Growth and
Income Fund, the only presently outstanding series of shares of the Trust, and
for that purpose adopts the following resolution:
RESOLVED, that pursuant to Article VI, Section 6.9 and Article XI,
Section 11.3 of the Declaration of Trust, the name of Transamerica Growth and
Income Fund, the only presently outstanding series of shares of said Trust, is
thereby changed to "John Hancock Growth and Income Fund".
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Amendment to be executed this 16th day of December,
1994.
<TABLE>
<S> <C>
/s/ R. Trent Campbell /s/ Thomas R. Powers
- ------------------------------ -------------------------------
R. Trent Campbell, as Trustee Thomas R. Powers, as Trustee
5005 Riverway, Ste #240 1000 Louisiana
Houston, TX 77027 Houston, TX 77002
/s/ Mrs. Lloyd Bentsen /s/ Thomas B. McDade
- ------------------------------ -------------------------------
Mrs. Lloyd Bentsen, as Trustee Thomas B. McDade, as Trustee
1810 Kalorama Square, N.W. 5276 Cedar Creek
Washington, D.C. 20008 Houston, TX 77056
/s/ William H. Cunningham /s/ Leo E. Linbeck, Jr.
- ------------------------------ -------------------------------
William H. Cunningham, as Trustee Leo E. Linbeck, Jr., as Trustee
601 Colorado Street P.O. Box 22500
O'Henry Hall Houston, TX 77027
Austin, TX 78701
</TABLE>
<PAGE> 3
TRANSAMERICA INVESTMENT TRUST
AMENDMENT TO DECLARATION OF TRUST TO: (1) Designate and classify Class
A Shares and Class B Shares of certain Series of the Trust; (2) provide that
such Class A Shares and Class B Shares shall be identical in all substantive
respects, as set forth in and pursuant to the Declaration of Trust (as
amended), except as to the separate bearing of certain distribution expenses;
and (3) redesignate and reclassify, without further act, all Shares of
beneficial interest of certain Series issued and outstanding on or before the
effective date of this Amendment to Declaration of Trust filed with the
Commonwealth of Massachusetts as Class A Shares (but with no change in
liquidation, net asset value, dividend, voting or any other rights of such
Shares).
I.
Pursuant to Article VI, Section 6.9 and Article XI, Section 11.3 of
the Declaration of Trust (as amended), each of the undersigned hereby executes
this certificate in connection with the designation and classification of Class
A Shares and Class B Shares of certain Series of the Trust and certain terms
and provisions thereof relating to the separate bearing of certain distribution
expenses, and redesignating issued and outstanding Shares of such Series as
Class A Shares, and for those purposes adopts the following resolutions:
RESOLVED, that pursuant to prior authorization of the Trustees and
approval by shareholders the Trustee and pursuant to Article VI, Section 6.9
and Article XI, Section 11.3 of the Declaration of Trust (as amended), each of
the Series of Shares of the Trust may be represented by Class A Shares and
Class B Shares of such Series, with such Class A and Class B shares to be
identical in all substantive respects except that (a) expenses related directly
or indirectly to the distribution of Shares of each Class may be borne solely
by such Class, and (b) the bearing of expenses solely by a Class shall be
appropriately reflected (in the manner and for the duration determined by the
Trustees, including, without limitation, automatic conversion of Class B shares
to Class A shares upon satisfaction of contingent deferred sales charges
relating to such Class B shares) in the net asset value, dividends and
liquidation rights of the shares of such Class; and
RESOLVED, that pursuant to authority expressly vested in the Trustees
of the Trust by Article VI, Section 6.9, of the Declaration of Trust (as
amended), the Trustees hereby create, divide and classify, and provide for the
issuance of, Class A Shares and Class B Shares of the Trust with respect to
certain Series of shares of the Trust, as follows:
<PAGE> 4
<TABLE>
<S> <C>
Series
- ------
Transamerica Growth and Income Fund
Class No. of Shares Authorized
- ----- ------------------------
Class A Shares Unlimited
Class B Shares Unlimited
</TABLE>
; and
RESOLVED, that except as hereinabove set forth with respect to bearing
of expenses and appropriate related matters (in the manner and for the duration
determined by the Trustees, including, without limitation, automatic conversion
of Class B shares to Class A shares upon satisfaction of contingent deferred
sales charges relating to such Class B shares), the terms of the Class A Shares
and Class B Shares of the above-listed Series shall be as provided in the
Declaration of Trust or an Amendment thereto or other appropriate constituent
document of the Trust; and be it
RESOLVED, that all shares of beneficial interest of each above-listed
Series issued and outstanding on or before the effective date of this Amendment
to Declaration of Trust filed with the Commonwealth of Massachusetts shall be
redesignated and reclassified, without further act, as Class A Shares of such
Series (but with no change in liquidation, net asset value, dividend, voting or
any other rights of such Shares).
IN WITNESS WHEREOF, the undersigned have caused this Certificate of
Amendment to be executed this 5 day of June, 1991.
<TABLE>
<S> <C>
/s/ Thomas R. Powers /s/ Thomas B. McDade
- --------------------------------- -----------------------------
Thomas R. Powers, as Trustee Thomas B. McDade, as Trustee
1000 Louisiana 5276 Cedar Creek
Houston, Texas 77002 Houston, Texas 77056
/s/ Leo E. Linbeck, Jr. /s/ R. Trent Campbell
- --------------------------------- -----------------------------
Leo E. Linbeck, Jr., as Trustee R. Trent Campbell, as Trustee
P.O. Box 22500 5005 Riverway, Suite #240
Houston, Texas 77027 Houston, Texas 77027
/s/ William H. Cunningham /s/ Mrs. Lloyd Bentsen, Jr.
- --------------------------------- -----------------------------
William H. Cunningham, as Trustee Mrs. Lloyd Bentsen, Jr.
P.O. Box T 1810 Kalorama Square, N.W.
Austin, Texas 78713 Washington, D.C. 20008
</TABLE>
<PAGE> 1
TRANSAMERICA INVESTMENT TRUST
AMENDMENT TO THE DECLARATION OF TRUST
AMENDMENT TO DECLARATION OF TRUST TO: (1) change the name of the
Trust; and (2) change the name of Transamerica Growth and Income Fund, the only
presently outstanding series of shares of the Trust.
I.
Pursuant to Article XI, Section 11.3(a) of the Declaration of Trust,
each of the undersigned hereby executes this instrument in connection with a
change in the name of the Trust and for that purpose adopts the following
resolution:
RESOLVED, that pursuant to Article XI, Section 11.3 of the Declaration
of Trust, the name of the Trust is hereby changed to "John Hancock Investment
Trust".
II.
Pursuant to Article VI, Section 6.9 and Article XI, Section 11.3 of the
Declaration of Trust, each of the undersigned hereby executes this certificate
in connection with the change of name of Transamerica Growth and Income Fund,
the only presently outstanding series of shares of the Trust, and for that
purpose adopts the following resolution:
RESOLVED, that pursuant to Article VI, Section 6.9 and Article XI,
Section 11.3 of the Declaration of Trust, the name of Transamerica Growth and
Income Fund, the only presently outstanding series of shares of said Trust, is
thereby changed to "John Hancock Growth and Income Fund".
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Amendment to be executed this 16TH day of DECEMBER, 1994.
/s/ R. Trent Campbell /s/ Thomas R. Powers
- ----------------------------------- ------------------------------
R. Trent Campbell, as Trustee Thomas R. Powers, as Trustee
5005 Riverway, Ste #240 1000 Louisiana
Houston, TX 77027 Houston, TX 77002
/s/ Mrs. Lloyd Bentsen /s/ Thomas B. McDade
- ----------------------------------- ------------------------------
Mrs. Lloyd Bentsen, as Trustee Thomas B. McDade, as Trustee
1810 Kalorama Square, N.W. 5276 Cedar Creek
Washington, D.C. 20008 Houston, TX 77056
/s/ William H. Cunningham /s/ Leo E. Linbeck, Jr.
- ----------------------------------- -------------------------------
William H. Cunningham, as Trustee Leo E. Linbeck, Jr., as Trustee
601 Colorado Street P.O. Box 22500
O'Henry Hall Houston, TX 77027
Austin, TX 78701
<PAGE> 1
EXHIBIT 1e
JOHN HANCOCK INVESTMENT TRUST
Instrument Increasing the Number of Trustees and
Appointing Individuals to Fill the Vacancies
The Trustees of John Hancock Investment Trust (the "Trust"), hereby
amend the Trust's Declaration of Trust, dated December 12, 1984, effective
September 11, 1995.
(a) pursuant to Section 2.1 of the Declaration of Trust, to increase
the number of Trustees of the Trust from nine to eleven; and
(b) pursuant to Section 2.4 of the Declaration of Trust, to appoint
Charles F. Fretz and Harold R. Hiser, Jr. to fill the vacancies
thereby created, such appointments to become effective upon such
individuals accepting in writing such appointments and agreeing to be
bound by the terms of the Declaration of Trust with such individuals
holding office until their successor is elected and qualified or until
the earlier of their resignation, removal or death.
IN WITNESS WHEREOF, the Trustees of the Trust have executed these
Instruments as of the 11th day of September, 1995.
/s/ Edward J. Boudreau, Jr. /s/ Patricia P. McCarter
- ------------------------------- -------------------------------
Edward J. Boudreau, Jr. Patricia P. McCarter
As Trustee and not individually As Trustee and not individually
/s/ James F. Carlin
- ------------------------------- -------------------------------
James F. Carlin Steven R. Pruchansky
As Trustee and not individually As Trustee and not individually
- ------------------------------- -------------------------------
William H. Cunningham Norman H. Smith
As Trustee and not individually As Trustee and not individually
- ------------------------------- -------------------------------
Charles L. Ladner John P. Toolan
As Trustee and not individually As Trustee and not individually
- -------------------------------
Leo E. Linbeck, Jr.
As Trustee and not individually
<PAGE> 2
The Declaration of Trust, a copy of which is on file in the office of
the Secretary of State of the Commonwealth of Massachusetts, provides that 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 Persons;
and all such Persons shall look solely to the Trust Property, or to the Trust
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.
<PAGE> 1
EXHIBIT 4
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK GROWTH AND INCOME FUND-B
fully paid and non-assessable Shares of Beneficial Interest, of JOHN HANCOCK
INVESTMENT TRUST, in respect of JOHN HANCOCK GROWTH AND INCOME FUND- B, par
value $0.01 per share, transferable on the books of the Trusts by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Declaration of Trust, no
holder of any shares of the Trust has any preemptive rights to acquire unissued
or treasury shares of the Trust. This certificate is not valid unless
countersigned by the Transfer Agent.
Change date 5/15/95...jxr TEST
Mass Fund
Signed by Boudreau, Chairman
<PAGE> 2
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK GROWTH AND INCOME FUND-A
fully paid and non-assessable Shares of Beneficial Interest, of JOHN HANCOCK
INVESTMENT TRUST, in respect of JOHN HANCOCK GROWTH AND INCOME FUND- A, par
value $0.01 per share, transferable on the books of the Trusts by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Declaration of Trust, no
holder of any shares of the Trust has any preemptive rights to acquire unissued
or treasury shares of the Trust. This certificate is not valid unless
countersigned by the Transfer Agent.
Change date 5/15/95...jxr TEST
Mass Fund
Signed by Boudreau, Chairman
<PAGE> 1
Exhibit 10
[JOHN HANCOCK FUND LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
- --------------------------------------------------------------------------------
101 Huntington Avenue
Boston, Massachusetts 02199-7603
December 19, 1995
John Hancock Investment Trust
101 Huntington Avenue
Boston, MA 02199
RE: John Hancock Investment Trust
John Hancock Growth and Income Fund
File Nos. 2-10156; 811-0560 (0000022370)
---------------------------
Ladies and Gentlemen:
In connection with the filing of Post-Effective Amendment No. 26 pursuant
to Rule 24e-2 under the Investment Company Act of 1940, as amended, registering
by Post-Effective Amendment No. 74 under the Securities Act of 1933, as
amended, 19,142 shares of the John Hancock Investment Trust (the "Fund") sold
in reliance upon Rule 24e-2 during the fiscal year ending August 31, 1995, it
is the opinion of the undersigned that such shares will be legally issued,
fully paid and nonassessable.
In connection with this opinion it should be noted that the Fund is an entity
of the type generally known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of a Massachusetts business trust may be held
personally liable for the obligations of the Fund. However, the Fund's
Declaration of Trust disclaims shareholder liability for obligations of the
Fund and indemnifies any shareholder of the Fund, with this indemnification to
be paid solely out of the assets of the Fund. Therefore, the shareholder's risk
is limited to circumstances in which the assets of the Fund are insufficient to
meet the obligations asserted against Fund assets.
Sincerely,
/s/ Alfred P. Oullette
Alfred P.Ouellette
Assistant Secretary
Member of Massachusetts Bar
- ----------------------------------------------------------- [JOHN HANCOCK LOGO]
John Hancock Advisers, Inc. - John Hancock Funds, Inc. * - John Hancock
Investor Services Corporation - The Patriot Group, Inc. John Hancock
Advisers International, Ltd. - NM Capital Management, Inc. - Sovereign
Asset Management Corporation
*Member of National Association of Securities Dealers, Inc.
<PAGE> 1
EXHIBIT 1e
JOHN HANCOCK INVESTMENT TRUST
Instrument Increasing the Number of Trustees and
Appointing Individuals to Fill the Vacancies
The Trustees of John Hancock Investment Trust (the "Trust"), hereby
amend the Trust's Declaration of Trust, dated December 12, 1984, effective
September 11, 1995.
(a) pursuant to Section 2.1 of the Declaration of Trust, to increase
the number of Trustees of the Trust from nine to eleven; and
(b) pursuant to Section 2.4 of the Declaration of Trust, to appoint
Charles F. Fretz and Harold R. Hiser, Jr. to fill the vacancies
thereby created, such appointments to become effective upon such
individuals accepting in writing such appointments and agreeing to be
bound by the terms of the Declaration of Trust with such individuals
holding office until their successor is elected and qualified or until
the earlier of their resignation, removal or death.
IN WITNESS WHEREOF, the Trustees of the Trust have executed these
Instruments as of the 11th day of September, 1995.
/s/ Edward J. Boudreau, Jr. /s/ Patricia P. McCarter
- ------------------------------- -------------------------------
Edward J. Boudreau, Jr. Patricia P. McCarter
As Trustee and not individually As Trustee and not individually
/s/ James F. Carlin
- ------------------------------- -------------------------------
James F. Carlin Steven R. Pruchansky
As Trustee and not individually As Trustee and not individually
- ------------------------------- -------------------------------
William H. Cunningham Norman H. Smith
As Trustee and not individually As Trustee and not individually
- ------------------------------- -------------------------------
Charles L. Ladner John P. Toolan
As Trustee and not individually As Trustee and not individually
- -------------------------------
Leo E. Linbeck, Jr.
As Trustee and not individually
<PAGE> 2
The Declaration of Trust, a copy of which is on file in the office of
the Secretary of State of the Commonwealth of Massachusetts, provides that 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 Persons;
and all such Persons shall look solely to the Trust Property, or to the Trust
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.
<PAGE> 3
EXHIBIT 4
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK GROWTH AND INCOME FUND-B
fully paid and non-assessable Shares of Beneficial Interest, of JOHN HANCOCK
INVESTMENT TRUST, in respect of JOHN HANCOCK GROWTH AND INCOME FUND- B, par
value $0.01 per share, transferable on the books of the Trusts by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Declaration of Trust, no
holder of any shares of the Trust has any preemptive rights to acquire unissued
or treasury shares of the Trust. This certificate is not valid unless
countersigned by the Transfer Agent.
Change date 5/15/95...jxr TEST
Mass Fund
Signed by Boudreau, Chairman
<PAGE> 4
JOHN HANCOCK INVESTMENT TRUST
JOHN HANCOCK GROWTH AND INCOME FUND-A
fully paid and non-assessable Shares of Beneficial Interest, of JOHN HANCOCK
INVESTMENT TRUST, in respect of JOHN HANCOCK GROWTH AND INCOME FUND- A, par
value $0.01 per share, transferable on the books of the Trusts by the holder in
person, or by duly authorized attorney, upon surrender of this certificate
properly endorsed. Pursuant to Article VI of the Declaration of Trust, no
holder of any shares of the Trust has any preemptive rights to acquire unissued
or treasury shares of the Trust. This certificate is not valid unless
countersigned by the Transfer Agent.
Change date 5/15/95...jxr TEST
Mass Fund
Signed by Boudreau, Chairman
<PAGE> 5
Exhibit 10
[JOHN HANCOCK FUND LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
- --------------------------------------------------------------------------------
101 Huntington Avenue
Boston, Massachusetts 02199-7603
December 19, 1995
John Hancock Investment Trust
101 Huntington Avenue
Boston, MA 02199
RE: John Hancock Investment Trust
John Hancock Growth and Income Fund
File Nos. 2-10156; 811-0560 (0000022370)
---------------------------
Ladies and Gentlemen:
In connection with the filing of Post-Effective Amendment No. 26 pursuant
to Rule 24e-2 under the Investment Company Act of 1940, as amended, registering
by Post-Effective Amendment No. 74 under the Securities Act of 1933, as
amended, 19,142 shares of the John Hancock Investment Trust (the "Fund") sold
in reliance upon Rule 24e-2 during the fiscal year ending August 31, 1995, it
is the opinion of the undersigned that such shares will be legally issued,
fully paid and nonassessable.
In connection with this opinion it should be noted that the Fund is an entity
of the type generally known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of a Massachusetts business trust may be held
personally liable for the obligations of the Fund. However, the Fund's
Declaration of Trust disclaims shareholder liability for obligations of the
Fund and indemnifies any shareholder of the Fund, with this indemnification to
be paid solely out of the assets of the Fund. Therefore, the shareholder's risk
is limited to circumstances in which the assets of the Fund are insufficient to
meet the obligations asserted against Fund assets.
Sincerely,
/s/ Alfred P. Oullette
Alfred P.Ouellette
Assistant Secretary
Member of Massachusetts Bar
- ----------------------------------------------------------- [JOHN HANCOCK LOGO]
John Hancock Advisers, Inc. - John Hancock Funds, Inc. * - John Hancock
Investor Services Corporation - The Patriot Group, Inc. John Hancock
Advisers International, Ltd. - NM Capital Management, Inc. - Sovereign
Asset Management Corporation
*Member of National Association of Securities Dealers, Inc.
<PAGE> 6
EXHIBIT 11
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "The Fund's
Financial Highlights" in the Prospectus and "Independent Auditors" in the
Statement of Additional Information and to the use, in this Post-Effective
Amendment Number 74 to Registration Statement (Form N-1A No. 2-10156), of our
report dated October 16, 1995 on the financial statements and financial
highlights of John Hancock Growth and Income Fund, a series of the John
Hancock Investment Trust.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Boston, Massachusetts
December 21, 1995
<PAGE> 1
EXHIBIT 16
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
<S> <C> <C> <C> <C>
10 Year Return: 11.48% 196.36% 10 Year Value: $2,963.56 Investment
5 Year Return: 12.58% 80.86% 5 Year Value: $1,808.56 MONTH TO DATE
$29,635.63 Rate Value
3 Year Return: 9.76% 32.25% 3 Year Value: $1,322.48 Since 1.52% $1,015.18
Inception or
1 Year Return: 19.23% 19.23% 1 Year Value: $1,192.25 10 Years
YTD Return: 26.50% 26.50% YTD Value: $1,265.04
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
10-Year
----------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8/85 $10.42 $10.42 0.00% 95.969
9/85 $9.99 $9.99 0.00% $0.0000 0.000 95.969
10/85 $9.41 $9.41 0.00% 10/15/85 0.88000 $8.99 0.78000 $84.4527 9.394 105.363
11/85 $9.85 $9.85 0.00% $0.0000 0.000 105.363
12/85 $10.13 $10.13 0.00% 1/3/86 0.07000 $10.03 $7.3754 0.735 106.098
1/86 $10.20 $10.20 0.00% $0.0000 0.000 106.098
2/86 $11.01 $11.01 0.00% $0.0000 0.000 106.098
3/86 $11.26 $11.26 0.00% 4/1/86 0.11000 $11.04 $11.6708 1.057 107.155
4/86 $11.21 $11.21 0.00% $0.0000 0.000 107.155
5/86 $11.27 $11.27 0.00% $0.0000 0.000 107.155
6/86 $11.25 $11.25 0.00% 7/8/86 0.08000 $11.25 $8.5724 0.762 107.917
7/86 $10.70 $10.70 0.00% $0.0000 0.000 107.917
8/86 $11.11 $11.11 0.00% $0.0000 0.000 107.917
9/86 $9.51 $9.51 0.00% 10/7/86 0.99000 $9.51 0.88000 $106.8378 11.234 119.151
10/86 $9.98 $9.98 0.00% $0.0000 0.000 119.151
11/86 $10.09 $10.09 0.00% $0.0000 0.000 119.151
12/86 $9.96 $9.96 0.00% $0.0000 0.000 119.151
1/87 $10.82 $10.82 0.00% 1/14/87 0.07000 $10.18 $8.3406 0.819 119.970
2/87 $11.14 $11.14 0.00% $0.0000 0.000 119.970
3/87 $11.24 $11.24 0.00% 4/3/87 0.09000 $11.51 $10.7973 0.938 120.908
4/87 $11.19 $11.19 0.00% $0.0000 0.000 120.908
5/87 $11.20 $11.20 0.00% $0.0000 0.000 120.908
6/87 $11.38 $11.38 0.00% 7/6/87 0.11000 $11.48 $13.2999 1.159 122.067
7/87 $11.72 $11.72 0.00% $0.0000 0.000 122.067
8/87 $12.04 $12.04 0.00% $0.0000 0.000 122.067
9/87 $11.75 $11.75 0.00% $0.0000 0.000 122.067
10/87 $8.96 $8.96 0.00% 10/28/87 1.60500 $8.98 1.49000 $195.9175 21.817 143.884
11/87 $8.71 $8.71 0.00% $0.0000 0.000 143.884
12/87 $8.90 $8.90 0.00% $0.0000 0.000 143.884
1/88 $9.04 $9.04 0.00% 1/26/88 0.13500 $8.88 $19.4243 2.187 146.071
2/88 $9.20 $9.20 0.00% $0.0000 0.000 146.071
3/88 $8.88 $8.88 0.00% 4/4/88 0.13000 $8.88 $18.9892 2.138 148.209
4/88 $8.88 $8.88 0.00% $0.0000 0.000 148.209
5/88 $8.90 $8.90 0.00% $0.0000 0.000 148.209
6/88 $8.95 $8.95 0.00% 7/5/88 0.11000 $8.94 $16.3030 1.824 150.033
7/88 $8.93 $8.93 0.00% $0.0000 0.000 150.033
8/88 $8.83 $8.83 0.00% $0.0000 0.000 150.033
9/88 $8.96 $8.96 0.00% $0.0000 0.000 150.033
10/88 $8.93 $8.93 0.00% 10/10/88 0.14000 $8.82 $21.0046 2.381 152.414
11/88 $8.88 $8.88 0.00% $0.0000 0.000 152.414
12/88 $8.80 $8.80 0.00% 12/23/88 0.15000 $8.76 $22.8621 2.610 155.024
1/89 $8.97 $8.97 0.00% $0.0000 0.000 155.024
2/89 $8.96 $8.96 0.00% $0.0000 0.000 155.024
</TABLE>
<TABLE>
<CAPTION>
5-Year
----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- -----------------------------------------
<S> <C> <C> <C>
8/85
9/85
10/85
11/85
12/85
1/86
2/86
3/86
4/86
5/86
6/86
7/86
8/86
9/86
10/86
11/86
12/86
1/87
2/87
3/87
4/87
5/87
6/87
7/87
8/87
9/87
10/87
11/87
12/87
1/88
2/88
3/88
4/88
5/88
6/88
7/88
8/88
9/88
10/88
11/88
12/88
1/89
2/89
</TABLE>
<PAGE> 2
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
<S> <C> <C> <C> <C>
10 Year Return: 11.48% 196.36% 10 Year Value: $2,963.56 Investment
5 Year Return: 12.58% 80.86% 5 Year Value: $1,808.56 MONTH TO DATE
$29,635.63 Rate Value
3 Year Return: 9.76% 32.25% 3 Year Value: $1,322.48 Since 1.52% $1,015.18
Inception or
1 Year Return: 19.23% 19.23% 1 Year Value: $1,192.25 10 Years
YTD Return: 26.50% 26.50% YTD Value: $1,265.04
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
10-Year
----------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/89 $8.93 $8.93 0.00% 4/3/89 0.16000 $8.85 $24.8038 2.803 157.827
4/89 $9.14 $9.14 0.00% $0.0000 0.000 157.827
5/89 $9.34 $9.34 0.00% $0.0000 0.000 157.827
6/89 $9.19 $9.19 0.00% 7/5/89 0.16000 $9.39 $25.2523 2.689 160.516
7/89 $9.90 $9.90 0.00% $0.0000 0.000 160.516
8/89 $10.19 $10.19 0.00% $0.0000 0.000 160.516
9/89 $9.99 $9.99 0.00% 10/2/89 0.08000 $9.89 $12.8413 1.298 161.814
10/89 $9.80 $9.80 0.00% $0.0000 0.000 161.814
11/89 $10.04 $10.04 0.00% $0.0000 0.000 161.814
12/89 $10.16 $10.16 0.00% 12/20/89 0.16400 $10.09 0.07100 $26.5375 2.630 164.444
1/90 $9.57 $9.57 0.00% $0.0000 0.000 164.444
2/90 $9.75 $9.75 0.00% $0.0000 0.000 164.444
3/90 $9.99 $9.99 0.00% 3/30/90 0.03000 $10.01 $4.9333 0.493 164.937
4/90 $9.80 $9.80 0.00% $0.0000 0.000 164.937
5/90 $10.77 $10.77 0.00% $0.0000 0.000 164.937
6/90 $10.67 $10.67 0.00% 7/3/90 0.07000 $10.66 $11.5456 1.083 166.020
7/90 $10.65 $10.65 0.00% $0.0000 0.000 166.020
8/90 $9.87 $9.87 0.00% $0.0000 0.000 166.020
9/90 $9.46 $9.46 0.00% 9/28/90 0.04000 $9.52 $6.6408 0.698 166.718
10/90 $9.35 $9.35 0.00% $0.0000 0.000 166.718
11/90 $9.82 $9.82 0.00% $0.0000 0.000 166.718
12/90 $9.75 $9.75 0.00% 12/21/90 0.22500 $9.67 0.18500 $37.5116 3.879 170.597
1/91 $10.09 $10.09 0.00% $0.0000 0.000 170.597
2/91 $10.78 $10.78 0.00% $0.0000 0.000 170.597
3/91 $10.91 $10.91 0.00% 3/28/91 0.05000 $10.64 $8.5299 0.802 171.399
4/91 $10.87 $10.87 0.00% $0.0000 0.000 171.399
5/91 $11.43 $11.43 0.00% $0.0000 0.000 171.399
6/91 $10.83 $10.83 0.00% 6/28/91 0.06000 $10.79 $10.2839 0.953 172.352
7/91 $11.40 $11.40 0.00% $0.0000 0.000 172.352
8/91 $11.77 $11.77 0.00% $0.0000 0.000 172.352
9/91 $11.50 $11.50 0.00% 9/30/91 0.04000 $11.53 $6.8941 0.598 172.950
10/91 $11.79 $11.79 0.00% $0.0000 0.000 172.950
11/91 $11.24 $11.24 0.00% $0.0000 0.000 172.950
12/91 $12.37 $12.37 0.00% 12/31/91 0.33960 $11.90 0.29510 $58.7338 4.936 177.886
1/92 $12.17 $12.17 0.00% $0.0000 0.000 177.886
2/92 $12.21 $12.21 0.00% $0.0000 0.000 177.886
3/92 $11.96 $11.96 0.00% 3/31/92 0.05330 $12.06 $9.4813 0.786 178.672
4/92 $12.19 $12.19 0.00% $0.0000 0.000 178.672
5/92 $12.30 $12.30 0.00% $0.0000 0.000 178.672
6/92 $12.03 $12.03 0.00% 6/30/92 0.10790 $11.97 $19.2787 1.611 180.283
7/92 $12.57 $12.57 0.00% $0.0000 0.000 180.283
8/92 $12.43 $12.43 0.00% $0.0000 0.000 180.283
9/92 $12.38 $12.38 0.00% 9/30/92 0.12270 $12.35 $22.1207 1.791 182.074
</TABLE>
<TABLE>
<CAPTION>
5-Year
----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- -----------------------------------------
<S> <C> <C> <C>
3/89
4/89
5/89
6/89
7/89
8/89
9/89
10/89
11/89
12/89
1/90
2/90
3/90
4/90
5/90
6/90
7/90
8/90 101.317
9/90 $4.0527 0.426 101.743
10/90 $0.0000 0.000 101.743
11/90 $0.0000 0.000 101.743
12/90 $22.8922 2.367 104.110
1/91 $0.0000 0.000 104.110
2/91 $0.0000 0.000 104.110
3/91 $5.2055 0.489 104.599
4/91 $0.0000 0.000 104.599
5/91 $0.0000 0.000 104.599
6/91 $6.2759 0.582 105.181
7/91 $0.0000 0.000 105.181
8/91 $0.0000 0.000 105.181
9/91 $4.2072 0.365 105.546
10/91 $0.0000 0.000 105.546
11/91 $0.0000 0.000 105.546
12/91 $35.8434 3.012 108.558
1/92 $0.0000 0.000 108.558
2/92 $0.0000 0.000 108.558
3/92 $5.7861 0.480 109.038
4/92 $0.0000 0.000 109.038
5/92 $0.0000 0.000 109.038
6/92 $11.7652 0.983 110.021
7/92 $0.0000 0.000 110.021
8/92 $0.0000 0.000 110.021
9/92 $13.4996 1.093 111.114
</TABLE>
<PAGE> 3
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
<S> <C> <C> <C> <C>
10 Year Return: 11.48% 196.36% 10 Year Value: $2,963.56 Investment
5 Year Return: 12.58% 80.86% 5 Year Value: $1,808.56 MONTH TO DATE
$29,635.63 Rate Value
3 Year Return: 9.76% 32.25% 3 Year Value: $1,322.48 Since 1.52% $1,015.18
Inception or
1 Year Return: 19.23% 19.23% 1 Year Value: $1,192.25 10 Years
YTD Return: 26.50% 26.50% YTD Value: $1,265.04
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
10-Year
-----------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/92 $12.34 $12.34 0.00% $0.0000 0.000 182.074
11/92 $12.60 $12.60 0.00% $0.0000 0.000 182.074
12/92 $11.24 $11.24 0.00% 12/31/92 1.56750 $11.20 1.45000 $285.4010 25.482 207.556
1/93 $11.25 $11.25 0.00% $0.0000 0.000 207.556
2/93 $11.43 $11.43 0.00% $0.0000 0.000 207.556
3/93 $11.71 $11.71 0.00% 3/31/93 0.08900 $11.62 $18.4725 1.590 209.146
4/93 $11.48 $11.48 0.00% $0.0000 0.000 209.146
5/93 $11.64 $11.64 0.00% $0.0000 0.000 209.146
6/93 $11.69 $11.69 0.00% 6/30/93 0.09200 $11.56 $19.2414 1.664 210.810
7/93 $11.71 $11.71 0.00% $0.0000 0.000 210.810
8/93 $12.08 $12.08 0.00% $0.0000 0.000 210.810
9/93 $12.05 $12.05 0.00% 9/30/93 0.10600 $12.01 $22.3459 1.861 212.671
10/93 $12.13 $12.13 0.00% $0.0000 0.000 212.671
11/93 $11.86 $11.86 0.00% $0.0000 0.000 212.671
12/93 $11.93 $11.93 0.00% 12/31/93 0.10700 $11.84 $22.7558 1.922 214.593
1/94 $12.16 $12.16 0.00% $0.0000 0.000 214.593
2/94 $11.82 $11.82 0.00% $0.0000 0.000 214.593
3/94 $11.08 $11.08 0.00% 3/31/94 0.09300 $11.52 $19.9571 1.732 216.325
4/94 $11.20 $11.20 0.00% $0.0000 0.000 216.325
5/94 $11.11 $11.11 0.00% $0.0000 0.000 216.325
6/94 $10.75 $10.75 0.00% 6/30/94 0.06630 $10.71 $14.3423 1.339 217.664
7/94 $10.95 $10.95 0.00% $0.0000 0.000 217.664
8/94 $11.42 $11.42 0.00% $0.0000 0.000 217.664
9/94 $11.07 $11.07 0.00% 9/30/94 0.04500 $11.08 $9.7949 0.884 218.548
10/94 $11.24 $11.24 0.00% $0.0000 0.000 218.548
11/94 $10.75 $10.75 0.00% $0.0000 0.000 218.548
12/94 $10.68 $10.68 0.00% 12/30/94 0.03920 $10.68 $8.5671 0.802 219.350
1/95 $10.95 $10.95 0.00% $0.0000 0.000 219.350
2/95 $11.43 $11.43 0.00% $0.0000 0.000 219.350
3/95 $11.62 $11.62 0.00% 3/24/95 0.06690 $11.62 $14.6745 1.263 220.613
4/95 $12.01 $12.01 0.00% $0.0000 0.000 220.613
5/95 $12.61 $12.61 0.00% $0.0000 0.000 220.613
6/95 $12.73 $12.73 0.00% 6/23/95 0.05150 $12.93 $11.3616 0.879 221.492
7/95 $13.18 $13.18 0.00% $0.0000 0.000 221.492
8/95 $13.38 $13.38 0.00% $0.0000 0.000 221.492
</TABLE>
<TABLE>
<CAPTION>
5-Year
-----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------
<S> <C> <C> <C>
10/92 $0.0000 0.000 111.114
11/92 $0.0000 0.000 111.114
12/92 $174.1712 15.551 126.665
1/93 $0.0000 0.000 126.665
2/93 $0.0000 0.000 126.665
3/93 $11.2732 0.970 127.635
4/93 $0.0000 0.000 127.635
5/93 $0.0000 0.000 127.635
6/93 $11.7424 1.016 128.651
7/93 $0.0000 0.000 128.651
8/93 $0.0000 0.000 128.651
9/93 $13.6370 1.135 129.786
10/93 $0.0000 0.000 129.786
11/93 $0.0000 0.000 129.786
12/93 $13.8871 1.173 130.959
1/94 $0.0000 0.000 130.959
2/94 $0.0000 0.000 130.959
3/94 $12.1792 1.057 132.016
4/94 $0.0000 0.000 132.016
5/94 $0.0000 0.000 132.016
6/94 $8.7527 0.817 132.833
7/94 $0.0000 0.000 132.833
8/94 $0.0000 0.000 132.833
9/94 $5.9775 0.539 133.372
10/94 $0.0000 0.000 133.372
11/94 $0.0000 0.000 133.372
12/94 $5.2282 0.490 133.862
1/95 $0.0000 0.000 133.862
2/95 $0.0000 0.000 133.862
3/95 $8.9554 0.771 134.633
4/95 $0.0000 0.000 134.633
5/95 $0.0000 0.000 134.633
6/95 $6.9336 0.536 135.169
7/95 $0.0000 0.000 135.169
8/95 $0.0000 0.000 135.169
</TABLE>
<PAGE> 4
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
<S> <C> <C> <C>
10 Year Return: 11.48% 196.36% 10 Year Value: $2,963.56 Investment
5 Year Return: 12.58% 80.86% 5 Year Value: $1,808.56
$29,635.63
3 Year Return: 9.76% 32.25% 3 Year Value: $1,322.48 Since
Inception or
1 Year Return: 19.23% 19.23% 1 Year Value: $1,192.25 10 Years
YTD Return: 26.50% 26.50% YTD Value: $1,265.04
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
3-Year
-----------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8/92 $12.43 $12.43 0.00% 80.451
9/92 $12.38 $12.38 0.00% 9/30/92 0.12270 $12.35 $9.8713 0.799 81.250
10/92 $12.34 $12.34 0.00% $0.0000 0.000 81.250
11/92 $12.60 $12.60 0.00% $0.0000 0.000 81.250
12/92 $11.24 $11.24 0.00% 12/31/92 1.56750 $11.20 1.45000 $127.3594 11.371 92.621
1/93 $11.25 $11.25 0.00% $0.0000 0.000 92.621
2/93 $11.43 $11.43 0.00% $0.0000 0.000 92.621
3/93 $11.71 $11.71 0.00% 3/31/93 0.08900 $11.62 $8.2433 0.709 93.330
4/93 $11.48 $11.48 0.00% $0.0000 0.000 93.330
5/93 $11.64 $11.64 0.00% $0.0000 0.000 93.330
6/93 $11.69 $11.69 0.00% 6/30/93 0.09200 $11.56 $8.5864 0.743 94.073
7/93 $11.71 $11.71 0.00% $0.0000 0.000 94.073
8/93 $12.08 $12.08 0.00% $0.0000 0.000 94.073
9/93 $12.05 $12.05 0.00% 9/30/93 0.10600 $12.01 $9.9717 0.830 94.903
10/93 $12.13 $12.13 0.00% $0.0000 0.000 94.903
11/93 $11.86 $11.86 0.00% $0.0000 0.000 94.903
12/93 $11.93 $11.93 0.00% 12/31/93 0.10700 $11.84 $10.1546 0.858 95.761
1/94 $12.16 $12.16 0.00% $0.0000 0.000 95.761
2/94 $11.82 $11.82 0.00% $0.0000 0.000 95.761
3/94 $11.08 $11.08 0.00% 3/31/94 0.09300 $11.52 $8.9058 0.773 96.534
4/94 $11.20 $11.20 0.00% $0.0000 0.000 96.534
5/94 $11.11 $11.11 0.00% $0.0000 0.000 96.534
6/94 $10.75 $10.75 0.00% 6/30/94 0.06630 $10.71 $6.4002 0.598 97.132
7/94 $10.95 $10.95 0.00% $0.0000 0.000 97.132
8/94 $11.42 $11.42 0.00% $0.0000 0.000 97.132
9/94 $11.07 $11.07 0.00% 9/30/94 0.04500 $11.08 $4.3709 0.394 97.526
10/94 $11.24 $11.24 0.00% $0.0000 0.000 97.526
11/94 $10.75 $10.75 0.00% $0.0000 0.000 97.526
12/94 $10.68 $10.68 0.00% 12/30/94 0.03920 $10.68 $3.8230 0.358 97.884
1/95 $10.95 $10.95 0.00% $0.0000 0.000 97.884
2/95 $11.43 $11.43 0.00% $0.0000 0.000 97.884
3/95 $11.62 $11.62 0.00% 3/24/95 0.06690 $11.62 $6.5484 0.564 98.448
4/95 $12.01 $12.01 0.00% $0.0000 0.000 98.448
5/95 $12.61 $12.61 0.00% $0.0000 0.000 98.448
6/95 $12.73 $12.73 0.00% 6/23/95 0.05150 $12.93 $5.0701 0.392 98.840
7/95 $13.18 $13.18 0.00% $0.0000 0.000 98.840
8/95 $13.38 $13.38 0.00% $0.0000 0.000 98.840
</TABLE>
<TABLE>
<CAPTION>
1-Year
-----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------
<S> <C> <C> <C>
8/92
9/92
10/92
11/92
12/92
1/93
2/93
3/93
4/93
5/93
6/93
7/93
8/93
9/93
10/93
11/93
12/93
1/94
2/94
3/94
4/94
5/94
6/94
7/94
8/94 87.566
9/94 $3.9405 0.356 87.922
10/94 $0.0000 0.000 87.922
11/94 $0.0000 0.000 87.922
12/94 $3.4465 0.323 88.245
1/95 $0.0000 0.000 88.245
2/95 $0.0000 0.000 88.245
3/95 $5.9036 0.508 88.753
4/95 $0.0000 0.000 88.753
5/95 $0.0000 0.000 88.753
6/95 $4.5708 0.354 89.107
7/95 $0.0000 0.000 89.107
8/95 $0.0000 0.000 89.107
</TABLE>
<PAGE> 5
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
<S> <C> <C> <C>
10 Year Return: 11.48% 196.36% 10 Year Value: $2,963.56 Investment
5 Year Return: 12.58% 80.86% 5 Year Value: $1,808.56
$29,635.63
3 Year Return: 9.76% 32.25% 3 Year Value: $1,322.48 Since
Inception or
1 Year Return: 19.23% 19.23% 1 Year Value: $1,192.25 10 Years
YTD Return: 26.50% 26.50% YTD Value: $1,265.04
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
YTD
-----------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/94 $10.68 $10.68 0.00% 12/30/94 0.03920 $10.68 93.633
1/95 $10.95 $10.95 0.00% $0.0000 0.000 93.633
2/95 $11.43 $11.43 0.00% $0.0000 0.000 93.633
3/95 $11.62 $11.62 0.00% 3/24/95 0.06690 $11.62 $6.2640 0.539 94.172
4/95 $12.01 $12.01 0.00% $0.0000 0.000 94.172
5/95 $12.61 $12.61 0.00% $0.0000 0.000 94.172
6/95 $12.73 $12.73 0.00% 6/23/95 0.05150 $12.93 $4.8499 0.375 94.547
7/95 $13.18 $13.18 0.00% $0.0000 0.000 94.547
8/95 $13.38 $13.38 0.00% $0.0000 0.000 94.547
</TABLE>
<TABLE>
<CAPTION>
MTD
-----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------
<S> <C> <C> <C>
12/94
1/95
2/95
3/95
4/95
5/95
6/95
7/95 75.873
8/95 $0.0000 0.000 75.873
</TABLE>
<PAGE> 6
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
------ Investment
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: 10.90% 181.50% 10 Year Value: $2,814.98
5 Year Return: 11.43% 71.81% 5 Year Value: $1,718.05 MONTH TO DATE
$28,149.80 Rate Value
3 Year Return: 7.92% 25.68% 3 Year Value: $1,256.78 Since -3.53% $964.67
Inception or
1 Year Return: 13.27% 13.27% 1 Year Value: $1,132.74 10 Years
YTD Return: 20.20% 20.20% YTD Value: $1,202.01
</TABLE>
* Since Inception
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
10-Year
--------------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8/85 $10.42 $10.97 5.00% 91.158
9/85 $9.99 $10.52 5.00% $0.0000 0.000 91.158
10/85 $9.41 $9.91 5.00% 10/15/85 0.88000 $8.99 0.78000 $80.2190 8.923 100.081
11/85 $9.85 $10.37 5.00% $0.0000 0.000 100.081
12/85 $10.13 $10.66 5.00% 1/3/86 0.07000 $10.03 $7.0057 0.698 100.779
1/86 $10.20 $10.74 5.00% $0.0000 0.000 100.779
2/86 $11.01 $11.59 5.00% $0.0000 0.000 100.779
3/86 $11.26 $11.85 5.00% 4/1/86 0.11000 $11.04 $11.0857 1.004 101.783
4/86 $11.21 $11.80 5.00% $0.0000 0.000 101.783
5/86 $11.27 $11.86 5.00% $0.0000 0.000 101.783
6/86 $11.25 $11.84 5.00% 7/8/86 0.08000 $11.25 $8.1426 0.724 102.507
7/86 $10.70 $11.26 5.00% $0.0000 0.000 102.507
8/86 $11.11 $11.69 5.00% $0.0000 0.000 102.507
9/86 $9.51 $10.01 5.00% 10/7/86 0.99000 $9.51 0.88000 $101.4819 10.671 113.178
10/86 $9.98 $10.51 5.00% $0.0000 0.000 113.178
11/86 $10.09 $10.62 5.00% $0.0000 0.000 113.178
12/86 $9.96 $10.48 5.00% $0.0000 0.000 113.178
1/87 $10.82 $11.39 5.00% 1/14/87 0.07000 $10.18 $7.9225 0.778 113.956
2/87 $11.14 $11.73 5.00% $0.0000 0.000 113.956
3/87 $11.24 $11.83 5.00% 4/3/87 0.09000 $11.51 $10.2560 0.891 114.847
4/87 $11.19 $11.78 5.00% $0.0000 0.000 114.847
5/87 $11.20 $11.79 5.00% $0.0000 0.000 114.847
6/87 $11.38 $11.98 5.00% 7/6/87 0.11000 $11.48 $12.6332 1.100 115.947
7/87 $11.72 $12.34 5.00% $0.0000 0.000 115.947
8/87 $12.04 $12.67 5.00% $0.0000 0.000 115.947
9/87 $11.75 $12.37 5.00% $0.0000 0.000 115.947
10/87 $8.96 $9.43 5.00% 10/28/87 1.60500 $8.98 1.49000 $186.0949 20.723 136.670
11/87 $8.71 $9.17 5.00% $0.0000 0.000 136.670
12/87 $8.90 $9.37 5.00% $0.0000 0.000 136.670
1/88 $9.04 $9.52 5.00% 1/26/88 0.13500 $8.88 $18.4505 2.078 138.748
2/88 $9.20 $9.68 5.00% $0.0000 0.000 138.748
3/88 $8.88 $9.35 5.00% 4/4/88 0.13000 $8.88 $18.0372 2.031 140.779
4/88 $8.88 $9.35 5.00% $0.0000 0.000 140.779
5/88 $8.90 $9.37 5.00% $0.0000 0.000 140.779
6/88 $8.95 $9.42 5.00% 7/5/88 0.11000 $8.94 $15.4857 1.732 142.511
7/88 $8.93 $9.40 5.00% $0.0000 0.000 142.511
8/88 $8.83 $9.29 5.00% $0.0000 0.000 142.511
9/88 $8.96 $9.43 5.00% $0.0000 0.000 142.511
10/88 $8.93 $9.40 5.00% 10/10/88 0.14000 $8.82 $19.9515 2.262 144.773
11/88 $8.88 $9.35 5.00% $0.0000 0.000 144.773
12/88 $8.80 $9.26 5.00% 12/23/88 0.15000 $8.76 $21.7160 2.479 147.252
1/89 $8.97 $9.44 5.00% $0.0000 0.000 147.252
2/89 $8.96 $9.43 5.00% $0.0000 0.000 147.252
</TABLE>
<TABLE>
<CAPTION>
5-Year
--------------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------- --------------------------------------------
<S> <C> <C> <C>
8/85
9/85
10/85
11/85
12/85
1/86
2/86
3/86
4/86
5/86
6/86
7/86
8/86
9/86
10/86
11/86
12/86
1/87
2/87
3/87
4/87
5/87
6/87
7/87
8/87
9/87
10/87
11/87
12/87
1/88
2/88
3/88
4/88
5/88
6/88
7/88
8/88
9/88
10/88
11/88
12/88
1/89
2/89
</TABLE>
<PAGE> 7
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
------ Investment
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: 10.90% 181.50% 10 Year Value: $2,814.98
5 Year Return: 11.43% 71.81% 5 Year Value: $1,718.05 MONTH TO DATE
$28,149.80 Rate Value
3 Year Return: 7.92% 25.68% 3 Year Value: $1,256.78 Since -3.53% $964.67
Inception or
1 Year Return: 13.27% 13.27% 1 Year Value: $1,132.74 10 Years
YTD Return: 20.20% 20.20% YTD Value: $1,202.01
</TABLE>
* Since Inception
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
10-Year
--------------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/89 $8.93 $9.40 5.00% 4/3/89 0.16000 $8.85 $23.5603 2.662 149.914
4/89 $9.14 $9.62 5.00% $0.0000 0.000 149.914
5/89 $9.34 $9.83 5.00% $0.0000 0.000 149.914
6/89 $9.19 $9.67 5.00% 7/5/89 0.16000 $9.39 $23.9862 2.554 152.468
7/89 $9.90 $10.42 5.00% $0.0000 0.000 152.468
8/89 $10.19 $10.73 5.00% $0.0000 0.000 152.468
9/89 $9.99 $10.52 5.00% 10/2/89 0.08000 $9.89 $12.1974 1.233 153.701
10/89 $9.80 $10.32 5.00% $0.0000 0.000 153.701
11/89 $10.04 $10.57 5.00% $0.0000 0.000 153.701
12/89 $10.16 $10.69 5.00% 12/20/89 0.16400 $10.09 0.07100 $25.2070 2.498 156.199
1/90 $9.57 $10.07 5.00% $0.0000 0.000 156.199
2/90 $9.75 $10.26 5.00% $0.0000 0.000 156.199
3/90 $9.99 $10.52 5.00% 3/30/90 0.03000 $10.01 $4.6860 0.468 156.667
4/90 $9.80 $10.32 5.00% $0.0000 0.000 156.667
5/90 $10.77 $11.34 5.00% $0.0000 0.000 156.667
6/90 $10.67 $11.23 5.00% 7/3/90 0.07000 $10.66 $10.9667 1.029 157.696
7/90 $10.65 $11.21 5.00% $0.0000 0.000 157.696
8/90 $9.87 $10.39 5.00% $0.0000 0.000 157.696
9/90 $9.46 $9.96 5.00% 9/28/90 0.04000 $9.52 $6.3078 0.663 158.359
10/90 $9.35 $9.84 5.00% $0.0000 0.000 158.359
11/90 $9.82 $10.34 5.00% $0.0000 0.000 158.359
12/90 $9.75 $10.26 5.00% 12/21/90 0.22500 $9.67 0.18500 $35.6308 3.685 162.044
1/91 $10.09 $10.62 5.00% $0.0000 0.000 162.044
2/91 $10.78 $11.35 5.00% $0.0000 0.000 162.044
3/91 $10.91 $11.48 5.00% 3/28/91 0.05000 $10.64 $8.1022 0.761 162.805
4/91 $10.87 $11.44 5.00% $0.0000 0.000 162.805
5/91 $11.43 $12.03 5.00% $0.0000 0.000 162.805
6/91 $10.83 $11.40 5.00% 6/28/91 0.06000 $10.79 $9.7683 0.905 163.710
7/91 $11.40 $12.00 5.00% $0.0000 0.000 163.710
8/91 $11.77 $12.39 5.00% $0.0000 0.000 163.710
9/91 $11.50 $12.11 5.00% 9/30/91 0.04000 $11.53 $6.5484 0.568 164.278
10/91 $11.79 $12.41 5.00% $0.0000 0.000 164.278
11/91 $11.24 $11.83 5.00% $0.0000 0.000 164.278
12/91 $12.37 $13.02 5.00% 12/31/91 0.33960 $11.90 0.29510 $55.7888 4.688 168.966
1/92 $12.17 $12.81 5.00% $0.0000 0.000 168.966
2/92 $12.21 $12.85 5.00% $0.0000 0.000 168.966
3/92 $11.96 $12.59 5.00% 3/31/92 0.05330 $12.06 $9.0059 0.747 169.713
4/92 $12.19 $12.83 5.00% $0.0000 0.000 169.713
5/92 $12.30 $12.95 5.00% $0.0000 0.000 169.713
6/92 $12.03 $12.66 5.00% 6/30/92 0.10790 $11.97 $18.3120 1.530 171.243
7/92 $12.57 $13.23 5.00% $0.0000 0.000 171.243
8/92 $12.43 $13.08 5.00% $0.0000 0.000 171.243
9/92 $12.38 $13.03 5.00% 9/30/92 0.12270 $12.35 $21.0115 1.701 172.944
</TABLE>
<TABLE>
<CAPTION>
5-Year
--------------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------- --------------------------------------------
<S> <C> <C> <C>
3/89
4/89
5/89
6/89
7/89
8/89
9/89
10/89
11/89
12/89
1/90
2/90
3/90
4/90
5/90
6/90
7/90
8/90 96.246
9/90 $3.8498 0.404 96.650
10/90 $0.0000 0.000 96.650
11/90 $0.0000 0.000 96.650
12/90 $21.7463 2.249 98.899
1/91 $0.0000 0.000 98.899
2/91 $0.0000 0.000 98.899
3/91 $4.9450 0.465 99.364
4/91 $0.0000 0.000 99.364
5/91 $0.0000 0.000 99.364
6/91 $5.9618 0.553 99.917
7/91 $0.0000 0.000 99.917
8/91 $0.0000 0.000 99.917
9/91 $3.9967 0.347 100.264
10/91 $0.0000 0.000 100.264
11/91 $0.0000 0.000 100.264
12/91 $34.0497 2.861 103.125
1/92 $0.0000 0.000 103.125
2/92 $0.0000 0.000 103.125
3/92 $5.4966 0.456 103.581
4/92 $0.0000 0.000 103.581
5/92 $0.0000 0.000 103.581
6/92 $11.1764 0.934 104.515
7/92 $0.0000 0.000 104.515
8/92 $0.0000 0.000 104.515
9/92 $12.8240 1.038 105.553
</TABLE>
<PAGE> 8
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
------ Investment
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: 10.90% 181.50% 10 Year Value: $2,814.98
5 Year Return: 11.43% 71.81% 5 Year Value: $1,718.05 MONTH TO DATE
$28,149.80 Rate Value
3 Year Return: 7.92% 25.68% 3 Year Value: $1,256.78 Since -3.53% $964.67
Inception or
1 Year Return: 13.27% 13.27% 1 Year Value: $1,132.74 10 Years
YTD Return: 20.20% 20.20% YTD Value: $1,202.01
</TABLE>
* Since Inception
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
10-Year
----------------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/92 $12.34 $12.99 5.00% $0.0000 0.000 172.944
11/92 $12.60 $13.26 5.00% $0.0000 0.000 172.944
12/92 $11.24 $11.83 5.00% 12/31/92 1.56750 $11.20 1.45000 $271.0897 24.204 197.148
1/93 $11.25 $11.84 5.00% $0.0000 0.000 197.148
2/93 $11.43 $12.03 5.00% $0.0000 0.000 197.148
3/93 $11.71 $12.33 5.00% 3/31/93 0.08900 $11.62 $17.5462 1.510 198.658
4/93 $11.48 $12.08 5.00% $0.0000 0.000 198.658
5/93 $11.64 $12.25 5.00% $0.0000 0.000 198.658
6/93 $11.69 $12.31 5.00% 6/30/93 0.09200 $11.56 $18.2765 1.581 200.239
7/93 $11.71 $12.33 5.00% $0.0000 0.000 200.239
8/93 $12.08 $12.72 5.00% $0.0000 0.000 200.239
9/93 $12.05 $12.68 5.00% 9/30/93 0.10600 $12.01 $21.2253 1.767 202.006
10/93 $12.13 $12.77 5.00% $0.0000 0.000 202.006
11/93 $11.86 $12.48 5.00% $0.0000 0.000 202.006
12/93 $11.93 $12.56 5.00% 12/31/93 0.10700 $11.84 $21.6146 1.826 203.832
1/94 $12.16 $12.80 5.00% $0.0000 0.000 203.832
2/94 $11.82 $12.44 5.00% $0.0000 0.000 203.832
3/94 $11.08 $11.66 5.00% 3/31/94 0.09300 $11.52 $18.9564 1.646 205.478
4/94 $11.20 $11.79 5.00% $0.0000 0.000 205.478
5/94 $11.11 $11.69 5.00% $0.0000 0.000 205.478
6/94 $10.75 $11.32 5.00% 6/30/94 0.06630 $10.71 $13.6232 1.272 206.750
7/94 $10.95 $11.53 5.00% $0.0000 0.000 206.750
8/94 $11.42 $12.02 5.00% $0.0000 0.000 206.750
9/94 $11.07 $11.65 5.00% 9/30/94 0.04500 $11.08 $9.3038 0.840 207.590
10/94 $11.24 $11.83 5.00% $0.0000 0.000 207.590
11/94 $10.75 $11.32 5.00% $0.0000 0.000 207.590
12/94 $10.68 $11.24 5.00% 12/30/94 0.03920 $10.68 $8.1375 0.762 208.352
1/95 $10.95 $11.53 5.00% $0.0000 0.000 208.352
2/95 $11.43 $12.03 5.00% $0.0000 0.000 208.352
3/95 $11.62 $12.23 5.00% 3/24/95 0.06690 $11.62 $13.9387 1.200 209.552
4/95 $12.01 $12.64 5.00% $0.0000 0.000 209.552
5/95 $12.61 $13.27 5.00% $0.0000 0.000 209.552
6/95 $12.73 $13.40 5.00% 6/23/95 0.05150 $12.93 $10.7919 0.835 210.387
7/95 $13.18 $13.87 5.00% $0.0000 0.000 210.387
8/95 $13.38 $14.08 5.00% $0.0000 0.000 210.387
</TABLE>
<TABLE>
<CAPTION>
5-Year
--------------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------- --------------------------------------------
<S> <C> <C> <C>
10/92 $0.0000 0.000 105.553
11/92 $0.0000 0.000 105.553
12/92 $165.4543 14.773 120.326
1/93 $0.0000 0.000 120.326
2/93 $0.0000 0.000 120.326
3/93 $10.7090 0.922 121.248
4/93 $0.0000 0.000 121.248
5/93 $0.0000 0.000 121.248
6/93 $11.1548 0.965 122.213
7/93 $0.0000 0.000 122.213
8/93 $0.0000 0.000 122.213
9/93 $12.9546 1.079 123.292
10/93 $0.0000 0.000 123.292
11/93 $0.0000 0.000 123.292
12/93 $13.1922 1.114 124.406
1/94 $0.0000 0.000 124.406
2/94 $0.0000 0.000 124.406
3/94 $11.5698 1.004 125.410
4/94 $0.0000 0.000 125.410
5/94 $0.0000 0.000 125.410
6/94 $8.3147 0.776 126.186
7/94 $0.0000 0.000 126.186
8/94 $0.0000 0.000 126.186
9/94 $5.6784 0.512 126.698
10/94 $0.0000 0.000 126.698
11/94 $0.0000 0.000 126.698
12/94 $4.9666 0.465 127.163
1/95 $0.0000 0.000 127.163
2/95 $0.0000 0.000 127.163
3/95 $8.5072 0.732 127.895
4/95 $0.0000 0.000 127.895
5/95 $0.0000 0.000 127.895
6/95 $6.5866 0.509 128.404
7/95 $0.0000 0.000 128.404
8/95 $0.0000 0.000 128.404
</TABLE>
<PAGE> 9
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
------ Investment
<S> <C> <C> <C> <C> <C>
10 Year Return: 10.90% 181.50% 10 Year Value: $2,814.98
5 Year Return: 11.43% 71.81% 5 Year Value: $1,718.05
$28,149.80
3 Year Return: 7.92% 25.68% 3 Year Value: $1,256.78 Since
Inception or
1 Year Return: 13.27% 13.27% 1 Year Value: $1,132.74 10 Years
YTD Return: 20.20% 20.20% YTD Value: $1,202.01
</TABLE>
* Since Inception
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
3-Year
----------------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8/92 $12.43 $13.08 5.00% 76.453
9/92 $12.38 $13.03 5.00% 9/30/92 0.12270 $12.35 $9.3808 0.760 77.213
10/92 $12.34 $12.99 5.00% $0.0000 0.000 77.213
11/92 $12.60 $13.26 5.00% $0.0000 0.000 77.213
12/92 $11.24 $11.83 5.00% 12/31/92 1.56750 $11.20 1.45000 $121.0314 10.806 88.019
1/93 $11.25 $11.84 5.00% $0.0000 0.000 88.019
2/93 $11.43 $12.03 5.00% $0.0000 0.000 88.019
3/93 $11.71 $12.33 5.00% 3/31/93 0.08900 $11.62 $7.8337 0.674 88.693
4/93 $11.48 $12.08 5.00% $0.0000 0.000 88.693
5/93 $11.64 $12.25 5.00% $0.0000 0.000 88.693
6/93 $11.69 $12.31 5.00% 6/30/93 0.09200 $11.56 $8.1598 0.706 89.399
7/93 $11.71 $12.33 5.00% $0.0000 0.000 89.399
8/93 $12.08 $12.72 5.00% $0.0000 0.000 89.399
9/93 $12.05 $12.68 5.00% 9/30/93 0.10600 $12.01 $9.4763 0.789 90.188
10/93 $12.13 $12.77 5.00% $0.0000 0.000 90.188
11/93 $11.86 $12.48 5.00% $0.0000 0.000 90.188
12/93 $11.93 $12.56 5.00% 12/31/93 0.10700 $11.84 $9.6501 0.815 91.003
1/94 $12.16 $12.80 5.00% $0.0000 0.000 91.003
2/94 $11.82 $12.44 5.00% $0.0000 0.000 91.003
3/94 $11.08 $11.66 5.00% 3/31/94 0.09300 $11.52 $8.4633 0.735 91.738
4/94 $11.20 $11.79 5.00% $0.0000 0.000 91.738
5/94 $11.11 $11.69 5.00% $0.0000 0.000 91.738
6/94 $10.75 $11.32 5.00% 6/30/94 0.06630 $10.71 $6.0822 0.568 92.306
7/94 $10.95 $11.53 5.00% $0.0000 0.000 92.306
8/94 $11.42 $12.02 5.00% $0.0000 0.000 92.306
9/94 $11.07 $11.65 5.00% 9/30/94 0.04500 $11.08 $4.1538 0.375 92.681
10/94 $11.24 $11.83 5.00% $0.0000 0.000 92.681
11/94 $10.75 $11.32 5.00% $0.0000 0.000 92.681
12/94 $10.68 $11.24 5.00% 12/30/94 0.03920 $10.68 $3.6331 0.340 93.021
1/95 $10.95 $11.53 5.00% $0.0000 0.000 93.021
2/95 $11.43 $12.03 5.00% $0.0000 0.000 93.021
3/95 $11.62 $12.23 5.00% 3/24/95 0.06690 $11.62 $6.2231 0.536 93.557
4/95 $12.01 $12.64 5.00% $0.0000 0.000 93.557
5/95 $12.61 $13.27 5.00% $0.0000 0.000 93.557
6/95 $12.73 $13.40 5.00% 6/23/95 0.05150 $12.93 $4.8182 0.373 93.930
7/95 $13.18 $13.87 5.00% $0.0000 0.000 93.930
8/95 $13.38 $14.08 5.00% $0.0000 0.000 93.930
</TABLE>
<TABLE>
<CAPTION>
1-Year
- ----------------------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ----------------------------------------------------
<S> <C> <C> <C>
8/92
9/92
10/92
11/92
12/92
1/93
2/93
3/93
4/93
5/93
6/93
7/93
8/93
9/93
10/93
11/93
12/93
1/94
2/94
3/94
4/94
5/94
6/94
7/94
8/94 83.195
9/94 $3.7438 0.338 83.533
10/94 $0.0000 0.000 83.533
11/94 $0.0000 0.000 83.533
12/94 $3.2745 0.307 83.840
1/95 $0.0000 0.000 83.840
2/95 $0.0000 0.000 83.840
3/95 $5.6089 0.483 84.323
4/95 $0.0000 0.000 84.323
5/95 $0.0000 0.000 84.323
6/95 $4.3426 0.336 84.659
7/95 $0.0000 0.000 84.659
8/95 $0.0000 0.000 84.659
</TABLE>
<PAGE> 10
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS A
INITIAL INVESTMENT: $1,000
<TABLE>
<CAPTION>
Average Annual Total Return Rate Cuml. Investment Value @ End of Period $10,000.00
Return Initial
------ Investment
<S> <C> <C> <C> <C> <C>
10 Year Return: 10.90% 181.50% 10 Year Value: $2,814.98
5 Year Return: 11.43% 71.81% 5 Year Value: $1,718.05
$28,149.80
3 Year Return: 7.92% 25.68% 3 Year Value: $1,256.78 Since
Inception or
1 Year Return: 13.27% 13.27% 1 Year Value: $1,132.74 10 Years
YTD Return: 20.20% 20.20% YTD Value: $1,202.01
</TABLE>
* Since Inception
Constant Sales Charge: 5.00%
<TABLE>
<CAPTION>
YTD
--------------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/94 $10.68 $11.24 5.00% 12/30/94 0.03920 $10.68 88.968
1 /95 $10.95 $11.53 5.00% $0.0000 0.000 88.968
2 /95 $11.43 $12.03 5.00% $0.0000 0.000 88.968
3 /95 $11.62 $12.23 5.00% 3/24/95 0.06690 $11.62 $5.9520 0.512 89.480
4 /95 $12.01 $12.64 5.00% $0.0000 0.000 89.480
5 /95 $12.61 $13.27 5.00% $0.0000 0.000 89.480
6 /95 $12.73 $13.40 5.00% 6/23/95 0.05150 $12.93 $4.6082 0.356 89.836
7 /95 $13.18 $13.87 5.00% $0.0000 0.000 89.836
8 /95 $13.38 $14.08 5.00% $0.0000 0.000 89.836
</TABLE>
<TABLE>
<CAPTION>
MTD
- ------------------------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------------
<S> <C> <C> <C>
12/94
1 /95
2 /95
3 /95
4 /95
5 /95
6 /95
7 /95 72.098
8 /95 $0.0000 0.000 72.098
</TABLE>
<PAGE> 11
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
Average Annual Total Return Investment Value at End of Period Cumulative Return
CDSC
Excluding With Excluding % CDSC Ending Excluding With
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC
--------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 Year Return:# (100.00)% (100.00)% $0.00 0.00% $0.00 $0.00 10 Year (100.00)% (100.00)%
5 Year 44.80 % 42.80 %
4.03 Year Return: 9.62 % 9.24 % $1,448.03 2.00% $20.00 $1,428.03 3 Year 29.22 % 26.22 %
MONTH TO DATE CDSC
3 Year Return: 8.92 % 8.07 % $1,292.23 3.00% $30.00 $1,262.23 Excluding Ending
CDSC Value
1 Year Return: 18.41 % 13.41 % $1,184.09 5.00% $50.00 $1,134.09 $1,015.14 5.00% $50.00 $965.14
1.51% (3.49)%
YTD Return: 25.98 % 20.98 % $1,259.82 5.00% $50.00 $1,209.82
</TABLE>
# Since Inception
Constant Sales Charge: N/A
<TABLE>
<CAPTION>
5-Year
-----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8/22/91 $11.52 $11.52 N/A 86.806
8 / 91 $11.77 $11.77 N/A $0.0000 0.000 86.806
9 / 91 $11.52 $11.52 N/A 9/30/91 0.01100 $11.55 $0.9549 0.083 86.889
10 / 91 $11.81 $11.81 N/A $0.0000 0.000 86.889
11 / 91 $11.25 $11.25 N/A $0.0000 0.000 86.889
12 / 91 $12.39 $12.39 N/A 12/31/91 0.32410 $11.92 0.29510 $28.1607 2.362 89.251
1 / 92 $12.18 $12.18 N/A $0.0000 0.000 89.251
2 / 92 $12.22 $12.22 N/A $0.0000 0.000 89.251
3 / 92 $11.98 $11.98 N/A 3/31/92 0.03720 $12.08 $3.3201 0.275 89.526
4 / 92 $12.21 $12.21 N/A $0.0000 0.000 89.526
5 / 92 $12.31 $12.31 N/A $0.0000 0.000 89.526
6 / 92 $12.06 $12.06 N/A 6/30/92 0.07380 $12.00 $6.6070 0.551 90.077
7 / 92 $12.59 $12.59 N/A $0.0000 0.000 90.077
8 / 92 $12.44 $12.44 N/A $0.0000 0.000 90.077
9 / 92 $12.41 $12.41 N/A 9/30/92 0.08940 $12.39 $8.0529 0.650 90.727
10 / 92 $12.37 $12.37 N/A $0.0000 0.000 90.727
11 / 92 $12.62 $12.62 N/A $0.0000 0.000 90.727
12 / 92 $11.28 $11.28 N/A 12/31/92 1.54000 $11.24 1.45000 $139.7196 12.431 103.158
1 / 93 $11.28 $11.28 N/A $0.0000 0.000 103.158
2 / 93 $11.45 $11.45 N/A $0.0000 0.000 103.158
3 / 93 $11.75 $11.75 N/A 3/31/93 0.06500 $11.65 $6.7053 0.576 103.734
4 / 93 $11.52 $11.52 N/A $0.0000 0.000 103.734
5 / 93 $11.67 $11.67 N/A $0.0000 0.000 103.734
6 / 93 $11.74 $11.74 N/A 6/30/93 0.06500 $11.60 $6.7427 0.581 104.315
7 / 93 $11.74 $11.74 N/A $0.0000 0.000 104.315
8 / 93 $12.10 $12.10 N/A $0.0000 0.000 104.315
9 / 93 $12.09 $12.09 N/A 9/30/93 0.08400 $12.05 $8.7625 0.727 105.042
</TABLE>
<TABLE>
<CAPTION>
3-Year
-----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
8/22/91
8 / 91
9 / 91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92 80.386
9 / 92 $7.1865 0.580 80.966
10 / 92 $0.0000 0.000 80.966
11 / 92 $0.0000 0.000 80.966
12 / 92 $124.6876 11.093 92.059
1 / 93 $0.0000 0.000 92.059
2 / 93 $0.0000 0.000 92.059
3 / 93 $5.9838 0.514 92.573
4 / 93 $0.0000 0.000 92.573
5 / 93 $0.0000 0.000 92.573
6 / 93 $6.0172 0.519 93.092
7 / 93 $0.0000 0.000 93.092
8 / 93 $0.0000 0.000 93.092
9 / 93 $7.8197 0.649 93.741
</TABLE>
<PAGE> 12
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
Average Annual Total Return Investment Value at End of Period Cumulative Return
CDSC
Excluding With Excluding % CDSC Ending Excluding With
CDSC CDSC CDSC CDSC Amount Value CDSC CDSC
--------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 Year Return:# (100.00)% (100.00)% $0.00 0.00% $0.00 $0.00 10 Year (100.00)% (100.00)%
5 Year 44.80 % 42.80 %
4.03 Year Return: 9.62 % 9.24 % $1,448.03 2.00% $20.00 $1,428.03 3 Year 29.22 % 26.22 %
MONTH TO DATE CDSC
3 Year Return: 8.92 % 8.07 % $1,292.23 3.00% $30.00 $1,262.23 Excluding Ending
CDSC Value
1 Year Return: 18.41 % 13.41 % $1,184.09 5.00% $50.00 $1,134.09 $1,015.14 5.00% $50.00 $965.14
1.51% (3.49)%
YTD Return: 25.98 % 20.98 % $1,259.82 5.00% $50.00 $1,209.82
</TABLE>
# Since Inception
Constant Sales Charge: N/A
<TABLE>
<CAPTION>
5-Year
-----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 / 93 $12.16 $12.16 N/A $0.0000 0.000 105.042
11 / 93 $11.88 $11.88 N/A $0.0000 0.000 105.042
12 / 93 $11.96 $11.96 N/A 12/31/93 0.08500 $11.88 $8.9286 0.752 105.794
1 / 94 $12.19 $12.19 N/A $0.0000 0.000 105.794
2 / 94 $11.84 $11.84 N/A $0.0000 0.000 105.794
3 / 94 $11.11 $11.11 N/A 3/31/94 0.07100 $11.56 $7.5114 0.650 106.444
4 / 94 $11.22 $11.22 N/A $0.0000 0.000 106.444
5 / 94 $11.13 $11.13 N/A $0.0000 0.000 106.444
6 / 94 $10.78 $10.78 N/A 6/30/94 0.04570 $10.74 $4.8645 0.453 106.897
7 / 94 $10.98 $10.98 N/A $0.0000 0.000 106.897
8 / 94 $11.44 $11.44 N/A $0.0000 0.000 106.897
9 / 94 $11.11 $11.11 N/A 9/30/94 0.02400 $11.12 $2.5655 0.231 107.128
10 / 94 $11.27 $11.27 N/A $0.0000 0.000 107.128
11 / 94 $10.73 $10.73 N/A $0.0000 0.000 107.128
12 / 94 $10.71 $10.71 N/A 12/30/94 0.01920 $10.71 $2.0569 0.192 107.320
1 / 95 $10.98 $10.98 N/A $0.0000 0.000 107.320
2 / 95 $11.45 $11.45 N/A $0.0000 0.000 107.320
3 / 95 $11.65 $11.65 N/A 3/24/95 0.04600 $11.66 $4.9367 0.423 107.743
4 / 95 $12.04 $12.04 N/A $0.0000 0.000 107.743
5 / 95 $12.64 $12.64 N/A $0.0000 0.000 107.743
6 / 95 $12.77 $12.77 N/A 6/23/95 0.02860 $12.97 $3.0814 0.238 107.981
7 / 95 $13.21 $13.21 N/A $0.0000 0.000 107.981
8 / 95 $13.41 $13.41 N/A $0.0000 0.000 107.981
</TABLE>
<TABLE>
<CAPTION>
3-Year
-----------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
10 / 93 $0.0000 0.000 93.741
11 / 93 $0.0000 0.000 93.741
12 / 93 $7.9680 0.671 94.412
1 / 94 $0.0000 0.000 94.412
2 / 94 $0.0000 0.000 94.412
3 / 94 $6.7033 0.580 94.992
4 / 94 $0.0000 0.000 94.992
5 / 94 $0.0000 0.000 94.992
6 / 94 $4.3411 0.404 95.396
7 / 94 $0.0000 0.000 95.396
8 / 94 $0.0000 0.000 95.396
9 / 94 $2.2895 0.206 95.602
10 / 94 $0.0000 0.000 95.602
11 / 94 $0.0000 0.000 95.602
12 / 94 $1.8356 0.171 95.773
1 / 95 $0.0000 0.000 95.773
2 / 95 $0.0000 0.000 95.773
3 / 95 $4.4056 0.378 96.151
4 / 95 $0.0000 0.000 96.151
5 / 95 $0.0000 0.000 96.151
6 / 95 $2.7499 0.212 96.363
7 / 95 $0.0000 0.000 96.363
8 / 95 $0.0000 0.000 96.363
</TABLE>
<PAGE> 13
JOHN HANCOCK GROWTH & INCOME FUND - SEC TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return:# (100.00)% (100.00)% $0.00 0.00% $0.00 $0.00
4.03 Year Return: 9.62 % 9.24 % $1,448.03 2.00% $20.00 $1,428.03
3 Year Return: 8.92 % 8.07 % $1,292.23 3.00% $30.00 $1,262.23
1 Year Return: 18.41 % 13.41 % $1,184.09 5.00% $50.00 $1,134.09
YTD Return: 25.98 % 20.98 % $1,259.82 5.00% $50.00 $1,209.82
</TABLE>
# Since Inception
Constant Sales Charge: N/A
<TABLE>
<CAPTION>
1-Year
-----------------------------------
Payment/
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
8 / 94 $11.44 $11.44 N/A 87.413
9 / 94 $11.11 $11.11 N/A 9/30/94 0.02400 $11.12 $2.0979 0.189 87.602
10 / 94 $11.27 $11.27 N/A $0.0000 0.000 87.602
11 / 94 $10.73 $10.73 N/A $0.0000 0.000 87.602
12 / 94 $10.71 $10.71 N/A 12/30/94 0.01920 $10.71 $1.6820 0.157 87.759
1 / 95 $10.98 $10.98 N/A $0.0000 0.000 87.759
2 / 95 $11.45 $11.45 N/A $0.0000 0.000 87.759
3 / 95 $11.65 $11.65 N/A 3/24/95 0.04600 $11.66 $4.0369 0.346 88.105
4 / 95 $12.04 $12.04 N/A $0.0000 0.000 88.105
5 / 95 $12.64 $12.64 N/A $0.0000 0.000 88.105
6 / 95 $12.77 $12.77 N/A 6/23/95 0.02860 $12.97 $2.5198 0.194 88.299
7 / 95 $13.21 $13.21 N/A $0.0000 0.000 88.299
8 / 95 $13.41 $13.41 N/A $0.0000 0.000 88.299
</TABLE>
<TABLE>
<CAPTION>
YTD MTD
-------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94 93.371
1 / 95 $0.0000 0.000 93.371
2 / 95 $0.0000 0.000 93.371
3 / 95 $4.2951 0.368 93.739
4 / 95 $0.0000 0.000 93.739
5 / 95 $0.0000 0.000 93.739
6 / 95 $2.6809 0.207 93.946
7 / 95 $0.0000 0.000 93.946 75.700
8 / 95 $0.0000 0.000 93.946 $0.0000 0.000 75.700
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-07-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 195,826,755
<INVESTMENTS-AT-VALUE> 242,754,625
<RECEIVABLES> 3,206,997
<ASSETS-OTHER> 78,709
<OTHER-ITEMS-ASSETS> 46,927,870
<TOTAL-ASSETS> 246,040,331
<PAYABLE-FOR-SECURITIES> 818,580
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 316,283
<TOTAL-LIABILITIES> 1,134,863
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196,913,679
<SHARES-COMMON-STOCK> 9,726,172
<SHARES-COMMON-PRIOR> 10,608,098
<ACCUMULATED-NII-CURRENT> 503,632
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 560,287
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 46,927,870
<NET-ASSETS> 244,905,468
<DIVIDEND-INCOME> 7,063,204
<INTEREST-INCOME> 129,942
<OTHER-INCOME> 0
<EXPENSES-NET> 3,804,830
<NET-INVESTMENT-INCOME> 3,388,316
<REALIZED-GAINS-CURRENT> 6,147,562
<APPREC-INCREASE-CURRENT> 30,850,499
<NET-CHANGE-FROM-OPS> 40,386,377
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,080,993
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,688,091
<NUMBER-OF-SHARES-REDEEMED> 2,719,043
<SHARES-REINVESTED> 149,026
<NET-CHANGE-IN-ASSETS> 9,720,115
<ACCUMULATED-NII-PRIOR> 310,216
<ACCUMULATED-GAINS-PRIOR> (5,587,275)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,441,081
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,804,830
<AVERAGE-NET-ASSETS> 120,482,217
<PER-SHARE-NAV-BEGIN> 11.42
<PER-SHARE-NII> 0.21
<PER-SHARE-GAIN-APPREC> 1.95
<PER-SHARE-DIVIDEND> 0.20
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.38
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 195,826,755
<INVESTMENTS-AT-VALUE> 242,754,625
<RECEIVABLES> 3,206,997
<ASSETS-OTHER> 78,709
<OTHER-ITEMS-ASSETS> 46,927,870
<TOTAL-ASSETS> 246,040,331
<PAYABLE-FOR-SECURITIES> 818,580
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 316,283
<TOTAL-LIABILITIES> 1,134,863
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196,913,679
<SHARES-COMMON-STOCK> 8,554,156
<SHARES-COMMON-PRIOR> 9,965,870
<ACCUMULATED-NII-CURRENT> 503,632
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 560,287
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 46,927,870
<NET-ASSETS> 244,905,468
<DIVIDEND-INCOME> 7,063,204
<INTEREST-INCOME> 129,942
<OTHER-INCOME> 0
<EXPENSES-NET> 3,804,830
<NET-INVESTMENT-INCOME> 3,388,316
<REALIZED-GAINS-CURRENT> 6,147,562
<APPREC-INCREASE-CURRENT> 30,850,499
<NET-CHANGE-FROM-OPS> 40,386,377
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,113,907
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,972,798
<NUMBER-OF-SHARES-REDEEMED> 3,464,943
<SHARES-REINVESTED> 80,431
<NET-CHANGE-IN-ASSETS> 9,720,115
<ACCUMULATED-NII-PRIOR> 310,216
<ACCUMULATED-GAINS-PRIOR> (5,587,275)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,441,081
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,804,830
<AVERAGE-NET-ASSETS> 110,090,656
<PER-SHARE-NAV-BEGIN> 11.44
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> 1.96
<PER-SHARE-DIVIDEND> 0.12
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.41
<EXPENSE-RATIO> 2.03
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
